Levelling up: a small step in the right direction, but not a giant leap

We were first introduced to the concept of levelling up in the Conservative Party manifesto for the 2019 General Election. The party promised to “use…. investment prudently and strategically to level up every part of the United Kingdom, while strengthening the ties that bind it together". Following that, plans were unveiled this month by Michael Gove, Secretary of State for Levelling Up, Housing and Communities. The strategy will take until 2030 and according to Mr. Gove, it will “shift both money and power into the hands of working people”.

The scheme as laid out in the White Paper does not provide new funding, instead concentrating on how existing money is spent, with a view to ensuring it is used more effectively. An important part of that is to allow for more regional mayors, such as Andy Burnham here in Greater Manchester, with the idea being that they will be in a better position to know where to target spending. Any part of the country that wants to go down this road will be able to do so by 2030.

So, what might this mean for construction? Housing is one of the 12 areas – known as ‘missions’ – identified by the government for levelling up. There are a number of interrelated aims:

·         to improve the quality of rented homes by 50%

·         a secure path to ownership via increasing the number of first-time buyers, with the input of £1.5bn Levelling Up Home Building Fund

·         to build more affordable social housing, including a Social Housing Regulation Bill

More generally, as part of the overarching aim of regeneration deprived parts of the country, 20 town and city centres will be redeveloped. This will be led by Homes England, a non-departmental public body, with Sheffield and Wolverhampton the first two cities chosen. The template for regeneration is seen as King’s Cross in London, which has changed dramatically since redevelopment began in 2008. Also on the table is a ‘80/20 rule’, which means that 80% of the total of government funding for housing is to be directed at areas where it will be most affordable, which means that £1.8m of Brownfield funding will go to the North and Midlands, instead of London and the South East.

Balance scale. Photo: winnifredxoxo/flickr/licensed under CC2.0

Stephen Beechy, group public sector director of Wates Group, has suggested that net zero needs to come into the mix:

 “The government should also take this opportunity to align their commitment to Levelling Up with the drive to reach net zero. By prioritising net zero as a focal point of the Levelling Up agenda, the government can help create new jobs, skills and industries throughout the whole of the country – particularly in the areas the Government has set out to support.”

It will be interesting to see how this sits with the Green Building Revolution and the Future Buildings Standard, both of which were under discussion this time last year. The latter is a consultation on changes to Part L, which regulates heating, lighting and hot water energy use in buildings and Part F, which regulates ventilation, of the Building Regulations for non-domestic buildings and dwellings. The former announced that new homes will be expected to produce 75-80% lower carbon emissions than the average home does. Clearly, levelling up has to go hand in hand with a continued emphasis on meeting carbon commitments. A significant part of that would be retrofitting existing buildings, which will still be producing the majority of emissions by 2050, the date which the government has set to meet its net zero commitments. Moreover, given the huge increase in energy prices, this need is only going to grow.

The £1.5bn Home Building Fund will provide monies for SME developers in the priority regions. However, John Baker, co-founder and chief development officer of housebuilder Modomo, thinks the government is underestimating the required level of commitment:

“Distributing the investment required for redevelopment thinly, while expecting cash-strapped councils to provide further leadership in planning, neglects that King’s Cross benefitted from £3bn — multiples higher than the entirety of the Levelling Up Fund — and three decades of government commitment to see it over the line.”

It’s obvious from such comments that there is some scepticism out there. Furthermore, in terms of the transport aspect of levelling up, the White Paper comes in the wake of repeated delays to HS2, the high-speed railway line.

There has also been criticism of the lack of detail in the paper. Mark Sitch, senior partner at planning and design consultancy Barton Willmore, said

“Now is the time for genuinely collaborative spatial planning and wider regional strategies. The 12 new ‘missions’ may go some way towards this, but there needs to be more emphasis on joining things up within and between regions. We must look at investment in terms of people, homes, jobs and infrastructure all being connected to deliver the maximum potential benefits to communities.”

This brings up the question of infrastructure and the extent to which the UK is set up to optimise the new levelling up agenda. Of course, to a large degree, it will be down to mayors and others to develop infrastructure planning to the requisite level; having said that, it will be an easier task if longer-term devolved funding comes about. To that extent, it may well be that getting the governing structures in place – which can then fight for more funding – will be the catalyst for levelling up to work, rather than the other way around. Part of a new successful infrastructure would be creating a process whereby smaller builders could more easily compete against larger construction companies, which would make the most of local resources and boost business.

The Chartered Institute of Building (CIOB) has also highlighted issues with infrastructure, suggesting that the way forward is via clustering:

“Clustering could prove a critical tool in fostering closer cooperation across the construction supply chain and opportunities for knowledge sharing are essential to meet the challenges ahead. Clustering of businesses is seen as positive for innovation, productivity and raising the potential for international trade.”

We’ve recently looked at how successful clustering can be in providing centres for sustainable innovation. It’s clear that it’s key in fostering sustainable growth. The CIOB, along with other environmental bodies, has also called for a commitment to further retrofitting in the form of a National Retrofit Strategy. It’s been published as a costed model by the Construction Leadership Council. While retrofitting is mentioned in the levelling up White Paper, it is not in any way central to the plan. Let’s hope that the industry can continue to lobby to change that.

In the meantime, the levelling up agenda does present a step in the right direction, but if we are going to see sustainable growth spread out more equitably throughout the country, there is much work to do. Investment by the construction sector in low-carbon technologies and skills requires sustained government policy in the right direction: to foster confidence, and to embed social value in the supply chain. That is what is needed to accelerate change.