Northern Powerhouse? 10 of the UK's 12 most struggling cities are in the North, report reveals

Study show spiral of decline facing many towns, calling into question Chancellor's pledge to bridge North-South divide

Sally Guyoncourt
Monday 29 February 2016 01:12
Derelict homes wait for their fate in Toxteth, Liverpool
Derelict homes wait for their fate in Toxteth, Liverpool

George Osborne’s Northern economic powerhouse has been undermined by revelations in a new report that 10 of the UK’s 12 towns and cities in greatest economic decline are in the North.

Rochdale, Burnley, Bolton, Blackburn and Hull lead the list of places caught in a downward spiral of low employment and population growth.

Not a single town from the South of England is among the worst 24 listed, which includes Grimsby ranked sixth, Bradford ninth and Liverpool in 19th place.

The results call into question the Chancellor’s initiative, announced in 2014, to bridge the North-South divide and create a Northern Powerhouse for the UK, partly by devolving power to local authorities and creating metro mayors for big city areas such as Greater Manchester.

“Deals behind closed doors” rather than transparency and a comprehensive strategy for the North have hampered any signs of real progress, according to Josh Stott, the policy and research manager for the Joseph Rowntree Foundation (JRF), which commissioned the report.

“I think the vision of a Northern Powerhouse is right but it has been founded on deals struck behind closed doors rather than a coherent strategy or delivery,” he said. “Beyond the introduction of a metro mayor there’s not really any delivery.

“The Government’s agenda has been orientated around growth. I would argue it would be better to have a growth agenda, joining up services for economic development, transport, education and skills.”

The economic fortunes of 74 British towns and their local labour market areas with populations of more than 100,000, were examined in the study – Uneven growth: tackling city decline. It focused on employment rates, numbers of highly qualified workers in the area and migration rates.

Full-time job creation in the 12 worst-performing cities fell by 2.1 per cent, compared with the national average of growth of 1.9 per cent, and 5.4 per cent in the top 12 best-performing cities.

The JRF has suggested Government should give local councils a greater financial incentive to get people back to work. In a submission for next month’s Budget, the JRF said “the Treasury could create financial incentives for councils to address unemployment through a ‘welfare earn-back’ model, which would see the financial benefits of addressing unemployment shared between city regions and the Government.

“This could create a virtuous circle which helps achieve full employment, brings down the welfare bill and provides economic security for families.”

Rochdale fared worst in the survey, heading the cities on a downward trend. Its borough council claimed the research used “outdated data”, distorting the picture of the area.

Steve Rumbelow, the council’s chief executive, said: “The outdated data used in this piece of research does not show what is happening in Rochdale right now.

“It does not take into account that we have seen hundreds of new jobs created and safeguarded in the past 12 months and our growth strategy and ambitions are creating new and better opportunities.

“Nor does it show that more than £100m of investment was made in Rochdale last year and companies are locating here because they know it’s the best-connected and most ambitious place in Greater Manchester.

“Rochdale was at the heart of the Industrial Revolution and will be at the heart of the Northern Powerhouse.”

But Mr Stott said Rochdale, like Bolton and Wigan, fell into the category of cities “overshadowed” by a larger, more powerful neighbour and work would need to be done to re-balance this.

Greater Manchester, which includes Rochdale, Bolton and Wigan, has signed up to a devolution deal with the Government and will elect a metro mayor next year.

Interim Greater Manchester Mayor, Tony Lloyd, said: “It’s no secret that for too long economic growth in the South has outstripped the North. It’s the reason we need to take power from the corridors of Westminster and start making better local decisions that work for people in our communities.

“We’re working to improve skills, get people back to work or into better jobs and grow our economy. But we need a fair deal from central Government that ensures we have the resources to make better local decisions and improve lives across Greater Manchester.”

Chris Fletcher, of the Greater Manchester Chamber of Commerce, said: “Obviously it’s disconcerting when reports such as this show that significant areas are lagging behind but this is partly what prompted the thinking and argument for the Powerhouse in the first place.”

The report identified three types of city in decline: “core”, such as Liverpool, “overshadowed”, such as Rochdale, both of which are most likely to benefit from a metro mayor, and “freestanding” such as Grimsby and Blackpool.

The “freestanding” faced the greatest risk, according to researchers, as they had yet to benefit from any Northern Powerhouse initiative.

James Wharton, the minister for the Northern Powerhouse, would not comment on the report’s findings. However, his department claimed employment in the region was now at its highest ever level, with 7.5 million in work.

A Department for Communities and Local Government spokesman, said: “The Northern Powerhouse will transform our great Northern cities and rebalance the economy, having already helped create record employment rates and getting more than 440,000 people into work since 2010.

“We have secured a host of devolution deals, and invested in transport, science and the arts across the region, backed by more than £4bn of new funding from central Government. We want to harness the North’s massive potential to drive the UK’s economy, and its prospects make it a lucrative place to invest and live.”

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