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AS 2016: Northern Powerhouse survives but volume turned down

The Chancellor reiterated the government’s support for the Northern Powerhouse, publishing a dedicated strategy paper, made up mainly of earlier announcements with few new measures, other than the result of Local Growth Fund bids and borrowing powers for metro mayors.

Compared to the loud trumpeting on the Northern Powerhouse by the previous Chancellor, George Osborne, there was barely a mention of the phrase in Philip Hammond’s speech to the house.

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Hammond did give the regional breakdown of winning bids from the £1.8bn Local Growth Fund third round which opened for applications in March this year.

The breakdown was as follows:

  • £556m will go to LEPs in the North of England
  • £392m to the Midlands
  • £151m to the East of England
  • £492m to London and the South East
  • £191m to the South West

LEPs are area-based economic advisory organisations established by government with public-private boards allied closely to local authorities and combined authorities. LEPs now handle EU funding bids, Local Growth Fund programmes, initiatives such as enterprise zones and they help inform industrial policy when called upon by Whitehall.

The extra cash will be used to “improve transport connections, unlock housing and enhance digital productivity”. Specific LEP allocations will be announced in due course.

LGF monies awarded in 2014 are only now being spent on the ground, given the time it takes to get planning permission and agree terms, which could mean in two years’ time there will be infrastructure funding available for developments just as Britain leaves the EU.

A growth deal for North Wales is being considered, Hammond said.

On devolution deals, the Chancellor said “…government will give mayoral combined authorities powers to borrow for their new functions, which will allow them to invest in economically productive infrastructure, subject to agreeing a borrowing cap with HM Treasury. The government will also consult on lending local authorities up to £1bn at a new local infrastructure rate of gilts + 60 basis points for three years to support infrastructure projects that are high value for money.”

Devolution deals have already been agreed with Greater Manchester and Liverpool City Region where elections will take place next spring to choose new metro mayors. There was no mention of Lancashire and Cheshire devolution bids.

Talks on future transport funding will begin with Greater Manchester, the Chancellor said.

The budget for the Work & Health Programme will be devolved to London and Greater Manchester, “subject to the two areas meeting certain conditions, including on co-funding.”

Industry reacts

Nicola Rigby, director of planning, development and regeneration at GVA, commented: “The Chancellor has put to bed the question of whether this Government supports the idea of the Northern Powerhouse. Clearly recognising the significant contribution that the UK’s regions make and can contribute to UK Plc, Hammond has put the money where his mouth is with additional infrastructure spending and Local Growth Fund allocations to LEPs. He has also strengthened the role of Mayors in Combined Authorities through greater access to funding. More is needed, but equally we recognise The Chancellor is constrained by wider economic, and even political circumstances, beyond his own control. Ultimately, we asked for Government commitment and I believe we have it. Focus remains on us, as an industry, to identify those projects across the Northern Powerhouse which will address the challenges and opportunities ahead.”

Andrew Pattinson, real estate partner at Shoosmiths in Manchester: “The Chancellor’s updated ‘Northern Powerhouse Strategy’ document, published alongside the Autumn Statement, did importantly reaffirm the Government’s commitment to the agenda, which is clearly good news as there were fears over the summer that it may have been shelved.”

Chris Oglesby, chief executive of Bruntwood and chairman of Manchester Science Partnerships: “We’re pleased to see the Chancellor reinforcing the importance of the Northern Powerhouse and Midlands Engine. The economic thesis that underpins these concepts is undeniable.”

Richard Corby, director of Lambert Smith Hampton: “Are we in the North getting more than crumbs from the table of central government for once? It is great to see £556m directed to the LEPs in the North and for the Northern Powerhouse to get some honourable mentions about increasing productivity and improving infrastructure, but is this new money or a restating of existing budgets?”

Your Comments

With no mention of devolution deals for Lancashire or Cheshire, could that hearld the movement of some of their boroughs to the GM & LCR regions?

By Man on bicycle

Sorry, but I see the ‘Northern Powerhouse’ as nothing more than a load of hot air. How is it ever going to change the ingrained views of Planning Officers and Members in relation to ‘difficult’ planning decisions? Imagine the scene, a Committee Member addresses the room “I dont like this scheme, it has many drawbacks in my view, but as we are as a Northern Powerhouse, my view has been changed”. It will never happen. I attended an event not too long ago where the Chief Execs of Trafford and Stockport were keen to extol the virtues of this ‘initiative’ but asked whether it would lead, for example, to a full Green Belt Review in Stockport, or the reallocation of employment land in Trafford, as examples, neither CE was keen to commit or offer any hope or certainty. Column inches and back-slapping does not deliver development; in the main, this will continue to occur via appeal after appeal.

By Steve the Sceptic

The northern powerhouse is not simply cover for lazy developers to create low quality sprawl but increasing economic productivity and output. This implies a focus and delivering agglomeration economies by increasing densities of housing and employment close to existing urban centres so business can benefit from better access to markets, innovation networks and labour.

The councils are completely correct to resist lobbying to increase low density, low quality, disjointed urban sprawl. It may be profitable for certain landowners but would not deliver any sort of northern powerhouse.

By Get real

@Man on bicycle..Heard Warrington thinking of joining Merseyside……

By Schwyz

A lot of hot air from a lot of hopefuls – can someone show me a business plan? – been asking for two years.
Neither government nor private sector can/will answer questions.
As for the questions about devolution – at least get someone who can take a spelling test.
“Dumbed down Britain” appears to rule.

By Mike Livesey

@Schwyz, Yes you are probably right, as you know Both Warrington and West Lancs are already associated with the LCR in some form or other and this may tip the balance. Disclaimer, if there are any spelling mistakes, sorry it’s very difficult to keep your balance and type while holding up the bike..

By Man on bicycle

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