Lord Kerslake: business leaders crucial to Northern Powerhouse success

Lord Kerslake, pictured by Jonathan Gawthorpe.
Lord Kerslake, pictured by Jonathan Gawthorpe.
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THE project to create a Northern Powerhouse will fail without the active engagement of business leaders, the former head of the civil service has warned.

In an interview with The Yorkshire Post, Lord Kerslake said business leaders can break through parochial barriers around local authorities by bringing a global perspective to the North and its cities.

He said they can also bring a commercial focus to decide the key issues that need to be addressed.

And he added they should expect an audience at the highest level with local authority leaders.

Lord Kerslake urged business leaders to “make their voice known in a constructive but challenging way because it is so important to the success of this project”.

The wide-ranging interview covered his views on the progress of the Northern Powerhouse initiative to create a counterbalance to the strength of London and the South East and the challenges facing the civil service and the UK economy.

It took place before an event in Leeds related to his role chairing an all-party inquiry into devolution in England.

Lord Kerslake said: “If you look at the so-called rebalancing agenda... you will see it has moved in the opposite direction.

“We start from the position where we have to reverse an existing trend rather than build on a trend that is moving in the right way in the first place.

“The Northern Powerhouse has the ingredients to drive economic growth in the North but we are some way off putting all the bits in place that need to be there.”

Lord Kerslake was head of the civil service from 2012 to 2014, reporting directly to the Prime Minister, and had responsibility for more than 400,000 civil servants.

He was also permanent secretary at the Department for Local Government and Communities from 2010 to 2015 and is a former chief executive of Sheffield council. He entered the House of Lords last year.

Lord Kerslake said the top priority for central Government should be “let go”. He added: “We are an absurdly centralised country and we would be better run if there was more power devolved away from Whitehall. Whitehall most certainly doesn’t always know best.

“Both powers and funding need to move away from Whitehall. That’s number one priority.”

He warned his former senior colleagues in Whitehall against a break-up of the United Kingdom as they try to deal with the “intrinsically disruptive” process of transferring funding and powers to the regions.

Lord Kerslake said: “Devolution sits within a wider constitutional challenge for this country.

“The very union, the very thing we have all grown up with is at threat. We could see radically different changes.

“The lesson I learnt is the civil service has to be aware of the very turbulent times we live in and not assume things will carry on as they are.”

He said the civil service, like local government, is very tactical and deals with “what the minister wants tomorrow and what is important in terms of parliament” and does not have the capacity to look beyond to see the big driving issues that could shape the future of the UK.

Lord Kerslake said: “Having the capacity to see the big picture and think long term is something that proves very hard in central government particularly with the 24-7 news culture.”

He said that central government needs to “do less and do less better”. He added: “I sat in cabinet for over two years and sometimes the things we talked about, like individual sites and planning policy on those sites... you thought there is no possible chance that the people sitting around this table really know what the story is at local level.

“More power locally, more local decision making would free up Whitehall to focus on the big things that matter.”

Yorkshire’s efforts to win control over funding and powers have been hampered by political argument with local politicians unable to agree on the geographic terms of devolution deals.

Lord Kerslake said: “For the North, the priority is to sort out its approach to leadership and cooperation. It is easy when you are sitting in Whitehall to say ‘why don’t they just work together?’

“Well, it’s tough, we all know this. But it is essential we build the right alliances and partnerships between the key authorities.

“There is a lot of it about the Yorkshire mayor but what’s on offer is city mayors and we should harness that opportunity, build the leadership and use that as a way of driving change.”

He said the priorities for the region are widely known: stronger skills, better education, transport infrastructure and being more open for business.

Lord Kerslake said he was optimistic about the future of the UK but warned that the nation is in for a bumpier ride than many expect.

He added: “It may not be this year, it may be next year. But there are some key issues. We all know about China slowing down and so on, but I think it is deeper than that.

“Some of the big issues that caused the crash in 2007 have not gone away so we should be prepared for the fact that life could still be quite tricky in the period ahead.

“The risk is that people can forget that what goes up can go down sometimes.”

He also raised concerns about “an extraordinary widening” of the gap between rich and poor, with “massive wealth held at the very top end and ordinary people requiring in effect state funding in order to get a meaningful, survivable income”.

Lord Kerslake also waded into the debate about the location of Sheffield’s high-speed rail station, backig calls for it to be built in the city centre rather than at Meadowhall.

The issue has divided opinion in the city region and an announcement on its location is expected later this year.

Lord Kerslake, the chief executive of Sheffield council from 1997 to 2008, said the decision “could fundamentally influence for a very long time how the economy in Sheffield city region develops and whether we learn the lessons of the past and build on economic centres or whether we take very short-term tactical decisions that will undermine the opportunities for the future”.

He added that the economic case is “overwhelming”.