Member Article

Is the Northern Powerhouse already starting to show cracks?

It’s been just over 12 months since George Osborne first mentioned the ‘Northern Powerhouse’, an idea that rapidly gathered pace and was arguably one of the key platforms that helped the Conservatives achieve an unexpected outright majority in May’s election.

What’s clear is that since 2014, as a brand and a concept, the ‘Northern Powerhouse’ has achieved huge cut-through and awareness in referring to the devolution of power to local authorities in the North. Its near-daily reference in the business media makes it a significant communications success.

However, research amongst businesses released by the Institute for Public Policy Research (IPPR) this week, has shown that four in five respondents felt that current plans on devolution were not being communicated effectively - that’s pretty damning.

As devolution is central to the creation of the Northern Powerhouse, where are the cracks in its communication and does this gap demonstrate a risk?

Well the IPPR research goes some way to outlining the key issues, which include an underlying fear in ‘The North’ that the Government’s commitment would turn out to be political spin and easily discarded election promises.

This view has not been helped as at the first major test of that commitment, the new Transport Secretary Patrick McLoughlin has ‘paused’ the funding for the electrification of the Midland Mainline and Transpennine rail routes, whilst retaining the funding for the southern-based Crossrail and improvements to the Great Western route.

With connectivity and investment in infrastructure being key foundations of the Northern Powerhouse - so that Leeds, Manchester and Liverpool can become one inter-connected metro region - this feels like a pretty significant back-peddle.

IPPR’s research also shows that some northern businesses feel as though they are being kept out of the devolution process by the LEPs and central government, through secretive “backroom deals”. Conversely there is a feeling that LEPs are being forced to dance to Westminster’s tune and into systems of government that they have previously rejected. Specifically, if we want full devolution we must elect a Mayor.

Both of these points have some merit but, with regard to backroom deals, I would suggest that Westminster’s timetable for delivery is forcing the LEPs to make decisions without being able to go out to the business community first.

However, on being forced into using the Government’s preferred model, this is undoubtedly true. Manchester voters rejected a mayor back in 2012 and then the authority announced in November last year that it would now get one, in order to receive the maximum amount of power for the region. We can expect Leeds to follow suit shortly, despite its population also shooting down the idea in a vote in 2012.

These sorts of U-turns are exactly what damage the credibility on both sides – specifically as they tend to be announced without the full context of why the decisions have been made.

What it really shows is the yawning gap between the national concept and the detail available at a regional level. I wrote a previous post stating that if LEPs don’t successfully communicate at the local level they will find it difficult to build support and, ultimately, be as vulnerable as the previous Regional Development Agencies were. The IPPR research suggests that they still aren’t getting their message across.

There are two things that need to happen to demonstrate that the Northern Powerhouse remains on track and a living, breathing entity, rather than empty rhetoric.

Firstly, George Osborne needs to make a solid and binding commitment to the North in his budget on 8th July. With the ‘pausing’ of the electrification work, perhaps a definitive investment in HS2 infrastructure would be a good signal?

And on a regional level the LEPs need to start communicating the road map towards devolution, outlining all the options on the table, instead of waiting for big announcements. They need to go beyond the economics and the Strategic Plan and communicate the journey rather than the desired destination, because otherwise we won’t understand why and how we got there.

By Tim Downs, Aberfield Communications

This was posted in Bdaily's Members' News section by Aberfield Communications .