Government can achieve levelling up agenda without new cash, perm sec says

Andy Haldane says government can instead “tilt” existing budgets “in the direction of poorer areas”
Andy Haldane. Photo: PA/Alamy

By Tevye Markson

02 Mar 2022

The levelling up agenda can be achieved without injecting lots of new funding, the permanent secretary for the government's flagship plan has claimed.

Germany spent around £1.7tr euros between 1990 and 2014 on levelling up measures, according to Centre For Cities analysis, compared to the UK’s commitment so far of £11bn over the next five years.

Critics have said the levelling up white paper, published in February, contains no new funding and the amount announced so far will be insufficient to achieve the agenda’s goals.

But Andy Haldane, permanent secretary for levelling up in the Cabinet Office, said the government is “already spending quite a lot of money” and can instead use current budgets and “tilt them in the direction of poorer areas”, speaking at an Institute for Government event.

Haldane, who is leaving his role at the end of the month, said: “Public commentary often focuses on the new rather than the news

“People ask what extra money is coming forward in this voluminous tome [the levelling up white paper] that hasn’t already been announced. The truth is government is already spending quite a lot of money, getting on towards £900bn.

“If you take that existing spend and tilt it ever so much in the direction of poorer areas, that could have a dramatically bigger impact quantitatively than any new pot.”

The outgoing permanent secretary said the government could “tilt” its £900bn budget “by a mere 1% and create extra finances for the poorer parts of the UK that are twice the size of the levelling up fund”.

“Take the government procurement budget: £300bn,” he added.

“A small sliver of that gets redirected – which is now possible under the Social Value Act – and you are talking real money.”

Haldane also pointed out that the current funding is only for the next three years as part of the Spending Review 2021 and so more funds will follow.

The head of the levelling up taskforce answered questions on the levelling up white paper in a discussion with IfG director Bronwen Maddox on Tuesday.

Asked whether such a “tilt” could disadvantage London, Haldane said: “There is absolutely no desire to in any sense to disadvantage London. London is itself home to significant pockets of deprivation.”

“This time might be different”

The levelling up white paper set out 12 missions such as improving education, broadband, transport and “pride in place”. Haldane said they are all “ambitious but achievable” but will require action by all of society.

Governments have attempted but struggled to address the disparities between different people in the UK for decades, with Haldane suggesting there has been “70 years of disparities widening”.

But he said he has “quite a degree of faith that this time might be different” due to civil servants’ “enthusiasm” for the agenda, more focus on data, the new emphasis on space and changes to government structures.  

“There is a huge amount of enthusiasm among civil servants for the levelling up project,” he said.

“Because everyone is from somewhere. Most civil servants are not from London. They know what their areas are like and what they might need.”

On the new focus on narrowing spatial economic disparities, he said: “Historically, central government has not necessarily gone about its decisions in a spatially-aware way. Many departments couldn’t tell you what their geographic footprint looks like.

“They haven’t got the data to enable those choices to have been made. They have been operating effectively space-blind.”

Haldane said "rewiring Whitehall machinery" will also make a difference, highlighting a new spatial data unit in the Department for Levelling Up, Housing and Communities and the new weekly levelling up cabinet sub-committee, where ministers make decisions on levelling up.

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