It's all or nothing when it comes to making a success of the Northern Powerhouse

Marc Davies
02 June 2016

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Northern Powerhouse

We need to develop a plan that aligns skills, transport, energy, and other economic drivers to make the North successful says WYG director and chair of ACE’s Northern Region, Marc Davies 

The concept of the Northern Powerhouse was introduced by chancellor George Osborne in June 2014 as a vision to reduce economic disparities between the North and South, benefiting the country as a whole. 

The significant economic performance gap was highlighted most recently in the Transport for the North Spring 2016 report. This gap is estimated at a £4,800 per person difference in income between the North and the UK average, and a £22,500 per person difference between the North and London in 2014. 

In Rhetoric to Reality, the IPPR North report produced in partnership with KPMG, a staggering statistic supports the Northern Powerhouse agenda: “If the North were able to halve the gap between its economic output per head and the national level then its economy would be £34bn (11.9%) bigger.” In State of the North, an October 2015 IPPR North report, some key differentials are observed. In education, for instance, the North has a lower attainment level for the 4-9 age group. 

The report highlights other priorities: boosting economic growth, involving people in the way the North is run, and investing in the necessary future-proof infrastructure. The need for better transport connections is also clear. It takes longer to get from Liverpool to Hull by train than it takes to travel twice the distance from London to Paris. 

In an effort to put the Northern Powerhouse on a level playing field with Greater London, it is sometimes pictured as an area confined to the M62 corridor linking Liverpool to Hull. But superimposing the Greater London urban model fails to account for the lower density of the Northern population and its geographical diversity. 

The Pennines and the Peak District certainly give the North a quality of life advantage, but also present challenges when it comes to transport infrastructure. The Rhine-Ruhr region in western Germany offers a much better comparison. This polycentric region, capable of attracting international investors and accounting for 15% of the national economy, has been cited as a credible model for the Northern Powerhouse. The Randstad in the Netherlands serves as another example of an economically powerful region revolving around multiple cities. 

These European power hubs demonstrate how the North of England could become stronger if its cities were better integrated, operating in synergy rather than independently and competitively. 

A powerful, unified vision of the North needs to extend further than this east-west axis, to include Sheffi eld in the south, Newcastle in the north-east, and Cumbria. With £25bn of private investment being pumped into Cumbria over the next 10-15 years and a national lead in the energy sector established over several decades, Cumbria has the potential to become an engine room of the Northern Powerhouse. 

Solid plans for transport investment 

The Budget, announced on 16 March, backed up the recommendations made by the National Infrastructure Commission’s High-Speed North report, which called for immediate and sustained investment in transport links in the North. 

Since then, Transport for the North has published its Northern Transport Strategy Spring 2016 update. Among £300m of further investment for transport: £60m for HS3, between Leeds and Manchester, and other major city rail links; £161m to accelerate the M62 upgrade; and £75m to fast-track the development of major new road schemes, including on the M60, A66, and A69, and the feasibility study for a trans-Pennine road tunnel. 

The NIC has quite rightly identified that the answer is not a single rail line but a high-capacity regional network, and that proposal should align with currently planned investments. The transport commitments are a step in the right direction, but much greater commitment is required if we are to move from modest incremental improvement to transformational impact, and redress the current heavy bias of infrastructure investment toward the South East. 

The £150m investment in flood defence schemes in Leeds, Cumbria, Calder Valley and York – as well as the additional £130m to repair roads and bridges in Cumbria, West Yorkshire, Northumberland, Greater Manchester, Durham and North Yorkshire – are a much-needed addition to the road upgrades and will go some way to alleviate the criticism of the government for neglecting the North’s flood defences. 

Measures to streamline the planning process are more immediately capable of bringing tangible results, and they will contribute to bringing forward significant regeneration sooner. The challenge will be for government and local authorities to engage with developers and landowners to ensure that planning applications are approved in good time to be delivered alongside the Northern Powerhouse infrastructure schemes. These can include housing, commercial development around stations, freight development and improved transportation links. 

Without this significant peripheral growth, in 20 years, the Powerhouse could be just better infrastructure. A great example of transport investment acting as a catalyst for development is the South Bank in Leeds city centre, one of the biggest development areas in Europe. 

A key element of the masterplan is the planned HS2 station, and the already opened southern entrance to Leeds station. Once completed, over 1,700 new homes and 13,000-20,000 jobs will be created, according to HS2’s February report Changing Britain. Investment is already taking place, with Burberry investing £50m in a manufacturing facility. 

Engage with business for success

 As those who will actually generate the economic outputs, businesses need to be part of the conversation. Business North was launched in February to create a unifi ed voice for the region’s business community to ensure that business plays a new civic leadership role. As a founding member, WYG supports the aim of signifi cantly growing the region’s economy and ensuring it is an internationally competitive place to do business. Integrated thinking needs to go far beyond transport. 

We need to develop a plan that aligns skills, transport, energy, and other economic drivers. Future government decisions would do well to adopt a holistic approach to the Northern Powerhouse. 

Regional rail networks including Merseyrail must be upgraded, and integrated with the planned high-speed rail links, if the region is to achieve its economic potential