While media coverage of the recent Queen’s speech focused mainly on prison and education reforms, the government’s renewed commitment to building the northern powerhouse went largely unnoticed.
That pledge followed George Osborne’s pledge in the March Budget to give the green light to the High Speed 3 train link between Manchester and Leeds, as part of his commitment to “making the northern powerhouse a reality”.
It is clear the government wants to ensure that the northern powerhouse has the potential to have a real impact in addressing the North/South economic divide.
However, our research warns that if the government is to boost economic growth in the region, it needs to go beyond current plans to improve transport links between northern cities.
The report, Building the Northern Powerhouse, compares Northern cities to the Rhine-Ruhr and Randstad regions of Germany and Holland, which the government has cited as models for the northern powerhouse. In particular, the government has argued that these regions function as vibrant single economies with strong transport links enabling workers to commute between different cities – and that bolstering rail and road connections is key to the success of the Northern economy.
However, the new Centre for Cities analysis suggests that the success of the Rhine-Ruhr and Randstad areas is not down to intercity transport links, but is instead driven by the economic strength of individual cities and their surrounding areas. The largest cities in the German and Dutch regions are 40% more productive than their counterparts in the northern powerhouse.
For example, Amsterdam – the most productive city in the Rhine-Ruhr and Randstad regions – contributed £75,188 per worker to the Dutch economy in 2011. In the same year, Leeds – the top-performing northern powerhouse city – contributed £46,575 per worker to the exchequer.
This suggests that we can not build a successful northern powerhouse without addressing the productivity deficit in the North. For that to happen, national and local policy-makers should invest in skills. Only three Northern cities – York, Warrington and Leeds – are in the UK top 20 in terms of the number of residents educated to degree level. While nearly half (47%) of residents in Reading have a degree, for example, only a quarter of people in Liverpool are educated to this level.
Of course, there is still a case for improving train links between big cities such as Manchester and Leeds. But our research suggests that strengthening transport networks within Northern cities will be crucial to help people access jobs and businesses access customers.
The government needs to boost economic growth in big city regions such as Leeds and Manchester. Rather than spreading limited monies and political focus equally across the whole region, focusing investment on these places will deliver the biggest benefits for the North.
• Alexandra Jones is chief executive of the Centre for Cities
