5. Learning from Past Policies for “Levelling Up” and “Left Behind Places” in the UK

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Notes

1 Parsons DW (1986) The Political Economy of British Regional Policy. London: Croom Helm.

2 Garcilazo JE, Martins JO and Tompson W (2010) Why policies may need to be place-based in order to be people-centred. VoxEU.org, 20 November; Gill I (2010) Regional development policies: Place-based or people-centred? VoxEU.org, 9 October.

3 Beer A, McKenzie F, Blažek J, Sotarauta M and Ayres S (2020) Every Place Matters: Towards Effective Place-Based Policy (RSA Policy Impact Book Series). London: Routledge.

4 Cheshire P, Nathan M and Overman H (2014) Urban Economics and Policy. Aldershot: Edward Elgar; World Bank (2009) Reshaping Economic Geography. Washington, DC: World Bank.

5 Bolton R (1992) “Place prosperity vs people prosperity” revisited: An old issue with a new angle. Urban Studies, 29: 185–203.

6 Barca F (2009) An Agenda for a Reformed Cohesion Policy (Independent report prepared at the request of Danuta Hubner, Commissioner for Regional Policy); Barca F, McCann P and Rodríguez-Pose A (2012) The case for regional development intervention: Place-based versus place-neutral approaches. Journal of Regional Science, 52: 134–152.

7 Neumark D and Simpson H (2014) Place-Based Policies (Working Paper No. 20049). Cambridge, MA: National Bureau of Economic Research (NBER).

8 Austin B, Glaeser E and Summers L (2018) Jobs for the Heartland: Place-Based Policies in 21st Century America. Washington DC: Brookings Institution.

9 Overman H (2020) People, Places and Politics: Policy Challenges (CEP 2019 Election Analysis Series). London: London School of Economics (LSE).

10 Neumark D and Simpson H (2014) Place-Based Policies (Working Paper No. 20049). Cambridge, MA: National Bureau of Economic Research (NBER).

11 Iammarino S, Rodríguez-Pose A and Storper M (2018) Regional inequality in Europe: Evidence, theory and policy implications. Journal of Economic Geography, 19: 273–298.

12 Barca (2009), see Reference 6.

13 Barca et al. (2012), at 139, see Reference 6.

14 Bailey D, Pitelis C and Tomlinson PR (2018) A place-based developmental regional industrial strategy for sustainable capture of co-created value. Cambridge Journal of Economics, 42: 1521–1542.

15 Alessandrini M , Celotti, P, Dallhammer, E, Gorny, H, Gramillano, A, Schuh, B, Zingaretti, C, Toptsidou, M, and Gaupp-Berghausen, M (2019) Implementing a Place-Based Approach to EU Industrial Policy Strategy. Brussels: European Committee of the Regions, Commission for Economic Policy.

16 Beer et al. (2020), see Reference 3.

17 Beer et al. (2020), see Reference 3.

18 Morgan K (2020) The future of place-based innovation policy (as if “lagging regions” really mattered). In M Barzotto, C Corradini, F Fai, S Labory and P Tomlinson (eds.), Revitalising Lagging Regions: Smart Specialisation and Industry 4.0, pp. 79–90. London: Routledge.

19 Parsons (1986), see Reference 1.

20 Barlow, M (1940) Report of Royal Commission on the Distribution of the Industrial Population. London: HMSO.

21 McCrone G (1969) Regional Policy in Britain. London: George Allen & Unwin; Parsons (1986), see Reference 1.

22 Such as under the Margaret Thatcher governments in the 1980s. As regional inequalities widened in that decade, and the “North–South divide” debate erupted accordingly, Lord Young, the then Secretary of State for Trade and Industry, and the member of the Cabinet responsible for regional policy, actually rejected the need for such intervention with a simple and unapologetic appeal to the “justice of history”: “There was more industrialisation in the North, originally, therefore there now has to be more deindustrialisation. Until 70 years ago the North was always the richest part of the country. […] Now some of it is in the South. It’s our turn, that’s all” (quoted in UK Parliament, 1987, Hansard Business, vol 489, at 48). Table 2.1 in Chapter 2 suggests that this line of reasoning was in fact quite erroneous.

23 Martin RL (1988) The political economy of Britain’s North–South divide. Transactions of the Institute of British Geographers, 13: 389–418; Martin RL (1993a) Remapping British regional policy: The end of the North–South divide? Regional Studies, 27: 797–805; Martin RL (1993b) Reviving the economic case for regional policy. In RT Harrison and P Townroe (eds.), Spatial Policy in a Divided Nation, pp. 270–290. London: Jessica Kingsley; Moore BC, Rhodes J and Tyler P (1986). The Effects of Government Regional Policy. London: HMSO, 1986; Rhodes J, Tyler P and Brennan A (2007) The Single Regeneration Budget—Final Evaluation. Cambridge: Department of Land Economy, University of Cambridge. https://www.landecon.cam.ac.uk/system/files/documents/SRB_part1_finaleval_feb07.pdf/; Taylor J and Wren C (1997) UK regional policy: An evaluation. Regional Studies, 31: 835–848.

24 Bellini N, Danson M and Halkier H (2012) Regional Development Agencies: The Next Generation? New York: Routledge.

25 Hudson R (1989) Wrecking a Region: State Policies, Party Politics and Regional Change in North East England. London: Pion.

26 Martin (1993a, 1993b), see Reference 23.

27 Bellini et al. (2012), see Reference 24.

28 Oatley N (ed.) (1998) Cities, Economic Competition and Urban Policy. Thousand Oaks, CA: Sage.

29 Pacione M (2009) Urban Geography: A Global Perspective. London: Routledge.

30 Oatley (1998), see Reference 28.

31 Pike A, Kempton L, MacKinnon D, O’Brien P and Tomaney J (2020) Evidence for the Devolution All-Party Parliamentary Group. Newcastle upon Tyne: CURDS, Newcastle University. https://www.ncl.ac.uk/media/wwwnclacuk/curds/files/CURDS%20evidence%20for%20the%20Devolution%20APPG%20inquiry.pdf/.

32 A key difficulty in assessing the impact of past policies is that of specifying a realistic and meaningful “counterfactual” position, that is, an estimate of what would have happened in the assisted areas in the absence of regional aid.

33 Estimating expenditure on urban and regional policy is not at all easy. To the authors’ knowledge there has been no systematic attempt to record expenditure systematically. The tendency for the type of policy initiatives to change with successive governments and, importantly, the way they have been delivered has complicated matters considerably. In more recent years, and particularly since the time in England of the RDAs, it has been very difficult to separate out urban and regional policy expenditure, and the recent moves to providing funds on the basis of growth deal funding has complicated matters even further. Two important sources in relation to UK regional policy are: Moore et al. (1986), see Reference 23; Wren C (2005) Regional grants: Are they worth it? Fiscal Studies, 26, 245–275; and Taylor and Wren (1997), see Reference 23. Our estimate of expenditure on regional policy over the period 1961–92 is £63.1 billion constant 2020 prices. The only source we have to compare this estimate with is that of Wren (2005), who derived an estimate of £53.76 billion constant 2020 prices. Our combined estimate of expenditure on both urban and regional policy in the UK over the entire period 1961–2020 is of the order of £174.5 billion constant 2020 prices. This would translate into an estimate of 0.15% per annum constant 2020 prices averaged over 60 years. The main source of evidence on expenditure relating to EU Structural Fund and Cohesion Policy is the work of Bachtler, J and Begg, I (2017) Cohesion policy after Brexit: the economic, social and institutional challenges, Journal of Social Policy, 46(4), 745–763. They suggest that EU regional policy may have contributed £66 billion (nominal) of funding over broadly the period since the late 1970s through to 2020, roughly equivalent to 0.1% of the UK’s GNI (nominal). Although there is clearly much uncertainty, we have adopted a range of £57–66 billion and translated this into constant 2020 prices. A key problem is that we do not have estimates of how the funding was apportioned over the early part of the period 1975–late 1980s. On the basis of the data, we have we would suggest that the EU funding was in a range of 0.12–0.16%, but it is probably best to prefer the lower estimate until more data can be obtained. Overall, our rather crude estimates suggest that discretionary expenditure in the UK on urban and regional policy when both domestic and EU policy were available has been over the last 60 years has been equivalent to some 0.27% of the UK’s GNI (2020 prices). European regional policy support has often been deployed on the basis of a model of matched co-financing from domestic UK spatial policy funds, broadly on the basis of 50%, although the precise co-financing percentage has varied considerably by programme and over time. It should also be remembered that UK regional and urban policy has also usually required the projects and partners supported to provide funding and the ability of urban policy expenditure to lever other funds into the regeneration process has been an important feature. The amount of extra funding leveraged has varied considerably, but it has not been uncommon for leverage to be of the order of three-to-one, particularly when it comes to property related regeneration.

34 Moore et al. (1986) see Reference 23; Taylor and Wren (1997), see Reference 23; Wren (2005), see Reference 33.

35 This compares with around 0.7% of GNI (£14 billion in 2019) the UK government has spent on international aid in recent years (see https://www.gov.uk/government/statistics/statistics-on-international-development-final-uk-aid-spend-2019/statistics-on-international-development-final-uk-aid-spend-2019). Mainstream UK total government expenditure in 2018–19 was some £855 billion in real terms (HM Treasury, 2019). See reference 40.

36 Tyler P, Warnock C, Provins A and Lanz B (2011) Valuing the benefits of urban regeneration. Urban Studies, 50: 169–190.

37 Barlow (1940), see Reference 20.

38 Haddon C, Devanny J, Forsdick C and Thompson A (2015) What is the Value of History in Policymaking? London: Institute of Government.

39 Morgan K (2006) Devolution and development: Territorial justice and the North–South divide. Publius, 36: 189–206.

40 HM Treasury (2019) Public Expenditure Statistical Analysis 2019. London: HM Treasury.

41 For example, see https://www.gov.uk/government/statistics/country-and-regional-analysis-2020/.

42 Martin RL, Bailey D, Evenhuis E, Gardener B, Pike A, Sunley P and Tyler P (2019) The Economic Performance of Britain’s Cities: Patterns, Processes and Policy Implications (Economic and Social Research Council (ESRC) Structural Transformation, Adaptability and City Economic Evolutions Research Project). www.cityevolutions.org.uk/.

43 National Audit Office (NAO) (2019) Local Enterprise Partnerships: An Update on Progress. London: NAO.

44 National Audit Office (NAO) (2013) Funding and Structures for Local Economic Growth. London: NAO; NAO (2019), see Reference 43; Pacione M (2009) Urban Geography: A Global Perspective. London: Routledge.

45 Clelland D (2020) Beyond the city region? Uneven governance and the evolution of regional economic development in Scotland. Local Economy, 35: 7–26.

46 NAO (2013), see Reference 44.

47 Clelland (2020), see Reference 45; Organisation for Economic Co-operation and Development (OECD) (2020) The Future of Regional Development and Public Investment in Wales, United Kingdom. Paris: OECD.

48 Gray M and Barford A (2018) The depths of the cuts: The uneven geography of local government austerity. Cambridge Journal of Regions, Economy and Society, 11: 541–563.

49 Harding A and Holden J (2015) Using Evidence: Greater Manchester Case Study. London: What Works Centre for Local Economic Growth.

50 Moore et al. (1986), see Reference 23.

51 What Works Network (2014) What Works: Evidence for Decision-Makers. London: What Works Network.

52 Harding and Holden (2015), see Reference 49.