William Eichler 21 September 2020

Tackle health and economic inequalities at local level, economists say

A group of leading economists says that the Government’s ‘leveling up’ agenda should focus more on devolution and health and economic inequalities, and not just on big infrastructure projects.

The Greater Manchester Independent Prosperity Review, which was initially issued in response to the coronavirus pandemic but has now been updated, argues that the levelling up agenda will only be effective if it supports people employed in the sectors hardest hit by COVID-19 and helps to improve people’s health and well-being.

The report welcomes the Government’s focus on major infrastructure projects and it concludes that Greater Manchester has ‘world class sectors’ that can accelerate economic growth with substantial and long-term innovation funding from Government.

However, it also found that the pandemic has amplified existing economic inequalities between North and South, in particular by hitting lower paying sectors such as retail, hospitality and leisure.

‘The pandemic has laid painfully bare some of the frailties and vulnerabilities of the UK’s economic model, at least since the financial crisis,’ said Independent Prosperity Review chair, Professor Diane Coyle.

‘What the reviewers all agreed, however, is that there is potential to take the opportunity of needing to do things significantly differently to 'build back better’, and to begin investing in a future far more resilient to the inevitable shocks ahead of us.

‘This determination to seize the opportunity fits well with the UK Government’s commitments to “level up” – within, as well as between different places - and to continue building on the foundations that a more devolved and decentralised approach to evidence-based decision-making have begun to introduce.

‘Levelling up will require investment, along with a greater role for city regions, in improving employment and skills programmes, and in addressing health inequalities; it is not only a question of investment in infrastructure and R&D.’

The report warns that decision making in the UK is also ‘highly centralised’ and calls for devolution to local areas so they can put a greater focus on re-training and upskilling.

It also says that given the threat of unemployment on a grand scale, local areas should be given more powers to design and test innovative local policies and programmes which directly respond to the needs of their residents and local economy.

‘This report makes for difficult reading, but it confirms what we always feared: that the coronavirus pandemic has ruthlessly exploited the inequalities in our society, hitting the poorest hardest,’ said mayor of Greater Manchester Andy Burnham.

‘We know that the UK is one of the most politically centralised and regionally unequal countries in the developed world. This should be a moment of clarity for all of us, and an opportunity to address these deep-seated disparities by doing things differently.

‘It’s essential that we build back in a way that makes us more resilient to the challenges of the future – that means sustainable infrastructure and investment, properly integrated health and social care services, and access to high quality education, training, jobs, and housing. In Greater Manchester our unique devolution deal puts us in the perfect position to look at these things in the round, and determine the kind of action we need – not only to shore up our defences, but to really level up in a way that benefits our people and places.

‘We need a Government spending review and devolution white paper that delivers substantial devolution of power and resources - otherwise levelling up will be nothing more than a slogan.’

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