Unlocking regional growth in the UK
The north-south divide in the UK has long been recognised, with wealth being unevenly distributed across the country and those living in London and the South East benefitting from profoundly different economic conditions to those living in the north.
Successive governments have rolled out policies aimed at re-balancing regional differences, with perhaps the most high-profile being the devolution measures that gave additional money and power to councils in the north. Andy Burnham was elected Mayor for Greater Manchester in 2017 and took control of £1 billion in devolved funds to spend on improving the city and attracting new businesses.
Dan Butler partner in the Manchester office says: “Historically, Manchester has boxed above its weight, but there is clearly a north-south divide that is going to take generations to rebalance.
"The key lies in being outward-facing and not allowing UK cities to compete against each other, as they have done for centuries, but rather to play to their own strengths."
Manchester has a rich heritage in innovation and manufacturing, with the largest and fastest growing economy outside London and a proud tradition of entrepreneurship, creativity and innovation. Population growth is a major fact in its continued success, with students, young professionals and new communities increasingly choosing to stay in Manchester as a result of its knowledge-based economy.
Amardeep Gill, a partner in the firm’s Birmingham office, adds: “There is certainly a need for a bit more understanding of each region’s strengths, and more mutual respect. Birmingham is not competing with Manchester and Leeds, it is competing with Paris and Frankfurt.”
In 2014, the chancellor of the time, George Osborne announced the need to create a Northern Powerhouse, attempting to galvanise the 15 million-strong workforce across the northern cities and seeking to attract investment into the region. Before that, the coalition government established Local Enterprise Partnerships, which partner local authorities with private sector businesses. The intention being to determine local economic priorities and lead economic growth and job creation in an area. The coalition government also established Combined Authorities, which allow councils to collaborate across boundaries.
Gill says: “For me, the creation of local enterprise partnerships and Combined Authorities was one of the big policy drivers behind addressing regional inequalities. These big institutions are relatively new on the landscape and their responsibility is to bring their priorities together and act as a voice for the region. They continue to deliver and work on a pan-regional basis, particularly in Greater Manchester and the West Midlands, and they are doing great things.”
He adds, “I now know that if I wanted to work in Peterborough and Cambridgeshire, there is a central point that I can use for making contact. That is very important if you are a business looking at moving into a new area and contributing more to the local economy.”
While such initiatives are embryonic and are only now bedding in, there are growing signs of businesses engaging and understanding what might be on offer in the form of financial incentives, research and development grants, incubator support or tax breaks.
Gill says: “There has to be consistency of policy so that people can play into what’s on offer and we can start to see more signs of success. The money being distributed to Local Enterprise Partnerships is being swallowed up, and people now really want to work with the combined authorities because they know those are a helpful place to start.”
There is already evidence of growth in the Manchester economy, thanks in part to the success of the international airport, which is undergoing a £1bn expansion programme and has added routes direct to China and India. Additionally the arrival of the BBC and the subsequent ITV relocation have enhanced the idea of the city as a media destination. “Businesses are at least now considering the need to have a footprint in the north,” says Butler. “There is much more recognition that it makes economic sense for people to be here, whether that is the large Amazon hub that has been set up outside the airport or the growing number of law firms opening up.”
A lot of the responsibility for social infrastructure has fallen on the shoulders of the public sector and local authorities have been dynamic in setting up joint ventures to provide services and facilities from local funds.
When it comes to regeneration in the north, further issues are raised in connection with struggling town centres, Butler says: “As well as changing the face of cities, there is a further consideration around towns – including the old mill towns and struggling seaside towns – which are also in need of regeneration. Much more needs to be done to encourage the growth of towns now that the cities are starting to put strategies in place.”
Connectivity is a vital feature of successful cities. Strong connections across and beyond Manchester ensure that people are able to fully access all the opportunities the city can offer. Improving Manchester’s connectivity, across the city region, the UK and internationally, will make it an increasingly attractive place for people to live, for businesses to invest and for visitors to enjoy.
Gill says: “Anecdotally, we are seeing big institutional investors wanting to come to the region now. There is a wealth of opportunity that will actually become far more important as the UK recalibrates its relationships with the rest of the world in a post-Brexit dynamic. There is a lot of potential for growth within our own borders, as much as elsewhere, and businesses need to be paying closer attention to the skills and opportunities of our local economies.”
A new report published by the British Foreign Policy Group, Manchester: Soft Power Entrepreneur, explains that Manchester is particularly well placed to succeed internationally. This is largely thanks to its global outlook and innovative approach to nurturing and harnessing its global reputation in areas such as sport, tourism, education, music, science and innovation and culture.
The report says Manchester is disproportionately important to the UK’s place in the world precisely because it has always done things its own way – blazing a trail for others to follow.
Government initiatives are starting to deliver on objectives of unlocking regional growth, and businesses now have a role to play in supporting those efforts moving forward, with any opportunities they can capitalise on throughout the country.