Budget 2016: Four Northern Powerhouse announcements you might have missed

17th Mar 2016

The Budget included a number of announcements on the government’s drive to create a Northern Powerhouse. Mike Haw says they could be used to help join up economic growth with poverty reduction.

Several significant announcements about the Northern Powerhouse were buried away in the Budget documents – some of which have the potential to ensure the recovery reaches all people and places in the North:

1. The ‘Northern Powerhouse Phase 2’
The leaders of Manchester, Leeds, Sheffield, Liverpool, and Newcastle councils have committed to working together to meet shared objectives in four key areas: employment and skills, trade and investment, enterprise and innovation, and housing. 

This second phase appears to move the Northern Powerhouse beyond rhetoric and into specifics about how the cities can work together to shared objectives. However, leaders will be judged by their actions and with a new suite of powers at their disposal, they must harness these to ensure growth and prosperity is shared by all. Our recent report on uneven city growth highlighted that 10 of the UK’s top 12 struggling cities are based in the North, local leaders must ensure that places outside the Core Cities benefit from this next phase.

2. Pilots for 100% business rate retention
Piloting this approach in Greater Manchester and Liverpool from 2017 is significant given how big the change is to how councils are funded. Not all areas will be able to grow their business rate easily, and government should consider providing extra support for councils facing the biggest challenges to grow their local economy.

3. The Northern Powerhouse Schools Strategy
The government has committed £80 million over the next four years to improve educational attainment of schools in the North of England. The success of the London Challenge shows what can be achieved with this approach, and our analysis shows that it is important the money is used in evidence-based ways to support children from lower income backgrounds with a particular focus on improving leadership, teachers’ professional development and the use of data and evidence. If this can be replicated, we should expect significant improvements in the attainment of schools in the North.

4. The Greater Manchester Life Chances Investment Fund
This fund brings together funding from the Troubled Families Programme, Working Well pilot, and the Cabinet Office Life Chances Fund into a single pot, and forms part of public service reform in the city. Inclusion of spending from across government departments is significant for places wanting to tailor programmes to meet the specific needs of their communities.

The Budget highlighted that 57% of the population of the North of England will be covered by an elected Mayor following elections in May 2017. It is notable that Leeds is the only one of the Northern Core Cities not to be covered by an elected mayor following the failure to agree a new deal prior to the budget. Mayors will see a new suite of powers at their disposal, which present an opportunity to ensure growth and prosperity is shared by all, so we hope deadlock in the Leeds City Region can be overcome to take this forward.

The Northern Powerhouse can play a key role in rebalancing the economy, bringing prosperity to all people and communities in Northern England. This Budget provides opportunities for local leaders to join up economic growth and poverty reduction in a single Inclusive Growth strategy that would ensure no one misses out from the benefits of economic recovery and new powers.