We need to get a move on and deliver the Northern Powerhouse

OPINION: The reality hasn't matched the promises, says Owen Michaelson, CEO of Harworth Group.

by Owen Michaelson
Last Updated: 29 Jan 2018

This autumn, Phillip Hammond committed billions to new regional investment. The Industrial Strategy promised every part of the country a voice. But haven’t we been here before? Three years ago the Northern Powerhouse, a platform for political leaders to agree a common goal for the regions across the North and directly backed by the Treasury, heralded a revolution. Priorities and mechanisms for delivery were agreed.

Yet media column inches on the subject have not been matched with either material policy changes or a genuine ramping up of infrastructure or educational investment.

For the UK to thrive on the international stage, as it will increasingly have to in a post-Brexit world, there needs to be a serious rebalancing of the national economy, driven by a realignment in skills, infrastructure and housing. We also need to offer a united front to the world in demonstrating this rebalancing, if we’re to underpin future investment.

Each of the North’s regions have their own unique selling points and the introduction of regional mayors was an important step to giving them a greater voice. They get a seat at the top table with ministers every month and real results have been achieved: Andy Street in the West Midlands has secured a £250m devolution deal; Ben Houchen in Teeside secured £68m for Redcar.

We need to see more of this progress elsewhere, but how do we get there?

The first way is to ensure infrastructure spend is correctly allocated. Our existing assets need to be better funded, maintained and developed. Local transport networks, which provide essential and routing connectivity for the movement of workers and goods, should be a priority yet are often forgotten in favour of longer-term investments such as HS2.

Secondly, we need to invest more in skills, at all ages. Whilst I welcome the improvement in R&D investment, it remains the case that nearly half of money from the UK’s seven research councils and the Higher Education Funding Council for England (HEFCE) goes to Oxford, Cambridge and London. Redirecting some of this money elsewhere will develop further ambitious and capable younger people to be the bedrock of economic growth in the regions.

Finally there is the ‘direct investment’ option. The government needs to take a far more proactive approach to creating jobs and opportunities in the regions, giving the younger generation hope.

Some major businesses have relocated and invested. The BBC moved to Salford. The Met Office moved to Exeter. Vodafone opened a Northern Hub. HSBC moved swathes of staff to Birmingham. But it’s a drop in the ocean if we are serious about positioning cities such as Manchester, Leeds and Birmingham as desirable locations where people want to live and work, not just as cheap alternatives to London.

It really does work. The BBC’s move up North created 3,000 jobs, and MediaCityUK at Salford has now become a beacon of aspiration and a cluster for knowledge and expertise. A local councillor recently told me he’d spoken to school kids who had been inspired by the visible success and opportunity that the Salford regeneration has offered and now wanted a future career in media. This was unthinkable 20 years ago.

Internationally, we face just as many issues. Future single market and customs access is now unclear and our friends in Europe could look elsewhere for their goods and investment.

With this in mind, should or can Sheffield, Leeds or other city regions now be expected to forge their own relationships with provincial mayors across the world? No. The only way forward is for leaders to come together to promote the North of England internationally. To date the government has been very supportive of this, but it has to be backed by a strong, growing domestic economy to pique genuine international interest.

Now frankly is the time for delivery. The two key investments required to create more productive regional economies and thereby drive UK growth are on infrastructure and skills. This would allow businesses, people and goods to move freely and efficiently and create a workforce that is sufficiently skilled and motivated to deliver world-class goods and services.

Only through this investment will we see significantly more international companies deciding to locate here. This will allow the Midlands and North to be considered genuinely competitive places to invest, not just as an affordable second choice. Only then will the Northern Powerhouse help to underpin a renaissance in the UK’s economic growth.

Owen Michaelson is chief executive of brownfield regeneration and property investment specialist Harworth Group plc.

Image credit: Steve O'Brien/Wikimedia Commons

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