Building the Northern Powerhouse

Lessons from the Rhine-Ruhr and Randstad

Report published on 1 June 2016 by Paul Swinney

Part of the Government’s Northern Powerhouse initiative aims to improve transport links between cities in the North of England in order to create one single economy. This approach has been inspired by the Randstad and the Rhine-Ruhr, two areas on the continent that, like the North of England, have a number of cities located close together.

This report sets out what the Northern Powerhouse can learn from the examples set by the Randstad and Rhine-Ruhr. It shows that while their economies perform better than their respective national averages, this success does not appear to be based on the strength of their transport links. Commuting between city regions in the Randstad and Rhine-Ruhr is not significantly greater than across city regions in the North of England, nor are train links much quicker. There is no clear policy lesson for the Northern Powerhouse from the proximity of or the links between the cities in the two areas – they just happen to be close together.

Instead, the main lesson from these areas is that strong regional economies require strongly performing cities at their heart. The Randstad and Rhine-Ruhr get more out of the economic activity they have by concentrating it in cities, and this pattern of economic activity makes both areas more productive than their respective national economies.

This suggests that to improve the performance of the North, policy makers should prioritise supporting the growth of its cities. This will require them to do the following:

  • Increase the density of cities. This will make it easier for people and organisations to share information and come up with new ideas. Policy should focus on expanding the supply of office space and associated amenities within city centres, and creating long-term spatial plans for city regions that make strategic choices about how land is used.
  • Manage the costs of density. Increasing demand to live and work in particular places pushes up the cost of offices and housing and increases congestion. As the performance of the North’s cities improves, policies like congestion charging will need to be considered.
  • Increase the size of the pool of skilled workers that businesses can choose from. This means focusing on increasing the skills of workers as well as improving the public transport networks within city regions, particularly through creating Transport for London style models with similar powers.
  • Make decisions about economic policy at the lowest level appropriate for those decisions to be efficient and well-informed. Skills, city-region transport and spatial planning should be administered at the city-region level, and should be the responsibility of the forthcoming metro mayors. Pan-Northern institutions should only be created where there are significant benefits from working together that cannot be achieved either alone, or through partnerships between mayors for specific purposes.

The gif below explains why the Northern Powerhouse should focus on cities (click to open in new window)

Agglommeration-animationSupported by

DAC Beachcroft

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