The ‘Northern Powerhouse’ could prove far more than a slogan

Samuel Stafford

Samuel Stafford, director of planning, development and regeneration at consultant GVA, on a cultural and political shift towards the north.

The politics of regional policy tends to sway from one direction to another as opposition parties win and then lose general elections. The 2010 general election, for example, was contested by the Conservatives on “localist” grounds and the sweeping away of Labour’s centralising regional tier. The 2015 election promises to be a little different, however, as a consensus appears to be forming around the north, around the importance of cities, and around the importance of city regions. 

Consider, for example, that the past few months have seen:

• Conservative chancellor George Osborne’s “Northern Powerhouse” speech in June, which “starts a conversation about serious devolution of powers and budgets for any city that wants to move to a new model of city government – and have an elected mayor”;
• Labour peer Lord Adonis’s review Mending the Fractured Economy: Smarter State, Better Jobs, which sets out reform to empower city and county regions;
• And Liberal Democrat deputy prime minister Nick Clegg’s launch of Northern Futures, a “call to arms for ideas on how to create a vibrant Northern hub so it can compete with the biggest cities around the world”.

We have also seen recently a strategic proposition for transport in the north, One North, led by the city regions of Leeds, Liverpool, Manchester, Newcastle and Sheffield and the next few months promises no let-up in this devolution frenzy.

In September, Sir Mark Walport, the government’s chief scientific adviser, is expected to publish a new Science & Innovation Strategy, while in October, Sir David Higgins, the chairman of HS2, will present updated plans for the trans-Pennine HS3 railway links between several northern cities.

In November, in what is believed to be the centrepiece of the Autumn Statement, the chancellor will follow up his Northern Powerhouse speech with plans to give towns and cities greater control over their own budget.

It is the extent to which control really will be handed over that is likely to provide some separation between the main political parties in the run-up to the election, but the direction of travel is a clear one and the investment opportunities and benefits that this agenda presents for the property and construction in our cities, especially our northern cities, are very exciting.

International evidence shows that investing in infrastructure is essential to competing in the global economy and driving economic growth. Yet, as the Institute for Public Policy Research has pointed out, for a highly developed country, the UK has underinvested in major infrastructure networks, and according to the World Economic Forum, is slipping down the world rankings in terms of infrastructure provision (WEF 2013).

Further, investment spending is out of balance. Treasury figures project London’s per capita publicly supported infrastructure spending at around £5,426 per resident. The north west region is projected at £1,248 per resident, Yorkshire and the Humber sees £581 per resident and the north east, with few capital projects, only £223 spent per resident (HMT 2014).

Treasury figures also show that the economy of the north of England has grown by 3.9% a year over the past 18 years, which is considerably lower than the 4.4% achieved by the UK as a whole. If, as Jim O’Neill, chairman of the City Growth Commission points out, the northern growth rate could be raised to the national level, it would add some £56bn in nominal terms and £44bn in real terms.

Politics and the pressure on the public purse will ultimately define the commitment to the devolution agenda (it should be noted that the new London Infrastructure Plan 2050 includes a £1.3 trillion shopping list). But if the next government, of whichever hue, does commit to support the regions where needed and devolve powers and responsibility where possible then the recovery from recession could be longer and stronger than a continued clinging to the coat-tails.

Samuel Stafford, director, planning, development and regeneration, is at Samuel.Stafford@gva.co.uk

GVA is teaming up with Core Cities to present the launch of the Evolving Cities manifesto, in Central London on 12 September. For more information please visit www.gva.co.uk/core-cities