by GK Strategy 1st February, 2018
3 min read

Do we need more Powerhouses?

Last week, in a speech in Newport, Welsh Secretary Alun Cairns called for a new Western Powerhouse, with pooling of skills and expertise across the Severn Estuary to create an “all-new economic region”.

This announcement follows hot on the heels of the Northern Powerhouse, which then-Chancellor George Osborne introduced in 2014, and the Midlands Engine, which first popped up as a concept in 2015. The branding is great, of course, but what does the Government actually mean, and what will these powerhouses deliver in practice?

The basic idea linking all of these powerhouses is to maximise agglomeration benefits by creating better transport links between cities, so that groups of towns and cities can begin to rival London as economic centres. Making it easier to travel by road or rail should mean it’s easier for businesses to cluster and for people to commute to take on high-skilled jobs.

In the West of England and Wales, it’s a little early to tell what this might mean in practice. The focus at present seems to be on removing the Severn Bridge tolls, to make it easier for businesses and individuals to regularly travel between Bristol and South Wales. This was happening anyway, but the Western Powerhouse branding might indicate that there’s more to come. Look out for further announcements in the Spring Statement on 13 March.

The Northern Powerhouse and Midlands Engine have had a little longer to develop. The Midlands Engine now has an office in Nottingham, and five themes it’s working towards – Midlands Connect (a long-term transport strategy for the Midlands), supporting business innovation to improve productivity and competitiveness, promoting skills pathways and linking employers to skills providers, simplifying and streaming the funding landscape for small businesses and developing a regional branding proposition to attract domestic and foreign investment.

There’s money behind these proposals too; the Autumn Budget outlined £250 million for local transport priorities, £6 million for a housing delivery taskforce and £5 million for a construction skills training scheme as part of a devolution deal with the West Midlands Combined Authority. Midlands Connect has received £4 million to tackle transport congestion and £2 million to develop options to address constraints on the Coventry-Leamington rail corridor. The Government is also going to pilot a manufacturing zone in the East Midlands, reducing planning restrictions to bring land into productive use.

The Northern Powerhouse has similarly had funding for a range of different projects lavished on it in recent years. Money is concentrated on transport projects, with £300 million going to ensure that HS2 infrastructure can accommodate Northern Powerhouse Rail services, £337 million to replace rolling stock on the Tyne and Wear Metro.

The Northern Powerhouse Rail project specifically remains somewhat unclear, with an ‘emerging vision’ of its route, but no business case developed as yet and little chance of spades in the ground any time soon. The project, previously referred to as HS3, had to adopt the name of the wider Northern Powerhouse scheme, partly because the route planned would not allow trains to reach velocities qualifying the route as high-speed.

With a number of devolution deals either completed, as in Manchester and Liverpool, or in progress, like the North of Tyne, the focus of the Northern Powerhouse seems to be on devolving power to cities and connecting them as part of a broader region.

But wouldn’t most of this be happening anyway? Most of the specific schemes badged as part of the Northern Powerhouse or Midlands Engine are focused on cities, rather than regions.

There’s a real mix of transport, housing and skills projects, some of which were being planned or discussed before they were brought under the umbrella of one of these broader programmes.

Right now, the Northern Powerhouse and Midlands Engine still feel a little like branding exercises rather than cohesive programmes. However, with the Northern Powerhouse recently being put on a statutory footing, and with organisations like Transport for the North and Transport for West Midlands taking on more responsibilities, we may yet see more concrete strategic plans for the Powerhouses and the regions they represent. In that case, roll on the Western Powerhouse!

For more information on how GK can help your business engage with regional stakeholders, contact christine@gkstrategy.com

To find out more about how onefourzero’s digital due diligence and insights can help you identify opportunities for growth and potential risks, click here or contact fleur@onefourzerogroup.com

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