Writing last week in Building the Northern Powerhouse: Next Steps for Transformation, Treasury commercial secretary Lord O’Neill reiterated the importance of infrastructure and skills to make the North successful over the coming decades.
This is no doubt a view most in the construction sector will agree with.
The National Infrastructure Delivery Plan published in March boasted a range of projects under the Northern Powerhouse banner, many of which will excite our industry.
But before we count too many chickens, let’s not lose sight of the number of schemes still at the planning or business case development stage.
Just a gesture?
The political green light is greatly welcomed – but it remains a theoretical gesture without committed funding and a clear delivery plan.
It is not due to either a lack of commitment or good intentions on the government’s part. On the contrary, the political will is there; the challenge is delivery.
“The reality is that far greater levels of funding are needed than the public purse can afford”
Finding the funding to realise the ambitions of the Northern Powerhouse is the next hurdle to be cleared.
The reality is that far greater levels of funding are needed than the public purse can afford. Attracting foreign direct investment will, naturally, be crucial. But investors don’t back regions; they back their best bet of generating a return.
The North must therefore compete on merit, like any other potential recipient project in any other country.
It is vital the Northern Powerhouse offers foreign investors a clear, balanced vision that recognises the importance of its core cities as well as the wider TransPennine hinterland.
A regional brand and well-articulated development plans, leading to long-term gains, will be pivotal.
Other forms of funding should not, however, be overlooked.
One of the recommendations in last week’s Northern Powerhouse report was an Institutional Investment Fund that could create innovative products such as City Bonds to drive forward investment from the markets to accelerate progress.
Although the concept of issuing regional bonds to fund infrastructure is not new, it’s an approach worth exploring.
While the UK has blazed many trails in public-private financing, the US has pioneered its own variants of regional infrastructure funding models, from municipal bonds to project-specific taxes, voted through by the local electorate.
“The people of the North are the final piece of the puzzle”
The UK has already made progress in this direction with the introduction of the UK Guarantees scheme, which underwrote the Mersey Gateway Project – a key component of the Northern Powerhouse.
The people in the North are the final piece of the puzzle. Investing in skills is just as important as investing in transport, housing and other physical assets.
Protecting the unique quality of place and building the region’s expertise will be vital to securing the desired outcomes for investors and for future generations in the North.
Richard Green is director of design, planning & economics at Aecom