This article is part of a series in which DLA Piper professionals define what the Northern Powerhouse means to them and how to deliver the regeneration of the Northern economy. It is the basis for a piece in Super North, a monthly supplement produced by The Times and sponsored by DLA Piper.
There is a general consensus that the North has a lot to offer the UK economically and the term 'Northern Powerhouse' is now referred to in political rhetoric on a daily basis. Of course, cities of the North, many of which used to be 'global powerhouse' cities are grasping the opportunity to be on the political agenda and to lay the foundations for future prosperity by accepting proffered control of matters previously reserved to the Westminster government.
Nonetheless, there are a number of questions that arise that remain currently unanswered. The first and perhaps the most obvious is how one defines the North geographically - who will receive devolved powers? Over the years this has been interpreted in many ways and the North of England is very far from being a homogenous polity. Focus has tended to be concentrated on the M62 route from Liverpool to Leeds, missing most of the North East and the counties of Cumbria and Lancashire.
So when we refer to the 'Northern Powerhouse' and devolution do we focus on the metropolitan areas or do the recipients of devolved powers embrace the intervening countryside? The North is immensely diverse, and this is reflected in the sheer range of socioeconomic groups. For instance, will the nuclear workers of Cumbria be included in the same political structure as the farmers of the East Riding? At present the idea of devolution has been very focussed on the metropolitan centres - and recent announcements about healthcare devolution have focussed on Greater Manchester. Perhaps a more holistic approach will need to be considered if the concept is going get political buy in.
One way to navigate this potential minefield may be to have an umbrella Northern assembly, a sort of super combined authority. If major infrastructure projects like HS3 or new roads to support important regional airports such as Manchester are going to be achieved, a structure will be needed. This is important so that city fathers will be able to resolve competing demands - and take tough decisions such as on expenditure or routeing rail links with cabinet-style responsibility. The key points to balance here, are that any assembly would have to achieve electoral buy- in at a time of voter fatigue, but would have to avoid pork-barrel politics.
How will the dominance of the big cities be tempered and how will the hierarchy be managed? For example how would the Port of Liverpool feel if investment goes to Immingham? Northern cities need a structure to achieve consensus on what exactly they expect from the government, being more articulate than simply seeking better infrastructure. Local taxation is one idea, letting local areas have control over business rates - something achieved by Manchester in the latest budget.
The ability to hypothecate revenue from growth such as through tax increment financing is a common approach in the US, and echoes the mayor of London's Crossrail levy and business improvement districts elsewhere. In other words, this is not a new approach, HS3's precursor, the Liverpool and Manchester Railway, was predicted on being paid for by the prosperity generated. Extending deals such as that afforded to Manchester to other regional centres would assist in providing financial muscle to let the region deliver infrastructure itself.
All of this will only happen if the results of the 'Northern Powerhouse' can be translated to real benefits to the electorate such as new jobs. This is what will motivate the politicians not only in the North but also in Westminster. The nodes linked by new infrastructure are the reservoirs of growth, but that need to translate into gross domestic product growth to justify the approach. To an extent, that's what has been going on in London - the business rate supplement for the Crossrail Levy. It is doing things in a way that doesn't make the cost of regional growth seem expensive, and so unattractive. But before all this, you have to sort the question of governance.
Therefore, the aspects that will make a Northern Powerhouse successful are three key points: a political and governance structure that can manage its programme, the financial wherewithal to deliver its aspirations and successes in generating growth and opportunity that achieves buy-in for the institutions created.
The Times - Super North
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