January 2016

Independent Economic Review (IER) of the Northern Powerhouse


The North of England is home to 16m people and 7.2m jobs and contributes almost £300bn to the UK's economy each year. But long-standing challenges remain in terms of its prosperity and productivity 'gaps' relative to the wider UK. Simply put, the North is not delivering as much wealth to the national economy as it could.

Recognising this, over the last 18 months momentum has been building behind the concept of a 'Northern Powerhouse' (NPh) where the prosperity and productive potentials of the North are realised. The Chancellor of the Exchequer argues that 'together our northern cities can be more than the sum of their parts' and 'if the northern economy grows in line with the rest of the UK over the next 18 years (2013/30), compared to previous 18 years, it would be worth an additional £56bn in nominal terms to the northern economy'.

In this context, TfN on behalf of wider partners, commissioned SQW Ltd and Cambridge Econometrics Ltd (CE), supported by SDG Ltd, John Jarvis Consulting, and Professors Philip McCann (Groningen), Ron Martin (Cambridge) and Roger Vickerman (Kent) in late October 2015 to undertake an Independent Economic Review (IER) of the Northern Powerhouse.

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The IER comprises five work streams:

  • Workstream 1 – an analysis of the prosperity and productivity gaps in the North, and the potential contribution role of different drivers, including (proxies for) transport connectivity, in closing these.
  • Workstream 2 – an analysis of the economies of the 11 Local Enterprise Partnership (LEP) areas, which together form the North. This work, includes an assessment of local productivity performance and causes, sectoral specialisms, capabilities, and assets, and major investments planned/underway in each of the LEPs geographies.
  • Workstream 3 – building on the evidence above, an analysis of distinctive competitive advantage and sectoral strengths, capabilities and potentials of pan-Northern significance.
  • Workstream 4 – modelling future growth scenarios for the North, including growth consistent with NPh's aspirations, and an assessment of the role of agglomeration and transport in achieving these. From this, an overall Strategic Growth Narrative will be developed for the North.
  • Workstream 5 – developing proposals for an Independent Panel to act as the 'guardians' of the IER's evidence base going forward.

The assignment will take place between November 2015 and March 2016. It will provide data, evidence, and intelligence to underpin proposals for transport investment in TfN's Strategic Investment Framework, which NPh partners are to make to Whitehall in February 2016 as an input to the Spring 2016 budget, and provide robust evidence and arguments around which the wider 'strategic narrative' for the NPh can be built and argued.