Six practical steps for the industry to support the levelling up agenda – article by Nadav Livni in React News

21 March 2022

There’s more that the industry can do to make the most of Michael Gove’s policies

From my discussions with business owners, I sense a large degree of cynicism
towards Michael Gove’s Levelling Up White Paper.

While this response from the private sector is understandable, given the White
Paper’s evident shortcomings which include political propaganda for the PM,
lack of detail on implementation, naïve deadlines, lack of substantial new
Treasury funding and a lukewarm enthusiasm from local governments, I firmly
believe this should be viewed as an opportune moment: the essential elements
of a private-public partnership could be brought together to achieve successful
consequences. In addition, it should not be viewed as a zero-sum allocation of
resources, merely shifting taxpayer money from the south to the north.

My conviction is based on recognising this as a unique opportunity – we are
being presented with the perfect storm. Regional cities already have the
ingredients of Gove’s six “capitals” (physical, human, intangible, financial,
social and institutional), the government needs to do ‘something’ and the
private sector is positioned to serve as a catalyst to action and can step up.

“The real estate industry not only can contribute, but has a major
role to play”

I have observed first-hand the existence of the six identified ingredients in the
regional cities, notably exceptional human capital, world-leading educational
and research institutions, private sector recognition of the benefits of
establishing a regional office presence and a quality of life to attract and retain
staff at lower costs than London.

This, then, “just” needs carefully calibrated government intervention to create
an optimal environment through incentives, investments and powers to local
super-mayors to bring these elements together and create long-term
sustainable growth. It is a big “just”, of course, but clearly with Gove’s White
Paper there is a will and need in government to do it.

I agree with the Financial Times’ esteemed chief economics commentator,
Martin Wolf, that “the way to look at this White Paper is as a call to arms” to
address regional inequality and lack of productivity. I am in no doubt that the
real estate sector can play a positive role, by repurposing properties to their
optimal post-Covid uses and adopting best ESG practices.

What the industry can do

I can think of six practical things that we, as an industry, can do to support the
levelling up agenda:

  • create employment opportunities by giving preference to local contractors,
    technical experts, lawyers, accountants and graduate internships. This has
    the benefit of requiring local contractors to illustrate their corporate ESG
    policies when tendering for business and ensures material transportation
    is kept local which further reduces pollution
  • retrofit existing properties to high ESG criteria, which would have the dual
    benefit of sustainability by minimising carbon emissions from new build
    and creating workplaces offering all the post-Covid flexibility, technology
    enablement, digital connectivity, end-of-journey amenities and landscaping
    to enhance wellness, all of which are required by tenants and their
  • provide charge stations for electric vehicles as a matter of standard
    practice in all suitable commercial properties, which would massively
    contribute to the regional infrastructure required to meet the Government’s
    bold ambition of making the UK a leader in moving to an all-electric fleet
    by 2030
  • focus on recycling materials and creating new methods for this – the UK
    can become a leader in this industry as part of its COP26 agenda and
    create new industries in the regions
  • developers in consultation or in partnership with local municipalities as
    well as universities can look at mixed-use schemes to regenerate an area
    and make it more socially diverse
  • more lenders can follow the recent positive trend of encouraging developers to pursue an ESG agenda by offering lower borrowing costs for schemes which illustrate tangible regional benefits, as illustrated above

Regional cities are already benefitting from government departments moving
out of London as well as the post-Covid re-evaluation by wider society, which,
having experienced lockdowns and working from home, is now rebalancing
towards new hybrid working patterns. These trends massively benefit those
regional hubs that offer high-speed digital connectivity, transportation links and
a high quality of life.

Gove’s White Paper has lofty objectives, but it lays the framework for a once-in-a-generation opportunity to address an ever-widening fracturing of social and economic inequalities originating in the post-Thatcher era. The real estate
industry not only can contribute, but has a major role to play.