Government urged to prioritise infrastructure spending to grow and rebalance the economy

The Government should champion investment in regional infrastructure to support economic growth and help eradicate the north-south divide, according to a new report published today.

The 32-page report, ‘Investing in the Future’ by the economic consultancy, Metro Dynamics, concludes that the Government should work more closely with regional and city leaders to ensure that economic ambitions of all regions of England are reflected in national priorities.

In a series of recommendations, the report says that the Government should explicitly promote the Shared Prosperity Fund for regional economic rebalancing and recognise investment in infrastructure as critical to the long-term competitiveness of a modern economy.

The report recognises the vital role of Mayors and regional bodies such as the Northern Powerhouse and Transport for the North, along with the National Infrastructure Commission, as important new enablers of regional planning and investment that should be used to help switch the emphasis from London and the South East.

The report encourages combined authorities to proactively engage key private sector players in their area at a strategic level, to deliver shared aims for transformational change. It also concludes that Metro Mayors should have strong statutory planning policies that promote, rather than constrain, economic growth.

The report also calls for changes to the way infrastructure is planned for and appraised to increase the relative importance of rebalancing as a factor in investment decisions to encourage inclusive growth throughout the country, and particularly in less economically successful places.

The report prepared by Metro Dynamics and sponsored by The Peel Group will be launched today at an event in Warrington, by Greater Manchester Mayor, Andy Burnham, and Metro Mayor of the Liverpool City Region, Steve Rotheram, who both supported its aspirations.

Ben Lucas, Managing Director of Metro Dynamics, said

“We are all agreed that infrastructure is necessary for growth. However, the UK regions suffer from historical and sustained underinvestment in infrastructure which has affected our national economic performance and has had major consequences for inclusive economic growth outside of London and the South East.

“Without fundamental changes to the way in which infrastructure is planned and appraised – cohesively, ambitiously, and with a long-term vision – the challenges will remain. Our new report provides important insights and recommendations to address this situation and help rebalance the UK economy.”

Mayor of Greater Manchester, Andy Burnham, said: “This report comes at a critical time when Northern business, political and civic leaders are getting organised and the calls for greater investment in the North are growing louder.

“The report once again makes the irrefutable case for greater investment in the North and its city-regions to be a national priority. This is the best way to boost the UK’s economy and international competitiveness.

“However, just last week IPPR North analysis showed that, since the Northern Powerhouse was initiated in 2014, transport spending per person has gone up twice as much in London as in the North. That is simply not acceptable. Projects like HS2 to Greater Manchester and Northern Powerhouse Rail must now be brought to the front of the queue when it comes to investment.

“This Government promised us a Northern Powerhouse and we stand ready to work with them to make this idea a reality. Not just for the sake of the Northern economy, but for the country as a whole.”

Steve Rotheram, Metro Mayor of the Liverpool City Region, said: “Rebalancing the economy and ensuring that everyone benefits from inclusive growth are two of the biggest challenges facing the country today, so I welcome this report. 

“As we prepare for a post-Brexit world it is particularly important that the government addresses the inbuilt unfairness of the funding methodology in order to address historic under-investment in infrastructure projects in areas such as ours.”

Dan Jarvis, Mayor of the Sheffield City Region, said: "Our transport system is not fit for the 21st century and poor infrastructure constrains our growth.  Connecting the great cities and towns of the Northern Powerhouse and delivering major infrastructure improvements must be an urgent priority.

“This report from Metro Dynamics shows what the Government must do if they are serious about rebalancing our economy and empowering elected Mayors and the private sector to drive growth in the North.”

Emma Degg, Chief Executive, North West Business Leadership Team said: “Rebalancing the UK economy is the great challenge of our time. Inclusive growth will not be delivered if the necessary infrastructure investment by national government does not take account of the needs and opportunities of all the regions of the UK. I welcome the important contribution this report makes to the debate and hope policy makers nationally and across the North take note.”

Neil Lees, Deputy Chairman, The Peel Group said: “The Peel Group is committed to the North of England and all that the Northern Powerhouse represents. Our Ocean Gateway vision to deliver 50 projects over 50 years with an investment of £50 billion is a prime example of our commitment. We are forging ahead with our regeneration programmes, however, we regularly see imbalances in the way investment is viewed at local and national level.

“We all recognise that the gap between the Regions and London and South East exists and that the gap is not shrinking but growing. This report is an important piece of intelligence which shines a light on the extent of the issue and we whole heartedly support the recommended measures which will help to redress this imbalance.”

The full report can be found here: https://www.peel.co.uk/wp-content/uploads/2018/11/Metro-Dynamics-Investing-in-the-Future-November-2018.pdf