This is the newsletter from the Levelling Up Taskforce. If it’s been forwarded on to you, you can subscribe using the link below.
The big news this week is of course the Budget and Spending Review. Here are the key developments for levelling up:
- £6.9 billion will be dedicated to improving local transport links, focusing on regional towns and cities. Onward and the Levelling Up Parliamentary Taskforce called for greater regional transport funding in our recent report Network Effects, where we exposed the yawning transport gap between different parts of the country.
- £11.5 billion in the Affordable Homes Programme – the largest cash investment in a decade, with 65% of funding for delivery outside London.
- Over £1.6 billion for the British Business Bank’s (BBB) regional funds, which provide debt and equity finance to SMEs. This will expand these funds into the North East and South West of England and set up new regional funds in Scotland (£150 million) and Wales (£130 million), and to build on existing programmes in Northern Ireland (£70 million). Plus £150 million additional commitment for the Regional Angels programme, which reduces imbalances in access to early-stage equity finance across the UK.
- £2.8 billion in capital investment in skills. This funding will include: improvements to the condition of post-16 estate; new places in post-16 education; more specialist equipment and facilities for T Levels; and delivery of the commitment to 20 Institutes of Technology across England. It will also help to provide the skills that local areas need in key sectors like biosciences, through industry-standard equipment and facilities.
- Extending the £1 million Annual Investment Allowance to March 2023. This will encourage businesses to bring forward investment, and benefit firms across the country, especially our manufacturers and SMEs.
GRAPH OF THE WEEK
DATA AND RESEARCH
What congestion costs us
- Looking at German cities, a new model quantifies the cost of rush hours. Seidel and Wickerath estimate that reducing traffic congestion by 50% increases of average labour productivity by 0.8%, boosts employment by 3.7 percentage points, and leads to more urbanization.
- This recent paper from Russo et al estimates the costs of congestion in Rome. The marginal cost in terms of lost time is equal to 66% of the average journey time for drivers, and a financial cost of €0.2 per kilometer, which doubles during peak time.
Driving up inequality
- The benefits of highway access disproportionately accrue to the well-off, and the costs disproportionately hurt low-income earners. A Swiss study shows that building a highway entrance/exit ramp within 10km of a municipality caused a 24% increase in the share of top-income taxpayers living in the area and an 8% decrease in the share of below-median income earners.
The Taskforce is made up of around 65 Conservative MPs from constituencies right across the country.
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