Transformational transport investment for Northern regeneration

Productivity is vital for economic growth. It determines the wealth, wages and living standards of a society and is critical for ensuring the long-term success of a country. The Government has said that it wants to level up the UK economy, by re-balancing the economy away from London and the South East to other parts of the country, including the North. This objective is based on the idea that the UK’s productivity challenge is largely a result of these areas significantly lagging behind the capital, and that a turnaround in the UK’s fortunes overall can only be achieved by correcting the imbalance and boosting productivity in these slower growing regions.

The North of England already has significant strengths. It is one of the largest regions in the UK with a population of 16 million and generates over a fifth of the UK’s GDP. It has seven of the UK’s leading universities and features over five areas of outstanding natural beauty. It has a major international airport, currently the UK’s third largest, with significant spare capacity and a number of significant other ports and airports. Increasingly, it is home to a number of ‘prime’ capability industries that are capable of competing globally. 

To truly create a ‘Northern Powerhouse’ economy, however, will require a step change in the economic performance of our cities, towns and economic centres. Most future growth is likely to be in knowledge intensive industries, which are disproportionately city based. Cities are the engine of economic growth as they help match workers to firms and firms to workers. Doubling the size of the city alone can increase productivity by 3 to 8%. So cities matter, but increasing productivity in city centres is only likely to drive transformational economic change if it is part of a wider strategy for improving economic prosperity across a range of places.

Transport is fundamental to driving economic change on the spatial scale of the North of England. We need to encourage greater co-operation beyond traditional boundaries; create a joined-up approach that helps Northern towns, cities and rural areas develop sustainably and ensure that prosperity generated by the Northern Powerhouse is shared as widely as possible, not just in the key cities.

Transport for the North’s role is to make the case for transformational transport investment that would enable the North to function as a single economic area, with productivity growth driven by easier commuting, trade and knowledge sharing both within and between our city regions. Bringing these cities and economic centres closer together to help the region function more like a unified economy that has the size and scale to compete globally with the most productive and prosperous places around the world.

In 2019, Transport for the North published the first Strategic Transport Plan for the North of England, setting out an ambitious vision to transform the economy of the North of England and create a global powerhouse that could compete with the most productive and prosperous places in the world, creating 850,000 jobs by 2050 and adding £100bn to the North’s economy. The Plan will rebalance decades of underinvestment and transform the lives of people in the North.

A truly inter-connected North will drive business productivity which creates a virtuous cycle of greater investment and higher skilled jobs locating to the region. More people will have the opportunity to access a wider range of jobs that better match their skills. Businesses will more easily be able to seek out opportunities across a wider range of markets. This helps drive business productivity, more investment and higher skilled jobs locating to the region. Visitors to the North by rail and air can access a wider range of destinations, growing the visitor economy and supporting trade and inward investment.

Northern Powerhouse Rail forms the heart of that plan for an interconnected North. A fast, frequent train service connecting the city regions of the North. NPR and HS2 together can bring new opportunities to millions of people and thousands of businesses, a one in a generation opportunity to create a core spine of rail connectivity for the next century and beyond.

Transport for the North recognises that fulfilling that opportunity will require not only significant investment in transport infrastructure, but progress on skills, research and development, decarbonisation and social inclusion to grow a successful and prosperous North. Our Plan is aligned with and reflect the vision of our Northern towns and cities.

The key then is to ensure that investment in transport can kickstart a wider revolution of opportunity for business, people and places. Emerging spatial plans and economic around proposed HS2 and Northern Powerhouse Rail stations demonstrate the opportunity for unlocking the economic potential of the North. In Leeds for example, the arrival of HS2 is a facilitator of the regeneration of the South Bank, a 250-hectare regeneration project creating at least 8,000 new homes and generating 35,000 jobs, doubling the size and economic impact of Leeds city centre. The key test for Northern Powerhouse Rail will be how it contributes to the creation of inclusive, healthy and productive spaces and places right across the North.

Author: Tim Foster, Head of Economic Advice, Transport for the North