Sharon White is the current Chair of the John Lewis Partnership. She was the Chief Executive of the British media regulator Ofcom from March 2015 to November 2019, and was Second Permanent Secretary at HM Treasury from 2013 to 2015.
This interview was conducted on 7 August 2023.
Q: Could you tell us about your roles with respect to growth in the UK’s regions over the past few decades?
I worked in various guises, inside and outside the Treasury, on public finances but with a particular focus on social security and on improving the functioning of the labour market. Within that, schemes and programmes trying to support people who are furthest away from the labour market to get jobs, keep jobs and progress their skills.
Q: What stands out to you over that period as the biggest achievement in helping drive regionally balanced growth across the UK, and what stands out as the biggest frustration?
The focus through most of my time in government was around different groups or cohorts of people who, for various reasons, were disadvantaged in terms of the labour market. You might be a Bangladeshi family in inner-city London for whom English was not your first language, or it might not be spoken at all in the family. You might be from another ethnic minority group or somebody who had a broken family life and broken education.
I would say for my work, there was very little focus on what I would call directed regional programmes. For example, a lot of the work on trying to encourage people who were had a disability and were claiming incapacity benefit. That’s a national programme, but obviously e more focused on those from former industrial parts of the country. What was most successful – there was a broad consensus between parties that labour market interventions were a good thing for the economy. A good thing for growth, a good thing for the individuals concerned. If I look at transitions between Conservative Chancellor Ken Clarke and Labour Chancellor Gordon Brown, there was a lot of consensus at the heart of those plans and ambitions. I think, in the long run, that was a good thing for the country and a good thing for those communities.
Q: Where do you think policy hasn’t been so successful over the past few decades?
It is one of the features of being in the Treasury, where you have had good intent but probably have been less focused on implementation, particularly ease of implementation for the business. Under Ken Clarke I worked on a very elaborately designed subsidy scheme involving reducing national insurance, but in quite a complicated way for business. The design of it was complicated and like many budget proposals was done with very little consultation, either with business or the department concerned. Unsurprisingly the impact of it was much more limited. I think where things haven’t worked, it has often been where the intent has been good, but that the policy design has been too distant from how business and other economic actors work.
Q: How did the Treasury think about regional economies?
I do not think we thought about the regional dimension in a very systematic way. Very early on in my career we were very concerned about the loss of jobs from ship building for Barrow International. There would then have been quite a lot of analysis of job loss, local labour market, commuting distances, and alternative jobs. But it was very much where you had a very regionally concentrated shocks rather than looking at particular programmes or particular policies, particular interventions, and then figuring out their regional implications, looking systematically at how different policies affected different groups. I don’t really recall, outside those big shocks that hit a particular city, particular town, particular region, any work that my team or I pulled together that really looked at regions in a very deep or particularly useful way.
Q: Does the introduction of the Regional Development Agencies after 1997 change any of the focus?
Continuity is probably too strong, but I think the principles were very similar post-1997, although it was massively dialed up. The tax credit system was a huge positive after 1997. There was The New Deal was a very developed and very well thought through targeted programmes. These came after training schemes and Restart. But the volume definitely was more significant, the degree of investment was greater.
The Department of Work and Pensions was set up to look and think nationally in terms of data, in terms of structures. Bringing together employment, skills and cash benefits, it basically ran a national programme. There are some relatively small, local developments. There were more conversations with the RDAs and a better structure for having those conversations. I don’t think on design it had an enormous impact. It was more the starting assumption: the very reason for setting up these programmes is that there are parts of the country which are left behind, have been left behind, communities which have been left behind. But the design was then very national.
Q: Why?
I think we have a highly centralised system of government. Those 1997 reforms obviously came before devolution and the structural delegation of some bits of the fiscal policy space and some bits of the tax system. But the UK is good at running national, standardised, centralised programmes. I think it’s partly history, I think it’s also politically being seen to be providing a programme in every constituency, whether in the Severn or in South Yorkshire, or in Newcastle, we’re providing the same even if take-up is different because the need is different.
We’re not the size of the US, we’re not the size of Europe. It’s not part of our policy-making culture and it proved politically difficult to offer different shapes, shades, levels, and standards of programmes to the people who might be setting up a postcode lottery for people who might be living within a few streets away from each other.
Q: Why do you think the programmes that were being delivered in the late 1990s have not helped deliver wider productivity convergence across the regions?
I don’t know whether it’s a surprise that it hasn’t helped convergence. I think the very high centralization not just of policy but of wealth creation and the fact that the economic heart of the UK is still so incredibly London and the South East centric. I guess I would look at the success of the labour market interventions in terms of holding up a tide. But the tide is still very much in favour of London and the South East, and that comes back to the degree to which we are prepared to delegate real decision-making outside London.
It’s great now that we’ve got regional mayors, although with relatively little to no discretion in the fiscal states. But it’s a big ask to place on labour market interventions, which are basically mitigating the failures of the job market, to be a sufficient corrector to the enormous concentration of money and wealth, and power and decision-making in London.
Q: Are there areas of the UK that seem to have been able to more effectively swim against that tide that you mentioned?
The big practical example when I was in government, was obviously Leeds and Manchester. It’s difficult to separate it from the governance question, because I think these things are intimately linked: the way in which you have a very pro-active, focused politicians, regional officials and chief executives of the city councils and the ways in which they forged productive relationships with Westminster. If you look at the contrast during that time with Birmingham, you could see more regeneration and much more focus and coherence with a strategic regional plan.
After 1997 when all the discussions centered around Sure Start, the first place we visited was on the borders of Manchester. They knew that this policy was good, and they were keen to be part of it. If you’re going to look at regional cities and metropolitan areas outside London that have been successful, I would certainly point to Manchester. But I would also say that this is intimately linked with local leadership and forward-looking leadership.
Q: Is London an asset for the whole of the UK and has the distribution of UK spending done enough to equalise opportunities?
When George Osborne was Chancellor, and there was a Conservative mayor in London with Boris Johnson, you could certainly see the importance of a mayor having spending power to improve the particular local infrastructure. Especially with the regeneration coming out of the Olympics, we probably saw more concentration of spending and investment in London. It’s not an area I worked very closely on. But if you also look at the pattern of major transport investments in terms of which part of the country has been opened up: HS2 is the obvious example, where it is debatable whether this is really going to improve the economic well-being of Birmingham, or Leeds, as opposed to making London a more commutable city. The short answer to the question would be I think it has been quite a mixed picture.
Q: Was the concentration of innovation funding in the South East a worry or a strength?
This is quite a thought-provoking conversation because I do not recall, at any stage, either raising or being in a conversation where the concentration of more spending, more investment, and more innovation, within already privileged areas was ever a concern. I remember visiting one of the catalyst programmes in Bristol University, one of the main innovators on quantum computing. I think perhaps it was because the perspective was: what’s the UK’s response, given movements internationally – are we getting our fair share of spend or doing enough to attract international flows of spend?
Q: When you look back at the pattern of innovation spending, it’s quite striking that the public sector is more southern-biased than the private sector.
There were two sides to this. One was public finances and the numbers adding up. What’s the right balance between capital spending. These were all quite big picture considerations. And then, within that, how are particular communities fairing. I certainly remember conversations that, yes, some of the poorest parts of the country, are in inner city London. But the idea that we then took a step back and look at the pattern of these investments and what they meant in terms of regional concentration. Maybe it happened. It certainly never happened when I was in the Treasury, or indeed when I was at DWP after the financial crisis.
The Treasury is a relatively closed department. Of course, you are having conversations with the Local Government Association, talking to departments. But it is often quite a close group of advisers, special advisers, officials and ministers. Obviously, ministers talk to lots of people, lots of constituency MPs. ‘s, et cetera. But that’s not a piece of advice saying ‘Please be aware that this gives you a weak spot politically’. It was just a much more national policy setting.
Q: What was your experience of the Treasury working with the RDAs, mayors, with people based outside of Whitehall?
I would say it’s still relatively shallow. I would have gone to the LGA national conference and probably wouldn’t have spoken. The team might have had some contact with the local mayors. But again, it was hard enough keeping, and engaging with other departments and junior ministers. And sometimes for reasons of confidentiality
Q: Would you extend that into Scotland, Wales and Northern Ireland as well? Or is this primarily an English story?
When I was at the Treasury, the point at which engagement with Scotland was greatest was ahead of the 2014 independence referendum. Specifically, the degree to which you have got an analysis of the prosperity between two countries. The Treasury then set up an office in Scotland. Even with devolution before the referendum, the usual focus around conversations on tax flexibility were much more in the context of what this means in terms of fiscal risk for the UK than in terms of greater scope for economic development, regeneration in Scotland. I wouldn’t say it was completely not on the agenda, but it just was not that big a focus.
Q: Was there any evolution that you saw over the whole period?
I think it was constant. My focus was on advising on a national programme, probably doing local good, and on the overall health of the public finances, which obviously is important for growth.
Q: What was your experience of how governing capacity varied across the country?
During the coalition government and the austerity programme, most of the focus that was local was around social care, which obviously took quite its share of the fiscal consolidation. There was a lot of rather good analysis of what this meant for local authorities, what the capacity capability was in quite a lot of detail to cope with the changes, and what the local landscape looked like in terms of the relationship between health and social care. And quite a lot of work on, well, almost social care migration. At the time I was working, we had local authorities exporting problem families, and problem children that they could not cope with. So along the southern coastal areas, there was that dimension.
Q: Whitehall can be spoken about as almost a homogenous blob. Was that your experience?
It’s quite a big question that’s got many different answers. But you’ve got the centre of government, basically the Treasury and Number 10. You’ve got big delivery departments. Often Number 10, the Treasury and DWP form quite a triangle – Number 10 will vary depending on the issue, but the Treasury and DWP very much so. Then probably the departments that have possibly got less leverage because they don’t control the money or they don’t control some of the big levers.
Departments are very different from each other, but there are some universal truths I would say: the Treasury, normally, not always but normally, is the strongest and most central department.
Q: How about the Department of Work and Pensions?
Its leaders are all national. We have a national standardised, centralised, consistent benefit system. It doesn’t matter which part of the country you’re in, the bils are still the same. We’ve not found a way in which we feel comfortable to have more flex in the system. Certainly the conversations about what jobs might suit you, what skills might suit you, what the local employment markets like, what local vacancies are – these are all local. But it’s a very, very central centralised, nationally minded department.
Q: During the early 2010s was the Treasury changing the way it thought about devolution?
No, it was relatively minor. Interesting, because the minister I worked closely with, Danny Alexander as Chief Secretary, you’d expect with a Lib Dem focus, particularly the way the Lib Dems have been very successful by being very active locally. But the dominant focus of George Osborne and Deputy PM Nick Clegg and Prime Minister David Cameron was how do you create more fiscal space without really screwing capital expenditure? And enable some good spending to be done. So, I was more focused on things like the people premium again a national programme with local ambitions. City Deals were, and this would have felt quite a terrible thing to say, almost lost in the rounding, and certainly not enough to have changed or affected a different culture.
Q: Did you see the same patterns that you’re describing in terms of how the Treasury operates more widely?
I think with Ofcom again, it’s not just national regulation, it’s mostly European regulation that you’re applying in the UK context. It’s still a big public policy lever. At the time, I was there really to try to encourage private companies to reduce their dividends, to build more infrastructure for the country. Definitely there are local dimensions because where you don’t have a population density, you don’t have an economic or commercial case to build. Where the state comes in tends to be very local, because some of those areas are southern and rural.
Then with the John Lewis partnership, we have as strong community focus. This is what attracts me to work there, and we’re doing quite a lot of work because we’re trying to be the employer of choice for people from the care system. That is very local, and it’s very difficult to do because there’s no unified charity, there’s no unified organisation.
Obviously, every local authority is different, and I feel like the JL partnership is basically setting up a series of pilot programmes. Essex is really pro, Manchester Trafford is really pro, but it’s been interesting. This is all being done through our shops and distribution centres, which are all enterprise business initiatives. Everything’s been done very locally, so very decentralised, delegated, and they definitely do see the other side of the coin where you don’t have any national infrastructure to lock into.
Q: Is there anything, as part of your Treasury career, where you saw a shift towards spatial thinking?
I think the only big shift that affected me was in the run-up to the Independence referendum and subsequently in Scotland.
Q: Does the movement of part of the Treasury Department to Darlington feel like something cosmetic?
There’s probably some word between cosmetic and big shift. That strong focus on the national, I didn’t change it materially. Which is not to say it didn’t add value.
Q: If you were looking back over your career, what would your suggestion be if we wanted to make a difference around regional inequalities in the UK?
I look back and feel slightly shocked and guilty about my reflection selections on that time. Maybe this is an easy thing to say, but I think maybe an institution like the Office for Budget Responsibility, which is independent and looking not just at the overall fiscal policy efficacy but also ensuring that we’ve got the data and the evidence of how particularly the major policies impact on different regions, I think would be a good start.
ENDS