Is levelling up missing the point? Matt Whittaker, CEO of Pro Bono Economics This article was first posted here in The Times' Red Box on 7 April 2021. Arguably the most notorious debate during the EU referendum didn’t take place at Wembley Arena, with the leader of the Scottish Conservative Party and the future leader of the entire Conservative party at loggerheads. Instead, it occurred in a townhall in Newcastle where, fed up with Europe expert Anand Menon explaining the impact of a Leave vote on GDP, an audience member shot back “that’s your GDP, not ours”. Those five words seemed to encapsulate an uncomfortable number of home truths – about the ever-increasing gap between London and the rest of the UK, about the unequal recovery from the financial crash, and the divide between ‘the elite’ and the people. The heckler hit upon a fundamental economic tenant too: GDP doesn’t mean that much to people, and I don’t just mean the acronym. GDP isn’t what makes life worthwhile. Having a job and a decent, secure, pay packet coming in of course makes a big difference to someone’s satisfaction with life. But beyond a certain – relatively modest – point, money really doesn’t seem to buy very much more happiness. Money matters, but our relationships, our connections with our community, our environment, and our mental and physical health all have equally crucial roles to play in driving personal wellbeing. Why, then, is this government’s biggest programme for improving people’s lives obsessed with GDP? Of the £172 billion that currently falls under the levelling up umbrella, at least £163 billion is to pay for grey infrastructure like roads, railways, housing and broadband. The delivery of a long-promised bypass or a faster WiFi speed might well nudge our Newcastle heckler’s general wellbeing in the right direction. It might even increase job opportunities and eventually help her and her family become more prosperous, play a role in driving down crime and improve health. But alone, it won’t make her that much happier. Social infrastructure might. New analysis from Pro Bono Economics shows that the presence of community assets such as libraries and leisure centres, volunteering and group membership, charities, religion, socialising and leisure time might just be a better predictor of life satisfaction in an area than its GDP or average household income. It’s not a cheat code to happiness in the Red Wall, but it’s closer. Civil society has a role to play here. Closer to communities than most, civil society can help levelling up get nearer to improving lives. To do so, it needs a seat at the table and, of course, the funding behind it. At present, just £8.8 billion of levelling up funding has been allocated to schemes that want to do more than boost GDP and productivity. Social infrastructure and the civil society that drives much of it are likely to receive only a fraction of that pot – perhaps as little as 13% - as that money is stretched over a lengthy shopping list of deliverables. It is available for investment to reduce crime or increase tourism footfall. It can be spent on reducing emissions or increasing land values. A chunk of it, inevitably, will build more bypasses. The government could wait for its turbocharged infrastructure investment to raise productivity in left behind areas, for that to improve wages, for that to improve tax receipts, and for that in turn to be invested by local areas in the social infrastructure they want. But that’s not going to happen in a meaningful way before the next General Election. It has set itself the unenviable but essential task of resolving some of the economic inequality that has existed between London and the rest of the UK for over 100 years. Its policy toolbox has to have more in it than grey infrastructure to achieve that. If the government wants to ensure that levelling up truly makes a difference to people’s lives – not least our heckler in Newcastle – it should take another look at what makes most difference. Setting wellbeing as an objective for levelling up and as a way of measuring whether its working would help ensure that the levelling up agenda truly meets its promise to the people who have missed out. Otherwise, it might just miss the point.