A Budget for a Powerhouse


The Chancellor’s budget for 2016, which was announced recently, keeps building on his ambitions to create a Northern Powerhouse.

In his recent budget, George Osborne has pledged millions to improve the transport system with the construction starting from 2020.

The Chancellor’s eighth and most recent budget keeps reinforcing his plans to build a Northern Powerhouse to counterbalance London’s economy and strengthen the cities and town of the north of England.

George Osborne’s main promises include £60m for the development of an improved east-west rail link by the name of Northern Powerhouse Rail, aiming to reduce journey times between Leeds and Manchester from 50 minutes to 30 minutes, and £75m for an 18-mile road tunnel under the Peak District to speed up travel times between Manchester and London.

The small print, however, revealed that construction will only start from 2020 and the money has been put forward to draw up those plans rather than building the projects.

Osborne furthermore declared a £20m investment every year for “northern powerhouse schools strategy”, to tackle “the unacceptable divides that have seen educational attainment and progress in some parts of the north lag behind the rest of the country”.

Another Northern city, Hull, will receive £13m to deliver its City of Culture project in 2017. In addition to that, Osborne stated he would give £5m to support the Shakespeare North project to establish a new theatre in Knowsley in Merseyside.

Nevertheless, a lot of leaders in England’s north will be “deeply anxious”, according to Jonathan Carr-West, chief executive of the Local Government Information Unit.

“The chancellor announced £3.5bn extra cuts in public sector funding by the end of the parliament. It’s not clear where these cuts will fall but experience suggests they will hit local government either directly or through the knock on effects of cuts to welfare benefits,” he said.

In the prime minister’s questions on March 16, David Cameron named Birmingham as the UK’s second city. The budget however, suggests Manchester as the Chancellor’s pet project as he once again announced more power to the first metropolis ever, including significant control over the local criminal justice system. Birmingham reached a total of 15 mentions in the 140-page budget, whilst Manchester came up to 52 mentions in total.

Further to new devolution deals with local governments in Cardiff, East Anglia, West of England and Greater Lincolnshire, Osborne also expanded the existing deals with Greater Manchester and Liverpool city regions.

The latest deal made with Greater Manchester, and its fourth since November 2014, builds on enthusiastic plans to devolve its £6bn health and social care budget on 1 April.

The latest agreement hands over more power to local leaders in the criminal justice system, notably the commissioning of offender management services, alongside the National Offender Management Service, allowing more local flexibility, innovation and better coordination with other local services including healthcare and accommodation. Furthermore, this will also give Greater Manchester a bigger influence over probation by April 2017.

Other than that, the city will also have a say in the building of a resettlement prison and future plans for the local courts estate, such as the more innovative use of venues and testing of problem solving court approaches.

Greater Manchester, together with the Liverpool region, will also take part in pilots to test plans by the government to deliver 100% business rates retention for local authorities in England by the end of this parliament.

Jonathan House, PwC’s local government leader in the north of England, said of the pilots: “Retaining local business rates has the potential to better incentivise economic development and enable local voices to define clearly how this should happen.”

“The private sector is the vital engine for job creation and growth and this initiative should pave the way for councils to use these new powers to attract businesses and regenerate high streets.”

This budget’s loser is possibly Yorkshire, where leaders are continuingly disputing over whether or not to accept the imposition of elected mayors to receive more power. So far it’s only Sheffield that has signed a deal with the Chancellor.

But again, the county did not leave the budget empty handedly. Osborne pledged £500,000 to Welcome To Yorkshire for an international marketing campaign for the Tour de Yorkshire 2016. Furthermore, he promised £24m for the Local Growth Fund to improve roads across North Yorkshire.

The budget also revealed an “ambitious strategy to move civil servants out of expensive Whitehall accommodation and into the suburbs of London, delivering substantial savings for the taxpayer”.

Jonathan Reynolds, Labour MP for Stalybridge and Hyde in Greater Manchester, said: “If the chancellor is serious about building a northern powerhouse, then moving civil servants to the north would be a good move for both the civil service and the taxpayer. We have quality offices that offer value for money, and the civil service should be made up of people from across the whole of the UK, not just London.”

Recently, ministers have admitted that 100% of senior civil servants in the Treasury and 97.6% in the Department for Communities and Local Government (the two ministries in charge of the Northern Powerhouse) both work in London.

The budget also showed that by the middle of the current parliament the Ministry of Justice would have “a major programme to create substantial centres of expertise outside the capital”.

Source: The Guardian

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A Budget for a Powerhouse


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