What the budget means for the North
Chancellor Jeremy Hunt began his plan for growth with an overview of his plans for the regions – the ‘everywhere’ aspect of his growth plan.
But there was no mention of HS2 – and even before the chancellor started his announcement prime minister Rishi Sunak side-stepped a question on it at the end of Prime Minister’s Question Time, simply saying that the government had increased annual funding to the North by 30% each year.
The main points of Hunt’s plan for the regions are:
- 12 new investment zones, including ones in West and South Yorkshire, Liverpool and Greater Manchester.
- A £1bn third round of Levelling Up funding
- More control over budgets in Greater Manchester and West Midlands Combined Authorities, with plans to roll this out to other combined authorities
- Consultation over plans to remove central government funding from Local Enterprise Partnerships and a greater role for local authorities in encouraging business growth.
- Levelling Up Partnerships in 20 areas most in need for regeneration, including Kingston upon Hull, Wakefield, Blackburn with Darwen, Rother, Oldham, Doncaster, and Rochdale.
The budget was broadly welcomed by Sir Roger Marsh, chair of the NP11 group of northern Local Enterprise Partnerships.
“The North of England is a hotbed of innovation and invention, so I’m delighted the Chancellor is backing our region by locating six of England’s eight new investment zones here in the North.
“The confirmation of £80m funding per investment zone over the next five years will help the North build on its internationally significant strengths in industries such as clean energy, life sciences, advanced manufacturing, digital and creative industries, ensuring our region plays its full part in building a Global Britain that is known the world over as a Science and Technology superpower.”
Sir Roger said investment in academic institutions and emerging innovation clusters would be needed to truly boost business growth and international trade.
He added, “We also welcome the confirmation in the Budget of significant investment in carbon capture and storage and low carbon technologies. The North is already the UK’s Net Zero Powerhouse, responsible for half of the country’s renewable energy, and we are in pole position to help the Government unlock the once-in-a-generation economic opportunity that the global transition to Net Zero represents.”
Greater Manchester and West Midlands Combined Authorities will gain greater control of their budgets under plans announced by Chancellor Jeremy Hunt in his spring budget.
The two authorities will act as test beds for deeper devolution plans to be spread to combined authorities across England, including West and South Yorkshire, and the proposed East Midlands combined authorities.
The powers, published in the Levelling Up White Paper accompanying the budget, include a greater role in simplifying and integrating ticketing in local transport systems; devolution of the majority of 19+ adult skills funding to mayors; a long-term commitment to local authorities retaining 100% of their business rates. For the first time outside of London, local leaders will now be able to set the strategic direction over the Affordable Housing Programme in their areas.
In addition, the chancellor confirmed 12 pre-announced investment zones across the UK, including ones in South and West Yorkshire, Greater Manchester, and the East and West Midlands.
Tracy Brabin, Mayor of West Yorkshire, welcomed news that the county was to be the site of one of the UK’s 12 new investment zones, each of which will receive £80m a year in incentives.
Brabin said: “I’m pleased that government has recognised the strength of West Yorkshire and is choosing to work with us to deliver an investment zone. This will bring further opportunities for people across West Yorkshire and unlock more potential for our region.
“I also welcome energy support for households, as our communities continue to navigate through this crippling cost of living crisis. I’m glad that the Chancellor has listened to repeated calls from worried families up and down the country. But more needs to be done to safeguard businesses – many of whom are on the brink of collapse due to rising costs and inflation.
“I would have welcomed government taking this opportunity to recommit to Mass Transit, but we will continue to develop our plans and push Ministers for further funding.
“And if the Government is serious about growing our economy and getting people back into work, then West Yorkshire must be next in line for a trailblazer devolution deal. We stand ready to build on our track record, working with businesses to deliver the training and support our region needs to thrive.”
Central government funding for Local Enterprise Partnerships (LEPs) could be withdrawn in April 24 with their functions to be delivered by local authorities instead. The Department for Business and Trade and the Department for Levelling Up, Housing and Communities will consult on the proposals, with the government due to publish a policy position by summer.
New Levelling Up Partnerships in 20 areas ‘most in need of levelling up’ will gain £400m funding for bespoke regeneration. These include Kingston upon Hull, Wakefield, Blackburn with Darwen, Rother, Oldham, Doncaster, and Rochdale.
Martin Hathaway, managing director of the Mid Yorkshire Chamber of Commerce, said, “While levelling up did get a significant mention in today’s budget, I would like more detail on how exactly this £400m package of support and the investment zones for the north can be accessed. We need action on levelling up.
“We have talked about it in many budgets since the term was coined but I hope that Mr Hunt can actually start to move this programme forward with the support of his dedicated Secretary of State, Michael Gove.
“I was disappointed that transport did not appear a top priority for the Chancellor today. Here in Yorkshire, and across the north, we have suffered with inadequate transport links for many years, made worse by the ongoing strike action.
“I urge the Chancellor to place a higher focus on transport in our areas to bring it up to speed with the capital and other global infrastructure leaders. Enough is enough.”
Subrahmaniam Krishnan-Harihara, Head of Research at Greater Manchester Chamber of Commerce, said: “Some of the Chancellor’s announcements such as the confirmation of more devolved powers and funding, Levelling Up Partnerships and Investment Zones will have direct impact on Greater Manchester. Rochdale and Oldham will be part of the former, while the city region could also have an Investment Zone. Details for these new measures are not yet available but if funds for these are to be allocated via competitive bidding, broader levelling up cannot be achieved.”
He added, “Finally, Jeremy Hunt’s speech did not mention some of the bad news and concerns. The OBR forecasts estimate that there will be real drop in disposable household income in this year because wage rises have not kept pace with inflation. Mr Hunt also proposed to adhere to capital spending plans as set out in the autumn statement, which will see capital investment frozen for the next two financial years. There was also the recent announcement that HS2 will delayed by a further two years. In his speech, the Chancellor reeled off some big numbers in the target cohorts for his many ‘back to work’ announcements. The real question is whether they can get back to work without significant improvements to transport capacity and reliability.”
Amanda Beresford, chair of the West & North Yorkshire Chamber of Commerce, said: “The creation of an Investment Zone in West Yorkshire is welcome as it has great potential to create jobs and attract new capital into our region. Similarly, investment into Carbon Capture is a high-growth, future facing industry which is not only of huge benefit to our environment but is also an area in which Yorkshire is ideally situated to excel.
“The Chancellor’s move to make childcare more affordable will have a positive impact on the labour force and improve the career prospects of thousands of women in particular.
“While the confirmed rise in Corporation Tax is a blow for many firms already feeling the pinch, we acknowledge that tax boosts for SMEs around R&D and full capital expensing will help ease pressures.
“Finally, the lack of movement on energy prices will mean many businesses will face a fight for survival from next month when assistance ends.”