The UK government’s flagship race-to-high policy is likely to fall far short of what is required, economists have warned.
The reprimand comes after Prime Minister Boris Johnson launched his key policy with a speech Thursday, ahead of a detailed policy plan expected in the fall.
So far, the numbers and timeline attached to the effort have been overshadowed by the real funding and long-term vision needed to achieve meaningful results, economists and policy experts have said. The independent.
“It’s a matter of decades and billions, not years and billions,” said Torsten Bell, chief executive of the Resolution Foundation, a think tank. Mr Bell said the example of Germany, which Mr Johnson noted in his speech, highlighted the inadequacies of the UK effort so far.
“Germany has managed to stabilize where we haven’t,” Mr Johnson said.
After the fall of the Berlin Wall, Germany, Europe’s largest economy, invested more than two trillion euros in an attempt to make the former Communist East as prosperous as the West of the country. Despite the vast effort, there are still significant regional inequalities in the country.
Every region in the East is lagging behind, even the least productive region in the West, according to the German Ministry of Economy, which does an annual review of the impact of unification. In 2018, unemployment was still more than two percentage points higher in East Germany, at 6.9%, than in the West, at 4.8%.
Britain’s upgrade effort also risks falling prey to a political rather than an economic approach, experts have warned. Giving local councils in marginal constituencies the ability to bid for a few million pounds each, such as the government’s Freeports program and Town Deals, would have little or no significant impact on improving productivity in poorer areas, have they declared.
“You have to look at where this government was elected: the gains in the Midlands and the north were outside the main cities,” said Andrew Carter, chief executive of the Center for Cities, a think tank. So far, this is where the money has been targeted, in towns rather than towns, he said.
“The politics of this takes you in one direction. Reality takes you to another, to big cities [such as Manchester and Birmingham],” he said.
Instead of infrastructure projects that could only relocate rather than create high value-added jobs, the government would do better to fix the adult education sector, said Ian Mulhern, executive director of UK policy and economist in Britain. chef at the Tony Blair Institute.
He added that the government’s numbers were well below what would be needed for its workforce to be well-suited to the needs of a modern and highly productive economy.
“That doesn’t seem like enough to put a few million back in the pot,” Mulhern said. “It doesn’t even bring us back to where we were 10 years ago. “
Since the 2000s, there have been sharp cuts in adult education spending. According to figures from the Institute for Fiscal Studies’ 2020 annual report on education financing, spending is now almost two-thirds lower in real terms than in 2003-2004 and about 50% lower than in 2009- 10.
Other countries, like Switzerland, which score well on relative economic well-being scores, do so due to extreme decentralization, allowing their cantons significant autonomy, said Matthew Whittaker, chief executive of Pro Bono Economics. This has a profound impact on the relationship between businesses and local communities, Mr. Whittaker said.
“Businesses in Switzerland would see it as their civic duty to invest in local skills. Something we don’t do so much in the UK, ”he said.
A much greater effort to empower decision-making over large sums was needed to enable cities and regions to solve their particular economic problems with tailor-made solutions, said Whittaker. Birmingham has relatively low employment rates, while Manchester has a large relative wealth gap and Bristol residents are excluded from the housing market.
“We all want a new bridge where it helps you cross a river,” Mr. Whittaker said. But taking a cookie-cutter approach with narrow focus by the central government “misses a trick,” he said.
The prime minister said he would avoid a “one-size-fits-all” model, but did not explain how this would be achieved. Instead, he said he wanted others to come up with a local engagement plan for the government to do leveling work, admitting that the central government had “crushed” the local government in the past because “municipal socialist governments were bankrupting cities”.
Ultimately, three things need to change by the fall if the race is to be taken any more seriously, and is more than rhetoric, economists believe.
“The amount of cash, the longevity of the commitment and the flexibility given to local government,” Carter said.
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This notice was published: 2021-07-15 15:01:20