Regional mayors should be empowered and given responsibility for levelling up funds to rebalance UK economy

Published:  19 April, 2022

British manufacturing is a versatile sector, accounting for £191 billion of Britain’s output, paying an average of 13% more in start-up wages than the national norm. The majority of the 2.7 million people already employed in the sector are in those areas Government wants to level up. A new report “Levelling up: Bridging the gap between policy and progress” published by Make UK, reveals a significant number of manufacturers (30%) are not yet convinced levelling up has delivered any tangible benefit to their business.

The research revealed that 37% of manufacturers are neither satisfied nor dissatisfied with the Government’s current levelling up agenda, down from 52% two years ago indicating some positive movement. A quarter believe that allowing the available levelling up cash to be distributed locally by regional mayors would mean it could be used better to target issues and deliver growth and prosperity where it is needed.

The feeling of disconnect with this key tranche of Government agenda is at its worst the further away from London you go – with the Northeast, Yorkshire & the Humber and the Northwest the most disillusioned. Some 35.7% of businesses in the Northeast were not satisfied with the Government’s current progress on its levelling up agenda, with 37% in Yorkshire & the Humber echoing this sentiment and 27% in the Northwest.

A quarter of manufacturers would like to see Government prioritise better support for skills training which in turn would create better job opportunities. While a fifth said that upgrading local transport infrastructure including rail and road is key to levelling up across those left-behind regions of the UK. Greater incentives for businesses to become net zero was the ask from 17% of respondents in the report. Many manufacturers are unaware of the specific levelling up initiatives available to them (over half – 57% - had not heard of official levelling up schemes such as the UK Community Renewal Fund). Initiatives which were more high-profile such as HS2 and the Northern Powerhouse and the Net Zero Strategy were more likely to be on their radar. (87% aware of these).

Regionally the asks were slightly different. Businesses located in the North of England want to see Government prioritise upgrading local transport infrastructure. Across the Midlands and East of England, manufacturers wanted to see the Government focus on supporting them in the transition to Net Zero while the South wanted Government to prioritise improving digital connectivity, including full 5G coverage for businesses not just domestic households.

Ben Fletcher, COO of Make UK, the manufacturers’ organisation said:

“Manufacturing has a proven track record of bringing huge amounts of inward investment, prosperity and well-paid jobs across the whole of the UK. Key to delivering this is for Government to give us a much-needed National Manufacturing Plan to concentrate growth in those areas which need investment the most, and where there are the people ready and waiting to take up the new jobs the manufacturing sector could provide.

“By boosting manufacturing to 15% of GDP from the current 8%, Britain’s manufacturing sector could add an additional £142billion worth of output to the UK economy, which in turn would support the creation of thousands of new jobs where they are most needed. Boosts to infrastructure and skills are clearly needed and a dramatic improvement of digital connectivity will allow companies from the whole of the UK to compete successfully on the global stage and deliver true levelling up for all.”

Adam Hawksbee, Deputy Director and Head of Levelling Up at Onward said:

“Manufacturing matters. In almost every developed economy, manufacturing productivity growth has outpaced other sectors over the last two decades. In the UK, where our economic story since the 1980s has too often revolved around services, productivity in manufacturing has had almost double the quarterly growth rate of the economy as a whole. Ultimately, this productivity growth feeds through into higher wages and living standards. It is right that manufacturers in this report ask the Government to go further and faster with their agenda to level up the country.”

George Dibb, Head of the IPPR Centre for Economic Justice added:

“The manufacturing sector has a great potential to create jobs outside London and the South East, as well as supporting our transition to net zero, if government strategies can speak to the priorities of businesses and harness their innovation. If we’re going to create a high-investment, high-productivity, innovative economy with job creation across the country manufacturers and Government need to work hand in hand to help make levelling up work.

Link to full report:

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