As the government desperately attempted to tempt Labour MPs from the Midlands and the north to vote for Theresa May’s Brexit deal, the Ministry of Housing, Communities & Local Government announced a new ‘stronger towns fund’. This offers a new pot of cash – £1.6bn over seven years.
In the accompanying press notice it was stated: “The government acknowledges not all parts of the country have shared in the growth of the UK economy. This new fund will be targeted at towns to create new jobs, help train local people and boost growth”.
At the time, the initiative was greeted with a chorus of disapproval. MPs (notably some who Ms May must have hoped might vote for her deal) and commentators noted the relatively small amount of money per year. Oddly, London received none of the £1bn to be allocated by a new ‘needs’ formula, while the south east is to receive cash.
Moreover, the government did not name the towns to benefit or how much would be spent there. Local enterprise partnerships, not the most loved of institutions, were to be given a leading role in the use of the resources. Inevitably, it was pointed out that the amounts to be distributed per year were tiny compared to the cuts in local government finding since 2010.
All in all, the exercise proved that the government is far from delivering policy to tackle the challenges laid bare by the disenchantment which produced the 2016 Brexit vote. It is now almost three years since the referendum and there is little evidence that any of the major political parties has started to think through what changes are needed.
Odd pots of cash here and there, be they for ‘stronger towns’ or to fight the decline of high streets, are self-evidently never going to tackle the perceived sense of injustice that led many people to vote for a major change to their country.
At the root of the Brexit vote was a sense that the economy does not work effectively for many people and in many regions. This problem has been 50 or more years in the making and it will take a concerted effort if government is to make any real difference to the life-chances of people who feel resentment at the EU, the UK government and their employment prospects.
It is important to remember how much the UK economy has changed since the 1950s. Millions of manufacturing, production and agricultural jobs have disappeared while a range of new employment has replaced it.
The places where older sectors died out are often different from those where new jobs emerged. There is an academic literature about this: broadly, larger cities with a wide range of cultural and educational assets have seen major growth in highly-paid employment whereas smaller towns and more rural areas have generally benefited from lower-income service jobs.
Successive governments have introduced initiatives to help people move from older kinds of employment to new sectors. But it is evident that these efforts failed to make it possible for many citizens to gain the skills and resources to compete successfully in the labour market of 2019. Indeed, people leaving schools and colleges in China, India and other rapidly-developing countries appear to have an advantage over their equivalents in many parts of Britain, the United States and the rest of Europe. Thus ‘populism’.
The UK government needs an evidence-based strategy to improve the skill level of people who feel they are not being effectively served by today’s economy. Further education, which has been cut significantly since 2010, needs resources and status.
In some areas, there will need to be radical interventions to help people into new kinds of learning institution and to pay them to gain enhanced skills. A more skilled workforce will attract new companies with better-paid jobs. Small pots of money for high streets and stronger towns are only a tiny element in the solution to a far bigger problem.
Tony Travers, director, LSE