Chancellor urged to invest for the North to realise its true potential

As Rishi Sunak prepares to deliver his first Budget as Chancellor - a position he perhaps did not expect to be in so soon - experts from across the region have given their view on what key sectors will want to see from the announcement on Wednesday.

With coronavirus dominating Government business, the Treasury is expected to be restrained in its spending in order to ensure there are enough pennies in the coffers to react to the illness if necessary.

But newly-gained constituencies, especially those in the former so-called ‘red wall’, will be looking for investment in infrastructure, research and development, and a realisation of the Government’s favourite buzzword of “levelling up” to prove voters made the right choice in abandoning often long-held allegiances last December.

But with the National Infrastructure Strategy to invest £100bn in boosting the economy and tackling the climate crisis expected to be delayed until after the announcement, this may not happen as quickly as hoped.

Here is what experts across the region want to see.

Sarah Longlands - IPPR North

"From a northern perspective, it is pleasing that we have a Chancellor who, for once, can appreciate something of the unique economic and social challenges and opportunities of areas like Yorkshire.

"Let’s hope that he uses some of this knowledge to make an impression on the Government’s pledge to ‘level up’.

"Unfortunately for many Yorkshire residents, the only levelling up they’ve experienced in recent times is the rising tide of floodwater. And we know from our research at IPPR North’s that as a country we spend more money on cleaning up after floods than preventing them in the first place.

"There is no point building a Northern Powerhouse if large parts of it are under water.

"So Rishi Sunak has an opportunity to invest proportionately in infrastructure for flood prevention in the short and medium term. But the impacts of climate change like flooding, are only going to get worse so he should also be committing to investment in the technology and innovation that will help the UK and the North in particular, to lead the world in creating a cleaner and greener economy.

"With the right incentives, the North alone could generate 46,000 new jobs in the low carbon power sector alone and it already accounts for 35% of all jobs in the UK’s low carbon goods and services sector.

"But as many people have told me over the last few weeks, levelling up is also about education and skills. Businesses across the region can’t find enough people with the right skills to fill vacancies yet at the same time, many people struggle to find secure, well paid employment. This needs to change.

"We know that since 2009/10, total spending on adult education has been cut by 47 per cent with subsequent falls in learners from 4.4m in 2004/5 to 1.5 in 2017/18. This isn’t exactly the basis of a knowledge and innovation economy. An end to austerity is vital to ensure that our colleges have the resources they need to match people, skills and opportunity.

"But most importantly, we need an end to an austerity of mindset. Rishi Sunak can and should be ambitious for the North and its people."

Richard Stubbs - Chief Executive of Yorkshire and Humber Academic Health Science

"Yorkshire and Humber has serious health problems that have a knock on impact for our economic productivity. Northern workers who become ill are 39 per cent more likely to lose jobs than the rest of England, and we have the second highest percentage of working days lost due to sickness.

“We recognise the unbreakable link between health and economic prosperity. This means that high value jobs, better housing and good education are just as important as a high performing NHS in the challenge to extend our healthier lives.

“Yorkshire has many excellent foundations to build upon, if we had the same investment as the south east. We actually have more life sciences companies in Yorkshire than Oxford and Cambridge combined as well as a thriving digital health sector.

“We work with industry innovators, universities, and NHS hospitals, and understand how good local innovation not only creates jobs, it makes a difference to patient care too.

"For example, we’ve used smart phone enabled ECG devices to detect irregular heart rhythms and prevent a potential 930 life-changing strokes across Yorkshire. We’ve linked up hospitals with community pharmacies, so patients understand their medicines when they are discharged, saving the NHS £16m by preventing 1,600 readmissions.

“We have so much potential in the North to tackle health inequalities, create jobs and increase productivity. We need the government to recognise this, acknowledge why investment really matters here and why it has the potential for huge long-term impact.”

Fiona Spellman - Chief Executive of education charity Shine

"To truly level up opportunity across the country, this government must be prepared to invest in the long-term future of our children.

"The current education system is struggling to close the gap between children from disadvantaged backgrounds and their peers, and in the North of England specifically, children who are long term deprived are too often leaving the education system without the basic qualifications they need to access further education or work.

"The truth is, much of this gap exists even before children begin school, with language and vocabulary skills in the pre-school years being a key predictor of later life outcomes. This government needs to invest far more in high quality early years education and create genuine parity of esteem for the early years’ workforce and other educational stages.

"For too long, education policy has been in a state of constant flux, with one ideology battling with another, often without a clear evidence base or strategy to implement key decisions, and all underpinned by piecemeal funding commitments from one year to the next.

"Much like they have already delivered for the NHS, this government needs to make an ambitious,10-year funding settlement for schools, and enable all parts of the system to strategically invest in the strategies that will best serve the most disadvantaged students.

"According to analysis by the Education Policy Institute, the last Conservative manifesto contained pledges which would result in a relative shift in funding away from schools with higher levels of disadvantage. This risks further widening the disadvantage gap at a time when schools are already battling the effects of rising child poverty.

"This budget must demonstrate both the longevity and scale of investment our hard-working schools need – and it must ensure this funding is invested where it will make the most difference."

Adam Bedford - National Farmers' Union North East Regional Director

"The NFU is looking for a range of measures to ensure farm businesses remain viable during the transition away from the EU and go on to reach their full potential. In particular, we are focused on addressing key barriers to the industry achieving its ambitions for growth.

"Our number one ask is for measures that help improve farm productivity and business resilience. This will be crucial to help farm businesses move away from direct payments and become self-sustaining. Alongside continued investment in research, development and innovation, we also want to see access to on-farm productivity grant funding and agri-tech funding to help farm businesses develop innovative solutions to the challenges they face.

"We are also calling for ring-fenced funding to replace EU structural funds previously delivered through the Rural Development Programme for England (RDPE) – and for funding to be at least equal to previous levels of investment.

"The current National Productivity Investment Fund, if continued, could also help drive productivity increases and infrastructure improvements.

"Moving onto the capital allowances system, we would like to see further support for those businesses seeking to enhance their productivity and reduce emissions. This would include

accelerating relief on buildings and making permanent the current temporary Annual Investment Allowance limit of £1m.

"Two other issues addressed in the NFU’s budget submission to the Treasury include necessary reforms to the planning system to allow farmers to invest and adapt their businesses during Brexit agricultural transition period. We believe there are significant barriers that hold back farming businesses and these must be addressed.

"Finally, like most rural businesses, the NFU is calling on the government to ensure the rollout of superfast broadband alongside delivering complete mobile phone coverage at a reasonable cost. It is essential to lay the foundations for 5G coverage in rural areas now. The full delivery of the government’s agri-tech and industrial strategies depends on it."

Karen Finlayson - Regional Lead for Government and Healthcare Industries at PwC

“Delivering for voters in towns across Yorkshire and indeed the North will be front of mind for the Chancellor as the Conservative Government seeks to deliver for those constituencies that previously voted Labour until the last election.

"There will be some eye-catching projects such as new hospitals, transport infrastructure and energy, but look out for smaller pots of cash invested forensically in local projects such as roads, local bus services and investments for high streets.

“Recent PwC research shows this investment would be well made. Small interventions which make a noticable difference to the liveability of an area can make a big difference to people’s sense of fairness.

"Further devolution for cities would be a welcome step towards further rebalancing of the UK economy, but to truly ‘level up’ the neighbouring towns will require complementary spending on areas like providing good transport links to get people to where jobs are created.

“It’s good to hear that the Treasury is considering ways to reform the Green Book to look beyond the purely economic measures traditionally used to assess the value of public investment. We might expect to hear more about this as part of a broader political narrative which the Government will use to demonstrate it is delivering for ‘red wall’ voters.

"While it seems unlikely that the UK will follow New Zealand’s lead and introduce a ‘Wellbeing Budget’, anything which looks beyond GDP to people’s quality of life is to be welcomed.”

John Keyes - Chair of Public Sector at Cushman and Wakefield

“Notwithstanding the potential impacts of Coronavirus, the government will be planning a radical budget on 11 March, reflecting a government with a large majority and the years of inertia since the Brexit referendum. Expect to see confirmation of changes to the Treasury “Green Book” for investment appraisals. These will shift the balance of decision-making more to regions outside London and the South East.

“There will be some significant spending announcements around a national infrastructure strategy with regional rail investment to the fore. The Towns Fund will be further heralded – perhaps with additional money. There are some limits on available funds, however, so some smaller funding pots may be cut back or subsumed into larger investment initiatives.

“Some further relief on business rates for smaller businesses – especially retailers and high street businesses - is likely but perhaps, not yet, any radical change to the local property tax system.

“Significant new capital funding is required in the NHS. The question is how far the government goes beyond the headline grabbing announcements on new hospitals. What money will be made available to address backlog maintenance and how will local primary, community and social care provision be funded?

“Finally, many think that greater devolution of power is critical to ‘levelling up’ the regional economies. Is the government ready to give greater powers to City Mayors and local councils? I suspect not but expect to hear an announcement about more central government activity and staff being sent north.

"This should be a positive budget for the property industry. The government will be looking to provide incentives for property developers, investors and occupiers, with activity in new construction and building refurbishment a visible sign of the government’s manifesto commitments. Cities and towns in the North and Midlands should expect to hear some positive news about local projects and local authorities and property investors and developers should be ready to deliver.”

Barry White - Transport for the North Chief Executive

"The past few months have seen the North rise up the national political agenda like never before. As we approach the Budget, overhauling the “Green Book” approach to investment decision-making is critical if our region is to get what it needs to grow over the coming years. Decades of underinvestment have held us back, and this cannot continue.

"Our work to make the case for sustainable, long-term investment in our transport networks is a collaborative effort with our region’s political and business leaders. Together, we speak with one voice on the need to increase funding to secure transformational benefits for our region’s people and businesses.

"Over the past year we have been working on building a cross-party consensus on the future of devolution in the North of England, which has seen us call for a single devolved transport budget - a “Northern Budget”.

"The Northern Budget 'asks' are the minimum requirements for our region and would enhance connectivity between our towns and cities so people and businesses can make the most of the opportunities available. We’re calling for commitments to: build the £39bn Northern Powerhouse Rail network, in full, by 2040; an initial £7 billion Northern Infrastructure Pipeline of road and rail projects; and £1bn to develop the future pipeline of projects. All of this will help us “power up the North”.

"The Government has already made some very significant transport decisions, such as committing to HS2 and bringing in the Operator of Last Resort to replace Northern – both very much welcomed by us and more widely across the North. We were also delighted that the Prime Minister visited us last summer and told us that TfN were 'making a very, very good case here for £39bn investment'.

"Now we have the opportunity to enter a new era where political commitments on 'rebalancing' and 'levelling up' are put into action in order to provide significantly enhanced economic opportunities in the North.

"Providing a dedicated Northern Budget and changing the appraisal approach are vital and it is now time for us to be empowered to deliver upon the ambitions of people in the North.

Professor Andy Gouldson - Chair of Leeds Climate Commission and Professor of Environmental Policy at University of Leeds

“Tackling climate change is a massive challenge – if we’re going to respond effectively we have to do many more of the right things, and many less of the bad things - and we need to act at scale and pace from today through the 2020s.

"As part of a national aviation strategy, we need a frequent flyer tax, with the money ring-fenced and fed back into improving public transport. We also need to accelerate the transition to lower emissions vehicles – with higher taxes on larger and less fuel efficient vehicles funding investments in walking, cycling and charging points for electric vehicles. And we need to incentivise significant investments in domestic energy efficiency and support an ambitious home retrofit scheme – for example by adjusting VAT or even council tax rates.

"We should also invest heavily in reducing fuel poverty, where every pound we spend could reduce NHS bills by 42p as we improve public health.

"The UK government also needs to finally get properly behind supporting carbon capture and storage – which could be transformative for this region, in protecting jobs and in making sure that no-one and no-where is left behind in the low carbon transition. We also need to invest much more heavily in flood protection for the most vulnerable areas and communities – we know all too well what the impacts of under investment in flood protection can be.

"All of this could generate huge economic benefits for Yorkshire – we could save £3.5bn a year from our collective energy bill and create 5,000 jobs in the region through effective climate action. Instead of asking why would we do all of this, we ought to be asking, ‘Why wouldn’t we?’.”

Nicky Chance-Thompson DL - Chief Executive at The Piece Hall Trust

"Culture and heritage provide the seamless fabric that glues our society and places together.

"As well as providing a sense of community and shared values, places like The Piece Hall make a tremendous contribution to the region’s economy.

"According to the World Health Organisation high-quality outside spaces can help to remedy mild depression and physiological stress indicators. Research has shown that the size of the UK’s economy could have been £25bn higher if it had not been for the economic consequences of mental health.

"In addition to these 'softer' benefits many of Yorkshire’s cultural and heritage sites add significantly to the economy of local places by drawing in tourists, creating job opportunities and improving the value of homes in their proximity. An independent report by ex-Treasury economists which we commissioned found that every £1 spend running The Piece Hall contributed at least £5.30 to the local economy.

"In the nearby Woolshops Shopping Centre footfall has been boosted by one million people in the two years since we re-opened. This equates to an extra £5.8m for the local economy.

"The Prime Minister and Chancellor have both committed to “levelling up” the country. Delivering new roads and railways alone will not be enough. To regenerate place it requires a vision, a focal point and an anchor around which other investments can be made. The Piece Hall is one of the best examples in the country of how to do it well.

"So when the Chancellor stands at the despatch box next week in addition to increased transport spending, we would like to see more money made available for culturally-led regeneration which can raise aspiration levels, give a sense of pride and support the economy."

Dr Séamus O’Neill - Chief Executive at Northern Health Science Alliance

"The Budget comes at an extraordinary time for the Government and it is crucial that the North plays an important part in driving the success of the UK through effective investment

into health and the health innovation economy.

"The health of people in the region is paramount - around a third of the productivity gap between the North and the rest of the country is due to ill health.

"The previous decade has seen massive public health cuts which have contributed to the stark growth in health inequalities, as demonstrated in last month’s Marmot report. These need to be reversed so our population can be healthy, happy and productive again.

"However, starting on this path will require an injection of £1bn a year into Northern public health. And the Government needs to invest in our health system. The NHS is a huge employer in the North of England with many thousands of skilled workers driving the health and wealth of the region, a £10.5bn increase in NHS budgets in the North will support those working in

areas with the highest levels of deprivation, £600m for Health for Life Centres would offer support for those in the communities and towns.

"Health innovation has been recognised as a prime capability for the North of England and this should be invested in as an economic asset. The Northern Health Science Alliance’s analysis of Health Research Funding shows that we receive just £21 per person on health innovation compared to a £62 average in London Oxford and Cambridge despite the fact our

health is significantly poorer and the impact on levelling up this spending would have on the economy.

"Our Connected Health North proposal has asked the Government for £260m over five years to make the region a global leader in connecting and using health care data with an engaged

and supportive population. It would also provide capacity for the world-class research and clinical expertise in diagnostics, therapeutics and digital care to be mobilised in support of

both patient care and economic growth.

"In this Budget the Chancellor should invest in the areas that need it the most and that will make the biggest impact in the economy, health is one of those areas. Let’s hope he’s true

to his levelling up mantra and puts his money where the rhetoric is."

Claire Ainsley - Executive Director at the Joseph Rowntree Foundation

"This decade will be decisive for the future direction of the UK. One in five people in Yorkshire live in poverty, and one in three children. That’s over a million people in this region alone, and a rise of 30,000 in the last five years.

"The Government pledged in its manifesto to tackle child poverty. This first budget is a chance to show they meant it. JRF’s recent state-of-the-nation report revealed that a mix of housing costs, cuts to benefits, and work that doesn’t provide a reliable route out of poverty, is keeping families trapped.

"As Rishi Sunak prepares to deliver his budget, our message is that investment is badly needed to ‘level up’ the UK - but it must be well-targeted on things that people on low incomes can see and feel on the ground.

"Many low-income voters do not feel as though they have been well-represented in politics, so the new government has to make a difference to them otherwise distrust in politics will deepen.

"It is the right thing to do to invest in our much-needed public services. The NHS and police are vital but so is delivering a social security system that we can all depend on in hard times. People and their skills need investment – not just the hard infrastructure of roads and railways as much as that matters to us in our region.

"It is also time for action on genuinely affordable housing and that has to include an increase in social housing as well as home ownership if it is to benefit people on low- to -middle incomes. Increases in the national living wage are good news but if people’s costs outweigh their wage rise then they’re no better off. The Chancellor must act on the root causes of high costs as well as boost incomes now.

"The first budget of this new decade must set out a new direction which invests in people and places so that the effects are felt throughout the county."