Are we nearly there yet? Four years of the Northern Powerhouse

Remember him? Ex-chancellor George Osborne launches his Northern Powerhouse Partnership in autumn 2016. Image: Getty.

Saturday 23 June marks a significant anniversary in British political history. No, not that one: it’s four years since George Osborne, in a speech at Manchester’s Museum of Science & Industry, first coined the phrase “Northern Powerhouse”.

Osborne’s speech prompted equal parts intrigue and scepticism amongst certain sections of the Northern intelligentsia. Following the abolition of regional development agencies in 2010, and the quiet death of Labour’s now largely forgotten Northern Way agenda, regional policy for the North had lacked an overarching theme. Local Enterprise Partnerships, constrained by austerity and with few formal powers, struggled to make much of an impact. City-region devolution was (and remains) uneven and confused.

The Conservative-led government needed to reframe the regional policy debate, and the Chancellor desired an electoral strategy that would enable the Tories to compete in key Northern marginals like Bolton West and Hazel Grove. And so, the Northern Powerhouse was born.

What is the Northern Powerhouse?

In that 2014 speech, Osborne described four ‘ingredients’ for building a more prosperous North: transport; devolution; science & innovation; and culture.

Science and culture have since largely fallen from the radar, aside from a handful of investments in the likes of Manchester’s new Factory theatre and the upcoming Great Exhibition of the North. What remains is fundamentally a regional development project with transport planning as the central policy lever, with the goal of creating a region with “not one city, but a collection of Northern cities – sufficiently close to each other that combined they can take on the world”.

Right now though, Osborne’s promise of improving infrastructure to the point where traversing the North is the “equivalent of travelling around a single global city” appears laughable – especially given the recent well-publicised rail meltdown. The gap between rhetoric and reality for stranded commuters seems wider than ever.

A new civil service for the North

Nevertheless, it would be a mistake to dismiss the Northern Powerhouse project as a failure already. Its most significant achievement is the creation of Transport for the North (TfN), the UK’s first ever pan-Northern government body. Established in 2015 and granted statutory powers in April this year, TfN can now be regarded as the Powerhouse project’s civil service.

These are very early days, but there are signs that having a proper Northern institution with real, if limited, powers has helped shift the terms of the agenda somewhat. Osborne’s early vision was criticised in some quarters for its over-emphasis on the North’s largest cities, and Manchester in particular.

Where the magic happens. Click to expand. Image: TfN.

By contrast, TfN’s recently published draft Strategic Transport Plan provides a welcome focus on the assets of smaller cities and towns. It leans heavily on evidence from 2016’s Northern Powerhouse Independent Economic Review, which identified the four most important sectors, or ‘prime capabilities’ for the North: energy; digital; health innovation; and advanced manufacturing. The plan then identifies seven ‘growth corridors’ where transport infrastructure requires improvement to better connect the key businesses working in these areas.

Interestingly, the plan is not based on the existing transport network; nor does it simply aim to connect the North’s most populous cities. As such, it challenges the concept of the Northern Powerhouse as an overly urban-centric model that risks turning Manchester into a London of the North and ignores other parts of the region.

The role of high speed rail within the Powerhouse agenda reflects this. The “high speed rail connection from from Manchester to Leeds” described by Osborne in 2014 has morphed into Northern Powerhouse Rail (NPR), a less grandiose plan combining new lines, improvements to existing infrastructure and, crucially, a new station at Bradford, a city too often ignored in previous attempts at regional development.

The proposed corridors. Click to expand. Image: TfN.

HS2, meanwhile, is increasingly regarded by many Northern politicians as an opportunity for urban regeneration rather than a transformational infrastructure project, with the biggest improvements to connectivity likely to be felt more in Birmingham than Manchester or Leeds.


What happens next?

Of course, this is only a plan, and one at a very strategic level. As yet, there is no confirmed funding for NPR. Few of the proposed schemes have planning permission yet. Battles over Green Belt and compulsory purchases are some years off.

But the act of moving some power out of Whitehall to a new, independent, sub-national government body is significant and, given the UK’s long-standing reluctance to devolve governing capacity from the centre can be regarded as an achievement. The momentum of the Northern Powerhouse project can only be maintained if it is run from the North.

The Northern Powerhouse probably isn’t what George Osborne thought it would be, and by itself the project won’t reverse 100 years of relative decline in Northern England. But it is something, and unlike previous attempts at regional development will increasingly be driven by an organisation outside the Whitehall bubble. The current rail debacle is a major test – but it need not signal the end of the line for the Northern Powerhouse.

Tom Arnold is a PhD Researcher in the Department of Planning & Environmental Management at the University of Manchester. He tweets as @tj_arnold.

 
 
 
 

Businesses need less office and retail space than ever. So what does this mean for cities?

Boarded up shops in Quebec City. Image: Getty.

As policymakers develop scenarios for Brexit, researchers speculate about its impact on knowledge-intensive business services. There is some suggestion that higher performing cities and regions will face significant structural changes.

Financial services in particular are expected to face up to £38bn in losses, putting over 65,000 jobs at risk. London is likely to see the back of large finance firms – or at least, sizable components of them – as they seek alternatives for their office functions. Indeed, Goldman Sachs has informed its employees of impending relocation, JP Morgan has purchased office space in Dublin’s docklands, and banks are considering geographical dispersion rather concentration at a specific location.

Depending on the type of business, some high-order service firms will behave differently. After all, depreciation of sterling against the euro can be an opportunity for firms seeking to take advantage of London’s relative affordability and its highly qualified labour. Still, it is difficult to predict how knowledge-intensive sectors will behave in aggregate.

Strategies other than relocation are feasible. Faced with economic uncertainty, knowledge-intensive businesses in the UK may accelerate the current trend of reducing office space, of encouraging employees to work from a variety of locations, and of employing them on short-term contracts or project-based work. Although this type of work arrangement has been steadily rising, it is only now beginning to affect the core workforce.

In Canada – also facing uncertainty as NAFTA is up-ended – companies are digitising work processes and virtualising workspace. The benefits are threefold: shifting to flexible workspaces can reduce real-estate costs; be attractive to millennial workers who balk at sitting in an office all day; and reduces tension between contractual and permanent staff, since the distinction cannot be read off their location in an office. While in Canada these shifts are usually portrayed as positive, a mark of keeping up with the times, the same changes can also reflect a grimmer reality.  

These changes have been made possible by the rise in mobile communication technologies. Whereas physical presence in an office has historically been key to communication, coordination and team monitoring, these ends can now be achieved without real-estate. Of course, offices – now places to meet rather than places to perform the substance of consulting, writing and analysing – remain necessary. But they can be down-sized, with workers performing many tasks at home, in cafés, in co-working spaces or on the move. This shifts the cost of workspace from employer to employee, without affecting the capacity to oversee, access information, communicate and coordinate.

What does this mean for UK cities? The extent to which such structural shifts could be beneficial or detrimental is dependent upon the ability of local governments to manage the situation.


This entails understanding the changes companies are making and thinking through their consequences: it is still assumed, by planners and in many urban bylaws and regulations, that buildings have specific uses, that economic activity occurs in specific neighbourhoods and clusters, and that this can be understood and regulated. But as increasing numbers of workers perform their economic activities across the city and along its transport networks, new concepts are needed to understand how the economy permeates cities, how ubiquitous economic activity can be coordinated with other city functions, such as housing, public space, transport, entertainment, and culture; and, crucially, how it can translate into revenue for local governments, who by-and-large rely on property taxes.

It’s worth noting that changes in the role of real-estate are also endemic in the retail sector, as shopping shifts on-line, and as many physical stores downsize or close. While top flight office and retail space may remain attractive as a symbolic façade, the ensuing surplus of Class B (older, less well located) facilities may kill off town-centres.

On the other hand, it could provide new settings within which artists and creators, evicted from their decaying nineteenth century industrial spaces (now transformed into expensive lofts), can engage in their imaginative and innovative pursuits. Other types of creative and knowledge work can also be encouraged to use this space collectively to counter isolation and precarity as they move from project to project.

Planners and policymakers should take stock of these changes – not merely reacting to them as they arise, but rethinking the assumptions that govern how they believe economic activity interacts with, and shapes, cities. Brexit and other fomenters of economic uncertainty exacerbate these trends, which reduce fixed costs for employers, but which also shift costs and uncertainty on to employees and cities.

But those who manage and study cities need to think through what these changes will mean for urban spaces. As the display, coordination and supervision functions enabled by real-estate – and, by extension, by city neighbourhoods – Increasingly transfer on-line, it’s worth asking: what roles do fixed locations now play in the knowledge economy?

Filipa Pajević is a PhD student at the School of Urban Planning, McGill University, researching the spatial underpinnings of mobile knowledge. She tweets as @filipouris. Richard Shearmur is currently director of the School, and has published extensively on the geography of innovation and on location in the urban economy.