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Let’s level with everyone: How do we identify regional inequalities in the UK?

There have been various policy initiatives announced by the UK Government in recent months to try to further their ambition to “Level Up” the country.

These recognise that there are huge regional inequalities across the UK, which have only been increasing over the last couple of decades. To a certain extent, the UK Government is also looking to
fill a gap left by the absence of EU funding to further similar aims in the past.

We discuss the Levelling Up Fund in this paper, focussing on how different areas have been categorised through the Levelling Up prioritisation index. We also discuss the areas flagged for priority funding through the Community Renewal Fund, and compare and contrast the methodology used for both funds.

Our main findings are:

  • Whilst using a range of indicators to assist with allocation of funding is to be welcomed, this
    exercise demonstrates the difficulty of using a set of indicators to capture the different types
    of need in different areas;
  • The Levelling Up Fund methodology is not sufficiently transparent – much more must be
    done in future to ensure that appropriate detail is provided;
  • The Levelling Up Fund methodology is not capturing need for transport connectivity in
    rural areas in Scotland and Wales, due to the inconsistent nature of the indices in different
    nations;
  • Given the level of funding at stake and the need for transparency, it is critical that there is
    a more open consultation on the allocation of the forthcoming UK Shared Prosperity Fund,
    including a discussion of current data gaps and limitations to identify the people and areas
    most in need; and
  • Policy makers should pay special attention to areas most impacted by the COVID-19
    restrictions, while regional data fails to reflect these disproportionate impacts.

Authors

Mairi is the Director of the Fraser of Allander Institute. Previously, she was the Deputy Chief Executive of the Scottish Fiscal Commission and the Head of National Accounts at the Scottish Government and has over a decade of experience working in different areas of statistics and analysis.

Anton is a Research Assistant at the Fraser of Allander Institute. He is also studying for an M.Sc. in Economics from the University of Edinburgh. His research interests cover environmental and political economics, as well as computational macroeconomics.

James is part of the knowledge exchange team, which involves connecting academia to business, government, and the public. He has a Masters in Applied Economics, a degree in Mathematics, Statistics & Economics and is experienced in working on a wide range of projects for public and private sector clients.

Ben is part of the Knowledge Exchange team within the Institute and has experience working on a wide variety of projects for public and private sector organisations. He has a degree in Economics and is currently studying for an MSc on the Scottish Graduate Programme in Economics.