I recently shared on Talking Up Scotland findings from the National Audit Office (NAO) on deficiencies in Tory Westminster governments’ capabilities and practices in regional and local economic development. The NAO provided insights that should cause concern about the likely efficacy of Westminster’s Levelling Up interventions in Scotland – my main concern – but indeed its interventions everywhere across the UK.
See: ‘’Levelling up’ – policy imposed in Scotland without competence?’
The same NAO report, issued on 2 February and entitled ‘Supporting local economic growth’, also provides useful context for the policies that are now being delivered by the UK Department for Levelling Up, Housing & Communities (DLUHC). An appreciation of this is important as it speaks to the track record of failure of successive Westminster governments to effect beneficial change in this unequal UK. The NAO’s observations on the nature of the UK state follow.
Less productive and more unequal:
‘.. the UK remains less productive than its main competitors and it shows regional disparities in economic performance that are among the largest in the Organisation for Economic Co-operation and Development. Inequality within the UK’s regions is even greater than it is between them. While the full economic impact of the COVID-19 pandemic remains uncertain, emerging evidence suggests that it has compounded longstanding regional disparities.’
‘Academic research in 2018, which looked at 28 measures of inter-regional inequality across 30 countries, concluded that the UK showed higher levels of inequality between different regions than any other large wealthy country including the United States, France and Germany.’
Longstanding …. but worsening under the Tories:
Labour productivity i.e. ‘how much output is produced per hour worked … (is) a central indicator and driver of an area’s economic performance’. The NAO notes: ‘The UK’s productivity growth has slowed since the financial crisis in 2008 and varies considerably across the UK. Regional inequalities in productivity have persisted over many years. Since 2004, London and the South East have been the only two regions with productivity above the UK average.’
So after more than a decade of Tory rule, Westminster has failed to address fundamental inequalities across the UK. This is despite the Tories in government experimenting with how to support regional and local economic development in England. Cameron’s Coalition government disbanded well-established Regional Development Agencies (RDAs) and created Local Enterprise Partnerships (LEPs). In pursuing the latest wheeze – the so-called Levelling Up initiatives – the DLUHC has now, according to the NAO, ‘curtailed the role for LEPs in allocating local growth funding in England and will undertake all bid assessment activity in-house.’ My earlier TuS post based on this NAO report exposes the Tories’ failures to evaluate what their governments have done and have failed to learn lessons.
Repeated poor practice:
So, as Westminster now by-passes the Scottish Government and Parliament in pursuit of ‘Levelling Up’,the content of the NAO report is hardly reassuring as to the likely efficacy of Tory interference in what is a devolved competence. It exposes a lengthy history of poor practice, poor governance:
- ‘in our (the NAO’s) 2013 report ‘Funding and structures for local economic growth’, we said the Department lacked a clear plan for measuring outcomes and evaluating performance across its entire programme of local economic growth initiatives’
- ‘in 2015, we explained that without a robust evaluation approach for City Deals, government was finding it difficult to know what works best in boosting local growth’
- ‘our 2016 report on Local Enterprise Partnerships (LEPs) outlined the risks to value for money of not thinking through measurement criteria. The Department did consequently take steps to standardise definitions and align metrics with other local growth initiatives’; but
- ‘our 2019 follow-up report on LEPs reported that the Department had no plans to undertake a formal evaluation of the £12 billion Local Growth Fund. We said that the absence of robust evaluation meant that the Department was less able to ensure that lessons were reflected in the design of the UK Shared Prosperity Fund.’
These are damning observations on failures in governance and practice in local and regional economic development by the Tory Party. (Imagine the corporate media and BBC Scotland response if Audit Scotland had drawn such conclusions about an SNP Government and yet this NAO report has, to the best of my knowledge, received zero media coverage.) And this is the political party and government that now intends, without a democratic mandate, to interfere in Scotland!
About national and regional GDP:
The NAO provides evidence on the key metric of labour productivity across the UK. It maps differences using 2019 i.e. pre-pandemic, data (see map from the NAO above).
Scotland’s productivity performance is relatively and arguably, remarkably good on these figures. It certainly is when considered in the overall context of being within a UK ‘system’ – of government and economy – that has led to the establishment and persistence of such high levels of regional inequality. Of course when considering Scotland’s relative performance, a number of contributing factors need to be taken into account including but not limited to:
- the severe limitations that successive Scottish Governments (SG) and Parliaments have had to contend with in terms of fiscal powers
- the SG’s lack of any monetary powers
- the SG’s lack of any immigration powers
- the SG’s severely limited borrowing powers for investment
- the SG’s limited to no influence on: labour market matters, international trade, defence spending, war spending
- the long term economic management of Scotland’s major natural resource – offshore oil & gas – reserved to Westminster governments that have singularly failed to establish the kind of beneficial legacy for Scotland that successive governments in Norway, with responsibility for a comparable natural resource, have obtained
- Scotland’s experience of nearly a decade of Tory-imposed austerity since 2010, the political choice of the party of government we in Scotland did not choose – and enacted by a political party and philosophy we in Scotland have not chosen by majority since the mid 1950s
- the overall scale of expenditure on public services in Scotland to support education, health, social care, justice/policing, local government etc. set both by value and timing to a substantial extent by political choices made by Tory governments in Westminster, as levels of Westminster spending still determine what devolved governments receive through the Barnett Formula
- Scotland’s recent exclusion from the EU and its single market against the wishes and perceived best interests of a majority in Scotland
- longstanding, relatively favourable levels of public investment in London and the South-East.
The above factors do NOT constrain the government of England; they do NOT constrain the economic development of England and its regions. The reasons for England’s economic performance, the reasons for its regional inequalities, are down to successive, relatively unfettered Westminster governments.
Freed from the constraints of a UK state that has for long entrenched and accepted national, regional and local economic inequalities, it’s not hard – and hardly unreasoning – to be confident that what an independent Scotland achieves will be better still.