Remember “levelling up”? The Conservative government’s 2022 Levelling Up White Paper set out a comprehensive agenda for addressing what it called the “postcode lottery” which had seen many parts of the country “overlooked and undervalued”, while economic growth was “over-concentrated” in London and the South East. The paper called this an “historic injustice”.
The levelling up push didn’t start the London bashing which became a familiar part of Tory rhetoric in its final years, but didn’t do much to dampen it down either. Could things have been different?
Buried away in the White Paper ‘s 332 pages was a serious look at the capital – the UK’s economic powerhouse, yes, but with “significant pockets of high deprivation” too. “The costs of spatial inequality are experienced in…London as well as struggling areas,” it concluded.
This was a big enough concern to see a “London workstream” set up under the Levelling Up Advisory Council, established to “inform, support and challenge ministers”. Overseeing that work was a group of London experts, charged with considering how London’s “complex economic geography and socio-economic spectrum” might fit into the levelling up agenda.
This was no group of Michael Gove patsies. Its members included senior figures from City Hall, the Guildhall and London Councils, along with housing association, health and charity chiefs, Business LDN, think tanks Centre for London and Centre for Cities, the Core Cities UK grouping of regional cities, and LSE London director Professor Tony Travers.
The group agreed three themes for discussion: London’s relationship with the wider UK and its “global city” role; inequalities within the capital and ways to level up the city; and lessons from 25 years of devolution. Papers for its meetings were marked not to be shared. But documents released following a Freedom of Information request reveal some hard-hitting analysis.
The starting point was that London had levelling up needs too. Not all Londoners had shared in the city’s broad economic success. Income inequality in London was higher than elsewhere in the UK, with housing costs very much in the frame. Tackling the housing affordability crisis, in fact, was described by the group as “arguably the greatest public policy challenge facing the capital over the coming decade”.
A civil service analysis of the performance against the government’s levelling up “missions” of three very different boroughs, Barking & Dagenham, Kensington & Chelsea and Richmond made the point: the city’s story could be told as a “tale of two Londons” – one serving as an engine for the rest of the country, and another that lagged not just London overall but the wider UK too.
At the same time, although London was still the most economically productive region in the UK by far, growth in the capital had “stagnated” since the 2008 financial crisis. In one view, the group heard, London was now at an “inflection point, with its continued economic success more uncertain than at any point in the last 20 years”.
Not a happy city then, for many, and there was no “silver bullet” for solving the capital’s productivity puzzle and tackling its “stark inequalities”. A cocktail of measures was needed, from boosting public and private investment to promoting the AI and biotech sectors and making housing and transport more affordable – all requiring “well-coordinated planning and collaboration both between the public and private sectors and across all tiers of government”.
It was a familiar analysis but a comprehensive one that potentially added important perspectives to the levelling up debate. The group never got to make recommendations, though. It met just twice before the 2024 general election was called, and the new government proceeded to disband it.
However, its work hasn’t entirely gone to waste. One suggestion, that government, City Hall and the boroughs should agree a strategy to support “sustainable growth”, has already borne fruit, at least at local and regional government level, in the form of the new London Growth Plan launched just over a month ago. But Whitehall could also pay attention to the group’s discussions on widening devolution and new ways to pay for the infrastructure necessary to support growth.
Perhaps most significantly, serious consideration of giving London the ability to raise revenues from its own sources was now “inevitable”, the group heard. As well as continuing government contributions for the biggest schemes, “ideally, a growth strategy for London would envisage greater tax and revenue-generating powers at the regional and local levels”.
What are the chances of that happening? The government’s Devolution White Paper promises to explore a less restrictive “single pot” funding settlement from 2026 for Khan, one similar to those enjoyed by Greater Manchester and the West Midlands. But there is no mention of fiscal devolution. Time for the working group or a new London Finance Commission to reconvene to make the arguments again?
Meanwhile, there has been a call from London Councils for the boroughs to share decision-making with the Mayor in a formal “combined board”. The proposal has so far received a mixed response, and it’s interesting to see that the previous government robustly warned the levelling up London group to steer clear of the topic.
“Now is not the time to change existing governance structures or accountability mechanisms in London,” the group was told. “Questions over the distribution of power and decision-making between the GLA [Greater London Authority] and London borough councils risk becoming a narrow and niche debate, far removed from the lives of everyday Londoners.”
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