Chancellor hesitant on Northern Powerhouse but commits to £1.8bn growth deals

THE new Chancellor Philip Hammond seemed hesitant to throw his weight behind what was the brainchild of his predecessor George Osborne during the Autumn Statement.

However, Hammond insisted that “devolution is at the heart of this government’s approach” to local growth.

He has allocated £1.8bn from the Local Growth Fund to the English regions in a third round of Growth Deals.

Some £556m of this will go to the North of England, £392m to LEPs in the Midlands, £151m to the East of England, £492m to London and the south east, and £191m to the South West.

Awards to individual LEPs will be due in the coming months.

Hammond said that with this he aimed to improve transport connections, unlock housebuilding, boost skills and digital connectivity.

In Statement documents, the government said it would give mayoral combined authorities powers to borrow for their new functions – emphasis on ‘mayoral’ combined authorities.

Whilst Sheffield and Manchester have devolution deals in place, Leeds remains the last to hold out against a mayor.

Thus far there has been no movement on whether Leeds will get a deal.

Infrastructure is key to the Northern Powerhouse according to the government, although research yesterday posted by the BBC found that in the North West, £41bn had been spent or earmarked for infrastructure projects, whilst in Yorkshire, the Humber and the north East combined, the figure was only £15bn.

Hammond said that we should “celebrate” the fact that London is a strong capital, but that no other major developed economy has such a disparity between the capital and the country’s ssecond and third cities.

The Chancellor was also very proud of his allocation of £7.6m to restore Wentworth Woodhouse near Rotherham. The inspiration for Pemberley he said was a victim of “cultural vandalism” and a “key piece of Northern heritage”.

Tony Reeves, local government advisory partner at Deloitte, said: “The fact that the Chancellor set devolution and regional growth in the context of a long term drive to improve productivity should be a source of encouragement to those regions still trying to progress devolution deals.

“We’d encourage the Yorkshire sub-regions to continue to build the consensus necessary to take forward their devolution proposals as regional growth is clearly going to be a key ingredient in closing the productivity gap between the UK and other advanced economies.”