Why we need to engage philanthropists in the Levelling-Up agenda

In this article, James Macdonald reflects on the Levelling-Up white paper, how the flagship project will be financed, and the vital role philanthropists can play in helping to support left-behind communities.

On Wednesday, the Government unveiled its long-awaiting Levelling-Up white paper. Michael Gove – Secretary of State for Levelling-Up, Housing and Communities – introduced the paper in the House of Commons with a reality-check:

“While talent is spread equally across the United Kingdom, opportunity is not.”

Among the paper’s flagship policies are:

• Devolution – that every town or city which wants devolved powers can have them;
• Research & Development – a 40% increase in public funding for R&D outside the South East;
• Transport – the development of local transport networks resembling those in London.

“This is not about slowing down London and the South East,” claimed the Minister, “it’s about rocket-boosting every part of the UK.” He even went on to say that a more productive North would alleviate commercial pressure on the South.

For her part, Lisa Nandy – Gove’s shadow on the opposition bench – took him to task on the last 12 years of Tory rule.

She suggested that many of the issues Levelling-Up claims to address were actually caused under successive Conservative governments.

Nandy also lambasted what she saw as a homogenous approach to development: “Not every part of this country wants to be the same; we have our own identities.”

But despite political posturing on both sides, one question seemed to remain unanswered: How will it all be funded?

READ: Levelling-Up white paper

No new money?

Levelling-Up is not short of ambitious ideas. But ideas cost money, and the paper’s commitments run into the billions.

However, on release day it was reported by the Treasury that no new money would be put towards delivering the paper’s commitments. Providing clarity, Gove implored us to remember the new Levelling-Up funds allocated at the recent Spending Review ¹.

His response has done little to convince economists, who argue that “without more funding to make it achievable, the 12-point mission statement outlined in the White Paper is little more than a vision.” ²

Broadening the search.

If the Spending Review allocation is insufficient to convince financial experts, where else will we find the money to Level-Up?

Well, the upcoming increase in National Insurance is set to raise an extra £12b per annum. A good start. However, this money has already been ringfenced to alleviate pressure on the NHS, in the first instance ³. We can therefore rule-out this windfall.

Beyond this, Gove’s speech implied that new money would be generated from the delivery of the project itself:

“If underperforming places were levelled-up towards the UK average, unlocking their potential, it could boost aggregate UK GDP by tens of billions of pounds each year.”

The idea of cyclical and self-generating investment is exciting. But, of course, this will only appear once the project is underway. What we need is money now.

Philanthropy – the untapped pot.

The Levelling-Up paper is 332 pages in length. For all its talk of ‘unlocking’ new opportunities (40 mentions), it makes just one passing reference to the role of philanthropy.

^{Image: Levelling-Up the United Kingdom, page 24.}

At Beacon, our research demonstrates that successfully engaging philanthropists can unlock an extra £2.5b per year in civil society funding. You don’t have to look far to see philanthropists already committing their time and resources to improve left-behind places:

^{Our Common Good: John Nickson and Paul Donovan created Our Common Good to reignite Britain’s philanthropic tradition. Its aim is to leverage the money, networks and knowledge of wealthy individuals to catalyse social change in some of the country’s most excluded communities. Pilot schemes are currently working to drive community development in Oxfordshire’s poorest areas, supporting them to become self-sufficient and to prosper. Following a successful start, the duo plans to duplicate this model in other left-behind areas throughout the country.}

^{Law Family Commission on Civil Society: Andrew Law set up the Law Family Commission – run by Pro Bono Economics – over a decade ago. Funded philanthropically, it exists to research the development of a strong civil society in the UK, providing policy recommendations to achieve this. Last year, its research found that only 1 in 10 people wanted Levelling-Up to be shaped by the central Government – something which informed the Levelling-Up agenda. Throughout 2022, the Commission’s work will in-part consider how philanthropists can help to boost civil society in left-behind areas.}

Currently, it is only a handful of trailblazing philanthropists like these who are using their private resources to rejuvenate communities. And they’re doing it of their own accord – not in response to a ‘call to action.’

As charities who successfully fundraise from major donors will attest, support from these individuals has a multiplying effect. Philanthropic money can play a complementary role in community development.

Private donations are not accountable to the public purse, meaning charities and community organisations can use them for innovation, not just service provision. Innovation which can unlock greater efficiency and effectiveness.

Additionally, we should remember the skills, resources and networks of wealthy givers – many of whom are industry leaders in business and commerce. Beacon is currently at the initial stages of a ‘diaspora project’ encouraging individuals like this to contribute their money, time and skills back to their hometowns in pursuit of community development.

The early signs from our pilot in Stoke-on-Trent are incredibly encouraging. Imagine the extra resources a concept like this could bring to Levelling-Up if promoted by the Government around the country.

To borrow Gove’s phrase, philanthropists can help to “rocket-boost” the Levelling-Up agenda. But at the moment, they’re not being engaged. If we want to see a trend of wealthy individuals using their money to support left-behind neighbourhoods, the message needs to come from the top.

The Government needs to communicate to wealthy individuals the pivotal role their money can play in levelling-up the country. If we leave wealthy, socially-conscious individuals unengaged, we might leave billions of pounds sitting in bank accounts, rather than being used for public good.