Regional Development Agencies

BOTH SIDES SHOULD STOP THE EURO TRASH TALK

IDEAS FOR THE NORTH AFTER BREXIT.

It’s a shame that SAS (Strong and Stable) Theresa May and Jean Claude Juncker can’t stop the trash talking ahead of their Brexit fight. They should learn from the dignified approach of boxers Anthony Joshua and Wladimir Klitschko who avoided throwing chairs or making lurid threats against each other but delivered a huge success.

The UK government and the EU officials are as bad as each other. Mrs May’s ministers are adopting an arrogant and ignorant approach to the Brexit talks. But talk of bills escalating now to £100 bn from the European side can only serve to turn public opinion in Britain from a 52/48 divide to 60/40 for Leave. Very depressing.

If we do eventually leave, many questions about the future of the North will need to be answered. Among them are what is going to happen when we lose EU regional development funding and agricultural subsidies?

Common Futures Network (CFN) has been peering into the post Brexit world. It is an independent forum of economists, planners, housing experts, engineers and development interests.

In a report out this weekend they note that while Scotland, Wales and Northern Ireland have developed national frameworks, there is no equivalent for England. The report is right to say that the need to address the “English question” was demonstrated by the sharp divisions shown up last June between towns and big cities and the North and London. The destruction of the Regional Development Agencies and their replacement by hardly visible Local Enterprise Partnerships was exactly the wrong thing to do in my opinion.

The CFN report calls for a new regional development fund to replace the EU structural fund and for a comprehensive deal for England’s regions, in addition to its cities and city-regions. This is the right approach. This weekend newly elected city region mayors are starting their work in Merseyside and Greater Manchester. We must wait to see what they achieve and meanwhile turn our attention to the areas of the North outside these conurbations. The CFN report calls for a comprehensive rural programme, a need to identify new development areas to accommodate a population growth of 9 million by 2040 and a drive to manage the growth of the London megaregion.

Let’s hope the government has time to address these issues whilst it is arm wrestling Mr Juncker after the election.

CANDIDATES SLOTTING INTO PLACE.

Nominations close next week for the General Election and the parties have been rushing to choose candidates. Ironically it has been the Conservatives who’ve had most to do because their constituency chairs believed SAS Theresa May when she said there would be no election until 2020. Opposition parties feared she was fibbing and mostly selected candidates last autumn.

This week has seen Esther McVey become the candidate for Tatton. The constituency never fails to have a high-profile MP. Since Neil Hamilton was kicked out twenty years ago, he’s been followed by Martin Bell, George Osborne and now McVey. How her scouse vowels will go down in the leafy lanes of Knutsford remains to be seen.

Wirral West has made an excellent choice in Knowsley businessman Tony Caldeira who will have no rest from the campaign trail after running for Liverpool City Region Mayor.

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NORTHERN POWERHOUSE “MAY” BE DOOMED

The Northern Powerhouse had the perfect backer. George Osborne was Chancellor, the second most powerful person in the government. It was his project and he could make reluctant civil servants (they always are when it comes to devolution) do his bidding. Finally he represented a northern constituency.

The new Prime Minister has set up an economy and industrial strategy committee. It held its first meeting this week and the term Northern Powerhouse (NP) wasn’t mentioned apparently. This may be because Theresa May’s antipathy to Osborne is so great that she is indulging in a strategy that has been so debilitating for northern devolution down the years. I refer to the chop change with every passing minister, leave alone government. There is never the long term commitment to one plan to allow business to invest with any degree of certainty. There was a perfectly satisfactory structure of Regional Development Agencies in place but the Tories, with shameful silence form the Lib Dems, tore it all down.

All may not be lost however. It appears Mrs May wants to help all towns and cities in the North. There is a valid criticism that the NP was very city focused. The voting pattern in the EU referendum showed cities like Manchester and Liverpool backing Remain whereas suburban and rural communities voted Leave. They wrongly felt the EU was doing nothing for them but they may have concluded that about the NP as well.

Perhaps the economy and industrial strategy committee will recognise that the Northern Powerhouse needs to address the needs of all the people in the North East, Yorkshire and the North West and restore the organisations designed to achieve some urgent tasks.

They include improving people’s chances of owning a home (this week’s figures were shocking for the North),northern productivity, getting on with transport projects like HS3 east west rail connections and most of all raising our skills. A massive biomedical research centre, the Francis Crick Institute is opening this month…..in St Pancras London. We need the skills base to make it possible for such investments to be made north of the Trent. We have a huge advantage over London in terms of house prices, the quality of life and commuting costs. If only the NP could deliver the skill base.

The NP needs champions at the highest level. Andrew Percy doesn’t do it for me. He is the MP for Brigg and Goole so is (just) one of us but the new Northern Powerhouse Minister is even more unknown than his predecessor James Wharton. We must hope that Lord O’Neill of Gatley stays in the government working on the NP. He was angered about the Hinckley nuclear power station “pause”. Although nothing to do with the north, it seems George Osborne’s “golden age” of cooperation with the Chinese is over. The idea had been for substantial Chinese investment to help finance not just the Hinckley project but the NP too. If that commitment is lessened, Mr Percy will need to deal with the already existing criticism that the NP is all talk and no financial heft.

ENTERPRISE PARTNERSHIPS NEED SUPPORT

Since the late seventies there have been forty different schemes to boost economic activity in the North to help close the gap with the booming South East. Local Enterprise Partnerships (LEPs) are the latest initiative and their performance has come under the eagle eye of the National Audit Office (NAO).

Their findings matter because by 2021 £12bn of our money will be channelled through LEPs under the Local Growth Fund. However the NAO has just published a report saying many of them lack capacity, expertise, transparency and that they spend money on short term projects because of Whitehall funding conditions.

There are LEPs all across the North with Leeds awarded the largest Growth Deal so far, £627m. Greater Manchester tops the national table for money given to transport projects. Liverpool City Region has been well staffed from the outset having taken on the staff of the Mersey Partnership. Warrington and Cheshire LEP is boosted by Warrington’s ability to take advantage of its excellent connectivity. With regard to Lancashire, Downtown recently hosted a top level conference at Brockholes where the ambition of the county to be part of the Northern Powerhouse was clear.

For all that there are major challenges facing our LEPs. For instance what exactly is their role in the Northern Powerhouse world of City Regions and elected mayors? The government wants LEPs centrally involved in the devolution deals they have recently signed. But LEPs have told the NAO they are uncertain of their role particularly when their boundaries are not aligned with city regions. The relationship between the business led LEPs and city region mayors, to be elected next year, remain unclear.

The idea behind LEPs was that senior business leaders would play prominent roles, but getting these busy people involved has proved difficult. The impression is sometimes given that the business representation on LEPs lacks heft and drive. The NAO calls for business to make a greater effort to be involved after years of complaints that such bodies were dominated by politicians.

Although LEPs are business led, they rely heavily on local councils for expertise. 69% of LEPs told the NAO they did not have enough staff of their own and 28% said they were not skilled enough. However local councils are under enormous pressure to empty bins and care for the elderly. There has been a 68% cut in Town Hall spending on economic development, the core function of LEPs.

LEPs have been around for a few years now, so how are they doing? Are they providing value for money? The NAO is critical about Whitehall’s methods for answering that question. LEPs have admitted that pressure to spend money in a single financial year has sometimes led them to invest in “spade ready” schemes rather than ones that would be of longer term benefit.

LEPs also need to raise their profile with the public with greater media coverage and seek ways to be more democratically accountable. The danger of not putting down roots in the community was seen when the Coalition government was able to sweep away the Regional Development Agencies with little public reaction.

THE CHANCELLOR IN THE IRON MAIDEN

LABOUR’S DILEMMA.

The Chancellor’s economic bondage fetish continues! During the election he bound himself in pledges not to increase income tax, national insurance and VAT by law. Last night at the Mansion House he pledged a new fiscal framework to achieve permanent budget surpluses.

This is a major development in the finances of the nation. In only seven of the last fifty years have governments run a budget surplus. George Osborne is convening the first meeting in 150 years of the commissioners for the reduction of the national debt.

Business is likely to welcome this determination to tackle the national debt but its political implications are profound. Labour has always believed in the need to run deficits during difficult times to boost the economy and support public services. How will they respond to this? If they support it, the prospect of a Labour Party coming to power with ambitious visions for the NHS, housing and social care will be almost impossible. If Labour oppose Osborne, he will say it is evidence Labour are committed to running deficits and never tackling the National Debt currently running at 80% of GDP.

This move shows the Tories are determined to press home their advantage at a time when Labour is engaged in a tepid leadership election to which I will return in later blogs.

EURO HONEYMOON OVER.

It is a good job the Chancellor is able to divert attention from Tory divisions on Europe. I thought the “better off out” brigade now disguised as Conservatives for Britain might have come to have a little more respect for David Cameron after his election victory. Not a bit of it. We are back to the nineties with these Tory backbenchers making impossible demands on banning freedom of movement in the EU so that they can campaign to get Britain out.

MANDELSON ON NORTHERN DEVOLUTION.

Peter Mandelson is hoping to be elected Chancellor of Manchester University shortly and wants that institution to play its part in the Northern Powerhouse.

During the campaign he has made some painful observations about how Labour was completely outflanked on devolution during the last few years.

Labour council leaders across the North were left with no alternative but to go along with the Northern Powerhouse because of a complete absence of an alternative by Labour. They were reluctant to promise to abolish the Local Enterprise Partnerships but their vision of how the North South divide would be narrowed remained opaque. They should have returned to John Prescott’s vision of regional assemblies holding recreated Regional Development Agencies to account. Only this time they should have given them real powers, like Osborne is giving Greater Manchester.

Mandelson says he was hugely frustrated by seeing the Tories seizing the devolution agenda whilst Labour stood back. The former cabinet minister says Labour had the language but not the policies to rebalance the UK economy.

Labour got this wrong but the Tory plan to allow groups of councils to come together, each with a different model isn’t the answer either to the really big question of how England responds to the call for a federal UK.