Full steam ahead for the Northern Powerhouse project?

Thursday 14 July 2016

On 8 July 2016 former Communities Secretary Greg Clark MP spoke at the ResPublica “Finding True North” conference in Salford and said that local leadership is the key to unlocking the potential of the country’s towns, cities and regions.

In his speech Mr Clark outlined that, “in the last two years, foreign direct investment in the Northern Powerhouse has increased by 126%” and “since 2010, the long-standing North South gap in private sector job creation has almost disappeared.” He added, “cities in the North and Midlands are at the top of the job creation league.”

The Minister keenly pointed out, “Recent research by the London Stock Exchange found that almost 80% of the fastest growing stock listed companies in the UK were headquartered outside of London – with Manchester and Leeds among the locations.” From this the Minister concluded, “now more than ever it is essential this progress continues.”

Throughout his speech Mr Clark urged local government leaders, Local Enterprise Partnerships and other stakeholders to maintain the momentum of devolution and the local growth agenda. He said, “To support and incentivise locally-led investment in transport, housing, skills and other priorities, the next round of Growth Deals will make £4.3 billion of funding available from the Local Growth Fund.”

“This money will go to the best schemes, introducing a deliberate element of competition.” According to Mr Clark, “each deal and each piece of decentralising legislation represents a fresh point of departure not a final destination.” The Minister outlined that there is still work to be done, but three things are beginning to put in place:

“Firstly, combined authorities to provide the heft and coordination that communities need to deal directly with Whitehall and take control of major investment decisions.

“Secondly, elected mayors to provide combined authorities with democratic accountability and high profile leadership.

“The third enabling mechanism is fiscal devolution – the financial independence, stability and incentives that communities need to push for local economic growth.”

Interestingly the Minister explained how, “a shift to 100% local retention of business rates will be a massive step in that direction – and Greater Manchester and Liverpool City Region will be the first places to implement full business rate retention.”

To close Mr Clark said, “Whether on fiscal devolution, metropolitan mayors or combined authorities, Devo North is leading the way.”

The Northern Powerhouse project featured in the November/December 2015 issue of Property Professional Magazine where we analysed what it could mean for the property industry. It is clear that the issue should not fall off the Government’s agenda, despite Brexit and the change of leadership. Local communities and businesses must be prepared for the changes in order to reap the rewards.

The Communities Secretary’s speech can be read in full here