North needed to heal national finances
Think tank calls for investment shift from South East to North
Responding to the Chancellor's Autumn Statement, IPPR North has welcomed proposals for single pot funding but called for greater decentralised economic development powers and funding.
Ed Cox, Director of IPPR North, said:
"The Autumn Statement contains some small measures to enhance local growth, with the Single Pot proposal a clear precedent to decentralise economic development powers and funding. But to really heal the nation's fiscal health the Chancellor must accept that northern prosperity is national prosperity and take more radical measures to shift investment in London and the South East northwards."
IPPR North welcomes the Chancellor's commitment for more funding to support the Local Enterprise Partnerships (up to £250,000 per LEP) and for a single pot for LEPs to bid for that holds more of the funding that currently goes to local transport, housing, skills and getting people back to work.
IPPR North's Northern Economic Futures report recommended the government build the capacity of LEPs to support economic growth, skills, infrastructure, housing and business employment and sought a single pot for economic growth of up to £129billon. IPPR North is pleased the Chancellor understands the need to devolve to drivers of growth outside of Whitehall.
However, IPPR North remains concerned that the Chancellor's approach could see increasing disparity between areas that are successful in their bids and those that are not - we would prefer to see greater collaboration between LEPs, rather than seeing them compete against each other for Whitehall hand-outs. Moreover it is not clear how much 'a greater proportion' means at this stage. IPPR North is urging departments across Whitehall to be radical with the money and powers they are willing to devolve.
IPPR North welcomes the investment of £378 million to upgrade key sections of the A1 to up to Newcastle but many in the North East will be disappointed that this does not extend to the Scottish border. IPPR North will carry out a detailed analysis of the new National Infrastructure Plan but today's announcements appear small beer in comparison with the Olympic Park-scale investment proposed for Battersea Power Station. Only two out of the 12 cities to receive funding from the Government's Urban Broadband Fund are in the North and none are in the North East.
IPPR North welcomes the Chancellor's boost the Regional Growth Fund by £350million pounds. A closer inspection of the detail shows an additional £75 million next financial year, a boost of £200million in the following year and a further £75 million the year after that. The boost in capital is an excellent idea, but we argue that the money should be frontloaded for regional projects to access now, which in itself would provide a timely stimulant for national economy.
Inward investment is a vital source of finance for business growth in the north of England but the current arrangements are not delivering favourable outcomes for northern LEPs. If the new funding is to have greater impact for the north then it needs to be used to build local capacity and encourage more long-term, jobs-rich investment, in line with the recommendations of IPPR North's Northern Economic Futures Commission report.
Notes to Editors:
Today's Autumn Statement announcement is at:
IPPR North's Northern Economic Futures Commission is available here: http://www.ippr.org/publication/55/9949/northern-prosperity-is-national-prosperity-a-strategy-for-revitalising-the-uk-economy
IPPR's plan for deficit reduction is available here:
IPPR's plan for growth is available here:
Richard Darlington, 07525 481 602, email@example.com