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Britain is in turmoil – so what will become of the Northern Powerhouse?

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Britain is in turmoil – so what will become of the Northern Powerhouse?

Brexit has heralded so many departures that, at times, it has been difficult to keep up. Resignation upon resignation has resulted in the UK’s second female prime minister who, in establishing her first cabinet, brought about a fresh raft of ministerial resignations and sackings.

The installation of Boris Johnson as Foreign Secretary and the creation of the Ministry for Brexit have secured much of the attention. Yet the comparatively quiet jettisoning of erstwhile Chancellor of the Exchequer, George Osborne, will have significant consequences.

Osborne was the chief architect of the government’s programme of austerity, which is now set to be curtailed by his successor, Philip Hammond. Yet it has been clear for some time that the devolution of power to the northern city regions – dubbed the “Northern Powerhouse” – was intended to be Osborne’s political legacy.

The “devolution revolution” was to be the biggest change to local governance in England in decades. For better or for worse, it was set to bring more decisions over taxation and public spending closer to the people. The victory of the Leave campaign, which used “taking back power” as a call to arms, indicates that there is an appetite for this.

Now, as Britain begins the task of unpicking its relationship with the EU under new leadership, we are left wondering: what are the prospects for the Northern Powerhouse?

And they’re off…

Theresa May previously criticised the Northern Powerhouse for being too Manchester-focused, so it seems reasonable to expect that change is a-coming. The question is, what shape will it take?

Osborne subsequently expanded the Northern Powerhouse brand to encompass devolution deals for Nottingham, Lincolnshire, Norfolk, Bath and, perhaps, Bristol. It is possible that this effort – dubbed “the Midlands Engine” – will be enough to satisfy May’s criticism.

Chief Architect Osborne. Number 10/Flickr, CC BY-NC-ND

But the speed at which other initiatives have been shut down by incoming governments – exemplified by the termination of Labour’s regional governance scheme in 2010 – suggests that nothing is off the table.

But the race for the metro mayors – who are tasked with delivering the reforms for their respective city regions – is well underway in Liverpool, Manchester and the West Midlands, among others.

High profile candidates such as Andy Burnham and Luciana Berger have entered the starting gates, which may also offer a pain-free exit from the travails of Corbyn-led opposition.

As the race continues to garner national attention, the Northern Powerhouse may prove difficult to hobble. Indeed, with the appointment of Andrew Percy as the new Northern Powerhouse minister, it seems that the rhetoric will remain, and all betting is back on.

Sighs of relief

It seems difficult to imagine a scenario where nearly 11m people will be waking up on May 5, 2017 to anything but a newly elected mayor for their city region. Yet the powers, programmes and, crucially, funds available to that mayor are still open for debate.

In his first comments since becoming chancellor, Phillip Hammond seemed to indicate his concern with re-balancing the UK economy to end over-reliance on London and the South East through infrastructure spending. This bodes well for organisations such as Transport for the North, which are working to implement many of the strategic transport reforms required to link the Northern Powerhouse city regions.

It also serves proponents of HS2, which features prominently in the West Midlands devo-deal. Similarly, other organisations such as the Royal Town Planning Institute – who recently launched their Great North Plan initiative – can be optimistic that their work won’t be completely scotched.

It may also come to pass that George Osborne still has a role to play. Those who thought he would quietly join David Cameron on the backbenches were surprised to see that the former chancellor delivered Monday night’s Margaret Thatcher lecture, despite his sacking. In it, he underscored the economic philosophy that defined his tenure and, above all, gave indications that his exile will be relatively shortlived.

The shadow of Brexit

Through all of this, the short- to medium-term prospects for the northern cities will be inextricably tied to the outcome of the UK’s Brexit negotiations. The northern cities relied heavily on EU regional funding to drive regeneration, and it was no coincidence that the cities of Liverpool, Manchester, Leeds and Newcastle all voted Remain.

Now, as the mayoral candidates make their cases to lead their city regions from next May, they must answer a further question: what will they do in absence of those EU funds? From my own experience, I’ve seen varying degrees of shrugged shoulders and talk of “difficult decisions” in cities already damaged by prolonged austerity measures.

Yet an early criticism of the city devo deals was that the metro mayors risked a poison chalice of electoral responsibility with limited powers. If no alternative post-EU regeneration budget comes forward, such accusations may prove to be very well grounded.