Is levelling up whack-a-mole?

The Government’s flagship policy promises a cornucopia of benefits spilling out over the country and enriching us all. There’s just one problem, writes Keith Harrison-Broninski… it can’t possibly work

John Harris recently wrote in the Guardian that ‘riven by scandal and division, the Tories have all but abandoned levelling up’. Only two months after the new Department for Levelling Up, Housing and Communities published its foundational white paper, this seems a shame. Too preoccupied with world events to read this 330-page document? If so, here is a selection from its cornucopia of delights.

Levelling up will deliver rural broadband across the UK, streamlined transport everywhere, an end to postcode lotteries for education and health, upskilling for adults of all ages, more hospitals and nurses, safer streets and more police officers, lower taxes and higher wages, investment into cities and jobs, revitalised high streets, investment into a cultural renaissance, community ownership of pubs and football clubs, transition to Net Zero, and public sector jobs outside London. To quote from the paper: ‘This contemporary Medici model, our 21st century recipe for a new Industrial Revolution, depends on harnessing an array of interventions and catalysing a range of sectors.’ The private sector will grow. Public services will improve. Communities will be restored. People will have agency over the future of their locality.

But it can’t possibly work. Every time the Government splashes big money, it goes to the same people, those skilled at getting public funds, and too often their main interest is self-interest.

After the American Civil War, many Northerners moved south to profit  from investment in the Reconstruction. From the federal government’s aim of reducing inequality, these carpetbaggers, named for the cheap luggage they arrived with, grew rich. They bought or leased plantations, hiring freed slaves and poor white Southerners as sharecroppers, who gave much of their produce as rent, and with little chance of escaping poverty. Free from agricultural responsibilities, carpetbaggers established banks and retail businesses. By 1890, they controlled 88 per cent of railroad mileage. Many wanted social reform and so they became dominant in Southern politics.

Between 1946 and 1952, Washington invested $2.2 billion in Japan’s reconstruction. This led to a massive increase in inequality. In 1947, the top 10 per cent in Japan had 29.4 per cent of national income; by 1952, 38.3 per cent; today, 44.9 per cent). Between 1990 and 2014,, €2 trillion was spent to integrate East and West Germany. Today, East Germans earn 26 per cent less than West Germans. Now the UK is taking its shot at levelling up. What makes anyone think we’ll hit the target?

Well-meaning attempts at income redistribution make things worse for one reason. Benefits realisation, the process of transforming investment into positive outcomes, is hard. It is not enough to have outputs, such as increases in housing, production, or local stock market size. Outputs must also provide desired changes to the system. Do new houses solve housing problems? Does more steel mean more jobs, and more rewarding work? Who benefits from higher company valuations?

Benefits are mentioned many times in the paper but the only discussion of how they will be delivered is here: ‘Good quality data, monitoring and evaluation are essential to delivering beneficial outcomes for citizens and value for money for taxpayers. For those reasons, high-quality, timely and robust spatial data are a foundational pillar of the new policy regime for levelling up. The Government Statistical Service’s (GSS) Subnational Data Strategy was published in December 2021. It provides a framework for producing and disseminating more timely, granular and harmonised subnational statistics.’

This conflates data capture with benefits management: dangerous for a programme with a budget of £4.8bn. A more accurate description of the work required is given in this 2017 Government guide: ‘Benefits management is the identification, definition, tracking, realisation and optimisation of benefits. Benefits management is undertaken throughout the project lifecycle and into operations/business-as-usual, not just during investment decision-making. The identification of benefits should happen before a project is even initiated, informed by a defined problem, strategy or policy. These benefits are then developed throughout the project lifecycle, and then typically measured during project delivery and after the project has closed.’

Delivering outputs is the easy bit. Harder is understanding the complex feedback loops between inputs, activities, outputs, outcomes, associated system changes, and benefits. So, most government investment programmes succeed only in spending the money, then asking for more, in the  desperate hope of salvaging things. This is Einstein’s definition of insanity. It leads to a frustrating game of whack-a-mole with every new social issue that rears its head.

The problem is that initiatives are defined bottom-up, identifying all the components of a social issue and setting out to address them individually. It’s impossible to join up the dots later. On a national scale, it is very hard indeed to apply System dynamics. There are too many causal loops, and all interwoven. The resulting stocks and flows are bewildering and mind-bendingly difficult to configure for quantitative analysis. The answer? A top-down approach, visualising the different parts of the system can be made to interact effectively and efficiently.

It means that, before throwing money around, you impose a simple route that makes it possible to realise benefits. My book Supercommunities draws on modern socio-economic ideas to create a model for grassroots community empowerment, transitioning  to antifragility using the following circular model: using capitals to create and maintain assets; using those increased assets to improve the wellness of community members; using that increased wellness to improve capitals and assets; and improving the use of the capitals by the assets.

The modern age began when seafaring Europeans started exploring the globe in the 15^th century. The key wasn’t investment in the maps or the ships. It was magnetic compasses that let sailors know they were on course and sails that let them tack against the wind, and stay on track even if the weather was against them. It’s a working model for benefits realisation and anti-fragility.

If we want to level up, then don’t just spend money on levelling up – use that money to build Supercommunities.

Keith Harrison-Broninski FRSA is an author, speaker, and consultant specialising in collaboration across organisational boundaries as well as social technology for wellness, community, and finance. He welcomes contact from FRSAs, via either the RSA website or harrison-broninski.com