The obstacles to making the Northern Powerhouse work are huge – and the data proves it

Hello my name is George and for my birthday this year I would like a red, white and blue Northern Powerhouse. Image: Getty Images

The latest instalment of our weekly series, in which we use the Centre for Cities’ data to crunch some of the numbers on Britain’s cities.

See that man over there, waving manically while swimming around in a pool of cash? No, not Tony, the other one. George Osborne. Remember him?

The once-chancellor and Chief Machiavel of Westminster is still around, and is now at the reins of a think-tank founded to promote the Northern Powerhouse and work with businesses and investors to lobby for its execution.

Sadly, the political will to implement the policy amongst those with any actual power – read; not George Osborne – seems to be fairly close to nil. We’ve heard plenty of Brexit means Brexit, but when was the last time you heard Northern Powerhouse means Northern Powerhouse, huh? Yeah. Didn’t think so.


Part of the problem, of course, is that such a vast undertaking as transforming a vast number of the country’s cities involves various strands of thought. As much as it pains me to say it, you can’t just throw money at a couple of infrastructure projects and hope that everything magically sorts itself out. It’d be a start, but the problems that make the Northern Powerhouse project both so necessary and so challenging are far more varied and numbered. And here’s where the data can come in handy as a quick way of running through these issues.

The simplest way to look at all of these city metrics is with a national map. Each individual dot represents a city, and the colour of the dot varies according to the level of the metric the map is set to show. And for the sake of avoiding arguments further down the line, my definition of the cities covered by the Northern Powerhouse and also covered by the Centre for Cities’ data runs as follows: Blackpool, Preston, Blackburn, Burnley, Bradford, Leeds, Wakefield, Barnsley, Doncaster, Sheffield, Huddersfield, Manchester, Wigan, Warrington, and Liverpool.  As they say on the interwebs, don’t @ me.

Obviously, economic foundations are important here, and warning first: many, many maps follow.

Click to expand. Image: Centre for Cities

A splurge of green around the Northern Powerhouse area shows that the claimant count for unemployment benefit, taken from data in November 2016 – the most recent month available, is higher than in other areas of the country.

Click to expand. Image: Centre for Cities

You can see the same problem another way. The welfare spend per capita, measured in 2014, is similarly high in the area – though not quite as dramatically as the claimant count.

Clearly, employment is somewhat more of an issue here than elsewhere in the country. And much of that is likely to come from longer-term issues than just ploughing money in.

Click to expand. Image: Centre for Cities

The working age population with no formal qualifications, with data from 2014, tends to tick up a fair amount of green dots across the Northern Powerhouse belt. But it’s clearly not just that the labour force isn’t necessarily qualified enough to take on the kind of digital age start-up quango jobs that power places like the Silicon Fen and the Silicon Roundabout and anywhere else you can shove Silicon in front of.

Click to expand. Image: Centre for Cities

The level of people born outside the UK also suggests that the employment market doesn’t support enough capacity to encourage and foster immigration – whereby foreign workers fill gaps in the market that the local population can’t or won’t do.

But there are some more alternative ways of looking at the Northern Powerhouse. Through, say, broadband.

Click to expand. Image: Centre for Cities

A map of superfast broadband from 2015 shows a clear glut in the South East, whilst the Northern Powerhouse area is speckled with yellow dots, indicating poorer coverage. And that infrastructure matters – it encourages businesses to set up shop, makes operations quicker and more efficient, and generally makes stuff happen.

Click to expand. Image: Centre for Cities

Similarly, looking at the number of patents granted per 100,000 people in 2014 shows that the hothouses of innovation tend to be further south. Or in Aberdeen. Again, a smattering of yellow dots indicates that fewer patents per capita come from cities in the northern belt.

And finally, for those avid readers who go home deeply disappointed unless there’s at least a cursory mention of public transport in a CityMetric article, here’s this.

Click to expand. Image: Centre for Cities

The national picture of the proportion of people who commute by ‘private vehicle’ as per 2011 data – aka, mostly just driving your car but also hypothetically taxis – shows a glut of green dots in the northern areas.

And why does that matter? Almost every other way of getting to work is more conducive to working. Walking or cycling to work gives you a perky burst of fresh air, enabling a peachy start to the day, whilst travelling by public transport gives you crucial downtime where your brain can switch off, listen to music, potentially have a nap, and generally free up more concentration time for the bit where you actually do your job. Whereas when you drive, you’re sitting hacked-off in a metal box in a traffic jam, forced to concentrate to make sure you don’t – you know – crash.

The problem is that when George Osborne launched the whole Northern Powerhouse back in the land before time, he essentially just meant let’s do some economics and try and make things better. The only problem with that is that it’s incredibly complicated. But hey – if 2016 taught us anything, it’s that duplicating the same noun either side of the verb means solves all political issues, so I’m sure it’ll all work out in the end.  

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The ATM is 50. Here’s how a hole in the wall changed the world

The olden days. Image Lloyds Banking Group Archives & Museum.

Next time you withdraw money from a hole in the wall, consider singing a rendition of happy birthday. For today, the Automated Teller Machine (or ATM) celebrates its half century.

Fifty years ago, the first cash machine was put to work at the Enfield branch of Barclays Bank in London. Two days later, a Swedish device known as the Bankomat was in operation in Uppsala. And a couple of weeks after that, another one built by Chubb and Smith Industries was inaugurated in London by Westminster Bank (today part of RBS Group).

These events fired the starting gun for today’s self-service banking culture – long before the widespread acceptance of debit and credit cards. The success of the cash machine enabled people to make impromptu purchases, spend more money on weekend and evening leisure, and demand banking services when and where they wanted them. The infrastructure, systems and knowledge they spawned also enabled bankers to offer their customers point of sale terminals, and telephone and internet banking.

There was substantial media attention when these “robot cashiers” were launched. Banks promised their customers that the cash machine would liberate them from the shackles of business hours and banking at a single branch. But customers had to learn how to use – and remember – a PIN, perform a self-service transaction and trust a machine with their money.

People take these things for granted today, but when cash machines first appeared many had never before been in contact with advanced electronics.

And the system was far from perfect. Despite widespread demand, only bank customers considered to have “better credit” were offered the service. The early machines were also clunky, heavy (and dangerous) to move, insecure, unreliable, and seldom conveniently located.

Indeed, unlike today’s machines, the first ATMs could do only one thing: dispense a fixed amount of cash when activated by a paper token or bespoke plastic card issued to customers at retail branches during business hours. Once used, tokens would be stored by the machine so that branch staff could retrieve them and debit the appropriate accounts. The plastic cards, meanwhile, would have to be sent back to the customer by post. Needless to say, it took banks and technology companies years to agree common standards and finally deliver on their promise of 24/7 access to cash.

The globalisation effect

Estimates by RBR London concur with my research, suggesting that by 1970, there were still fewer than 1,500 of the machines around the world, concentrated in Europe, North America and Japan. But there were 40,000 by 1980 and a million by 2000.

A number of factors made this ATM explosion possible. First, sharing locations created more transaction volume at individual ATMs. This gave incentives for small and medium-sized financial institutions to invest in this technology. At one point, for instance, there were some 200 shared ATM networks in the US and 80 shared networks in Japan.

They also became more popular once banks digitised their records, allowing the machines to perform a host of other tasks, such as bank transfers, balance requests and bill payments. Over the last five decades, a huge number of people have made the shift away from the cash economy and into the banking system. Consequently, ATMs became a key way of avoiding congestion at branches.

ATM design began to accommodate people with visual and mobility disabilities, too. And in recent decades, many countries have allowed non-bank companies, known as Independent ATM Deployers (IAD) to operate machines. The IAD were key to populating non-bank locations such as corner shops, petrol stations and casinos.

Indeed, while a large bank in the UK might own 4,000 devices and one in the US as many as 12,000, Cardtronics, the largest IAD, manages a fleet of 230,000 ATMs in 11 countries.


Bank to the future

The ATM has remained a relevant and convenient self-service channel for the last half century – and its history is one of invention and re-invention, evolution rather than revolution.

Self-service banking and ATMs continue to evolve. Instead of PIN authentication, some ATMS now use “tap and go” contactless payment technology using bank cards and mobile phones. Meanwhile, ATMs in Poland and Japan have used biometric recognition, which can identify a customer’s iris, fingerprint or voice, for some time, while banks in other countries are considering them.

So it’s a good time to consider what the history of cash dispensers can teach us. The ATM was not the result of a eureka moment of a single middle-aged man in a bath or garage, but from active collaboration between various groups of bankers and engineers to solve the significant challenges of a changing world. It took two decades for the ATM to mature and gain widespread, worldwide acceptance, but today there are 3.5m ATMs with another 500,000 expected by 2020.

Research I am currently undertaking suggests that ATMs may have reached saturation point in some Western countries. However, research by the ATM Industry Association suggests there is strong demand for them in China, India and the Middle East. In fact, while in the West people tend to use them for three self-service functions (cash withdrawal, balance enquiries, and purchasing mobile phone airtime), Chinese customers consumers regularly use them for as many as 100 different tasks.

Taken for granted?

Interestingly, people in most urban areas around the world tend to interact with the same five ATMs. But they shouldn’t be taken for granted. In many countries in Africa, Asia and South America, they offer services to millions of people otherwise excluded from the banking sector.

In most developed counties, meanwhile, the retail branch and the ATM are the only two channels over which financial institutions have 100 per cent control. This is important when you need to verify the authenticity of your customer. Banks do not control the make and model of their customers’ smart phones, tablets or personal computers, which are vulnerable to hacking and fraud. While ATMs are targeted by thieves, mass cybernetic attacks on them have yet to materialise.

The ConversationI am often asked whether the advent of a cashless, digital economy heralds the end of the ATM. My response is that while the world might do away with cash and call ATMs something else, the revolution of automated self-service banking that began 50 years ago is here to stay.

Bernardo Batiz-Lazo is professor of business history and bank management at Bangor University.

This article was originally published on The Conversation. Read the original article.