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Northern Prosperity Is National Prosperity NORTHERN ECONOMIC FUTURES COMMISSION NORTHERN PROSPERITY IS NATIONAL PROSPERITY A STRATEGY FOR REVITALISING THE UK ECONOMY REPORT IPPR North and the Northern Economic Futures Commission November 2012 © IPPR North 2012 Institute for Public Policy Research ABOUT IPPR NORTH IPPR North is IPPR’s dedicated thinktank for the north of England. With bases in Newcastle and Manchester, IPPR North’s research, together with our stimulating and varied events programme, seeks to produce innovative policy ideas for fair, democratic and sustainable communities across the north of England. IPPR North specialises in regional economics, localism and community policy. Our approach is collaborative and we benefit from extensive sub-national networks, regional associates, and a strong track record of engaging with policymakers at regional, sub-regional and local levels. IPPR North 3rd Floor, 20 Collingwood Street Newcastle Upon Tyne NE1 1JF T: +44 (0)191 233 9050 E: [email protected] www.ippr.org/north Registered charity no. 800065 November 2012. © 2012 The contents and opinions expressed in this paper are those of the authors only. BOLD IDEAS for CHANGE NORTHERN PROSPERITY IS NATIONAL PROSPERITY A STRATEGY FOR REVITALISING THE UK ECONOMY IPPR North and the Northern Economic Futures Commission November 2012 in partnership with partly funded by EUROPEAN UNION Investing in Your Future European Regional Development Fund 2007-13 i ACKNOWLEDGMENTS The Northern Economic Futures Commission is made up of 16 high-profile figures bringing expertise from a wide range of disciplines and interests. Commissioners draw together knowledge and experience of a wide range of business sectors, economic experts and other civic leaders from across the north of England. • Geoff Muirhead cbe, former chief executive, Manchester Airports Group (NEFC chair) • Ed Cox, director, IPPR North (NEFC deputy chair) • Bill Adams, regional secretary, Yorkshire & Humber TUC • John Anderson, regional director, BT Yorkshire & Humber • Rhiannon Bearne, group director for policy, The Cyrenians • Paul Callaghan, chairman, Leighton Group • Adeeba Malik, deputy chief executive, QED-UK • Professor Philip McCann, chair of economic geography, University of Groningen • David McKeith, chairman, Greater Manchester Chamber of Commerce • Rodger McMillan, former area head for therapy, AstraZeneca • John Mothersole, chief executive, Sheffield City Council • Peter Nears, strategic planning director, Peel Holdings • Ann Pittard, large business development lead, Leeds City Region • Professor Philip Shapira, professor of innovation management and policy, Manchester Business School • Bill Tompson, head of rural and regional development, OECD • Julia Unwin, chief executive, Joseph Rowntree Foundation The commissioners would like to thank all those individuals and organisations who have given written and oral evidence. These are listed in annex 2. The commission’s work has been generously supported by the Joseph Rowntree Foundation, Network Rail, Port of Tyne, the North East Chamber of Commerce, Leeds City Council, Sheffield City Council, the North West Rail Campaign, Northumberland County Council, York City Council, Bradford City Council and the European Regional Development Fund. The commission would like to thank its advisory group: Philip Cox (DCLG), Scott Dickenson, Baron Frankal (Manchester New Economy), Sarah Jackson (N8 Universities), Stephen Jones (HM Treasury), Margaret Jackson (DfT), Nancy Kelley (JRF), Robert McIlveen (Network Rail), Isobel Mills (DBIS), Alice Owen, David Rossington (DCLG), and Edward Twiddy (NE LEP). The commission would also like to thank the following people for their input and advice: Brian Appleby, Matt Brunt, Simon Buckby, Tom Cannon, Will Cook, Ellen Cutler, Geoff Davidson, Ben Fisher, Enrique Garcilazo, Neil Gibson, Chris Goulden, Andrew Hair, Jonathan Levie, David Nash, John Stageman, Josh Stott, Roger Turner, Susan Wear, Frida Williams. The commission would like to thank IPPR North staff Ed Cox and Graeme Henderson, and former staff Katie Schmuecker and Lewis Goodall, for their research and authorship of briefing papers, the interim report and this final report, as well as Joanne Thomas, Tamsin Crimmens and Ellie Geddes for their secretariat support. It would like to thank Richard Baker, associate fellow at IPPR North and former head of policy and research at the Northern Way, for the significant contribution he has made as part of the research team. Thanks are also due to IPPR colleagues in London who have provided a further sounding board and supported this work, especially Nick Pearce, Tony Dolphin, Graeme Cooke, Will Straw, Tess Lanning, Kayte Lawton, Tim Finch, Richard Darlington and Molly Conisbee. This report is a consensus report of the Northern Economic Futures Commission. Analyses and recommendations contained within should be attributed to the commission as a whole rather than to any individual member. ii IPPR North | Northern prosperity is national prosperity: A strategy for revitalising the UK economy CONTENTS Foreword..............................................................................................1 Executive.summary:.Northern.prosperity.is.national.prosperity........4 Our analysis and vision .....................................................................4 Our 12-point plan for northern economic growth ..............................7 What will the North be like in 2022? ................................................18 1..The.northern.economy.and.the.drivers.of.future.growth.............23 1.1 The northern economy in context .............................................23 1.2 Drivers of growth in the northern economy ...............................26 2..Good.jobs.and.skills......................................................................30 2.1 Sizing up the challenge .............................................................30 2.2 The challenge: half a million jobs ...............................................37 2.3 Northern skills ..........................................................................40 2.4 Conclusions .............................................................................56 3..Innovation.and.business.growth...................................................57 3.1 Laying the ground for a northern industrial strategy ...................57 3.2 Emerging strengths and opportunities ......................................58 3.3 Maximising sectoral strengths and export potential in the North ....62 3.4 Innovation ................................................................................63 3.5 Northern export potential ..........................................................71 3.6 Foreign direct investment in the North.......................................77 3.7 Enterprise in the North ..............................................................87 3.8 Conclusion ...............................................................................96 4..Natural.assets.and.infrastructure..................................................98 4.1 Natural assets ..........................................................................99 4.2 Transport ................................................................................109 4.3 Housing in the North ..............................................................123 4.4 Mapping the Future ................................................................129 4.5 Conclusions ...........................................................................134 iii 5..Finance.and.funding....................................................................135 5.1 Investment patterns in the North .............................................135 5.2 The need for greater financial autonomy .................................139 5.3 New financial instruments and institutions ...............................140 5.4 Fiscal decentralisation and a single pot for economic development ................................................................................149 5.5 European structural funds .......................................................152 6..Institutions.and.leadership..........................................................155 6.1 How is the North governed? ...................................................155 6.2 Building on the foundations of city-regions .............................159 6.3 Northern voice .......................................................................160 6.4 Beyond ad hoc collaboration: the Northern Leadership Convention and N11 Leaders’ Summit .........................................161 6.5 Northern Future Leaders Academy .........................................162 7..Conclusions.................................................................................163 7.1 Monitoring northern progress .................................................164 7.2 Tackling poverty and disadvantage .........................................166 7.3 Cross-cutting themes .............................................................167 Bibliography.....................................................................................171 Annex.1:.Summary.of.recommendations........................................176 Annex.2:.Evidence.to.the.Northern.Economic.Futures.. Commission.....................................................................................180 Annex.3:.Indicators.and.targets......................................................183 A3.1 National indicators ...............................................................183 A3.2 International
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