Latest Public Sector News

26.09.16

Future of Northern Powerhouse questioned as devo minister resigns

The departure of the devolution minister from the Treasury is “unlikely to dampen the speculation” that prime minister Theresa May is not prioritising the Northern Powerhouse, the LGiU’s chief executive has said – despite Localis arguing that it could give the flagship project “a new lease of life”.

Responding to Jim O’Neill’s decision to step down from the Treasury, LGiU boss Jonathan Carr-West said: “Lord O’Neill’s resignation letter states that the Northern Powerhouse ‘appears’ to be commanding the Prime Minister’s personal attention ‘despite speculation to the contrary’. However, his resignation from the government and the Conservative Party is unlikely to dampen this speculation.

“Many will interpret this as another nail in the coffin of the Osborne legacy.”

It would be a “tragedy”, he added, if the devolution agenda – which Lord O’Neill was chosen to lead after chairing the independent City Growth Commission – “fell foul to political point scoring”.

“We need to return power to our great cities and county regions in order to grow sustainable economies, deliver effective public services and give ordinary citizens a stake and a say in the future of their communities,” Carr-West continued.

“That’s much bigger than one man’s political project. Indeed it should go beyond party politics. We should all hope that Lord O’Neill is right and that this agenda remains in safe and committed hands.”

In his resignation letter, Lord O’Neill, an economist who famously coined the term BRICS to describe the five major emerging national economies, said his responsibility for leading the government review on antimicrobial resistance (AMR) had “come to its natural end” after a UN high-level agreement on the issue.

“I joined the government with the AMR review already well developed in terms of our ideas and influence, but entered office, believing its goals would be enhanced by being a minister,” he said.

“I primarily joined however for the specific purpose of helping deliver the Northern Powerhouse, and to help boost our economic ties with key growing economies around the world, especially China and India and other rapidly emerging economies.

“The case for both to be at the heart of British economic policy is even stronger following the referendum, and I am pleased that, despite speculation to the contrary, both appear to be commanding your personal attention.”

An opportunity to refresh the approach?

Despite the questions that Lord O’Neill’s resignation would raise with respect to the Northern Powerhouse agenda, Liam Booth-Smith, chief executive of Localis, cautioned against “over interpreting what this means”.

“Government has still made all the right noises about devolution, and Theresa May personally has committed to seeing the devolution agenda through,” he argued.

“Whilst it’s a shame to lose someone so committed to devolution, it provides an opportunity for the government to refresh its approach and send the message that it remains committed to devolving power and ensuring economic growth benefits communities across the UK.”

Booth-Smith also noted that Lord O’Neill will now be able to “provide fresh scrutiny” on the Northern Powerhouse progress from the cross benches and, alongside former chancellor George Osborne, be able to “make the case for greater devolution, free of ministerial constraint”.

“The tendency will be to see the resignation as a setback for the Northern Powerhouse, but I think it could actually give it a new lease of life,” he concluded.

Separately, the director of IPPR North, Ed Cox, claimed that the resignation was a “great shame” due to Lord O’Neill’s Northern Powerhouse legacy, but noted that May “has been clear in her support” for the scheme.

“Ministers will come and go, but it is the businesses, innovators and investors in the North that will ultimately unlock our economic potential,” Cox said.

 

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(Top image c. Dominic Lipinski, PA Wire)

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