The Budget missed an opportunity to do something radical for the North of England. It only inches things forward when it could have taken a great stride.
Today’s Budget had the potential to be a game-changer for the North of England as the region waited on two significant announcements: the first, a report on transport investment in the North, and the second on a new combined authority deal for West Yorkshire.
The first has been delayed and will be published ‘this week’ – indicating that agreement has yet to be reached between Northern leaders and the government over the details. The latest devolution deal for West Yorkshire has been announced and signed, with further responsibility over skills, transport, employment, housing and business support included.
The West Yorkshire devolution deal is another incremental step in favour of city devolution, but it falls a long way short of the Greater Manchester agreement and appears to have faltered on Treasury’s unswerving commitment to directly elected mayors. In truth, devolution in England is progressing far more slowly than in Scotland and all political parties need to use their manifestos to set out a clear blueprint for devolution beyond one or two big cities.
While today’s announcements are a small step in the right direction, they fall far short of the ambition required to create the Northern Powerhouse desired by the chancellor. The powers for West Yorkshire will give them a little more scope to improve their economic prospects. Looking across the Pennine border, allowing Manchester to retain 100% of the growth in business rates – giving precedent for cities to have much-needed revenue raising powers – is another example of where the Budget only allowed the devolution bandwagon to creep forward.
It seems the extent of devolution is being held to ransom by the government’s political demands for metro mayors. As such, ambitions for economic renewal and public service reform are being stymied by backroom bargaining.
But much of the success of the Northern Powerhouse will depend on the transport report due shortly. It is unfortunate that it has not been completed in time for the Budget and as a consequence there is still no actual cash pledge for vitally needed investment.
The North was hoping to hear on the fate of £15bn funding for much-needed improvements to rail and road links between the cities that drive the Northern economy – Newcastle, Manchester, Leeds, Liverpool and Sheffield – and other key Northern economic assets, such as the region’s airports and ports. It therefore remains the case that the gap in planned infrastructure investment between and North and South is nearly £2,000 per person.
The plans, known as One North (or referred to as HS3), remain an unfunded aspiration without a commitments from the government. In an age where big ideas are few and far between, backing the One North plans could have a genuinely transformative effect on the Northern and national economy for a reasonably small cost. The £15bn sums in question – to be spent over a decade - pale into insignificance compared to a £110bn national infrastructure budget and the £14.5bn for one single project in London in the form of Crossrail.
To end decades of chronic underinvestment and diktat from Whitehall, IPPR North recently set out a blueprint for a Transport for the North body (built on the existing alliance of Northern leaders working with the government) to take on more decision-making powers and a significant proportion of transport investment budgets, emulating Transport for London.
In contrast, the Budget only nudged things forward – meaning the opportunity to make the Northern powerhouse a reality and build a prosperous, national recovery will have to wait for another day.
Ed Cox is Director at IPPR North. He tweets @edcox_ippr.
