Northern Powerhouse ‘undermined’ by austerity

The Institute of Public Policy Research (IPPR) North has said that the Northern Powerhouse is being ‘undermined’ by austerity despite signs of economic growth.

Five years after its launch, the think tank said that the economy had ‘moved in the right direction’ but more children were living in poor households. Andy Burnham, mayor of the Greater Manchester Combined Authority, said the project was at risk of ‘fizzling out’, despite the government pointing to record numbers of people were in work across the north.

The Northern Powerhouse has seen success in devolving power by creating five new metro mayors and a regional transport body - Transport for the North. However, IPPR North claims that the government had undermined the project while making cuts in public spending, with the north having seen an overall £3.6 billion reduction in real terms since 2009-10, while south-east and south-west England saw a £4.7 billion rise.

In its analysis IPPR North found positive changes, including: 34,520 more jobs in professional, scientific and technical jobs in 2019 compared with 2014, plus a further 54,523 jobs in manufacturing roles; ‘marginally’ higher economic growth in the north than the national average - a 10.7 per cent rise between 2014 and 2017, compared with 10.6 per cent for the UK as a whole and 9.7 per cent for the UK excluding London; and employment in the north increased about seven per cent, compared to the UK average of just over six per cent.

Nonetheless, among the negative changes, the think tank highlighted how 800,000 northern children are living in poor households, a rise of about 200,000 since 2014, and how weekly pay across the north has risen by £12 (2.4 per cent), against a national average increase of £19 (3.5 per cent) in real terms.

Luke Raines, from IPPR North, said: "Austerity has undercut a lot of the powerhouse agenda just because it's hit the North harder than any other region and that's had a consequence for people living in the North and for the economy within the North. So we've seen child poverty go up by 200,000 in just five years - that's quite a big increase."

Burnham said: “There are signs in Greater Manchester that devolution is starting to work," he said. "We're doing more to get people back to work but overall there is a real danger that the Northern Powerhouse could be about to fizzle out. Westminster has failed the North of England and that is over decades under governments of all colours."

Judith Blake, leader of Leeds City Council, said: "The northern authorities are working much more closely together and that's a real benefit. The real difficulty we have is that (transport) schemes are delayed and there's a real lack of commitment to rebalancing the economy."