UK: Budget 2015: 'Austerity To Prosperity' For The North?

Last Updated: 2 April 2015
Article by Deloitte Real Estate Group

Most Read Contributor in UK, August 2017

Following Chancellor George Osborne's Budget announcement in which he delivered a number of actions for the creation of a Northern Powerhouse and for 'building a truly national recovery', our key regional people comment on what impact these may have on the North of England. 

£11.2m in Tech Hubs: Manchester, Leeds and Sheffield 

Julian Hunt, Technology, Media and Telecommunications Partner:

"Technology clusters are important to the success of the UK digital economy and this support for tech incubators in Manchester, Leeds and Sheffield will assist innovation and growth for years to come. All three of these cities are increasingly dynamic start-up zones, with innovative universities and employees. It builds on the Government's existing support through programmes such as the Catapults network.  

"The Government is keen to build on the nationwide success of digital businesses. Recent government research found there were 1.46 million digital jobs across the country and 74% of digital businesses operate outside of London. The UK's digital business revolution is a nationwide growth story and today's announcement adds to this momentum."

Publishing the interim report of Transport for the North, building on the HS3 concept to develop a network of high quality rail connections across the north

Simon Bedford, Deloitte Real Estate Partner:

"Plans announced for HS3 will ensure that a long held need – for greater and faster east/west connectivity  is brought forward. Clearly the Northern Powerhouse strategy has helped draw more government attention to an acute problem on the overloaded transport network.  

"What we need now is a fast paced implementation plan backed by clear resource allocation that will ensure businesses and the workforce feel the benefit of the investment in the near term. As with all complex transport projects the devil tends to be in the detail so hopefully the details can be resolved quickly. 

"Crucial to the HS3 announcement is the plan for extended phases that will see both Liverpool and Hull included in the wider network. Given the potential for accelerated growth offered by both the Humber and Liverpool Ports we would encourage project sponsors to examine how we can do more in this area, this will surely ensure that more of the Northern Powerhouse objectives can be met through this most welcome investment."

Investing in the vibrant cultural life of the north, including £78 million for the Factory Manchester

John Cooper, Deloitte Real Estate Planning Director:

"With £78bn pledged towards The Factory, a multimedia arts and culture space located at St John's, the Chancellor solidifies his position as an investor in the North, with Manchester positioned as its cultural and economic heart.  

"The decision to channel funding towards an arts and culture space is indicative of a long-term growth strategy for the St John's neighbourhood, and provides a boost to the city's burgeoning creative sector. It is encouraging to see this level of detail accompanying the recent devolution deal, granting Manchester not just greater powers, but a more diverse offering, that can drive wider regeneration for the city."

Extending Enterprise Zones: Humber, Manchester, Mersey Waters, Tees Valley; amending the Leeds Zone; and developing Zone in Blackpool

Richard Bell, Deloitte North West Practice Senior Partner:

"The creation of a new Enterprise Zone in Blackpool is illustrative of the scope of ambition behind the Northern Powerhouse.

 "This heightened focus on Blackpool proves that a Super North initiative is not simply about elevating the status of our major northern cities, but realising the potential of the wider regions. Enterprise Zones have a strong track record of driving local employment prospects and R&D investment in their areas, as well as supporting both new and expanding businesses.

 "Regarding the long-term vision for Blackpool and the North West, what is perhaps most significant is the strengthened connectivity this announcement will bring. The prospect of improving transport links and investing in the area's business and education facilities is in line with the plans for a unified North, linking up some of its most exciting local economies to create the 'powerhouse' we've been promised."

Northern Powerhouse, building a truly national recovery

Tony Reeves, Local Authority Advisory Partner:

"The Chancellor's last budget before the General Election signals the intent of this Government, if re-elected, to put devolution in general and Northern economic growth at the heart of its regional programme in the next parliament. The signal that this is "as well as" rather than "instead of" continued investment in London is encouraging because when it comes down to major resource allocation successive governments have found it extremely hard to resist the economic case for investment in the capital.

"The announcements on trade missions are welcome as is an indication that the hugely important HS3 project is a step closer. What would give a real boost to business and investor confidence would be the emergence of a cross party consensus that delivering HS3, and HS2, as the centre piece of a new Transport system for the North was a national economic priority that will be delivered within an agreed timescale whoever wins this or successive elections."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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