Getting the Northern Powerhouse back on track in the wake of HS2 delays is the focus of a major report.
A period of “transformative investment” in the north could give the Northern Powerhouse the opportunity to fulfil its purpose, according to a new report.
The paper, written by Alliance MBS academics and sponsored by Barclays, highlights that a core weakness in the north is the lack of investment in transformative infrastructure, which has the potential to improve the region’s economic growth.
It also suggests that the region's leaders should also leverage the growing cross-party consensus around the importance of investing in transformative infrastructure, particularly with a general election expected in the near future. The resources released by the potential HS2 delay could also be turned to constructing HS2 Phase Two from both ends simultaneously.
Methodology
The report argues that the Treasury’s methodology for allocating investment, which follows economic growth rather than seeking to stimulate it, also disadvantages the north.
A recent report by think tank IPPR North claimed that the region was set to receive £2,389 less per person on transport spending than London. Current methodology means that faster-growing and more wealthy regions will always be favoured. The experts argue that regional disparities will be reinforced unless appropriate strategic decisions are made.
Professor Graham Winch, lead author of the report, said: “We lack the tools we need to drive transformative change here in the north and the national decision-making process for allocating resources in this area isn’t yet fit for purpose. We know that transformative infrastructure projects enable higher growth, and that the higher the rate of growth, the shorter the pay-back period for any given investment. With the tools at our disposal to stimulate growth, we’d be able to quell ongoing economic disparities.
“There is now considerable cross-party support for infrastructure development in the north, and so we need to grasp this opportunity to take the economic growth of the region to a new level through investment in transformative infrastructure.”
Efficiencies
Greater efficiencies in the organisation of project delivery could guarantee stronger infrastructure delivery too. According to the study, current inefficiencies are being caused by a lack of engagement with the supply side by public sector infrastructure owners and operators who are unable to govern their projects effectively as a consequence.
The experts also point out that overcoming additional challenges associated with delivery, such as the need to develop a northern skill base for delivery on site and a cadre of senior project managers and directors, would propel the region forward.
Added Professor Winch: “An over-reliance on the supply side, coupled with the fact that the north struggles to attract sufficient on-site labour and management teams from outside of the region, mean that delivering the same scale of infrastructure projects as other parts of the country is challenging. The north needs to develop its own infrastructure delivery skill base, otherwise the growth ambitions set out by the Northern Powerhouse will be compromised.”
Northern Powerhouse Rail
Identifying an ownership model for Northern Powerhouse Rail – the planned upgrade of trans-Pennine services - that has the capability to shape and deliver projects effectively and engages both regional and national stakeholders will also realise the north’s potential. Focusing on opportunities involving private sector investment such as the Manchester Airport HS2 Interchange, Northern Powerhouse Rail, and HS2 Phase Two, rather than putting forward a generalised 'ask' of central government, will help to ensure economic benefits are enjoyed in the region.
Henri Murison, Director of the Northern Powerhouse Partnership, said: “The Northern Powerhouse is of critical importance to the future prosperity of the UK, and leading academics at Alliance Manchester Business School, supported by Barclays, make a strong case for the benefits of transforming connectivity to make a much more significant impact. Without this, it will be impossible to secure a virtual city spanning the north and a more linked economy which can achieve the same advantages available to a city the scale of London including its wider South East labour market."
Graham Winch is a Professor of Project Management