Levelling Up: insights from The Productivity Institute

One of the keys to Levelling Up the different regions of the UK economy will be to understand why productivity varies to a greater degree across the UK regions than it does in the sub-national regions of other OECD countries.

The Productivity Institute’s UK-wide focus, through its eight Regional Productivity Forums and institutional partners, is rooted in the awareness of the need for interdisciplinary research that can offer policy-relevant and practical proposals for raising productivity and economic performance in different types of firms and in different regions, as well as in the UK as a whole.

Our work in this area also been recognised by the Academy of Social Sciences in their recent policy report The Place to Be: How social sciences are helping to improve places in the UK .

Ahead of the government’s White Paper in Levelling Up expected in 2022, we’ve collated our “Levelling Up” related insights below.

Levelling Up and Productivity: The Role of Industrial Policy, Institutions and Fiscal Mechanisms

In Episode 11 of our Productivity Puzzles podcast series released in January 2022, host Bart van Ark, Managing Director of The Productivity Institute, talks with three of our thematic leads – Professors Diane Coyle, Andy Westwood and Philip McCann – to discuss their recent research relating to Levelling Up in relation to UK industrial policy, local growth and fiscal implications of governance devolution. Links to the three papers discussed can be found below.

Levelling Up, Local Growth and Productivity in England

Lead Author: Andrew Westwood, Professor of Government Practice at The University of Manchester and the Institutions and governance research theme co-lead at The Productivity Institute.

What role do the existing institutions and governance structures in tackling spatial inequality and low productivity in England? This paper focuses how to best tackle low productivity and reduced regional inequalities, with three policy recommendations: a long-term institutional framework with more stability and co-ordination between institutions; clear devolution and decentralisation strategy with enhanced powers and resources at the city region and local levels.; and a clear, long-term strategy to improve productivity and economic growth.

Professor Westwood discussed this research with Professor Bart van Ark in December 2021, focusing on how institutional reforms and governance across the UK fits in to the Levelling Up debate. You can watch an edited recording on YouTube.

The fiscal implication of Levelling Up and UK governance devolution

Author: Philip McCann, Chair in Urban and Regional Economics at Sheffield University Management School and Geography and place research theme lead at The Productivity Institute.

There is currently widespread enthusiasm for devolution and decentralisation as part of a broader Levelling Up agenda. However, this needs to be undertaken very carefully because if poorly implemented, it could easily worsen the already-high interregional imbalances. What reforms to the UK’s interregional fiscal system will be needed to help deliver this agenda?

UK’s Industrial Policy: Learning from the past?

Lead author: Diane Coyle, Bennett Professor of Public Policy at the University of Cambridge and Knowledge Capital research theme lead at The Productivity Institute.

The UK’s industrial policy since the 1970s has been characterised by frequent policy reversals and announcements, driven by political cycles, while multiple uncoordinated public bodies, departments and levels of government are responsible for delivery. This paper explores the impacts of these deficiencies of the industrial policymaking landscape in the UK and contrasts them with the experiences of other advanced economies.

Levelling Up and the Northern Powerhouse

In Episode 4 of our podcast series, Productivity Puzzles, host Professor Bart van Ark talks to Lord Jim O’Neill, Dame Nancy Rothwell & Professor Philip McCann about raising productivity in the Northern Powerhouse, a powerful concept introduced more than five years ago with the aim to rebuild a competitive economy in northern England. Our guests have been there from the start and discuss what it’s delivered so far, its challenges, future directions and how it contributes to the government’s “Levelling Up” agenda.