UK “Northern Powerhouse”: The Future, or Another Round of Public Sector Folly

In a recent article in the publication SHDLogistics, Peter MacLeod talks about Peel Group’s commitment to the so-called “Northern Powerhouse”. The contents of that article is offered below. Peter offers a report about Peel’s message to Government about the NP, its potential and its own investment network. And with Peel and Macquarie joining-up under the Peel Logistics brand, this is but new evidence of private risk capital optimism about the future fortunes for the North.

I thought it important to talk about the NP as a variety of factors are coming together about now. Things like a new spending blueprint has been unveiled for transport, new private investment commitments on behalf of global infrastructure groups like Macquarie, devolved powers in Manchester and Sheffield and a comprehensive business strategy for the Humber —- are all happening. Is this the time, when the North begins to gain a strategic platform for really competing on a European stage?

The Northern Powerhouse represents a wide view of economic potential of the North of the UK and Government’s intentions to unlock this value by policy and Government intervention. The NP involves significant investments by Government in transport, science and innovation, and support for creating more local powers via devolution. According to Transport Secretary Patrick Mcoughlin, the £13bn blueprint represents how “government is determined to close the economic gap between north and south”.

With that said, bureaucrats in the UK Government talk quite a lot about “market failure” and the grand desire to fix broken market forces. I think the term ” market failure” is a quite interesting term, because the market is typically quite a good barometer of enabling success and uncovering inherent weakness or poor execution. I am not so sure that the market has “failed” in the North, rather I’d offer that it has vastly underperformed for some very good reasons, some of them seemingly self-fulfilling prophesies. It is absolutely true that London and the South have overshadowed the North, but frankly London is one of 3 or 4 global business capitals and almost anywhere would be overshadowed by the enormous energy of its financial, business and cultural power.

From a GLDPartners perspective, this is the right thing to do, o question about it. The NP isn’t that far off from what the “Northern Way” wanted to become. So Government will continue to beat the drum, and hopefully get better (and more serious) about delivering. With that said, we don’t at all believe that Government spending will “fix” the problem. It will help. It could help a lot, But it will not do the trick, no matter how much London decides to spend. The problems are more systemic than can be described by saying the North needs better commuter connections between its cities. Far beyond that are issues like: various key elements of the private sector need to believe it and be ready to risk capital, and talented young people will need to stop migrating South and out. And yes, devolution is a huge step in tying regional fortunes to directly elected local people that can be accountable for success or failure. Underlying mindsets need to change in a way that suggests that change and betterment are indeed possible – and that local leaders and their citizens don’t necessarily need to wait for bureaucrats from far away to give them permission to innovate and deliver in the way they see best.

Article from SHDLogistics: Peel pledges strong support for Northern Powerhouse

October 14, 2015 by Peter MacLeod

The Peel Group today (Wednesday 14th October) announced its strong support for the Northern Powerhouse and urged public and private sector partners to work together to deliver the shared ambition for rebalancing the UK economy through significant growth in the North.

Peel has identified 150 projects across its investment portfolio which sit within the Northern Powerhouse, and today launched a consultative document ‘Peel in the Northern Powerhouse’, which encourages a fresh dialogue between business, Government and other Northern-based partners.

The Peel Group is one of the UK’s foremost privately-owned investment enterprises, embracing a broad range of sectors: land and property; transport and logistics; retail and leisure; and energy and media. Its investment portfolio across the North includes: Manchester’s MediaCityUK; Port Salford; the Port of Liverpool; major regeneration schemes in Liverpool and Wirral; Liverpool’s John Lennon Airport; Robin Hood Airport Doncaster Sheffield; and Durham Tees Valley Airport.

John Whittaker, Chairman of The Peel Group, has written to both the Prime Minister and the Chancellor of the Exchequer, outlining the Group’s strategy: “We have a long-term vision for our investments and believe that coupled with the Government’s growth policies and direct investment in infrastructure and skills, our investments can make an important contribution to the aims of the Northern Powerhouse.”

Peel has a proven track record in pioneering regeneration in the North over the past 25 years, with total investments of over £5bn, supporting 70,000 jobs. There is an additional commitment of £1bn of investment underway, in partnership with others.

John Whittaker added: “We believe that the Government is making great strides in facilitating a new approach to Northern growth. However, it is clear that more needs to be done to give the private sector the confidence and ability to deliver in the North, across a range of issues such as transport and logistics, communities, energy and resources. We very much look forward to working alongside our many partners, local authorities and the Government to help deliver the Northern Powerhouse.”

Peel is planning to publish an investment prospectus in early 2016, setting out in more detail the contribution that Peel and its partners can make to the North.