What is the Northern Powerhouse?

February 1, 2016

Alison Cowie looks at the Government’s strategy for re-balancing England’s economy

The Northern Powerhouse is a term first coined by Chancellor Osborne at a speech in Manchester in June 2014, naming an attempt to redress the North/South economic divide.

In this speech, he admitted the North was not reaching its potential.

The Government’s answer has been to encourage the key locations of Manchester, Sheffield, Leeds, Liverpool, Hull, Newcastle and the Tees Valley to work together and create a pan-Northern powerhouse to attract more inward investment, both nationally and internationally.

Transport is seen as the key driver to creating a Northern Powerhouse by improving connectivity to the region’s cities via rail, road and air.

Chancellor Osbourne also wants the North to cast off its industrial image and become areas of excellence where science and innovation can thrive. Skills is another area identified for improvement, in order to build a talented and sustainable workforce in the North.

Finally, devolving power (to the North and other regions in UK), so that local authorities have a greater say on how their areas are run is a priority for this Government. So far, Northern-based devolution agreements have been signed in Manchester, Sheffield, the North East and Tees Valley.

This is not the first time a government has tried – and largely failed – to rebalance the North/South economic divide. Indeed, this latest attempt is not without its critics, with the recurring accusation that the Northern Powerhouse is no more than political rhetoric.

But there can be no denying that the Northern Powerhouse agenda has steadily grown in prominence for the public and private sectors in the North, and beyond, despite the fact that the true results of the scheme make take decades to emerge.

The Northern Powerhouse Timeline

June 2014
The vision for the Northern Powerhouse is set out for the first time by George Osborne, in a speech at Manchester’s Museum of Science and Industry.

November 2014
The Greater Manchester Agreement is signed. The agreement promises devolved new powers and responsibilities to Greater Manchester, and a city-region elected mayor.

December 2014
Chancellor Osborne makes a £7-billion Northern Powerhouse pledge in the Autumn Statement. It includes: £6 billion for improved transport and funding for a number of centres for innovation, including a new Sir Henry Royce Materials Research Institute in Manchester with centres in Leeds, Liverpool and Sheffield, funding for a National Centre for Ageing Science and Innovation, a new Cognitive Computer Research Centre in Warrington and a new National College for Onshore Oil and Gas in Blackpool. The pledge also committed to a Great Exhibition in the North to showcase the best Northern art, culture and design, and £78-million funding for a major new theatre and exhibition space in Manchester.

February 2015
Greater Manchester becomes the first English region to run its own £6-billion health and social care budget.

March 2015
One Agenda, One Economy, One North is a report on the Northern Transport Strategy. It is developed jointly by Government, Northern city regions and Local Enterprise Partnerships and sets out how transport can be used to help transform Northern growth, rebalance the country’s economy and establish the North as a global powerhouse.
The University of Manchester opens a £60-million Graphene Engineering Innovation Centre (GEIC) which represents a £60-million investment from the Government.

May 2015
The Chancellor returns to Manchester to continue the theme of devolution to the Northern Powerhouse after the Conservatives win the General Election.

Prime Minister appoints James Wharton, MP for Stockton South, as Parliamentary Under-Secretary of State and Minister for Local Growth and the Northern Powerhouse.

July 2015
George Osborne promised to put ‘the power into the Northern Powerhouse’ as he presents his Summer Budget. He announces plans to devolve greater powers to the ten councils of Greater Manchester and aims to extend these deals towards local authorities in Sheffield, Liverpool, Leeds and the Midlands. Transport for the North receives a £30-million boost.

August 2015
A blueprint for how £13 billion of Government investment in transport will create the Northern Powerhouse is unveiled. Roads Minister Andrew Jones pledges £350 million of improvements to the A1 and a £3-billion investment for Yorkshire and the North East.

September 2015
Hitachi opens a new £82-million facility in Newton Aycliffe, County Durham. Chancellor Osborne said: “This state-of-the-art facility will grow and secure jobs for decades to come and will help us to build the Northern Powerhouse.”

George Osborne showcases a selection of £24-billion worth of investment opportunities in the North of England at an event in Chengdu with senior Chinese investors, ahead of the upcoming state visit by President Xi in October.

Tech North is established to accelerate the development of the North’s digital economy through the promotion and support of digital entrepreneurship.

October 2015
Sheffield City Region agrees devolution deal with the Government.
This is followed two weeks later by similar devolution deals agreed by the Shadow Tees Valley Combined Authority and the North East Combined Authority.

November 2015
A £400-million Northern Powerhouse investment fund is announced in the Autumn Statement to help small businesses to grow as well as £150 million to help make Oyster-style ticketing a reality across the whole of the North.

December 2015
Government announces its intention to award a Northern franchise to Arriva Rail North Ltd, and a TransPennine Express franchise to First Trans Pennine Express Ltd. Together, these operators will oversee a £1.2-billion boost to rail services with 500 brand-new carriages, room for 40,000 more passengers, thousands of new services and improvements to facilities.