Divide and rule

As England’s regional development agencies close their doors for the last time, is it time to shift our focus away from regional inequalities and the north/south divide and towards an equitable vision for all places in the UK? Clare Goff reports

When the regional development agencies opened their doors in 1998, England was a polarised country. GDP levels in London and in the southeast were the highest in the country – at £16,200 per head and £14,500 per head – while in the north-east of England GDP stood at £9,800 per head (ONS). The gap between unemployment rates in the north and south in 1999 was over 3.5%.

A key aim of the RDAs was to reduce such gaps, to help the north, still suffering from the decline of its industrial base, to catch up. But, as RDAs close their doors for the final time at the end of this month, England is as polarised than ever. While progress in reducing the gap was seen in the early years of the noughties, regional disparities mean that areas in the north have been disproportionately impacted during the recession.

Latest figures from the Northern Economic Summary, produced by IPPR North, show that the unemployment gap between the north of England and the southeast has risen above 3.5% and is now at its highest level since the Labour Force Survey began reporting in 1992.

RDAs can claim to have at least reduced the differences between the English regions themselves. Excluding London, whose financial services industry warps the differences between the richest and poorest regions, the difference between the English region with the highest GVA per head and the lowest has fallen slightly since 2000. But for all the billions spent by the RDA and similar spatially-focused programmes, the gap between the prosperous south and the struggling north remains.

RDAs are not being directly replaced but their role will be fulfilled to some extent by local enterprise partnerships (LEPs), responsible for much smaller geographies than the RDAs. Will the localist approach succeed in tackling inequality where a regionalist one failed?

INEQUALITY IN EVERY CORNER
A new report by the Centre for Local Economic Strategies (CLES), Is it time to challenge the north-south divide debate?, argues that inequality knows no compass points. While north/south divisions exist, of more importance is the growing inequality and divisions between the haves and the have-nots, the divisions between the 1% and the 99% highlighted by the Occupy movement.

It argues that focusing on the north/south divide misses high levels of unemployment in the midlands and in London as well as localised inequalities.

Indeed, some of the most worrying divides are within the north itself, where analyses of Manchester and Sheffield show stark differences within the cities themselves. Recent work by IPPR North shows the extent to which northern city-regions are becoming more spatially polarised in terms of household income.

There is evidence that the focus on the problem of the north has actually reinforced regional inequalities; for 80 years the focus on the north/south divide has barely shifted the problem because, the report says, the problem is not actually the north but the centralist nature of the UK. All of the billions spent by the RDAs were unable to shift inequalities not because the north has a problem but because the UK’s centralised economic model would only allow it to improve its economic destiny so far.

Rather than continuing along the same groove that has failed in the past we should be arguing for a deeper and more fundamental shift that works to break the UK’s economic centralism and economic development orthodoxies. Thus we should be arguing for less power for the City of London, less economic centralism and a greater emphasis on economic and social localism that looks more closely at local relationships between work, welfare the economy and the state.

• Read the full article in the latest edition of New Start, including interviews with Patrick McVeigh of Shared Intellegience, Paul Hackett of the Smith Institute, Paul Salveson of the Hannah Mitchell Foundation and Neil Darwin of Regional Cities East.
• Is it time to challenge the north-south divide debate?