Growth across regions

Status:Final report complete.  

A discussion paper on the Commission's objectives

Executive summary

This discussion paper sets out the Commission's strategic stance on the relationship between economic infrastructure and local economic growth.

It covers two main areas:

  • the Commission’s interpretation of its objective to ‘support sustainable economic growth across all regions of the UK’ and the evidence supporting this
  • the Commission’s framework for considering how infrastructure can help to improve economic outcomes in different areas.

Over the past two centuries, regional inequality in economic outcomes in the UK has been persistent. Differences in productivity across UK regions are large, in absolute terms and when compared internationally. Regional variations in economic outcomes are driven by a range of factors. Infrastructure can play an important role.
The UK government has set itself the ambition of ‘levelling up’ economic outcomes between regions, emphasising the role of infrastructure in regional rebalancing. This is part of a series of government policies on regional rebalancing. While infrastructure is necessary to support growth, it is rarely sufficient to fundamentally alter the economic geography of a country. Infrastructure policy must be combined with other measures such as improving skills and innovation.

The Commission’s interpretation of the objective

The Commission recognises that addressing regional disparities is part of its objective to ‘support sustainable economic growth across all regions of the UK’. It will interpret its objective as being to support faster growth in low productivity regions and balancing this with maintaining the economic performance of high productivity regions.

The Commission has identified the following measures to assess progress against the objective:

  • gross value added (GVA) measures of overall economic activity and labour productivity, and data on median incomes before and after housing costs as relevant indicators of regional economic performance
  • three definitions of regions which capture clusters of cities, towns and other settlements at a large scale to measure progress against the objective, and several alternative definitions to enable the analysis of productivity disparities within and between regions at different spatial scales. This reflects the fact that intra-regional or local growth disparities are often as pronounced as inter-regional ones
  • measures of dispersion, which can help the Commission understand the level of regional and sub regional disparities, and identify which areas may require intervention.

The Commission’s framework for infrastructure and economic outcomes

The Commission has developed a framework that identifies three pathways through which infrastructure investment can help to achieve economic outcomes in different regional areas. These are: addressing constraints to growth; contributing to transformation; and universal provision.
Meeting the objective will require a balanced portfolio of interventions across the three pathways. The most appropriate pathways and type of infrastructure measures will vary according to the characteristics and strategic needs of different places. This aligns with the recommendations of the Commission’s Cities Programme, which identifies the importance of local decision making in capturing and acting upon local preferences and needs, thereby building consensus toward local infrastructure strategies.
This framework, alongside the interpretation of the objective, will shape the Commission’s approach to current and future work, most notably the Rail Needs Assessment for the Midlands and the North and policy recommendations in the second National Infrastructure Assessment.

Future work

The Commission will also develop discussion papers on the remaining aspects of its objectives including quality of life and sustainability. This will complete the series of discussion papers on the Commission’s objectives.

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Portrait of Professor Sir Tim Besley CBE

Better defining ‘levelling up’ is a crucial step to achieving it

Some form of regional inequality has been a persistent feature of the UK.  Not only are there profound differences between regions (i.e. North and South), there are also inequalities within regions. Pockets of low productivity and heightened levels of deprivation exist in both successful and unsuccessful places.  But these are not set in stone; changing...

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