Mark Whitehead 01 July 2019

Northern Powerhouse: The first five years

Northern Powerhouse: The first five years image

The North of England has been transformed in the last five years by a Government-led initiative to boost the region's economy, create jobs and encourage innovation. The Northern Powerhouse, launched by then chancellor George Osborne in 2014, has achieved stunning successes.

Transport in the region has benefited from £13bn of investment, 287,000 jobs have been created and its economy has expanded by £10b.

The success is not purely economic, according to the recent Government press release. Almost half the people of the North are now represented by elected metro mayors who have control over local spending plans and provide their region with 'an influential voice on the national and world stage'.

That's the official story. A report by the independent Institute for Public Policy Research presents a more mixed picture. There has been 'some progress' since the Powerhouse was launched, the institute says, notably in devolving power to metro mayors and creating Transport for the North.

But the project has been held back by the Government's austerity policy which has inflicted £3.6bn public spending cuts since 2009, at a time when the already affluent South East and South West enjoyed impressive increases in wealth. Public sector employment fell by 37,000. Transport spending in London has gone up by twice as much per person in London than in the North, while jobs created as a result of foreign direct investment fell by almost a quarter in the three years up to 2018, more than the national decline over the same period.

A recent report by construction analysts Barbour ABI and the Construction Products Association presents an even more damning indictment. The total value of commercial, residential and infrastructure construction contracts awarded in the region fell 24% between 2017 and 2018, it found.

Infrastructure - a key plank of the Northern Powerhouse plan - saw the biggest decline, with the value of contracts plummeting by 59.3% over the same period, despite the upgrade to the TransPennine Rail route which runs between Manchester, Liverpool and Newcastle.

The contradictory accounts present a problem: has the Northern Powerhouse achieved what it set out to do in its first five years?

Part of the difficulty is the lack of a clear identity. What is the Northern Powerhouse? It has no board of management, staff or offices. It has no annual report setting out its objectives, achievements, and finances. The Northern Powerhouse Partnership is a loose coalition of businesses together with a sprinkling of local authority leaders and colleges. In Whitehall a junior minister, Jake Berry, appears to be in charge. The Northern Powerhouse has a website, but it contains no list of officers, just a link to an email address. You cannot phone the northern powerhouse, email its chief executive or visit its head office.

This makes it difficult to judge whether it has been a success. The best anyone can do is look at data, as the IPPR have done, showing what has happened in the last five years while the powerhouse has been in existence and see whether things have improved or not.

One of the powerhouse's proudest achievements, according to the official view, is to have increased devolution and established regional mayors. This, however, has happened in other parts of the country too. And, as critics point out, most people care little about the structures of local government. It doesn't seem to them to impact on their daily lives.

Chi Onwurah is Labour MP for Newcastle upon Tyne Central, and a member of the all-party parliamentary group for the Northern Powerhouse. She stresses she wants to contribute constructively to the project. 'I value its ambition, its voice, its research,' she wrote in a recent newspaper article. 'But without real investment, powers and accountability, it can never be more than a marketing ploy with a little money attached.'

The North has the potential to drive a 'true, green, reindustrialisation that will help create good jobs, save the planet and rebalance our economy to deliver a more united country,' she says. 'But this is not a trivial challenge to be solved with a nice name and a few conferences. This is a structural change to the economy that requires real investment to deliver real return.'

IPPR North judges the project to have been successful on balance. Despite serious reservations – such as childhood poverty going up by 200,000 in the last five years, for example – it says the exercise has focused attention on the region and helped make best use of its huge potential.

The North of England is one of the most dynamic, highly skilled and resourceful regions in Europe. It has a proud history as the cradle of the industrial revolution, home to an array of history-changing inventions and innovations.

The Northern Powerhouse can be more than a PR exercise. It can help focus on the region's strengths, give it a sense of optimism and attract investment.

As a branding exercise and a way to rally available potential, the Northern Powerhouse was undoubtedly a good idea. But without meaningful injection of resources and genuine powers to back innovation and investment, it is in danger of remaining nothing more than that for the next five years: a good idea.

'A powerhouse', as one northern city council officer commented to LocalGov, 'needs batteries.'

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