Investing in the community: English local authorities and the ‘patient investment’ of economic regeneration

ABSTRACT

This paper explores increasing emphasis on long-term investment in English devolution policy, as part of attempts to revitalise struggling communities through investment in infrastructure and public space. English councils seek to offset the financial difficulties they faced due to austerity cuts by establishing their own corporations, joint ventures, and investment partnerships, in order to generate needed income by creating economic flows from capital markets to public services. They have, consequently, envisaged a form of ‘patient investment’ in their communities, taking a long-term view of economic regeneration that aims to balance the risk of investment with the reward of local growth. The rollout of the Levelling Up agenda in February 2022 entrenches the narrative of patient investment as a conduit to regional regeneration, although it emphasises investment in infrastructure projects primarily for the purpose of attracting business and industry to deprived areas. Through a narrative policy analysis of Parliamentary debates about Levelling Up in England, I examine the turn towards long-term investment as an ethical shift in conceptions of welfare provision which prioritises private sector expansion for its potential to drive economic improvement. In this understanding, quality of life in communities is tied to growth and profit, rather than social support.

KEYWORDS:

• Local authorities
• welfare
• finance
• patient investment
• Levelling Up

Introduction

Investment has become an increasingly central practice to English local government in the last decade, as councils attempt to grapple with growing economic uncertainty related to austerity measures, pandemic downturn, and poverty within their communities. Investing in infrastructure and commercial property can provide new revenue streams to cover the cost of badly needed welfare provisions and social services in the community, at a time when local authorities are receiving, on average, 76 percent less funding than they were allocated by central government in 2010 (HC Deb 8 February 2022), due to austerity cuts. The response to cuts has often been punitive, with local authorities transformed out of financial necessity into creditors who pursue households in arrears on taxes and bills (Dagdeviren et al. 2020), at the same time as they increase council tax rates to make up shortfalls (HC Deb 8 February 2022). But a growing need for sustainable sources of funding has also motivated local authorities, especially since the passing of the Localism Act in 2011, to look at regional infrastructure and community services as key sources of income that may also be used to regenerate local economies and thereby improve quality of life in the area. In this respect, local authorities have started to take up the role of the ‘patient investor’ (Morphet and Clifford 2018) within their communities, as they examine infrastructure development and service provision through the lens of long-term returns with the potential for social improvement. The Conservative government’s drive to ‘Level Up’ regional disparities across Britain, beginning under Boris Johnson in 2019, further helped promote the idea of councils as long-term investors, by framing newly available funds for local authorities as public investments generating economic growth, rather than as a form of government spending on social services (HC Deb 14 July 2021).

Government investment in infrastructure is hardly novel on its own. Public investment is made when the provision of services or infrastructure has the potential to provide a social good, even when financial returns fail to attract private investors because they are low or realised in the long-term (Toigo and Woods 2006). Infrastructure particularly is understood to have benefits which warrant taking the risk of investment, by driving economic growth through the provision of transport, utilities, and communications needed by households and industry alike (Seidu et al. 2020). The rise of long-term investment in the language of policy, however, reflects an expectation that the role of English local authorities is changing, such that patient investment in economic regeneration has started to become an important priority for councils. Local authorities have, in some cases, explicitly begun investing in commercial property, housing, property services and even financial services as a way of generating income to fund infrastructure and support within their communities (Christophers 2019; Ferry 2018; Morphet and Clifford 2017). The new expectations set out in the Levelling Up white paper and subsequent parliamentary discussion reveal a ‘risk versus reward’ approach to government spending, as a way of increasing spending in deprived areas after a decade of austerity, through public investment in space and infrastructure that might attract industry and enterprise.

This paper considers the conceptualisation of the English local authority in the Levelling Up agenda as a patient investor in public infrastructure during times of economic uncertainty. Devolution of decision-making powers from central to local governments across England, as envisaged by Conservative (-led) governments since 2010, turns on increasing ‘flexibility both in finance and functions’ for councils, who respond directly to the ‘sensible priorities’ set by their electorate (Pickles, cited in Bennett and Orr 2013, 75). But newfound powers to generate novel sources of revenue through the Localism Act of 2011 have also inadvertently provided potential solutions to serious funding shortfalls created by central government, allowing local authorities to establish wholly owned companies or joint ventures (Morphet and Clifford 2018). The Levelling Up agenda introduced by the Conservatives in their 2019 election manifesto puts institutional weight behind this shift, as it makes government funds available for the improvement of ‘left behind’ communities and, later, economic recovery from the COVID-19 pandemic. Instead of replenishing budgets that were cut under austerity, the funds represent opportunities for local authorities to bid for pots of public investment needed for infrastructure projects with the potential to cultivate private enterprise in their communities, thereby reinforcing austerity narratives of economic growth predicated on investment and innovation rather than government spending on public provision and welfare support. I think, as a result, about patient investment on the part of local government as an analytical feature of a policy paradigm responding to crisis and insecurity, where costs and potential risks of services and infrastructure are weighed against future payoffs such as a stronger local economy.

The paper uses a narrative policy analysis to examine the emergence of narratives surrounding the need for long-term investment in response to the crisis of public services and local authorities overstretched by austerity cuts. Focusing on parliamentary debates concerning the allocation of funds to local authorities as part of the Conservative government’s ‘Levelling Up’ approach to localism and devolution initiatives, I consider how government funding is justified as a productive investment that generates returns by boosting industry and innovation needed to create and sustain growth in deprived regions. Local authorities may have to take on, as a result, a long-term or patient approach to realising both monetary and social returns within their communities.

The patient investor: community development, social welfare, and ethics of the long-term outlook

The current crisis of local authorities in England since the implementation of austerity measures has certainly been one of sustainability, as funds are cut at the same time as demand for services and assistance increases in times of economic uncertainty. The emergence of the local authority as a patient investor in contemporary policy paradigms seems almost antithetical to the immediate need for emergency support and infrastructure that characterises so much spending at the local level. But, as I will argue, the long-term outlook and the ethical motivations of patient investment help clarify emerging expectations of local authorities and their role in economic regeneration. This section examines the ethical motivations of patient investors as a trope, before delving into transformations of social assistance in the UK since 2010 that necessitate new, risk-based approaches to funding and delivery with long-term horizons.

The idea of the ‘patient investor’ has received attention within the study of economics and finance, where it encapsulates an attitude towards investment that takes sustainable, long-term growth as a goal, even when faced with short-term risks. Approaching the idea from the perspective of comparative political economy, Richard Deeg, Iain Hardie, and Sylvia Maxfield examine ‘patient capital’ as ‘long term and not normally withdrawn in the face of short-term vicissitudes of financial markets or temporary falls in … cashflow’ (2016, 615–616), advanced by investors looking for a variety of outcomes from profit, to associated metrics of company improvement and performance like ‘increased market share or stabilizing employment’ (2016, 616). For Deeg and Hardie elsewhere, patient capital allows firms to consider a variety of long-term outcomes, as opposed to operating on short-term financial expectations, since investors ‘do not exit their investment or loan if [firm] managers do not respond to short-term market pressures’ (2016, 629). In this respect, patient investors exhibit high degrees of loyalty to and engagement with their investments, in search of personal payoffs and improved firm performance. From within behavioural finance, Christian Rainero and Giuseppe Modarelli examine the characteristics of patient investors beyond the amount of time invested in a long-term outlook, to consider additional motivations such as the desire for sustainable economic growth which maintains ‘wellbeing over a long, perhaps even an indefinite period’ (Kuhlman and Farrington, cited in Rainero and Modarelli 2019, 182). In this case, patient investors might be driven explicitly by ethical concerns above utilitarian calculations, allowing for a sense of ‘altruism and disinterested personal return, oriented to the opportunity for the welfare of others’ (Rainero and Modarelli 2019, 188). In taxonomies of patient investment, then, patient investors are those who advance capital with long-term expectations on returns, whilst taking account of the broader benefits and payoffs that might arise from sustained engagement with the investment.

The long-term outlook varies from the more traditional, short-term approach to investing in stocks and bonds, where rewards are often realised in a matter of months as assets are purchased and sold with a higher turnover rate. For Victoria Ivashina and Josh Lerner, long-term investments differ both in length and type of investment: they are generally held for at least five years, and target projects such as ‘cutting-edge technologies, fast-growing private firms hungry for capital and more mature restructuring ones, infrastructure projects, and more esoteric categories, such as farmland and water’ (2019, 7). These investments represent new and occasionally unexpected sources of income for institutional investors like pension funds in the public and private sectors, insurance companies, charities and endowments, or sovereign wealth funds. But patient investment also embodies, in Ivashina and Lerner’s assessment, a much-needed solution to a host of infrastructure and development issues created by the withdrawal of government funding, providing an opportunity for private investors with a preference or legal responsibility for the long-term holding of capital to contribute to social and political improvement through the ‘thoughtful application of time and money’ (2019, 1).

The rollout of austerity measures after the 2008 financial crisis presents, in this light, a new series of ethical considerations for patient investors, rooted in the retrenching of public programmes and infrastructure spending. Governments around the world, traditionally viewed as investors in long-term public projects, began to drastically cut public investment following the crisis, as a way of improving their credit ratings by reducing spending. In the United Kingdom, the Conservative-led coalition government cut public investment by 40 per cent between the 2010–2011 and 2011–2012 fiscal years, despite already investing comparatively less in housing, transportation and energy relative to the Eurozone (Van Reenen 2015). The cuts, according to George Osborne in his capacity as Chancellor of the Exchequer in 2010, ‘paid the debts of a failed past, and laid the foundations of a more prosperous future’ (cited in Mueller 2019, n.p), since they were aimed at reducing excess government borrowing, in addition to creating opportunities for private companies, charities, and community organisations to fill the public services gap with innovative and cost-effective solutions (Mueller 2019).

The importance of patient investment and patient investors in the British context therefore acquired political overtones related to a sense of personal responsibility within one’s community and city: long-term entrepreneurial solutions were needed amidst the withdrawal of public funding from central government, as part of a collaborative effort among business, investors, and stakeholders to ensure future prosperity. Such was the vision of David Cameron’s ‘Big Society,’ in which community groups, local businesses and investors, as well as concerned citizens and volunteers were meant to take the initiative to run and manage public services and facilities such as parks and libraries, post offices, public transport, and even housing development (Kisby 2010). In the end, however, the gap in provision was never filled, creating a crisis in public services and excessive strain for underfunded councils.

Crisis, austerity, and the search for sustainable, long-term solutions

Austerity cuts have been ‘one of the key drivers in restructuring local government and public service provision in Britain’ (Gray and Barford 2018, 542), with far-reaching effects for the quality of services that local authorities are legally mandated to provide, including ‘education services; children’s safeguarding and social care; adult social care; waste collection; planning and housing services; road maintenance; and library services’ (House of Lords 2019, 1). The Homelessness Reduction Act of 2017 also requires councils to investigate cases and seek housing provision for anyone who has lost their home or is in danger of becoming homeless, as part of a national strategy to eliminate homelessness (Bevan 2021). With rates of eviction rising and no additional funding to build social housing, councils face significant pressure to assist and accommodate individuals and families in need. Other sources of revenue such as taxes are precarious as a result of the economic difficulty experienced by households within local authority communities, who struggle to pay on time or at all (James 2020). A ‘drastic shrinking of funds for aid and assistance, previously an essential underpinning of the welfare state, has been accompanied by an increase in those who need such aid,’ as a result of spreading labour market and financial uncertainty amongst even the employed, in a way that moves beyond ‘the socially excluded and poor’ to include ‘large swathes of precariously situated middle classes’ (Koch and James 2020, 5). The difficulties experienced by a growing number of households, in other words, create knock-on effects for local governments, who must respond to the increasing requests for help while managing their own limited budgets.

The upshot of so many financial pressures, handed down from central government and exacerbated by households experiencing their own financial precariousness, is the frequent adoption of punitive measures by local authorities against those in their communities who are in arrears. As Dagdeviren et al. (2020) note, local government has responded to central government cuts and instability created by economic downturn by pursuing low-income households in arrears, with increasingly aggressive tactics such as collections notices and calls, or even visits from bailiffs. Welfare reform in the United Kingdom over the last 40 years has tended in the direction of a ‘welfare to workfare’ ideology (Koch and James 2020), with the aim of providing support and services that get people into work, or a better line of employment, rather than encouraging what is seen as a culture of ‘welfare dependency’ among groups of unmotivated service users (Edmiston 2017, 262). Local authorities are thus some of the biggest creditors of low-income households (Dagdeviren et al. 2020), as social support turns increasingly on the disciplinary techniques associated with managing payments and debts for any households in arrears on taxes (James 2020). Social support is, in short, replaced by financial considerations which ultimately relate to balancing budgets and maintaining required levels of provision, in keeping with a broader transformation that sees a ‘focus on financial rather than social or political solutions’ (Bear 2015, 1).

The movement towards localism in England, spurred by Coalition and Conservative government attempts to devolve power across the United Kingdom, has provided some unexpected but possible resolutions to the crisis of public services at the local level. The Localism Act of 2011 endows local authorities with a general power of competence, allowing them to ‘operate in the same way as the private sector;’ the provisions, as they were introduced in 2010, have been interpreted as permitting local authorities ‘to set up banks and companies to act in the same way as the private sector’ (Morphet 2018, 6). This outcome was not originally anticipated by central government, or local authorities themselves. But a growing trend in the direction of financial investment in public infrastructure has proved useful to local authorities who need to secure alternative sources of funding for development projects and welfare services within their communities.

Public infrastructure is, as previously noted, of growing interest to institutional investors looking for stable returns from long-term investments, making it a target among patient investors who are turning toward the public sector. It has proved particularly valuable to financial actors involved with pension or private equity funds in this respect, since it yields ‘attractive and less volatile returns insulated from swings in business cycles and markets’ (O’Brien and Pike 2019, 1449). An investment in infrastructure by local authorities, however, represents a new shift, in which local government takes up the mantle of long-term investment for itself, in a way that allows councils to consider sustainable approaches to service provision through the generation of revenue streams independently of any funding from central government. But potential returns on investment can take multiple forms, beyond income needed for services themselves. Rather, public infrastructure and social support have the potential to create a sense of steadiness within regions in economic decline, providing the stability and amenities residents need in order to work and live in the area. As Morphet and Clifford (2018) indicate, local authorities have devised new approaches to planning and development on the basis on long-term community needs. Some areas, for example, seek to retain recent university graduates by providing better quality, affordable housing that makes for an easier and more attractive transition from student accommodation to the rental market. Others are concerned to be able to look after their aging residents in homes suitable for their income and needs. There is, through long-term investment, the possibility of reducing regional volatility by contributing to amenities targeted at the immediate needs of area residents, which may improve economic outcomes and reduce the strain on overburdened services. Janice Morphet suggests, as a result, that ‘[m]any local authorities are now recasting their role as patient investors by establishing a long-term income through investment funds that could eventually make them free of all central government dependency’ (2018, 8).

The Conservatives’ ‘Levelling Up’ initiative, introduced under Boris Johnson as part of the 2019 election manifesto, represents the most recent incarnation of devolution under successive Conservative governments since 2010. The creation of a variety of central government funds earmarked for infrastructure projects, community development, and investment in transportation links or improved communications is meant to empower local government to cultivate strong community centres and a regional presence that can attract industry as part of its regeneration, whilst retaining workforces needed for areas in decline to thrive. With funding for projects allocated to successful local authority bids, however, the current rollout of government funding does not restore what was lost to austerity cuts, so much as it creates competition for public investment based on which local authorities are likely to generate the most successful returns. As I illustrate in the remainder of this paper, narratives of self-determination and regional responsibility help to cement the emerging idea of the English local authority as a patient investor in community infrastructure and economic prosperity, as opposed to a purveyor of welfare services and social support. Using the lens of long-term investment to understand the expectations laid out for English local authorities in the Levelling Up agenda can help explain why solutions to economic disparity and instability are cast as risks to be borne in the present, for the sake of future payoff.

Patient investment as public policy: the role of the narrative in policy development

The analysis in this paper focuses on the narratives that guide policy formation and grow out of the ethical commitments underpinning the Levelling Up initiative. Historically, welfare provision relates to a sense of shared responsibility for assisting the vulnerable, in contrast to the recent retrenchment of welfare services as a way of incentivising personal responsibility and reducing reliance on the state (Mounk 2017). The Levelling Up initiative is an interesting development, because it acknowledges the need for government support in places where people are vulnerable to economic disparity, while reimagining provision from English local authorities as a form of patient investment in the infrastructure that business and enterprise will need to grow and spread prosperity. This section thus unpicks the role of narratives in the creation of policy programmes, in order to understand evolving ethical commitments to welfare provision.

The analysis of meaning through narrative, symbol, or performance is a key part of the cultural turn within economics, providing insight into the ‘core meaningful ideals’ that shape the ‘organisation and goals’ of institutions, as well as the ‘structured context for debates over their legitimacy’ (Alexander 2011, 478). Thus, ‘every action, no matter how instrumental or coerced, is embedded in a horizon of affect and meaning’ (ibid., p. 477), necessitating a commitment to consider and analyse the stories and symbols that surround and legitimate seemingly technical processes such as policy creation, budget drafting, and the enactment of legislation. The place of the story as an analytical tool for understanding the context, assumptions, motivations, and likely courses of action for those involved in these situations is well understood by cultural economists and social scientists, whether it takes the form of language and narrative (Scott 2019), the tale (Lopes, Faria, and Faustino 2022; Dalsgaard 2022), or discourse (Forelle 2018; Van der Heide and Želinsky 2021).

The use of narrative within policy analysis is a ‘postempiricist’ (Fischer 2003) approach to policy inquiry, focusing on the stories, or narratives, underpinning proposed policy solutions. As part of a critical turn within policy studies, post-empirical examinations of narrative move away from a technocratic separation of facts from values in quantitative analyses, in order to contextualize assumptions, motivations, and ideological positions that inform policy solutions. Policy narratives are key to understanding the way that certain courses of action are framed as more viable than competing proposals, according to Emery Roe, who defines policy narratives as ‘those stories – scenarios and arguments – that are taken by one or more parties … as underwriting and stabilizing the assumptions for policymaking in the face of the issue’s uncertainty, complexity or polarization’ (1994, 3). A story gives coherence to moments of political turmoil, by setting the scene, explaining the particularities of a situation with recourse to appropriate evidence, and suggesting a possible outcome that can be achieved by following a set of aims, in the manner of a narrated beginning, middle, and end. The economic uncertainty facing the United Kingdom after austerity, the COVID-19 pandemic, and increasing cost of living pressures, provides a rich context in which policy proposals will emerge to frame and narrate pressing issues.

Through the analysis of policy narratives, I examine how government funding, intended to ameliorate poor quality of life due to industrial decline, has been reframed as a process of patiently investing in new and growing sectors, rather than a form of government spending that risks interfering in the economy. Narrative policy analysis first parses out the policy frames that inform the selection of ‘facts, values, theories, and interests’ (Rein and Schön 1993, 145), which are combined to craft the overarching narrative about the role of local authorities in economic recovery. A policy frame, in other words, is used either implicitly or explicitly by policy actors to select and interpret information needed to construct a concrete argument about the need for a certain kind of policy. The selected information, including facts, viewpoints, symbols or statistics surrounding a particular issue can then be organized into a narrative that provides a coherent story about the issue at hand, culminating in a policy recommendation that addresses the factors highlighted and emphasized by policy actors as key to resolving problems or uncertainties (Bedsworth, Lowenthal, and Kastenberg 2004). My analysis examines the growing emphasis on investment at the local level in the often-contradictory rollout of ‘Levelling Up’ initiatives across England, in order to understand how the need for regional financial assistance from central government has been framed as a question of economic efficiency that can generate returns and grow local business and industrial sectors. The analysis draws on Hansard records of Parliamentary debates concerning the allocation of funds to English local authorities under the purview of Levelling Up initiatives, between the official launch of the policy on 15 July 2021, and the release of the White Paper outlining the scope of the policy on 2 February 2022. Examination of the evolution of narratives relies on what Yanow calls a ‘constructed text’ (1995, 113) rather than the singular text of any debate, since the constructed narrative is derived from ‘the position of a group, an organization, or even a coalition of organizations’ (Van Eeten 2007, 253). A singular speech cannot completely capture the range of official policy statements within a party, necessitating the use of multiple texts and speeches.

The following sections provide a policy frame for the Conservatives’ rollout of new funding packages under Levelling Up, before looking at an evolving narrative of local long-term investment for the purposes of community regeneration. A policy frame centred on economic efficiency helps situate a new round of spending from a Conservative government within a paradigm of fiscal responsibility established by a decade of austerity measures. Then, a policy narrative emphasizing funding as a source of stable investment allows Conservative MPs to counter claims of regional inequality related to economic downturn and a crisis of public services, with a storyline of possible prosperity emerging out of the careful and considered decisions from local government, working with the greatest knowledge of the best regional solutions.

‘Taking control of their destiny and stimulating their own growth’: the English local authority as a patient investor

Boris Johnson formally introduced Levelling Up into policy in a speech delivered on 15 July 2021 (Hambleton 2021), having originally included the project in the party’s 2019 election manifesto. Touted as a ‘mission’ that is ‘part economic, part social, part moral’ (Levelling Up White Paper 2022, x), the Conservative government elaborated new ethical goals to rectify disparity across the United Kingdom by releasing several pots of funding targeting the improvement of public infrastructure, transportation and digital connectivity, or community centres and highstreets. Most funding is available as a public investment to be made by local authorities, with the goal of drawing industry and enterprise to regions suffering economic decline. The investment is thus meant to stimulate struggling local economies through the private sector, thereby bringing job opportunities, better earning power, and improved quality of life to parts of the country facing poverty and limited life chances. The Levelling Up white paper, released in February 2022, supersedes a devolution white paper that was originally promised for 2021. Levelling Up pledges devolved decision-making powers and long-term funding settlements to every region in England that wants a devolution deal as part of its policy programme, while setting out a centrally-mandated mission to grow private sector productivity, increase opportunities through education and training, and cultivating a ‘sense of community, local pride and belonging’ (White Paper 2022, 206), enabling residents across the country to remain in their local areas with good job and housing prospects, alongside a sense of community cohesion.

Initially, four funding opportunities for infrastructural improvement and community regeneration were set out as part of the Levelling Up initiative (Parliament House of Commons 2022). The Levelling Up Fund, worth £4.8 billion, offers local authorities the opportunity to bid for capital investment for local infrastructure development that may promote economic growth and visibly improve the community, especially in areas of need. The £3.6 billion Towns Fund is another chance for councils to make bids as part of ‘Towns Deals,’ geared towards improving regional economic decline, while the Future High Streets Fund, also under the purview of the Towns Fund, receives bids for projects concerned with regenerating high streets and town centres. A third pot of funding was available from the £220 million Community Renewal Fund between November 2021 and December 2022, which supported bids from local authorities seeking to pilot local improvement projects. The fourth fund is the £2.6 billion Shared Prosperity Fund, which supersedes the Community Renewal Fund from 2024 to 2025, to focus broadly on the improvement of communities, supporting people and skills, and local business. Intended to replace financial support from the EU Structural Funds, the Shared Prosperity Fund is to be allocated across the United Kingdom through a funding formula, rather than requiring local authorities to place bids for support.

The goals of the Levelling Up initiative are ambitious. The white paper envisions another Industrial Revolution emerging out of the cultivation of regional economic growth, as a path to prosperity across the country (Levelling Up White Paper 2022). The rhetoric surrounding the policy regime has, however, proved ambiguous, confusing and often contradictory. With plans to ‘end austerity’ (Partington 2022), Levelling Up appears to reverse the fiscal conservativism of funding cuts in favour of the ‘tax-and-spend’ approaches of earlier Labour governments (Newman 2021). But the allocation of funding follows a competitive bidding process, with central government selecting or approving which local authorities may make bids in the first place (Parliament. House of Commons 2022). The funds do not, as a result, replace what was lost to austerity cuts after 2010, with observers noting that Levelling Up packages are insufficient to make up for ‘an effective cut worth £15bn in real terms’ (Partington 2022, n.p.) to local authority funding since 2010.

The next section lays out the policy frames that Conservative and opposition MPs in England employ when making cases for, or against the promise of Levelling Up. The rollout of Levelling Up funding is often contested, in terms of its efficiency, adequacy for addressing problems, and whether allocation follows a fair and impartial process (Hanretty 2021; Newman 2021). The way that Conservative and opposition MPs frame their understanding of problems to be addressed, however, sheds light not only on the solutions they anticipate, but also on the measures by which they will judge the success of Levelling Up initiatives. The Conservatives frame Levelling Up as a question of economic efficiency, in which public investment is made in areas that have the potential to spur private sector growth and job creation, as opposed to a question of government spending and its association with social services and welfare provision. Opposition MPs from the Labour Party, by contrast, highlight the crisis of public services caused by the withdrawal of funding during the austerity era, in order to frame the immediate needs of struggling communities as a problem that will go unaddressed by a policy programme focused on long-term regeneration. The frames are not attributable to particular actors within parliamentary debates, but demonstrate an aggregate of discussion, questions, and challenges on issues related to local authority funding. They help illustrate the reinforcement of a Conservative narrative about economic prosperity as an ethics of long-term investment, planning, and risk-management, rather than funding programmes which drain resources without generating self-sustaining financial and social returns.

Policy frames: a story of economic efficiency, contrasted with a story of a failing public sector

Although the introduction of new funding packages for the purpose of ‘levelling up’ regional inequalities is touted as part of an end to austerity, an emphasis on economic regeneration led by the private sector, and with minimal government intervention, persists in Conservative policy approaches to regional inequality. The government thus frames Levelling Up around economic efficiency: prosperity can be achieved as business and industry expand operations throughout England, by ensuring that areas across the country have suitable local infrastructure, transportation and communication capabilities, as well as amenities that attract and retain a local workforce. A policy frame provides ‘guideposts’ for legislators and policymakers to understand and analyse an otherwise ‘complex reality,’ for the purpose of persuasion and pursuing courses of action (Rein and Schön 1993, 146). The Conservatives under Boris Johnson successfully mobilised support around a ‘geography of discontent’ (McCann and Ortega-Argilés 2021), drawing on the frustration of those in ‘left behind’ places such as deteriorating coastal towns and former industrial heartlands, by outlining to a return to prosperity through job creation. These initiatives, targeting specific localities for financial support based on regional characteristics and perceived need, ‘speaks to some voters’ feelings of having been neglected over many decades and having lost status to other groups in society’ (Jennings, McKay, and Stoker 2021, 306); they appeal, in part, to those from working- and middle-class backgrounds whose livelihoods have been lost or altered through industrial downturn, with the promise of job creation and rejuvenation that is associated with attracting industry and enterprise.

The policy frame, however, avoids any reference to inequality and redistribution between social classes themselves, since it defines the economic difficulties faced by households across the country almost exclusively as a problem of geographical location rather than working conditions, opportunities, and remuneration. Little can be said about the barriers to social mobility within the policy narrative that is being crafted about Levelling Up as a result, since it ultimately falls to individuals, taking advantage of new opportunities that emerge as enterprise expands alongside communication and transportation, to improve their own life chances. The framing of prosperity and regeneration is therefore still highly individualistic, promising the chance for better industry and new job creation which, in the context of strengthened infrastructure and visibly improved town centres and high streets, would cultivate a renewed sense of pride in the community on the part of residents. There is less concern with the interpersonal connections and ties that may be developed, or the ways in which social services could be built into public infrastructure and community organisations to ensure support for local households. As the white paper makes clear, Levelling Up involves no ‘dampening [of] the success of prosperous areas’ through any redistributive efforts, but ‘extend[s] opportunity across the UK’ (Levelling Up White Paper 2022, xiv) through direct intervention in areas selected, in the first instance, by the government itself. In the story told by Conservative legislators and policymakers, economic improvement is necessary for social stability, so that the spread of economic opportunity is closely aligned with narratives of personal prosperity and community cohesion.

The policy frame used by the Labour opposition, in stark contrast, is one of regional crisis directly caused by cuts to services since the implementation of fiscal restraint in 2010. The stories told by Labour MPs during Parliamentary debates centre on the rising rates of deprivation across the United Kingdom, alongside crumbling infrastructure and diminished job prospects, which are linked with the refusal of successive Conservative (-led) governments to adequately fund necessary public infrastructure and basic social provisions. Local authorities are, as a result, in immediate need of emergency support, which will remain unaddressed by the government’s offer of long-term, capital investment. The targeted nature of such investments is also frequently called into question by MPs from economically deprived regions which have not received support from Levelling Up initiatives despite meeting the criteria for intervention; this has led to accusations of ‘pork barrel politics’ in the selection of local authority projects for funding (Hanretty 2021), designed to effect favourable electoral outcomes in marginally-held ‘Red Wall’ regions which might otherwise vote for the Labour Party (Newman 2021).

The opposition has responded to the economic policy frame set out by the government with charges of ambiguity surrounding actual outcomes, since Levelling Up initiatives do not appear to address the deep financial concerns expressed by local authorities about overstretched budgets and insufficient services. The pressing questions about how to cope with household financial emergencies and collapsing community services are not part of the remit of initiatives which insist, first and foremost, on the necessity of a long-term view of local economic regeneration. For opponents of Levelling Up, the policy regime appears as an exercise in sloganeering, reinforced by Boris Johnson’s reliance on vague soundbites in his own flagship speech, in which he insisted that leadership surrounding regional inequality is ‘the ketchup of catch-up.’ Conservative MP Laura Farris inadvertently highlighted the generality of the programme when she claimed that Levelling Up ‘means whatever anyone wants it to mean’ (cited in Hambleton 2021, 373). Framed in this way, Levelling Up is presented as a rhetorical exercise without substance, and unsuitable to tackle economic instability related to stagnant wages, diminished savings, problem debt, and a host of weakened welfare provisions lacking the funding to assist those in need.

Policy narrative: investing in self-sufficiency and a better future

The narrative about economic regeneration posited by government MPs must account for the Conservatives’ longstanding commitment to fiscal discipline and service reduction, whilst simultaneously justifying the rollout of new funding initiatives as inherently different from previous iterations of the welfare state. Framed as an economic intervention on the side of industry and innovation, Conservative MPs take advantage of the rhetoric of personal responsibility and freedom from government oversight that used to accompany justifications for cuts to spending, at the same time as they highlight the necessity of improving conditions for business and expanding opportunities for households. The policy narrative surrounding Levelling Up and its support for local government therefore frequently emphasises the provision of new financial ‘support for local councils,’ but as something that will enable them to take ‘control of their destiny and stimulate their own growth’ (HC Deb 8 February 2022) in a productive capacity, rather than as government money that is to be continuously spent on welfare and social services. As such, funding awarded to successful bidders is treated explicitly as public investment that will stimulate business and industry expansion in places with limited opportunities, as distinct from ongoing spending that will have to be repeated to sustain households in the community, with no obvious economic growth associated with the initiative. The ethics of patient investment return to the fore, as local authorities are tasked with the long-term management of capital investments in infrastructure and community projects intended to draw enterprise and cultivate prosperity. The risks that must be dealt with in the short-term, such as the financial strain of poverty on both councils and households, are unaddressed by the narrative, regarded instead as epiphenomena of struggling economies that can be improved with better job prospects and expanded opportunities.

The core tenets of patient investment therefore feature as tropes in the stories told about recovery and growth, allowing us to understand how central government envisions the place of local government in the economic recovery of disjointed and unevenly developed geographies. As part of the long-term aspirations for sustainable development in otherwise under-resourced regions, the notion of a considered public investment into infrastructure, transportation, and community improvement itself follows a classic narrative structure which is often used to give weight to a policy proposal or regime. As Roe (1994) suggests, beginnings, middles, and ends underwrite, by ‘establishing or certifying,’ and stabilise, by ‘fixing and making steady’ (3) the assumptions that policymakers rely upon when faced with the uncertainty, complexity, and polarisation of any given issue. A narrative differs, as a result, from counterarguments which simply attempt to rebut policy narratives, even when the contrasting points are factually accurate. For Roe, the strength of a narrative lies in its ability to make complex and, at times, disparate events coherent and solvable, regardless of whether its propositions are entirely verifiable. The notion of regional growth informed by the patient investment of councils who are in tune with the needs of their communities relies, by definition, on a story of economic development carried out by a cast of characters drawn from the public and private sectors, as well as within communities themselves.

The Levelling Up white paper makes clear that the United Kingdom does not lack innovation and creative output but suffers in the first instance from geographic disparity ‘aris[ing] from market forces, which cause people, business and money to gravitate to where returns are perceived to be the highest’ (2022, 96). Absent any public policy that cultivates local growth, industry will concentrate in highly developed areas, leading to disparity and degeneration in places ‘left behind’ by industrial expansion, whilst overburdening prosperous regions with the excesses of growth such as rising house prices, increased pollution, or longer commutes (2022, 98). The narrative thus sets a scene of disjointed economic development, which needs only to be evened out through a local growth strategy, to ensure a proper dispersion and enjoyment of resources and profit.

The bulk of the narrative centres on the measures required for promoting local growth, which combines a dedicated long-term policy outlook, coordinated at the level of central government, but incorporating empowered local authorities to make decisions with their communities’ needs in mind. Local growth policies are, in the terms set out by the Levelling Up initiatives, geared towards sustainable development which is expected over decades rather than years (Levelling Up White Paper 2022, 100), making it necessary to account for a range of risks, such as short-term economic gains that do not translate into long-term regeneration, the failure of projects which have received investment, or diversion of industry and enterprise from established local economies as opportunities improve elsewhere (2022, 98). Although Levelling Up is itself centrally mandated, it requires coordinated efforts from local government to make effective use of public investments while securing local sources of funding to make up shortfalls or supplement bids for central government support. The process is often described as one of empowerment, in which local authorities work alongside local stakeholders to navigate the risks of long-term development. This is a stark contrast to engrained ethical perspectives that posit local authorities as primarily providers of services and support to impoverished and struggling households.

The white paper finishes by setting out its proposed targets for the year 2030, when it anticipates that Levelling Up will have been able to ‘boost productivity, pay, jobs, and living standards by growing the private sector.’ It expects an increase in employment and productivity across the country, with each area ‘containing a globally competitive city, and the gap between the top performing and other areas closing’ (2022, 160). Public transport and connectivity are projected to improve in line with services offered in London, in addition to expanded digital connectivity, with the promise of 4G or 5G coverage for most of the country (2022, 183). Perhaps the most idealistic target, highlighting the nature of the policy narrative, is the assurance that local pride of place will have also improved by 2030, as the ‘potential’ of ‘local centres’ is unlocked by updating high streets, housing stock, and helping local business to thrive. Local government and leaders are therefore explicitly tasked with developing and cultivating appropriate levels of expertise in order to support and manage both public and private investment in the area, under the assumption that sufficient investment will, ultimately, resolve disparities and lead to satisfaction among residents (2022, 207). The Levelling Up policy narrative effectively traces the lifecycle of public investment, to be primarily carried out by local government, as a story of sustainable development leading to the regeneration of deprived and insecure communities.

Patient investment and the ethics of financialized welfare in England after austerity

Despite recurrent concerns about a lack of clarity on funding allocation and policy objectives related to the implementation of programmes and initiatives, government MPs repeatedly emphasise a consistent position on the benefits of Levelling Up and localism. When it comes to ensuring regional prosperity across England, the Levelling Up agenda advances a narrative that relies upon the informed sensibilities of local leaders and stakeholders to take responsibilities and risks that will pay out for their communities in the long term, rather than depending on what is frequently described as the limited resources of central government for immediate assistance. The turn towards competitive forms of public investment envisaged by Levelling Up makes clear, in other words, that the funding local authorities received prior to the adoption of austerity measures in 2010 will not be reinstated, even as central government adopts a new set of spending priorities, and that local authorities now have a clearer requirement to help ensure growth and prosperity in their communities. As a result, a growing entrepreneurial ethic towards welfare is being institutionalised through policy narratives at the local level, as local authorities manage centrally mandated expectations surrounding economic regeneration, at the same time as they start to draw on financial capabilities provided by successive devolution attempts.

The expectation that councils will invest in community improvements as part of a long-term outlook meshes neatly with the unexpected consequences of the 2011 Localism Act, in which local authorities moved towards generating their own sources of revenue by establishing wholly owned companies or joint ventures (Morphet and Clifford 2017; 2018). The necessity stemmed, in the first instance, from the need to fund services affected by central government cuts, such as housing assistance, social care, and financial advice. Many local authorities have had to provide social support, including the costly provision of accommodation, on an emergency basis, as a result of insufficient funding for new social housing projects. However, short-term solutions, such as housing people at risk of homelessness in hotel rooms and temporary shelters, are frequently unsustainable, creating a costly overspend for councils that further overstretches budgets (BBC 2016; 2018; Butler 2018) and lead to growing rates of insolvency among councils (Kenyon and Clarke-Ezzidio 2023; Jeraj 2024). There has thus been a turn towards corporatization among local authorities seeking to generate income for long-term infrastructure and service projects needed within their communities, as subsidiaries, joint ventures, and even locally-owned banks are established with the aim of building infrastructure like housing, providing services such as transportation and waste collection, or funding projects for other local authorities and the private sector (Christophers 2019; Ferry 2018; Morphet and Clifford 2018). Embedded within these practices is a sense of patient investment on the part of local authorities (Morphet 2018), in the desire to establish long-term income streams that will allow local authorities to weather the financial risks associated with the instability of central government funding. There are also feelings of ‘stewardship’ associated with investing in necessary services and functions that improve the community, especially when they encompass necessities, such as affordable housing, which are under-addressed by the private sector (Hackett 2017).

These shifts are not exclusively economic in nature, but depend on a shift in priorities at the level of policy, which is elaborated in narrative form and contested by opposition members and local stakeholders through counternarratives emphasizing the uncertainty of proposals and the inefficacy of business-led economic recovery. The story of economic recovery outlined in the Levelling Up agenda is one of long-term fulfillment requiring patient commitment, risk management and supply-side support that comes increasingly from local government itself, as part of a capital investment in communities that helps cultivate prosperous business sectors and improved living conditions. As opposition MPs frequently point out, however, there is still uncertainty surrounding the provision of day-to-day costs associated with supporting households in immediate crisis, which largely relate to losses of £15 billion in welfare spending over 10 years for local authorities across the country (HC Deb 14 July 2021) as a result of austerity cuts. The Levelling Up narrative therefore distinguishes itself from ‘tax and spend’ welfare programmes associated with Labour governments (Newman 2021) by an economic focus emphasising gradual improvement in household fortunes as local economies improve and grow from the increased presence of industry and the innovation of enterprise, with the expectation that local government should be directly involved in the support of industry and enterprise.

The narratives of Levelling Up illustrate a decided institutional shift in the direction of financialized welfare approaches, which had initially been adopted at the local level on a contingent basis, and under pressure from central government funding cuts (Christophers 2019). A transition from traditional models of welfare predicated on social insurance and assistance (Garland 2016) to workfare, insisting on personal financial responsibility (Mounk 2017; Wiedemann 2021) and the attachment of job-seeking or employment requirements to benefits (Peck 2001), has undoubtedly altered the provisions available to households in need, and the interactions they have with local government in order to prove their eligibility for assistance (Davey 2017). As central government priorities indicate, however, welfare provision as it is understood through the narrative of Levelling Up is not purely about removing state support to encourage uptake in employment, but instead imagines ‘that putting in place opportunities to speculate will serve the interests of individual and collective prosperity’ (Davey 2022, n.p., emphasis in original). The point, in other words, is not to reduce or remove government service provision so that people feel incentivised to work, while business and industry are allowed to expand under conditions and regulations that favour private enterprise. Rather, it is about facilitating the growth of the private sector through, in the case of Levelling Up, public investment in infrastructure, transportation or communications capabilities, and city centre amenities. In this case, perceived welfare gains such as better quality of life and cohesive communities are achieved through central government initiatives that encourage local authorities to patiently invest in their communities with the aim of cultivating a successful local economy that can create growth and economic opportunities in a region. Infrastructure and enhanced local areas do not serve an intrinsic public good in this conception but are framed as the means of attracting private sector investment and involvement as an engine of growth and development needed to bring prosperity to otherwise crumbling localities in England. Ryan Davey refers to a ‘speculative principle of redistribution,’ in which social welfare ‘prioritises the redistribution through society of opportunities to borrow and speculate, rather than the redistribution of wealth, income, property or resources in the present’ (2022, n.p.). The upshot, however, is the concurrent redistribution of risks associated with unsuitable or poor investments, alongside pressures of repaying financial obligations which may be needed to finance projects in the short-term as part of a longer-term outlook.

Imagining local authorities as patient investors, in a policy context shaped by fiscal austerity and the economic uncertainty of household and public health crises, brings an entrepreneurial dimension to the purpose of local government that is distinct from the role of public investment that has typically been carried out by central government and councils. Governments have undertaken public investment in projects that might be unattractive to the private sector due to profitability, if the project serves a useful public purpose such as generating economic returns in other sectors, or providing an improvement in everyday life (Toigo and Woods 2006). In the case of Levelling Up, however, a new narrative prompts local authorities to invest in projects and infrastructure with a clear purpose of facilitating private sector growth in communities with otherwise poor productivity and jobs prospects. There is little appetite for investing in redistributive programmes which help mitigate the risks households might face during economic downturn, through the provision of benefits or housing assistance needed to smooth periods of financial uncertainty (cf. Wiedemann 2021). The intervention is instead of the side of business, with the intention of supporting growth and all its associated risks. The ethical activity of distributing goods or services is highly speculative as a result (cf. Davey 2022), aiming at the best and most suitable investments for sustainable growth in communities, with success in the business sector serving as a metric of improvement in quality of life for individuals and households.

Conclusion

The Levelling Up agenda, initially introduced in the Conservative party’s 2019 election manifesto and formally presented by the Conservative government under Prime Minister Boris Johnson in February 2022, has drawn criticism for its ambiguous aims and broad definitions. It represents an important shift in intentions, however, as indicated by the renaming of the former Department for Communities and Local Government as the Department for Levelling Up, Housing, and Communities in September 2021, and the willingness of the Labour party to adopt and pursue its basic tenets if elected in the next general election (Lloyd 2022). The language of the agenda, including its promises and the expectations of those involved in local economic regeneration, is instructive in understanding what kind of shifts are at stake in the imagining of economic regeneration in the UK. It is here that the insights of cultural economy, which takes seriously the stories or narratives that actors tell to make sense of their conjunctures and give meaning in times of uncertainty, can make a significant contribution (Alexander 2011; Roe 1994; Scott 2019). Cultural social science, in Jeffrey Alexander’s estimation, treats culture – the ‘domain of meaning’ – as a structural phenomenon rather than as an epiphenomenon, seeking to understand the internal structure of social action through the analysis of symbols and narratives (2011, 478). In this article, I have applied a narrative policy analysis to debates surrounding the role of local government in ‘levelling up’ the British economy, to parse out the importance of risk-taking, enterprise, and innovation in new stories being told about the regeneration of places and communities. The notion of patient investment as a long-term view taken irrespective of short-term risks, and with an eye to creating socially responsible or impactful returns in the future, serves a useful analytical function in understanding how successive Conservative governments are envisioning the role of councils in the Levelling Up agenda.

The current conjuncture offers an interesting opportunity to evaluate shifting understandings of public investment in cities, towns, and communities, precisely because the Levelling Up agenda sets out a particular ethics of community care, underpinned by a sense of independent industry that improves the lives of residents alongside its own fortunes. In Parliamentary debates and discussions proposed by government MPs, the root cause of economic decline and insecurity across the United Kingdom is narrated as an unequal distribution of opportunities for business and industry to grow and improve regional job markets. Conservative policy proposals do not, as a result, account for the effects of budgetary cuts to services, such as financial advice and support for indebted households, or public infrastructure, like social housing for those at risk of homelessness, when they outline the socioeconomic challenges facing the country’s most deprived localities. Public investment thus plays a decidedly entrepreneurial role in the new policy outlook, with local authorities bidding for public grants as part of a competitive process that requires councils to demonstrate how sustainable, long-term economic growth can be achieved in their communities by investing in infrastructure or transportation and communication projects. Investment at the local level is therefore not meant to revolve around the provision of public goods that improve quality of life by ensuring basic access to goods and services or support through institutions and infrastructure, but rather places public funds in the service of fledgling enterprise and industry, in the hope of stimulating economic growth. Through this policy formulation, local authorities are described in the language of patient investment, seeking long-term payout in the form of economic regeneration and increased life chances for struggling households. As patient investors, however, they are ultimately responsible for managing short-term risks, which frequently include household emergencies resulting from financial insecurity.

The Levelling Up approach to resolving economic inequality emphasizes within policy the growing but unexpected turn towards long-term investment by councils following a decade of devolution under Conservative(-led) governments in England. Seeking new revenue streams to fund services that local authorities are legally mandated to provide, councils have increasingly established their own companies and joint ventures with the aim of investing proceeds in commercial and public infrastructure. This allows them to draw incomes that supplement the reduced funding they have received since austerity measures were implemented in 2010, which can be put towards costly projects like social housing. The rollout of additional funds under the Levelling Up agenda for investment into projects that stimulate enterprise highlights a fundamental shift in local welfare provision, since it picks up on and extends the piecemeal, risk-based approach to community improvement that was adopted by local government in the wake of austerity measures and budget reductions. By evaluating the expectations placed on local authorities by central government and the goals of their investment activities through the lens of patient or long-term investment, it is possible to see how the Levelling Up initiative implements a new understanding of social support and community regeneration in the form of sustained investment in enterprise and economic development.

Although it is unclear what effect the Levelling Up initiatives will have on economic disparity in the long run, they serve as a useful illustration of the contingent transformation of public policy surrounding welfare provision, in such a way that financial risks are distributed throughout multiple levels of government and further to communities and households themselves. The attempt to ‘Level Up’ the country highlights the measures that have been put in place to encourage or even mandate long-term investment as a policy solution to economic inequality, in the absence of sufficient central government funding for social services and support. The point, then, is not the retrenchment of public services, as a way of forcing the un- and under-employed, or economically precarious households into the private sector for work. Rather, it is the active cultivation of an ethics of self-preservation and individualism, as financial risks are individualised rather than socialised, and entire communities encouraged to support the private sector as a conduit to their own growth and flourishing.

Disclosure statement

No potential conflict of interest was reported by the author(s).