This paper looks at the emergence of the ‘northern powerhouse’ concept, and in particular at the response of northern businesses to it.

The majority view of northern businesses surveyed and interviewed for this research is that devolution in England is to be welcomed and that the northern powerhouse should proceed ‘full steam ahead’. Despite an element of caution on the part of some national business bodies, businesses in the north – large and small – appear more bullish. They have clearly identified the commercial benefits of locating economic decision-making ‘closer-to-home’.

Whether in terms of a more devolved skills system, more local control of transport and other infrastructure, or even business rates and local tax variation, northern businesses clearly put more trust in local government and the emerging combined authorities in city-regions to work in their interests than they do in central government.

Although the limitations of this research project are clear, its conclusions reflect a growing consensus among businesses regarding the opportunities of the northern powerhouse agenda. This should add further encouragement to national government to press ahead with its Cities and Local Government Devolution Bill and to work hard to ensure devolution in England remains a central feature of its programme across government. It should also help to persuade local councils to work collaboratively with each other and with Westminster to ensure they secure the best deal for their area.

The paper sets out recommendations to counter three predominant barriers to progressing the northern powerhouse:

  1. Some implications of the Cities and Local Government Devolution Bill
  2. the spending review and constraints on capital investment
  3. external factors, specifically the potential impact of future changes in London and/or Scotland.