North contributes more to economy than devolved nations, but is growing slower

The North contributes 19% to the national economy, compared to 13% for Scotland, Wales and Northern Ireland combined, according to a new report from the thin tank IPPR North published today. The report shows that in the decade to 2012 the North grew at a slower rate, with the devolved nations spending far more per head on boosting their economies through R&D, skills and infrastructure investment. As the independent think tank IPPR North celebrates its 10th birthday it renews calls for increased infrastructure spending in the North, devolution of power to city and county regions, and strengthened local democracy so that the North can fulfil its untapped potential.

The report shows that over the past decade government spending on economic affairs has been highly skewed towards London and Scotland. IPPR North has led the way in highlighting how regions like the North East lose out on transport investment, with planned spending per head at £245 compared to London's £4,893.

The report further shows that while manufacturing still remains key, making the largest contribution to the northern economy, new northern growth businesses have come from sectors like property, and financial and professional services, while Northern universities have pioneered major developments in technologies such as graphene and the biomedicine.

The report also notes that there have been other success stories in the North of England over the last 10 years too:

• In the decade to 2012, the fastest growing local economies (Local Enterprise Partnership areas) in the North were Cumbria (46%) and Cheshire & Warrington (43%) followed by the city-regions of Greater Manchester (42%) and Sheffield (41%)
• The major city-regions (LEP areas) of the North are driving jobs growth - since 2010 jobs in Sheffield have increased by 4.0% and in Greater Manchester by 3.4% - twice the rate of jobs growth in the north as a whole (1.8%)

However, the report highlights that there is more to do. Since the beginning of the recession the North as a whole has fallen behind the rest of the UK with growth and employment levels only just returning to pre-recession levels.

Ed Cox, Director of IPPR North, said:

"The North's potential is starting to be recognised. While there have long been calls for a rebalancing of the UK economy, the evidence that more closely connected northern cities will bring significant economic benefits for the whole nation is now clear. Our maxim, 'northern prosperity is national prosperity', has become common currency in the corridors of Whitehall and in city and town halls across the north.

"In 10 years' time, with the right leadership and with a revitalised local democracy, there is no reason why the north of England shouldn't take its place alongside the most prosperous Northern European regions. But if that is to happen more needs to be done to develop good policy ideas which can be taken up by the politicians. That's why I'd like to see other think tanks on the IPPR North model set up in cities like Manchester, Leeds and Newcastle. At present, UK think tanks are too focused on central government in London."

Notes to Editors

1. IPPR North has played a vital role in highlighting these trends. In the last 10 years many of its ideas have been widely discussed and some taken up, including:

• A mayor for major northern city regions - a so called "Boris of the north" – the Chancellor has recently announced such a post will be created in Manchester
• An improved rail link between Manchester and Leeds –government has now said it will develop a strategy to look at options, costs and a delivery timetable for so called HS3
• Devolution of the work programme– joint control was also included in the Chancellor's announcement on devolution of power to Manchester
• Transport for the north – a regional transport authority similar TfL in London which is beginning to emerge with the development OneNorth and Rail North bodies
• Devolution of the homes and communities agency capital grant – which has recently been promised to Greater Manchester

But IPPR North remains the only think tank of its type outside Westminster, and as it marks its 10th anniversary its director has issued a call for more think tanks to concentrate on Northern issues.

2. In the decade to 2012, the fastest growing local economies (Local Enterprise Partnership areas) in the North were Cumbria (46%) and Cheshire & Warrington (43%) followed by the city-regions of Greater Manchester (42%) and Sheffield (41%)

> This is the difference in nominal gross value added between 2002 and 2012.

The major city-regions (LEP areas) of the North are driving jobs growth - since 2010 jobs in Sheffield have increased by 4.0% and in Greater Manchester by 3.4% - twice the rate of jobs growth in the north as a whole (1.8%)

> This is the % increase in the total number of working age people employed in the area (NB not residents, but those working in the area and therefore a good sign of how many jobs are being created in that economy); it's not the employment rate, as that would depend to an extent on jobs created outside of the area, which isn't the comparison we want to make in this case.

Sources: ONS
2010 comparison = when employment hit its low point nationally

3. As it turns 10 this week IPPR North has announced that it will be producing annual State of the North reports that reflect less on longer-term trends and more on the changes and challenges happening on an annual basis, and which above all continue to present analysis and policy proposals driven by our evidence base. IPPR North's new report – State of the North: Setting a baseline for the devolution decade will be available from Thursday 13^th November from http://www.ippr.org/publications/the-state-of-the-north-setting-a-baseline-for-the-devolution-decade
   
   
4. The report launch takes place on Thursday 13^th November the report will be launched at The Pandon Room in Newcastle Civic Centre from 4pm – 8pm, with Nick Forbes (Leader of Newcastle City Council), Heidi Mottram (Chief Executive of Northumbrian Water) and Catherine McKinnell,(MP for Newcastle North).
   Full details can be found here: http://www.ippr.org/events/state-of-the-north

Contacts

Richard Darlington, 07525 481 602, r.darlington@ippr.org

Sofie Jenkinson, 07981 023 031, s.jenkinson@ippr.org