Has the Northern Powerhouse been a success?
Last weekend marked five years since George Osborne stood in the Museum of Science and Industry in Manchester to call for a Northern Powerhouse. It aimed to improve incomes and opportunities for people in the North by helping its cities to rival London. His speech focused on:
- Better inter and intra- city transport
- More science and innovation funding
- More culture and art funding
- Metro mayors with new powers and funding
The agenda has been a hit with headline writers and is viewed as substantial enough to warrant academic investigation and reflections on how far it has come as it turns five. But it is a phrase used as often ironically as it is sincerely, depending on the speaker, and how they measure its impact.
How should we view the Northern Powerhouse, five years on? The first thought should be that expectations should be limited after five years. Change and improvement are difficult and long-term, and even with 20 times the funding and more powers, progress by this stage on these sorts of issues would be slow and hard to perceive.
The government naturally claims it has been a resounding success, dispensing a potpourri of projects large and small. Some have had a major economic impact, others less so.
On transport, £13 billion of transport investment is pointed to but the Bus Services Act 2017, which gives London-style bus powers (as called for by Osborne in his speech) to cities, is not mentioned.
On innovation, a £20 million fund to help SMEs is the headline result, while there is also a £70 million Northern Powerhouse schools strategy.
A £15 million Northern Cultural Investment Fund is highlighted, supporting a museum in Blackpool and music venue in Bradford. An additional 287,000 people in employment and a £10 billion increase in the size of the economy are attributed to the project.
But the change that stands out is that half of the North’s population are now represented by metro mayors with control of over £210 million a year (from just the Investment Fund and Transforming Cities Fund) to invest in the local economy.
Metro mayors are the biggest achievement of – and agitators for – the Northern Powerhouse
Centre for Cities had long advocated for metro mayors in major cities across the UK. It seems strange to think that only Londoners had such an institution to represent them and be held accountable by them.
Metro mayors were the rabbit in George Osborne’s hat. Though announced last, they were the first tangible change delivered by the May 2017 election of metro mayors in Liverpool City Region, Greater Manchester and Tees Valley.
Metro mayors matter not just because they are institutions that reflect and operate at the scale of the day-to-day economy, but also because they are recognizable democratically elected figures. This makes them visible, accountable and, hopefully, more durable than the Regional Development Agencies and Local Enterprise Partnerships were. The test of their durability will be at the next change of government.
These mayors have each approached the role in their own way. In Tees Valley, the local airport has been taken under public ownership by the Conservative mayor, while in Liverpool City Region trade union representation has played a bigger role in the combined authority and procurement.
Metro mayors are not just the first product of the Northern Powerhouse but also the catalyst for more action to breathe life into the brand. They have quickly become the institution with which the government clearly feels most comfortable, or compelled, to work with to support local growth.
Despite Philip Hammond having less devolutionary zeal than his predecessor, it did not stop him handing metro mayors directly more than half of the five-year £2.7 billion Transforming Cities Fund. In Greater Manchester, new trams funded by this money will be running on the Metrolink by February next year. Cities without metro mayors have had to bid for funding, and these are still in progress.
Andy Burnham, Steve Rotheram and Ben Houchen have also had the authority and platform to wield the Northern Powerhouse stick against the government most forcefully when it is viewed to be reneging on commitments.
Metro mayors have been able to push for promises to be kept, such as getting the Adult Education Budget from the Department for Education. They have been prominent in arguing for commitments to Northern Powerhouse Rail. It is this dynamic, rather than commitments to a railway that will still not have carried its first high-speed passenger by the end of the next decade that the Northern Powerhouse is better judged upon.
Whatever your view of the Northern Powerhouse, it seems unlikely that as much investment or devolution of powers would have happened without the brand and in particular the metro mayors which first substantiated it.
Northern Powerhouse is fused with local government austerity
Extra money and new powers for metro mayors came seven years into local government austerity. Cities Outlook this year highlighted how cities have suffered twice as much as the rest of the country from cuts to local government since 2010, and Northern cities twice as much as those elsewhere in the South outside of London.
In Liverpool, the local council saw spending fall by £816 per person, money that had to come from services. The extra £50-100 a year per person for metro mayors to look at strategic economic issues from transport to housing, skills or regeneration is not designed to fill this gap but will affect the mental accounting of members of the public when judging the government on its boasts about the Northern Powerhouse.
The government must end local austerity if it wants to ensure cities can play their role in improving local growth and ensure the public realm and services on offer the country are equal. It would also improve the chances of the government getting some political benefit from the Northern Powerhouse to do so.
Metro mayors have actively involved themselves in issues arising from local government austerity. As directly accountable to voters, unlike Regional Development Agencies and Local Enterprise Partnerships, their agenda is more sharply set by the priorities of voters during campaigns. Andy Burnham’s main campaign pledge focused on ending rough sleeping – a responsibility of local government but heavily impacted by cuts to local government services.
A job not even half done yet
While increasingly successful as recipients of funding pots, cities in the Northern Powerhouse still lack significant levels of long-term funding and the full powers that would allow them to act long term and strategically. A useful but small annual investment pot of around £15 per person is the only clear funding stream beyond 2023 once Transforming Cities Fund ends and while the Shared Prosperity Fund is unformed.
Also, a Northern Powerhouse driven by its cities will be incomplete as long as those in Yorkshire are not fully engaged and North of Tyne Combined Authority represents just half of the local economy. However, the government seems to have recently regained some of its belief in the initial rationale for city-based devolution in its recent correspondence with Yorkshire local authorities.
Perhaps now that James Wharton, the first minister for the Northern Powerhouse, is chief of staff to Boris Johnson, a former Mayor of London and the current front runner for Number 10, this momentum will grow again.
The Northern Powerhouse is still here
For all its flaws, the Northern Powerhouse is at least still going. Many things, from the Big Society to the health reforms have come and gone. However loosely, it provides a useful lodestar for devolution and economic policy to follow and for local leaders and businesses to remind the government of. This is a positive thing and long may it continue.