The idea is one of a raft of recommendations made by the IPPR North think tank today aimed at securing powers and money from the Government to help grow the economy in the North of England.
It argues that London has won backing for projects such as Crossrail by matching “long-term vision” with proposals for projects with “ambition and scale” and urges the North to do the same.
The report claims detailed plans for projects on the scale of Crossrail should be drawn up now so they are ready for the Government to support in 2015 when it next reviews spending.
Other suggestions include much greater local control over tax and borrowing, fixed five-year budgets for combined authorities – such as those being launched in South and West Yorkshire this year – covering areas including skills and transport, and more spending on scientific research at universities outside the South-East.
IPPR North insists it is not offering a begging bowl but arguing for a fairer share of money for the North. It has maintained it is making the case that investing in the North will unlock economic growth and create jobs that will reduce the country’s welfare bill and fund public services.
If its proposals were adopted in full they would represent a radical shift of power away from Whitehall to the English regions.
Sheffield City Council leader Julie Dore said: “We believe that cities are best placed to drive growth, which is why Englands eight largest cities have brought forward proposals that would give us the tools we need to develop our local economies and create more jobs and prosperity in our area.
“Currently Britain is one of the most centralised countries in the world. This is leading to bad outcomes with an increasingly centralised economy and growing North/South divide, that’s why we’re calling for a fair deal for our cities.
“We have already seen the benefits that devolution can bring, in Sheffield. Now that we have control of skills funding we are able to match the training offer for young people with the needs of local business.
“We need the Government to roll this out on a much wider scale and give cities the powers they need over so we can meet the needs of our local areas. I welcome this new report from IPPR which adds to this important debate.”
The IPPR report argues that the Government’s strategy of cutting public debt by reducing spending will reach its limits in the coming years and the next spending review needs to focus more heavily on growth, particularly in the North.
“Northern prosperity is national prosperity,” it says.
One of the most radical ideas in the report is the suggestion that 10 per cent of income tax raised in a given area could be retained locally giving local authorities an added incentive to grow the local economy and reducing dependence on Government grants.
Greater Manchester authorities have agreed a deal with the Treasury which means that when it succeeds in growing the economy the benefits, such as savings on welfare, are shared between the Government and councils.
The report calls for more of these so-called “earnback deals” to be struck with other parts of the North.
It also suggests that areas with high unemployment should be able to ask for the right to offer big incentives to businesses such as national insurance breaks and Government backing for companies that employ people who have proved difficult to get into work.
The report recommends the Government should publish more analysis of the impact of Treasury decisions on different parts of the country and argues the Office for Budget Responsibility should provide regional economic forecasts.
Figures released by the Treasury in November showed Yorkshire and the North of England are at risk of becoming the UK’s “squeezed middle”, as the Government pours money into both the booming South-East and into Scotland ahead of next year’s independence referendum.
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