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North needs new powers to close widening North South divide

North needs new powers to close widening North South divide

New IPPR North Commission set up to chart its own plans for growth

The North risks being left further behind as the drivers of economic growth are concentrated in the South according to new analysis by IPPR North (Institute for Public Policy Research North). The situation is made worse by new economic powers being devolved to London and Scotland.

The new analysis has been prepared to coincide with the launch of a new Commission, which aims to find solutions for the North to forge its own future. The Northern Economic Futures Commission brings together for the first-time, key figures from the business world across the North of England to set out a 10-year strategy for economic growth.

New analysis by IPPR North shows that there was a significant turn-around in the economic fortunes of some of the North’s major cities prior to the recession – including Manchester, Leeds, Newcastle, York and Sheffield – but the North South divide still continues to widen as the drivers for growth remain concentrated in the South.

Research by IPPR North shows that the North of England is falling behind in relation to key drivers for economic growth such as skills, business start-ups, and investment in transport, science and technology.

In 2010, the percentage of the working age population with no qualifications was 11.1 per cent in England compared with:

13 per cent in the North East

12.1 per cent in the North West

12.8 per cent in Yorkshire and Humber

Since 2004, the UK as a whole saw a 16.6% decrease in the number of new business start-ups over the period but the Northern regions saw a bigger decrease of 18.8 per cent and:

North East saw a 17.5 per cent decrease

North Westsaw a 19.4 per cent decrease

Yorkshire and Humber saw a 19.5 per cent decrease

The three Northern regions have lowest business start-ups of the English regions and all three Northern regions are below the British average of 7.9 births per 1,000. In 2009 the number of small businesses started per 1,000 of the adult population was:

5.7 in the North East

7.6 in the North West

7.1 in Yorkshire and Humber

The North East has fewest business start-ups per 1,000 of the population, only 5.7 compared to London which has the highest number at 11.

Investment in transport infrastructure is heavily skewed towards the London and the Greater South East. Based on recent Treasury figures, spending on transport in London has now risen to &pound802 per head compared with &pound248 per head for the North East, &pound333 for the North West, &pound272 for Yorkshire and Humberside.

In 2009/10 investment in science and technology was nearly double in London than in any of the Northern regions: the index of spending per head in London was &pound155 compared with &pound77 in the North West, &pound83 in the North East and &pound86 in Yorkshire and Humber. And only one of the three new Technology and Innovation Centres is located in the north of England at Daresbury Campus.

The aim of the Northern Economic Futures Commission is to articulate a ten-year strategy for economic growth across the three Northern regions of England. Its objectives will be:

To articulate a strong vision for the kind of economy we are seeking to develop in the North of England, understanding its role within a national and global context

To propose a coherent policy agenda and spatial framework within which national government and other players can take decisions about strategic investment

To provide a clear evidence base for strategic planning and local decision-making within and between local enterprise partnerships.

Geoff Muirhead, Chair of the Commission said:

“Northern prosperity is national prosperity and although this debate is so often framed in terms of North-South divide. With London, Scotland and the other devolved nations increasingly free to develop their own plans with their own powers, it is time for the North to set out its stall for what it needs to remain competitive in the global economy.”

Ed Cox, Director of IPPR North and Deputy Chair of the Commission said:

“Making sure that the UK economy is firing on all cylinders is vital for the whole country so it is in the interests of everyone to make sure the North of England prospers. In the past, the North has looked to London to solve its economic problems but this Commission is designed to allow the North to forge its own economic future.”


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