The full challenge facing George Osborne’s plan to create a “Northern Powerhouse” is today highlighted by a former global banker who points to years of transport failures in the region.
Jim O’Neill, former chairman of asset management at Goldman Sachs, has published a report from his City Growth Commission in which he describes how the UK economy is being held back as officials in Whitehall keep control of local transport and infrastructure decisions.
The call to hand the North a bigger say over its own future comes weeks after the Chancellor said he wants to rebalance the economy away from the South East, with a major new high speed rail network linking up the likes of Manchester and Leeds among the projects proposed.
But without handing city leaders a say over improving outdated infrastructure, the commission says, the Chancellor faces a tough task in matching that ambition with real change.
In his report Mr O’Neill warned that meeting Mr Osborne’s ambition would require “significant change” from Government.
The report, based on hearings in Newcastle and other cities, says Metropolitan areas like Tyne and Wear must be given a bigger say over their own future. The commission found that the UK loses billions of pounds every year as a result of poor, overly-centralised decision-making that fails to encourage greater links between cities.
Plans for a new high speed rail network must be improved so links from the North are prioritised, the commission said.
Talking of the need to strengthen Northern “metro” areas, Mr O’Neil said: “We recommend the Government considers making two bold decisions regarding its infrastructure policy. The first is to provide metros with a strong, powerful voice that can influence and guide decision making at a national level.
“For too long, our cities have not had a seat at the table, and this has been to the detriment of Northern metros in particular, as well as the economic growth of the UK economy as a whole.
“The second is to place connectivity between metros at the heart of any infrastructure investment, in particular via multiple transport links between cities and better broadband technology.
“Whilst the UK is starting to move in the right direction – with the creation of Infrastructure UK and the Chancellor’s recent proposal for a connected ‘Northern Powerhouse’ – there is still some way to go.”
Those transport concerns were last night backed by Gateshead MP Ian Mearns, vice-chair of the All Parliamentary Rail in the North group.
He said: “The difference in spending on transport between London and ourselves is about 520 to one, and even just changing the funding system now will not address the historic deficit we face. Time and time again we have lost out, and will continue to do so while the Government makes spending decisions based on congestion rather than on helping us grow.”
The lack of a Northern advocate in Government has again been highlighted after yesterday’s Government reshuffle.
Former regional minister Nick Brown warned: “The position of the English regions is weaker now than before the reshuffle. The surprise announcement of William Hague and the dilution of Greg Clark’s City Minister responsibilities leaves the English regions even less represented than they were before. This is a Home Counties reshuffle.”
The Government recently went some way to addressing the transport issues facing the region with its local growth fund announcement. With local contributions, the Government decision paved the way for £95m of infrastructure improvements. A “Provisional Allocation” of £78.7m was also announced for a number of further schemes due to start in 2016.
Ministers have also recently signed off on a new North East super council, the Combined Authority, which they say will be used to devolve new powers down to city regions.
Source – Newcastle Journal, 16 July 2014
Whitehall officials have been accused of trying to delay £760m of North East investment in a bid to find ‘election ready only’ spending projects.
Businesses and council leaders have jointly submitted a plan for growth as the region looks for a share of the Government’s £10bn local growth fund.
But after months spent compiling a wish list of jobs projects, including new railway lines and regeneration sites, ministers have now tried to force local enterprise partnerships to pick just a few priority schemes.
Cities minister Greg Clark has been told he risks setting back long term economic growth, with the leader of Newcastle Council Nick Forbes among those suggesting the move looks like an attempt to find an election boost.
If the Government insists on only funding schemes which are almost ready to go it would hand itself a list of ‘shovel ready’ projects that prioritise ministerial photo opportunities, city leaders have said.
Mr Forbes was among those who challenged the Government over its cash policy at a meeting with Mr Clark.
He said: “I raised the concerns when I met with Greg Clark last week. The Government haven’t just set a virtually impossible timetable for bids to the Local Growth Fund, they’ve changed the goalposts several times.
“Asking us, at the last minute, to prioritise schemes that are ‘shovel ready’ implies they are more concerned with projects that can be announced in the run-up to the election rather than those in the longer term interest of the region.”
The North East local enterprise partnership has refused to go along with the Government request, saying that it is wrong of the Government to ask businesses to spend months putting together a list of projects only to then change the criteria and ask for a new list with no clear indication as to how projects will be judged.
The region’s strategic economic plan will for now remain unchanged. Under the partnership’s preferred option, the Government would put £70m into a North East pot and let the region get on with building roads and clearing space for new firms. It would add to other cash for a North East Development and Investment Fund, handing the region £245m over five years to major developments.
If successful, the partnership says the overall plan could pave the way for an 11% increase in employment by 2024, suggesting some 10,000 jobs a year could be created.
Some £23m of local transport improvements are requested, including addressing traffic issues on the A185 and A19, work on the Lindisfarne Roundabout in South Tyneside and a Central Station Metro refurbishment.
Another £25m is asked for to pay for projects such as improvements to the A1 Scotswood Bridgehead, more work on the A19 near the Silverlink junction in North Tyneside and new funds to clear the way for roadworks behind Newcastle’s Central Station.
From 2016 onwards another £125m of funding is requested to help pay for the likes of a reopened Ashington, Blyth and Tyne railway, a new relief road for Durham City Centre, a link road for Newcastle Airport and Gateshead Town Centre regeneration.
Source – Newcastle Journal 12 May 2014
Tourism projects vital to Northumberland will be denied a chance to bid for Government cash.
Hopes of building on Northumberland’s tourist hotspot status were dashed when planners were told the latest Government advice was that new projects would not bring in enough jobs and so will not get any cash from a £2bn local growth fund.
Officials in Northumberland were told the news when they asked for £2m from the North East Local Enterprise Partnership, the business-led group backed by Government tasked with co-ordinating job creation efforts. Cash would have gone towards The Sill project, a visitor centre which would have created more than 100 jobs.
The partnership told Northumberland the blame lay with the Government, saying cities minister Greg Clark made the blunt assessment of the likelihood of funding bids being successful when he met business and council leaders last week.
But last night the Cabinet office said it was “absolutely wrong” to rule out tourism projects, and insisted the North East could try for cash if it could prove that the tourism project would create jobs.
Tourism in Northumberland alone is said to support some 16,000 jobs, but, Northumberland County Councilhas been told, strict funding rules for the new cash pot will rule out supporting visitor centres, galleries or hotels. The snub has raised fears at County Hall that money handed to the region through the Local Growth Fund will almost entirely benefit urban Tyneside and Sunderland.
“To say that ‘tourism isn’t an economic priority’ downplays the significant role this sector plays in the wider Northumberland economy but especially in Tynedale. Last year it accounted for over £700m in the county economy and underpinned over 13,000 jobs. The Conservative-led coalition doesn’t understand our needs.”
The Sill project, based near Haydon Bridge, is for a discovery centre and office space bringing in an expected 100,000 visitors, with 15,000 expected to stay overnight.
The partnership’s tourism advice also raises question marks over further tourism cash for other Northumberland projects, including a share of the £7m needed to further develop Kielder Forestwith a tree top walkway adventure centre and wildlife support.
A Cabinet Office spokesman said: “It is absolutely untrue to say that tourism projects are less likely be successful in bids for local growth deals.
“Any bid must be able to show good evidence of benefits for the local economy in terms of jobs and growth, and bids from the tourism industry will be considered on their individual merits alongside every other sector. It is for the North East Local Enterprise Partnership to decide what priority they give to the individual bids in the region, according to the evidence provided.”
A spokesman for the partnership said they were still finalising plans, adding that: “We have been advised that tourism and cultural projects are less likely to achieve these ambitious measures.
“This does not mean the end for the Sill or other projects which could not be prioritised at this time and we will be working with partners to identify alternative funding sources wherever possible.”
Source – Newcastle Journal, 25 March 2014
And on a similar theme…
The Trust set up to safeguard Hadrian’s Wall is to be closed down as a result of funding cuts.
Staff at the Hadrian’s Wall Trust face an uncertain future after English Heritage decided it had no option but to pull the plug on support.
The body had being tasked with managing the World heritage Site, but control will now have to be shared among various councils along the route.
English Heritage, Natural England and the eight local authorities who part fund the Hadrian’s Wall Trust are working with NorthumberlandNational Park Authority and the Chairman of the World Heritage Site Management Plan Committee, to put new arrangements in place to safeguard one of the country’s most famous landmarks.
Henry Owen-John, English Heritage planning and conservation director for the North West, said the funders were left with little choice.
He said: “The Trust as a charity is working in a pretty tough financial climate, as are the people who contribute funds to it, such as English Heritage.
“The Trust has been very successful in raising money for specific projects, but the difficulty is finding funding to cover its core costs, the day to day costs, and it is this which has led us to our decision.
“These are difficult times that we all have to operate under. The Hadrian’s Wall World Heritage Site is unusual in that we do not normally cover the management sites, it is really just this and Stonehenge where this happens, and we have to bring that situation here to an end, and try to get the management self sustaining.
“The people who will take over after the closure of the trust are committed to the future management and coordination of the sites.
“Northumberland County Council will take a lead role in coordinating this now.”
Mr Owen-John said promotional work this year will continue.
“It will take approximately six months to bring the affairs of the trust to a satisfactory conclusion, and the spring and autumn promotional work will continue as planned this year.
“We want to continue marketing Hadrian’s Wall as a whole rather than each council just marketing its bit of the wall.”
English Heritage has had a hard time when it comes to securing Government cash. In 2010 it had some 30% of its budget axed.
In 2013 the Department for Culture, Media and Sport came back for more cuts, asking for 10% from the heritage group’s 2015/16 budget.
Last month The Journal revealed concerns among North East councils that plans to reform English Heritage could see it cherry pick the best sites for its new management arm at the cost of less glamorous sites.
The changes have prompted fears from former Newcastle council leader Lord Beecham and former regional minister Nick Brown that the moves were akin to privatising the service.
In response, Sir Laurie Magnus told The Journal he wanted to “make clear that English Heritage considers its sites in the North East to be among the most important, interesting and beautiful in England. The advantage of the proposed change is that we will be able to invest more in them not less.”
In Northumberland it is hoped the staff currently working for the trust will, where possible, be found work with the councils and other bodies helping look after the wall in future, with decisions being made over the next six months.
Grant Davey, leader of Northumberland County Council: “Hadrian’s Wall is a core part of the county’s tourism industry. We are working alongside our partners with businesses, communities and all other stakeholders along the route to support them and keep them informed of developments. Our priority is safeguarding the Wall into the future.”
Source – Newcastle Journal, 25 March 2014
Sunderland has the lowest number of businesses out of any city in the UK, according to the latest report from think tank Centre for Cities.
Authors of the annual ‘health check’ of UK cities for 2014 also found Sunderland had the slowest-growing population, and was second bottom for business start ups.
The central spine of the report was the trend which showed the economic gap is widening between London and other cities.
Highlighting Sunderland, the report’s authors also listed Newcastle and Middlesbrough in the bottom ten cities for businesses in the UK.
The report also found there almost 10 times more jobs being created in the capital than the next best area.
Centre for Cities research revealed that London accounted for 80 per cent of national private sector employment growth between 2010 and 2012.
For every public sector job created in the capital, two have been lost in other cities, the study found.
While London is “booming”, cities such as Bradford, Blackpool and Glasgow have seen jobs lost in private and public sectors, said the report.
There has also been a significant number of jobs created in private firms in Edinburgh, Birmingham and Liverpool which have helped offset the impact of public sector job cuts.
In the two years to 2012 there were 216,000 private sector and 66,300 public sector jobs created in London, compared with losses of 7,800 and 6,800 in Glasgow, said Centre for Cities.
Other cities where jobs have been created in private companies included Nottingham (8,900), Brighton (6,400) and Aberdeen (4,900), but they were all hit by cuts in public sector employment.
The report said: “London remains the UK’s economic power house and is pivotal to the UK’s future success.”
Alexandra Jones, chief executive of Centre for Cities, said: “The gap between London and other UK cities is widening and we are failing to make the most of cities’ economic potential.
“Devolving more funding and powers to UK cities so they can generate more of their own income and play to their different strengths will be critical to ensuring this is a sustainable, job-rich recovery.”
Sunderland Echo, 27 January 2014