In late February, I sat in a Manchester conference hall with 2500 other delegates. The great and the good from across the North of England; Whitley Bay to Warrington. Public, Private, NGO. A fortnight has since passed and it has given me ample time to reflect on the state of the North and the third year of George Osborne’s pet project.
When all is settled beneath the chitter chatter and the noise – the diversity of voices, the various and disparate interests, the to and fro of debate – there stood a handful of glaringly obvious, self-affirming thoughts for policymakers to make what was, and still is, a vague concept for the North into something of real progress and prosperity.
The first and most crucial of these have to be in the creation of a pan-Northern statutory body. Whether that be a Council of Councils, an advisory board not dissimilar to the LEP structures already in place or, my preferred option, making Transport for the North akin and/or equivalent to TfL in infrastructure coordination and expenditure. This is a measure I very much hope Phillip Hammond will announce in his Spring Budget tomorrow.
There is a school of thought in the Powerhouse that it should remain a loose confederation, a partnership of business and local government. However, the inertia we have seen over the last few years regards infrastructure is indicative of the issues with this partnership. The pressures of business and shareholders’ short-termism and the election cycles, both national and local, do not make good bedfellows for 30-year infrastructure pipelines. Yes, there is a Minister for the Northern Powerhouse but he is as much at the mercy of political headwinds as any other. To appoint a non-governmental body would be to depoliticise and to develop a cohesive, joined-up infrastructure plan that places need above lobbying.
The second issue facing the Powerhouse’s infrastructure boom is the gap between finance and funding. Financing, the initial rush to invest in infrastructure is not the issue for the North. The issue lies in the long-term funding. The State as guarantor, whether at National or local level, is now looking like a necessity to maintain long-term funding required to follow through on such an enormous infrastructure prospectus. Grace Blakely’s paper at IPPR North has some fascinating statistics and recommendations on the subject.
Devolving not just political powers but also financial powers is critical to the Powerhouse’s success. Local policymakers should look to secure elements of Central government revenue before they leave the regions and reach Whitehall to enable businesses. For example, at this moment in time, local councils cannot sign off on box junctions in their own jurisdiction without the proposal and funding being signed-off in Whitehall first. If there were a policy area most deserving of devolution it would be intra-City infrastructure.
Although not often discussed as a facet of devolution it is one that weighs enormously on businesses and individuals alike. Digital Devolution – the rolling out of millions of kilometers of super-fast broadband cables was awarded to just a single company in Openreach. The Openreach monopoly has served little but to slow the process and create an inequality in internet provision. In allowing Openreach to manage the roll-out was to make it National and staggered. The roll-out should always have been provided locally, competitively and targeted at those in most need of such an amenity.
There are too many individuals, particularly in rural communities, that are being left behind in the digital revolution. We should look to open up the market, encourage the development of rural-urban digital interaction and give the North of England economy a big boost in the process through e-commerce, web design and all manner of associated digital industries.
Thus far, the Powerhouse has been discussed purely in terms of infrastructure improvements and little else. This is not the only problem facing the North. Skills, employment, industrial recomposition; these are central issues to the 21st-century Northern economy. The constant drip of graduates out of the North, despite having eight of the best research-heavy Universities in the UK, has been nothing short of relentless. Talented graduates came to the North and left. It’s the reasons why this was, and still is the case, that the Northern Powerhouse must answer.
The North has suffered a ‘Brain Drain’ for such a prolonged period of time that it is beginning to obviously and openly affect business. The North is overweighted in SMEs in comparison to every other region in the UK. SMEs are dynamic but also vulnerable. This is much the case for the burgeoning Life Sciences & Creative hubs in the North-West as it is for the growth of the Digital sector in the North-East. Where the crux of the problem lies is in the inability of these SMEs to reach a critical mass; to breakthrough a threshold in which they go from serving domestic demand to international.
The Northern economy has more high-growth companies than any other region of the UK, yet it has the lowest rate of private-equity backing. The problem lies in the perception of these companies to not effectively corporatise. These companies need to ossify their structures first, to convert high growth into consistent growth. The North needs to reattract those graduates it lost over the past-20 years from corporates in London & the South-East. This talent, now in their 30s and 40s, in management or on management pathways are packed to the brim with big business and international experience that is invaluable to growing SMEs in new and old sectors alike. New ideas and an international outlook will boost the Northern economy.
But what will attract this talent so used to a global City like London? This process of ‘North-Shoring‘ (as outlined excellently here) moving jobs from the South-East to the North is already happening but at a glacial pace. Finances are always a good argument; exorbitant rents and house prices make the North look a good option. The quality of life, the connection to the countryside. Each are valid but those short commutes are a thing of the past in Manchester & Leeds.
To repatriate talent, concentrate on intra-City travel; reduce commute times to restore the work-life balance, reduce lost hours to boost productivity, provide fast and universal internet connections in both rural and urban areas. Infrastructure is all well and good but the gulf is also cultural. Policymakers need to help develop the burgeoning cafe cultures particularly in Manchester and Newcastle through modifications business rates, encourage employers to adopt flexible working practices and work to integrate nightlife, culture and creative spaces into the planning mix as cities inexorably grow.
The future is bright for the North, there’s no denying that but the future must come now. So here let the Chancellor enable the North and the Northern Powerhouse will show you exactly what it’s capable of.
