Northern Powerhouse One Year On

The Northern Powerhouse

Just over a year ago I attended the Northern Futures Summit which was chaired by Nick Clegg MP who was then Deputy Prime Minister. The summit brought together speakers like Ed Glaeser, Jim O'Neil, Tony Trathers and Bob Kerslake as well as local politicians. entrepreneurs and even schoolchildren from across the region to discuss how the resources of the individual communities in the North of England could be pooled and coordinated for the benefit of all.

The shorthand term for this pooling and coordination is "the Northern Powerhouse" which was coined by George Osborn MP who, like Clegg, is a Northern MP. The concept was summarized by the Chancellor in his Autumn statement for 2015:

"The Northern Powerhouse is the government’s plan to boost the economy across the North of England. It is built on the solid economic theory that while the individual cities and towns of the North are strong, if they are enabled to pool their strengths, they could be stronger than the sum of their parts. It means investing in better transport to connect up the North; backing the science and innovation strengths of the North, so that new ideas can be turned into new products and new jobs; investing in culture, housing and the quality of life to make the North a magnet for new businesses and talented people; devolving powers and budgets from London to local areas across the North, and creating powerful new elected mayors who will give people in northern cities and towns a strong voice."

The Northern Powerhouse was a brainchild of the Coalition Government and Clegg and Osborn were its progenitors. Clegg is no longer in office but Osborn is and I am encouraged to see that he appears to remain committed to the project.

In his Autumn statement the Chancellor announced investment in public transport, science based innovative companies and the arts in the North.  A body called Transport for the North ("TfN") with its own website and logo has already been formed.

The Chancellor proposes to invest £150 million of public money in TfN's plans for a new smart ticketing system to allow passengers to cross the region easily by bus, metro, rail or tram.

As for science and innovation, he announced a £250 million investment in nuclear technology some of which will go to Sheffield and a new Northern Powerhouse investment fund to be run by the British Business Bank in collaboration with the local enterprise partnership, new enterprise zones, a sovereign growth fund for the North funded by shale gas exploration  and a £50 million investment in agricultural technology centres in York.

The timetable for the implementation of the Northern Powerhouse is as follows@

2015-16 and 2016-17

Key project starts:

• The first of almost £3 billion of Growth Deal projects get underway
• Launch of Health North
• Construction work on UK Collaboratorium for Research In Infrastructure and Cities hubs
• Investment package for Small Modular Reactor development and nuclear R&Dlaunched
• Accelerating £220 million upgrade to M6 Junctions 16-19

Key project completions:

• Electrification of railway between Manchester and Liverpool
• Appointment of Transport for the North’s Chair
• Interim report from Transport for the North
• Contract award for the New Northern and Transpennine Rail franchises

2016-17 and 2017-18

Key project starts:

• Construction work on Sir Henry Royce Institute in Manchester
• Energy Subsurface Test Centre, Chester
• Construction of National Centre for Ageing Science, Newcastle
• Great Exhibition Legacy Fund

Key project completions:

• First mayoral elections for northern cities
• Graphene Engineering and Innovation Centre, Manchester
• Cognitive Computing Research Centre, Cheshire
• Mersey Gateway Bridge opens
• New East Coast InterCity Express trains come into service
• National College of High Speed Rail, Doncaster
• Investments under the Builders Finance Fund for new homes
• ‘The Factory, Manchester’ – a new theatre and exhibition space
• 2019-20

Key project starts:
Major roads investment projects underway across the North, such as the A1 north of Ellingham and A1 Morpeth to Ellingham

Key project completions:

• Northern Hub rail enhancements scheme
• £350 million Metrolink extension to Trafford Park in Greater Manchester
• Development in extending the capabilities of the National Nuclear Users Facility
• Improved East Coast rail timetable with additional and faster services
• Hartree Cognitive Computing Research Centre, Cheshire

Should anyone wish to discuss this article or the Northern Powerhouse project in general, he or she should call me on 020 7404 5252 during office hours or send me a message through my contact form.

Northern Powerhouse Reading List

16 Nov 2015	BBC	Northern Powerhouse plan unknown to two-thirds in North	BBC website
14 May 2015	BBC	What is the Northern Powerhourse?	BBC website
7 Nov 2014	Eddie Copeland	Are elected mayors enough to deliver the Northern Powerhouse?	Policy Bytes
27 Nov 2015	HM Treasury	Autumn Statement 2015	Policy Paper
3 Dec 2014	HM Treasury	Autumn Statement 2014	Policy Papr
6 Nov 2014	Buce Katz	Manchester England England: Devolution U.K. Style	Brookings
10 Dec 2014	Jane Lambert	Let's Take this Opportunity with Both Hands	IP North West
8 Nov 2914	Jane Lambert	Northern Futures Summit	IP Yorkshire
25 Oct 2014	Jane Lambert	TechNorth	IP North West
22 July 2014	Jane Lambert	How can Leeds regain its Lustre	IP Yorks
5 July 2914	Jane Lambert	Power. Performance. Potential. Leeds Economic Conference	IP North West
3 Apil 2014	Jane Lambert	Creating a Northern Counterweight to London is good for the Nation	IP North West
3 Jan 2013	Jane Lambert	NESTA in Manchester	IP North West
10 Sept 2011	Jane Lambert	LEP Summit: My Impressions of the Day as a Delegate	IP Yorkshire
16 Oct 2014	Northern Futures	Open Ideas Day
5 Nov 2014	ONS	North of England Economic Indicators
6 Nov 2014	PWC	Northern Futures summit - PwC comments	PWC in the North
7 Nov 2014	Tony Travers	The Greater Manchester Agreement is only a small srep towards greater devolution in England	LSE, British Politics and Policy
7 Nov 2014	Paul Unger	Northern Futures: Promises Promises	Place North West

Northern Futures Summit

I was at the International Economic Conference in Leeds the day before the start of the Tour de France when Nick Clegg MP announced the launch of Northern Futures (see "Power. Performance. Potential. Leeds Economic Conference" 5 July 2014 IP North West). Shortly afterwards the Office of the Deputy Prime Minister launched the Northern Futures website which canvassed ideas from members of the public on how to "build on the strengths in the North to create an economic core in the heart of the region that can compete with the biggest cities in the world?"

According to the website the Office received hundreds of ideas which were grouped into 9 common themes all of which can be viewed here. The government had also received the final report of Jim O'Neil's City Growth Commission Unleashing Metro Growth which the Royal Society of Arts published in October and David Higginson's report Rebalancing Britain which supports a fast rail link across the Pennines. All those strands were gathered together at the Northern Futures Summit which took place in Leeds on 6 Nov 2014. The agenda for the event is here.  The proceedings were filmed and you can watch it above.  The highlights of the day were keynote speeches from the Deputy Prime Minister, Jim O'Neil and Prof. Ed Glaeser of Harvard University. Apart from two short presentations from local schoolchildren, a welcome from the leader of Leeds City Council and comments from local council leaders and chief executives, the day was spent listening to "pitches" on behalf of the 9 groups of proposals, evaluating those ideas and voting on them with electronic voting panels which were attached to our chairs. We tested those panels by voting on which of great cities of the North was more fun. The popular choice was Newcastle followed by Manchester.

At the economic conference in July I had been dismayed by the negativity of the council leaders and chief executive of York towards Manchester which was quite in contrast to the message of the Deputy Prime Minister. The same politicians and local government officer were at the Northern Summit and I am glad to say that this time they were a lot more positive in what they said about the North West. Perhaps it was because representatives of Greater Manchester and Merseyside as well as the Deputy Prime Minister were at the conference for the whole day.

According to Clegg the reason for the discussion was the economic crisis of 2008 from which the world is only just emerging and the Scottish independence debate. He described the crisis as not

"just a traditional blip on an economist’s graph; this wasn’t any old recession. This was a complete implosion, a seizure in the way in which we run our economy. I think what everyone’s realised in the wake of the 2008 crash was that it wasn’t just a failure to regulate the banks, it wasn’t just became of imbalances in the subprime market in the United States. It was also the consequences of a very – a profoundly unbalanced way in which the British economy was being organised: overreliance on one square mile in the City of London to the exclusion of the 100,000 square miles across the United Kingdom."

Clegg's points were picked up and developed by O'Neil who argued that the regeneration of the North was in the interests of the whole country and not just the region.  It was not to be at the expense of London. Rather it was to reproduce in the North some of the benefits of agglomeration that are to be found in London.  O'Neil also downplayed the importance of the Scottish referendum in the debate on devolution for the English regions. The case for decentralization was economic and would have taken place even without the referendum.

That prompted a question from me as to whether elected mayors and city regional authorities of the kind that had been announced for Greater Manchester a few days earlier were necessary for co-operation.   I pointed to New York where the agglomeration stretched across three states or the Upper Rhine where the Basel, Freiburg, Mulhouse agglomeration straddled three countries. O'Neil responded that it wasn't.  Many of his Commission's plans could be achieved without such institutions. In answer to another question he quoted a remark from the Vice-Chancellor of Sheffield University that if it was necessary for Sheffield to become a suburb of Manchester in order for all cities to get a slice of a much bigger pie then so be it. It was a way of thinking to be encouraged.

In his publications Prof Glaeser has influenced much of the debate on agglomeration as the motor of economic growth.  He spoke about the factors that caused cities to grow such as Seattle and to decline such as Detroit. He warned that decentralization was not always a good thing because it could lead to bad local management as exemplified in Detroit.  Great public infrastructure projects like the Detroit monorail were not the answer. Having lost half its population the city's streets were no longer congested.   What seemed to work was investment in education and favourable policies for business.   As I had discussed TechNorth in my IP North West blog I asked Prof Glaeser whether it was possible to create a silicon valley or roundabout in our region. His advice was not to try to re-create Silicon Valley. Get the regulation and environment right and good things will happen.

I met a number of interesting individuals over lunch and the tea and coffee break. I learned about the Hannah Directory that indexes great things happening in the North of England. I spoke to academics, councillors and businesspeople.  Everyone seemed to glad to be at the event though several thought the pitching and evaluation format as a back of an envelope approach to developing policy.

Had I been running the summit I think I would have separated the issues of devolution and economic regeneration. Moreover I am not sure that devolution is what the country needs. This was illustrated by a pitch by Prof Tony Travers for fiscal decentralization and an evaluation by Sir Bob Kerslake of the Department for Communities and Local Government. Travers argued that decentralization should be gradual and incremental otherwise it would be resisted by Whitehall. Interestingly the mandarin pointed out that the risk of gradualism was that it would be achieved piecemeal. In my humble opinion Kerslake is right. If we are to avoid not just West Lothian but also West Gorton questions them we need a demarcation between the responsibilities between central and local government that requires a federal constitution. I believe Germany offers a model as it accommodates the aspirations of the "Free State" of  a Bavaria with a more than twice the population of Scotland which was independent much more recently as well as those of the city regions of Berlin, Bremen and Hamburg but that is a discussion for another day.

If anyone wants to discuss this article, the summit, Northern regeneration, constitutional reform or any other topic discussed or alluded to here, he or she should call me on 020 7404 5252 during normal office hours or fill in my contact form.

Further Reading

10 Dec 2014	Jane Lambert	Let's Take this Opportunity with Both Hands	IP North West
3 Dec 2014	HM Treasury	Autumn Statement 2014
7 Nov 2014	Eddie Copeland	Are elected mayors enough to deliver the Northern Powerhouse?	Policy Bytes
6 Nov 2014	Buce Katz	Manchester England England: Devolution U.K. Style	Brookings, The Svenue
25 Oct 2014	Jane Lambert	TechNorth	IP North West
22 July 2014	Jane Lambert	How can Leeds regain its Lustre	IP Yorks
5 July 2914	Jane Lambert	Power. Performance. Potential. Leeds Economic Conference	IP North West
3 Apil 2014	Jane Lambert	Creating a Northern Counterweight to London is good for the Nation	IP North West
3 Jan 2013	Jane Lambert	NESTA in Manchester	IP North West
10 Sept 2011	Jane Lambert	LEP Summit: My Impressions of the Day as a Delegate	IP Yorkshire
16 Oct 2014	Northern Futures	Open Ideas Day
5 Nov 2014	ONS	North of England Economic Indicators
6 Nov 2014	PWC	Northern Futures summit - PwC comments	PWC in the North
7 Nov 2014	Tony Travers	The Greater Manchester Agreement is only a small srep towards greater devolution in England	LSE, British Politics and Policy
7 Nov 2014	Paul Unger	Northern Futures: Promises Promises	Place North West