Northern Powerhouse is dependent on productivity, not links to other cities, says Centre for Cities report

 
James Nickerson
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The report said devolution deals should be finalised (Source: Getty)

Northern cities must become more productive if the government's plan for a Northern Powerhouse is to become a reality, a think tank has warned.

A new Centre for Cities report today said that chancellor George Osborne's ambition will only come to fruition if the focus is on boosting productivity in underperforming cities in the north.

The report compares the cities to the Rhine-Ruhr and Randstad regions of Germany and Holland, which the government has said are models for the Northern Powerhouse, and finds the success of these regions is not to do with extensive connections between cities in these areas.

Read more: Businesses and government have a collective responsibility to close the skills gap

In fact, "inter-city communing links in the Rhine-Ruhr and Randstad areas are actually little better than in the north of England", the think tank said.

So far, Osborne has put much emphasis on links between the cities, hailing HS3 to speed up east-west connections and investment into roads in the regions.

It added: "Instead, the economic vibrancy of these regions is driven by the strong performance of their individual cities, which are 40 per cent more productive than counterparts in the Northern Powerhouse."

Alexandra Jones, chief executive of Centre for Cities said: "The government’s initiative has the potential to have a huge impact in addressing the north/south divide, but only if it maintains its original focus of boosting productivity in major Northern cities such as Manchester, Leeds and Newcastle.

"These big urban areas have the most potential for growth in the region, but are currently underperforming, especially in comparison to cities in more successful areas such as the Rhine-Ruhr and Randstad areas."

Read more: Most northern businesses don't believe government will invest in the Northern Powerhouse

Based on the findings, the think tank said that national and local policy-makers must focus on addressing the skills-gap in Northern cities, as well as finalising devolution to enhance city-region governance.

It also recommended that strengthening transport links within cities is a bigger priority than inter-city links, as research shows it will help improve productivity and give a boost to economic development.

A Government Spokesman said: "Centre for Cities recognises the need to address skills needs, strengthen transport networks and champion strong local leadership, which is exactly what we are doing.

"Already we have seen the Northern Powerhouse leading the way by agreeing five devolution deals which will see voters in the North elect their own powerful new mayors by next May. We are spending billions of pounds on a faster, more frequent transport network that will better connect Northern cities, expand opportunities for business and improve access to employment and skills.

"While there were more people in jobs across the North at the end of last year than ever before, we are clear this is a long-term project and will continue building on this progress as part of our long-term economic plan."

Stephen Ibbotson, ICAEW Director of Business, agreed with the report that productivity is essential, but added that no part of the North should suffer from a lack of connectivity.

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