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With no apparent irony, Prime Minister Rishi Sunak recently announced he was cancelling HS2 – one of the UK’s largest long-term infrastructure projects – under the 2023 Conservative party conference strapline, “Long-term decisions for a brighter future”. He did so after a week of repeatedly saying he would not be pushed into “a premature decision”. This, despite the fact that the decision was about the future of a project the government set in motion back in 2009 – 14 years ago.
This sequence of events illustrates a fundamental problem with the way politics and policy are done in the UK. The British political system is infused with political incentives that drive short-termism. It places extensive powers in the hands of the Westminster government, but with limited checks and balances. Short-term, often electorally-driven, priorities regularly trump longer-term policy targets, in a deeply corrosive way.
As Labour now sets out its priorities ahead of the 2024 general election, a key challenge confronting the opposition is whether it can prove it can do things differently. Shadow secretary of state for levelling up, housing and communities Angela Rayner has opened the 2023 Labour party conference with a speech claiming the party will end “short-term sticking plaster solutions” through a “mission-driven” approach to the economy.
A sizeable brief
Rayner’s speech made clear that Labour’s new approach to levelling up will no longer be like the “top down” projects of the past. She laid out how the party would grant new powers for mayors and embrace a model that creates more opportunities for local people to, as she put it, “control their futures”. Renewed economic growth, to her mind, will power resurgent public services, housing, pay and prospects.
Rayner’s brief is one of the most sizeable in the shadow cabinet. It is also, quite possibly, the policy area most acutely affected by short-termism, having previously been associated with spending for winning votes rather than delivering what is needed.
If Labour wins, Rayner will inherit a department responsible for housing, planning, local government, English devolution, levelling up and intergovernmental relations. To all that, she will add her campaign on work and employment rights.
This is not just a huge policy remit, it contains some very tricky political ground. This includes addressing the north-south divide, dealing with the devolved nations, overseeing controversial policies on housing and employment and responding to the red-wall grievances – a feeling across many communities that the economy does not work for them.
Rayner’s in-tray is dominated by what social scientists call “spatial policy”. This refers to attempts by the government to address geographic inequalities, usually by revitalising deprived places. As an agenda, levelling up has basically become a new way of saying “spatial policy”.
Spatial policy needs long-term thinking
Our research has identified and analysed every spatial policy since 1979. We have found that by far the biggest problem is that the shelf-life of multiple initiatives has been far too short.
Since 2010 alone, there has been former prime minister David Cameron’s localism agenda, former chancellor George Osborne’s Northern Powerhouse, former prime minister Theresa May’s industrial strategy, and former prime minister Boris Johnson’s levelling up agenda.
Spatial policies have almost all been short-term agendas. Many have been delivered by a government reacting to the latest political incentives, not learning from past failings.
A pattern emerges across different governments, where politicians merely tinker with an overly-complex and fragmented system. This in turn drives further short-termism. Our analysis shows, over the last 40 years, the speed at which new initiatives have been created and abolished has continued to accelerate.
Labour acknowledges that a short-term, centrally driven model of spatial policy has failed, but so have many successive governments. Rayner needs to avoid repeating the mistakes of the past and deliver on her promise to “hand power back to the people”.
She must follow through on Labour’s claim that local communities know what’s best for their area. This means finishing the devolution map quickly, so that all areas have a directly elected leader.
More importantly, it means central government needs to recognise the legitimacy of local leaders and engaging constructively with them – even when they disagree. Within Whitehall, Rayner must be the champion of local communities. She will need to push against a longstanding culture of distrust of local government.
Crucially, she cannot do this alone. Challenging short-termism and empowering devolved institutions will require the backing of shadow chancellor Rachel Reeves, who must ensure that the Treasury supports the long-term “missions”. A Reeves Treasury will need to guard against imposing the kind of central financial controls that have scuppered past attempts at levelling up.
Labour is considering creating watchdogs to stop government avoiding its long-term commitments. It remains to be seen how this will function alongside Reeves’ promise of “iron discipline” at the Treasury. What is clear is that, to end short-termism, Keir Starmer’s party needs to come good on its promise to empower local leaders and finally let go of the centralised levers that have caused so much instability.
Jack Newman receives funding from the ESRC Productivity Institute 'The UK Productivity-Governance Puzzle: Are UK’s Governing Institutions Fit for Purpose in the 21st Century?' ES/V002740/1.
Dave Richards receives funding from:
Nuffield Foundation 'Public Expenditure, Planning and Control in Complex Times' OSP/43109 ESRC Productivity Institute 'The UK Productivity-Governance Puzzle: Are UK’s Governing Institutions Fit for Purpose in the 21st Century?' ES/V002740/1
Sam Warner receives funding from: Nuffield Foundation 'Public Expenditure, Planning and Control in Complex Times' OSP/43109 ESRC; Productivity Institute 'The UK Productivity-Governance Puzzle: Are UK’s Governing Institutions Fit for Purpose in the 21st Century?' ES/V002740/1
