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01.06.16

Northern Powerhouse investment should focus on biggest cities – Centre for Cities

Strengthening the economies of key northern cities will be more important than large-scale investment in areas like rail, think tank Centre for Cities has said in a new report.

The report compares conditions in the north of England to that of the Rhine-Ruhr and Randstad regions of Germany and the Netherlands, which the government has cited as models for the Northern Powerhouse. The average productivity of the Rhine-Ruhr and Randstad in 2011 was £60,169 for every worker, compared to £42,816 in the north of England.

It says that most of these regions’ economic activity is concentrated in their major cities such as Amsterdam and Bonn, and recommends that Northern Powerhouse investment be focused on the economy of cities by increasing the density of office space and the education level of workers. This will allow businesses to benefit from sharing infrastructure and exchanging ideas, as well as a greater pool of workers.

Alexandra Jones, chief executive of Centre for Cities, said: “Instead of spreading limited monies and political focus equally across the whole region, national and local policy-makers should concentrate most resources on addressing the economic challenges that big Northern cities and their city regions face, as these have greatest potential to deliver benefits for the North as a whole.”

The report says that increasing city density would cause problems such as higher housing costs and increased congestion, but that this could be mitigated through measures such as congestion charges.

It also recommends that decisions about economic policy are made at the lowest level possible in order to ensure that they are attuned to local needs.

Skills, transport and planning decisions should be made at the city-region level by the new metro mayors instead of by pan-Northern bodies.

It says that proposals to devolve power over buses in the Buses Bill should be expanded so that Transport for London style bodies have responsibility for all public transport. They would then be able to control the provision of services, integrate them with other policy areas, negotiate long-term funding areas, introduce smart ticketing across different networks and raise funds for investment.

The latest edition of PSE features an article by Luke Raikes, a research fellow at IPRR North, on how metro mayors can better use transport policy.

Mike Bothamley, head of real estate at DAC Beachcroft, which sponsored the report, said: “The report gives a tangible direction for the evolution of the Northern Powerhouse concept. While supporting regional collaboration it clearly highlights the importance of local action in the drive for sustainable growth and recommends practical actions for planning and development.”

A survey of delegates at the Northern Powerhouse International conference found they rated investment much more highly than political devolution as a means of building the Powerhouse.

A recent report by the Joseph Rowntree Foundation warned that some of the LEPs in the Northern Powerhouse which have seen the greatest growth in prosperity have not seen a similar growth in economic inclusion.

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