January 15 2020

Manchester & North Set for Boost in Government Investment?

January 15 2020

Manchester & North Set for Boost in Government Investment?

Author: Gareth MarshallCategory: Manchester, UK Property
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Following the general election result, the Treasury is proposing to reform rules dictating which cities and regions receive government investment.

Summary:

  • Manchester and the north of England could become the focus of new government investment and spending targets
  • The UK Treasury is looking to redefine the rules which outline how, and where, the government makes significant economic investment
  • In December 2019’s general election, Boris Johnson’s Conservative won a majority, thanks in part to historic victories in constituencies across the north of England

 

Could the result of the 2019 general election lead to a wave of new government investment for cities across the north of England, such as Manchester?

The Times has reported that the Treasury is planning to change its rules which would enable greater levels of government money to be pumped into the north of England.

Currently, investment decisions are based on gross value added, assessing the net financial contribution of spending to the economy. For years, critics have claimed this system is too broad, and as such unfairly benefits areas with the highest concentration of businesses and people, ensuring the largest level of spend continually remains in London and south-east England.

The new policy change would see a host of new metrics introduced when determining where government investment should be focused. These may include rating the impact of investment on the wellbeing of people in certain areas, or assessing where investment could reduce gaps in regional productivity.

Boris Johnson’s Conservative party claimed historic victories in northern constituencies – many of which had long been traditional ‘safe seats’ for the opposition Labour party – on their way to winning a majority result in December 2019’s ballot.

In his victory speech, Mr Johnson acknowledged the faith handed to him by voters in the north of England, claiming that his party had “won the votes and trust of people who have never voted Conservative before”, and that his party “cannot and must not let them down”.

It’s led many political commentators and analysts to speculate whether this could mean an increased level of government investment in towns and cities across the region.

During the election campaign, Mr Johnson declared that a new Conservative government would increase investment in transport and infrastructure, as well as renewing the focus on the Northern Powerhouse project.

Commenting on the Treasury’s proposed policy change, Jim O’Neill, the vice-chair of the Northern Powerhouse Partnership, said: “I truly welcome a change to this approach, and hope it is for real. It would be a huge boost for many investments across the country, as well as throughout the ‘northern powerhouse’.”

Manchester, arguably the heartbeat of the Northern Powerhouse project, is the biggest economy in the north of England, and is set to benefit from a number of major investment projects in the coming years.

Work on a new £1 billion ‘super terminal’ at Manchester International Airport will complete by 2023, creating 40,000 new jobs and bringing an additional 10 million global passengers to the region, while forecasts suggest the city’s economic output will be boosted by £834 million as a direct result of the UK’s proposed HS2 high-speed rail line.

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