Step-change in investment can boost north by £97 billion

A step-change in investment can enable digital technologies, health innovation, energy and advanced manufacturing to transform the North of England’s economy, adding £97 billion and 850,000 jobs by 2050, according to Transport for the North (TfN).

The Northern Powerhouse Independent Economic Review, commissioned by TfN, identifies key capabilities across the north which could provide the foundations for closing a major gap in productivity, generating new jobs and enhancing global competitiveness. 

Chair of Transport for the North, John Cridland, said: “This Review clearly identifies that, if the right investment and focus is put into these capabilities, and the infrastructure is there to support them, then 1.56 million new jobs could be generated by 2050. Close to a million (850,000) of these will be directly attributable to the success of the Northern Powerhouse and we would expect productivity (GVA) to be 15% higher than currently which, in itself would represent a major step-change for the north.”

Transport for the North, the new body that will have statutory authority for long term transport investment strategy in the north, commissioned the Northern Powerhouse Independent Economic Review on behalf of the Northern Powerhouse partners to provide a clear picture of the economic landscape of the North in a national and global context and identify the major opportunities for economic growth.

Analysis has shown the north lags behind the rest of the UK, and in particularly behind London, in terms of productivity and jobs. The north currently produces £4,800 less GVA (Gross Value Added) per person per annum and over £22,000 less per person than London. Yet it contains twice as many people as London (16m) and has clear potential to be a globally competitive region. The review has identified ‘capabilities’ in which the north is a world leader. These already account directly for 30% of the North’s jobs and 35% of its GVA and have clear capacity to drive future growth.

The north’s four prime capabilities are advanced manufacturing, digital development, health innovation and energy. These are supported by three enabling capabilities – education, logistics and financial and professional services - that are vital if growth in these areas is to be successfully nurtured.

Cridland said: “This review will be fundamental for future planning. Central to powering the north’s future economy will be an efficient high capacity transport network capable of fully mobilising the workforce between the norths key economic heartlands. The review clearly identifies that such a network must be tailored and shaped to recognise emerging and sustainable strengths whilst acknowledging that many northern jobs are in other service sector businesses on every northern high street. In addition to this, improved education will also be vital in northern schools to give young people the chance to go for better jobs using the improved transport links we are delivering.”

He said that, to achieve such a transformational change, including major transport interventions such as a major new road or rail routes, “a step-change in investment strategy is required and long-term collaboration between key partners across the north, and with government and national agencies, will be essential if our joint ambitions are to be realised.”

Commercial secretary to the Treasury, Lord O’Neill said: “This review represents a hugely important milestone for the Northern Powerhouse and supports this government’s commitment to rebalance the economy. As the chancellor has said, the referendum result is even more of an instruction to deliver on our work to build a Northern Powerhouse and so it is hugely encouraging that the region’s leaders are working together to set out their long term priorities,” he said.

Sir Richard Leese, leader of Manchester City Council, said: "This independent economic review highlights the collective strength and potential of England's great northern cities and will inform the work which is taking place between those cities and government to come up with a single agreed economic strategy for the Northern Powerhouse. The prevailing economic uncertainty following the EU referendum result makes it even more essential that northern cities are given the tools and investment to work together to create the jobs and opportunities the region needs and help rebalance the nation's economy." 

Click here to view The Northern Powerhouse Independent Economic Review.


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