A cross-party group of council leaders has welcomed the Levelling Up white paper’s focus on tackling the deep inequalities that scar the UK. But the paper does not go far enough in addressing London’s stark inequality and deprivation, and risks ignoring the role that London can play supporting the country’s long-term economic recovery.
London is ready to step up and support levelling up across the UK. On the eve of the pandemic, the capital generated a surplus of £36bn for the Treasury, helping to fund investment in public services and infrastructure across the UK. London’s economy is inextricably linked to regional economies across the country: every £1 of consumption in the capital generates 24p of production elsewhere in the UK.
But London continues to face significant headwinds post-pandemic and needs support to bounce back. London has seen some of the highest levels of unemployment in the country and faced the steepest economic shocks during lockdown.
All this has only exacerbated the significant level of poverty in the capital. Recent research commissioned by CLF found that:
Once housing costs are included, 39% of central Londoners live in poverty, compared to an England average of 28%.
Over half (58%) of people in poverty in the capital are in a working household.
More than 300,000 employee jobs in central London boroughs are paid below the Living Wage Foundation Living Wage.
Empowering local communities through greater devolution of powers away from Whitehall is welcome. It is right that all areas of the country should have access to the same level of powers, and that this should be decided through a clear devolution framework. But devolution in London is not a done-deal, and London still lacks vital powers needed to enable us to invest in our places and people. The government should work with the Mayor and London boroughs to explore further devolution in the capital to help drive the recovery and narrow inequalities within the capital
Government must also ensure that funding is allocated fairly and transparently and reflects need. Meaningful devolution should mean funding and control being passed directly to local areas, with allocations being set centrally based on a transparent process.
