England

Northern Powerhouse 'undermined' by austerity, five years on

Manchester, Leeds, Newcastle, Liverpool
Image caption The Northern Powerhouse aims to encourage growth outside London and south-east England

The Northern Powerhouse is being "undermined" by austerity despite signs of economic growth, a think tank says.

Five years since its launch, Greater Manchester mayor Andy Burnham said the project was at risk of "fizzling out".

The Institute of Public Policy Research (IPPR) North said the economy had "moved in the right direction" but more children were living in "poor" households.

The government said record numbers of people were in work across the north.

IPPR North, a centre-left think tank, said the Northern Powerhouse had succeeded in devolving power by creating five new "metro mayors" and a regional transport body - Transport for the North.

However, it said the government had "undermined" the project while making cuts in public spending. Although spending has recently increased, the north has seen an overall £3.6bn a year reduction in real terms since 2009-10, while south-east and south-west England saw a £4.7bn rise.

Rise or fall in the number of jobs

Percentage change between June 2014 and March 2019

Source: IPPR analysis of ONS figures

In an analysis marking five years of the Northern Powerhouse, IPPR North found positive changes included:

  • 34,520 more jobs in professional, scientific and technical jobs in 2019 compared with 2014, plus a further 54,523 jobs in manufacturing roles.
  • "Marginally" higher economic growth in the north than the national average - a 10.7% rise between 2014 and 2017, compared with 10.6% for the UK as a whole and 9.7% for the UK excluding London
  • Employment in the north increased about 7%, compared to the UK average of just over 6%

Broken down by individual region, the North West was second only to London for the rise in jobs. Scotland saw a slight decrease.

Image copyright Getty Images
Image caption George Osborne wanted to give northern cities more powers

The Northern Powerhouse was first mentioned by the then Chancellor George Osborne in June 2014, when he outlined an ambition to bring together the cities, towns and rural communities of the north of England to fuel economic growth through modern transport links, devolved powers and increased investment.

Cities such as Manchester, Liverpool, Leeds, Sheffield, Hull and Newcastle were encouraged to work together both in rivalling London and the South East and to "take on the world", with more jobs and opportunities.

IPPR North said there had been "several negative changes" including:

  • 800,000 northern children are living in "poor" households, a rise of about 200,000 since 2014
  • Weekly pay across the north has risen by £12 (2.4%), against a national average increase of £19 (3.5%) in real terms

A household is defined as in "relative poverty" when its income is less than 60% of the median average - less than £17,040 a year, on the most recent figures.

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Cancelled trains

IPPR North said since 2014 transport spending in the north had increased by £149 per person in real terms, but this was less than half the £330 per person increase in London.

Transport spending per person

London has seen a rise of almost £330 per person since 2014

Source: IPPR analysis of Treasury and ONS data

Northern mayors want more investment in transport after figures showed train services also got worse.

The number of cancelled and significantly late trains on TransPennine Express and Northern franchises more than doubled from 20,000 in 2014-15 to 47,000 in 2018-19. It meant that almost one in every 20 services was either cancelled or more than 30 minutes late arriving at its destination.

Analysis

by Danny Savage, BBC North of England correspondent

Image copyright Northern Rail
Image caption Rail passengers in the north experienced thousands of delayed and cancelled services last year

The idea of the Northern Powerhouse was truly welcomed across this part of England - from Liverpool to Hull and up to Newcastle. Cumbria was a bit more lukewarm because it always feels geographically distant.

People watched and waited.

And five years on, many feel they're still waiting.

Raise the issue with strangers on a train and comments like "Northern Powercut more like" or "you mean the Northern Poorhouse" are forthcoming.

The government can point to a success in devolved power with regional mayors and some local initiatives but the perception of people living here is that the pledge made by George Osborne in 2014 hasn't been turned into action.

They point to old trains, arguments over electrifying key rail routes and quite obviously more investment in the south. The north of England has a combined population of nearly 15 million people. That's a lot of potential voters for any government to disappoint. It's been thus for decades but should the north-south divide feel so stark in 2019?

'Fizzle out'

Image copyright Getty Images
Image caption Andy Burnham says northern cities should be given the same powers as London

Labour mayor Mr Burnham said the north had a louder voice than it did five years ago.

"There are signs in Greater Manchester that devolution is starting to work," he said. "We're doing more to get people back to work but overall there is a real danger that the Northern Powerhouse could be about to fizzle out.

"Westminster has failed the North of England and that is over decades under governments of all colours."

Mayor of the Sheffield City Region, Labour MP Dan Jarvis, said he wanted the government to "look at the north of England as an asset, not a liability".

Judith Blake, leader of Leeds City Council, said: "The northern authorities are working much more closely together and that's a real benefit.

"The real difficulty we have is that (transport) schemes are delayed and there's a real lack of commitment to rebalancing the economy."

Image caption Leeds council leader Judith Blake said the north was speaking with one voice

The Conservative mayor of Tees Valley, Ben Houchen, said the Northern Powerhouse had helped him to secure the £35m purchase of Durham Tees Valley Airport.

He said: "We've done very well out of it. We've got a huge amount of money from central government. We've got more powers and control over our own destiny and it's led to things like my ability to buy our local airport and the create the first mayoral development corporation outside of London that will create many thousands of jobs in the Tees Valley.

"We could always ask for more money and more powers and that's something we do on a daily basis but there's always more we can do on a pan northern level working together across political parties."

Luke Raikes from IPPR North said: "Austerity has undercut a lot of the powerhouse agenda just because it's hit the north harder than any other region and that's had a consequence for people living in the North and for the economy within the North. So we've seen child poverty go up by 200,000 in just five years - that's quite a big increase."

When Mr Osborne unveiled the Powerhouse plans in 2014 he was Chancellor in David Cameron's coalition government and had been an MP for a northern constituency - Tatton, in Cheshire - for 13 years.

But he left the Cabinet after 2016's EU referendum, stood down as an MP at the following year's general election and is now the editor of London's Evening Standard newspaper.

A government spokeswoman said the Northern Powerhouse remained a priority and was "delivering results for people across the north with a record number of people in work and nearly 200,000 more businesses today than in 2010".

"We're investing over £13bn in improving transport - more than any government in history - and, with almost half the region represented by five strong metro mayors, we're keeping our promise for more decisions in the north to be made by the north," she said.

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