Thursday, November 24, 2016

News: Government publishes Northern Powerhouse strategy

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The Government has given a clear indication that the Northern Powerhouse idea will continue to have importance in the future of the UK economy by setting out a strategy to raise productivity across the North.

Raising the productivity of the UK was a key theme in chancellor Philip Hammond's first (and set to be only) Autumn Statement where he set out that the Government will maintain its commitment to fiscal discipline while recognising the need for investment to drive productivity.

Hammond explained the UK's productivity gap, "which means in the real world, it takes a German worker four days to produce what we make in five; which means, in turn, that too many British workers work longer hours for lower pay than their counterparts."

The Autumn Statement was used to prioritise additional high-value investment, specifically in infrastructure and innovation, that will directly contribute to raising Britain's productivity.

As part of this, the Northern Powerhouse strategy states that the Government will invest in transport infrastructure to improve connections between and within the North's towns, cities and counties; work with local areas to raise education and skills levels across the North; ensure the North is an excellent place to start and grow a business; and ensure the Northern Powerhouse is recognised worldwide as an excellent opportunity for trade and investment.

On connectivity, the strategy discusses the £13 billion of investment in northern transport over the course of this Parliament and high profile projects such as HS2.

Improving trans-Pennine connectivity was mentioned whilst the regions wait on studies into a potential tunnel to improve journey times between Sheffield and Manchester. Route development work on Northern Powerhouse Rail (HS3) linking the North's cities continues with transport body, Transport for the North to consider the options over the coming months, and announce the next steps in 2017.

Previous projects such as the upgrading the M1 to become a smart motorway between J32 and J35a through Rotherham were highlighted and the Government added that specific allocations for further transport schemes will be announced in due course.

One new project that is moving forward is the £75m+ "Sheffield Mass Transit Scheme" that has been successful in bidding for business case development funding within the Local Majors Fund. Rothbiz revealed the Sheffield city region's bids in June. Phase 1 of the project involves a massive replacement, refurbishment and possible extension of the Sheffield Supertram system. It would appear that bids to address congestion at J33-J34 of the M1, and a new Trans-Pennine through route linking the SCR with Manchester and the Humber ports, have not progressed.

Sir Nigel Knowles, chair of the Sheffield City Region LEP, said: "The Northern Powerhouse combined is equal in size to London. The North used to power this country and was one of the aspects that made it great. Central to this is connectivity – getting from Manchester to Sheffield or from Rotherham to Leeds needs to be as easy as going from Canary Wharf to the City of London."

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On skills, the strategy covers school improvement and that authorities, such as the Sheffield city region, are set to gain control over the Adult Education Budget for workplace skills and training.

The North is also expected to see some of the further £1.4 billion announced to deliver an additional 40,000 housing starts by 2020-21.

On enterprise and innovation, the strategy highlights the already approved £400m Northern Powerhouse Investment Fund which is set to begin support businesses early next year.

On economic development, the Sheffield City Region local enterprise partnership (LEP) is set to learn its allocation from the Local Growth Fund soon (it bid for £156m) and, if it becomes a mayoral combined authority as proposed, it will gain powers to borrow for their new functions, which will allow them to invest in economically productive infrastructure.

The University of Sheffield is involved with the £100m Government programme to incentivise university collaboration in tech transfer and in working with businesses. Proposals are being worked up.

Announced before the Autumn Statement, the Government is putting an additional investment in research and development, rising to an extra £2 billion per year by 2020-21. This includes the Industrial Strategy Challenge Fund to support collaborations between business and the UK's science base.

Mike Tynan, chief executive of the Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC), the multimillion pound centre in Rotherham, said: "I welcome the Autumn Statement focus on the key industrial drivers of productivity and research and development. Support to UK industry in order to improve its competitive position is vital to ensure that our manufacturing supply chain is able to participate in global opportunities.

"Regional investment is also necessary to develop our local capacity and capability and I'm pleased that the chancellor has provided funding for local deployment, in particular a recognition of the potential value of northern industry in the Northern Powerhouse."

The strategy also points out the Government's belief that the shale gas industry is to play an important role in the North.

On trade and investment, the Department for International Trade will continue to lead on work to promote the Northen Powerhouse to foreign investors through efforts like the Investment Portfolio which pitches projects such as the Sheffield-Rotherham Advanced Manufacturing Innovation District (AMID).

Images: HM Treasury


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