Levelling Up was arguably the signature policy agenda item of the previous government, and while there have been hints of scepticism around whether it would continue to have a place in the new government’s playbook, particularly against a backdrop of economic and geopolitical uncertainty, the recent announcement regarding the introduction of new Investment Zones up and down the country suggests that Levelling Up is alive and well.
Politics aside, evidence supports the view that Levelling Up has become a necessity in a country where regional inequality is higher than most other developed nations. Working with local authorities across the UK, we have seen first-hand how important interventions such as the Levelling Up Fund and its predecessors can be in unlocking local projects and catalysing regeneration—particularly in town centres.
On September 23, during the Chancellor’s mini-budget, further details were announced regarding Investment Zones, which the new Prime Minister referenced numerous times throughout her campaign. A series of low-tax, low-regulation investment zones will be located across England, with further investment zones in Wales, Scotland and Northern Ireland to be delivered in partnership with the devolved administrations.
What is interesting about the announcement is that Mayoral Combined Authorities (MCAs) and Upper Tier Local Authorities (UTLAs) have been asked to apply to have their potential sites be named as investment zones. This is contrary to central government mandating where these investment zones will be located, as they have done in the past. On any type of large-scale project, buy in from local government stakeholders is critical, and so ensuring MCAs and UTLAs are on board with becoming an investment zone is a welcome approach.
The first round of the Levelling Up Fund (LUF) saw the government invest £1.7 billion in 105 local standalone infrastructure projects across the UK. The results of the second round of bidding will be announced later this year and will likely provide similar levels of investment (up to £20 million per place), primarily to places which were unsuccessful in the first round of funding, with the potential to unlock even more investment from private and public sector partners down the line.
Meanwhile, Investment Zones, which could very well replace any future LUF bidding rounds after that, will seek to target any new investment in fewer areas. This is a much different and more focussed approach that encourages the private sector to take a greater leadership role in Levelling Up, with the support of a series of government tax incentives and coupled with fewer planning requirements to help move new housing and commercial development projects along at an accelerated pace.
Within the Investment Zone guidance, the Government notes that the sites most likely to be designated will have the potential to increase long-term UK economic growth, be aligned with other significant investments (i.e. HS2), have the local capacity and capability and be ready to deliver in short order. In the meantime, additional details around the liberalised planning process remain to be seen. The expression of interest form and associated guidance was released over the past weekend and with a deadline of October 14, the Government has indicated that it is keen to get on with the process as soon as possible and have a number of Investment Zones in place by November.
Without doubt, the new government is under tremendous pressure, but for the sake of communities across the UK it is crucial that the notion of addressing regional inequalities continues to be supported at the highest level of Government and does not follow in the footsteps of its original champion and fall by the wayside.
Agglomeration economies have proven to have the ability to deliver significant growth benefits because of the power that proximity has for business and overall prosperity. A coordinated, joined up approach to Levelling Up is essential for its success and with more detail still to come, there is good reason to be encouraged about the prospect of Investment Zones helping to achieve this important goal.