Yorkshire business leaders urge Osborne to put money into Northern Powerhouse scheme

George Osborne
George Osborne
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BUSINESS has told George Osborne he must put money behind his ‘northern powerhouse’ plan in his Budget next month.

There are also concerns that funding cuts have left councils without the resources to take on powers transferred from Whitehall although devolution, alongside investment in infrastructure, were both identified as priorities if the northern economy is to prosper.

The IPPR North thinktank, which compiled the report published today, is calling for the Government to make clear its willingness to spend on major schemes, particularly transport.

The report warns: “If there is any real chance that such investments are to bring any meaningful economic benefit even in the coming decade then more urgent progress needs to be made.”

Northern powerhouse is the Conservatives’ plan to rebalance the UK economy by better connecting the towns and cities of the North while devolving decision making powers away from London.

But the plan’s image was significantly tarnished last week when the Government announced two major rail electrification schemes for this region were to be put on hold just weeks after an election campaign dominated by promises of investment in the North.

IPPR North director Ed Cox said: “Northern businesses have overwhelming embraced the Northern Powerhouse agenda and welcome the fact central Government is finally ‘talking up’ the North.

“But despite its remarkable popularity, the Northern Powerhouse must go beyond its current guise as a brand. Bosses told us they want to see a more radical devolution of powers and funding over key economic issues, such as transport, infrastructure and business rates.

“This means the Powerhouse can go forward full steam ahead, ensuring Northern prosperity can create national prosperity.

“But there are substantial risks to the project, from the inevitable focus on London and Scotland, to the continued squeeze on public spending. The Budget is a prime opportunity to signal the extent of the Government’s ambition and put its money where its mouth is.”

The report calls for a change to the way local government is funded to make sure councils and combined authorities are ready to take on devolved powers.

Some business leaders surveyed for the report argued there should be a single pan-northern body to oversee infrastructure investment and economic development.

The report also reveals concerns that the London mayoral election next year will lead to the major parties making further spending promises to the capital while powers being handed to Scotland could lead to businesses and investment attracted north of the border.

Jamie Martin, managing partner at law firm Ward Hadaway which helped compile the report, said: “This report gives a strong and powerful voice to the North’s businesses which should be heeded not just by those in Whitehall but also across the country.

“It is very pleasing to see that the confidence in the North’s abilities and willingness to embrace positive change comes through loud and clear in every line of this report – and it is something which we share wholeheartedly.”

Mr Osborne will present a special “summer Budget” on July 8 to set out the Government’s post-election plans for public spending.