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Independent Economic Review of the Northern Powerhouse

Transport for the North

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Our Role

Steer Davies Gleave was commissioned to undertake the Independent Economic Review of the Northern Powerhouse, working with SQW, Cambridge Econometrics and specialist academics from the Universities of Kent, Cambridge and Groningen. 

Stimulated by HM Treasury, the Department of Business, Innovation, and Skills, and the cities and settlements in the 11 Local Enterprise Partnerships (LEPs) areas in the North, the Review was designed to provide the following: 

  • A clear, unequivocal and long-term perspective on the economic performance of the North, depicting this in GVA  and employment terms, and then providing a detailed decomposition of the underlying causal factors on consistently sub-optimal performance. These factors included demography, economic activity, and employment rates, sectoral mix, and productivity.
  • A detailed bottom–up assessment of the intents and objectives of the North’s 11 LEP areas as they work to develop and progress their Strategic Economic Plans. In progressing this work, we reviewed some 4,000 pages of evidence, synthesising these in to LEP-level stories. The output of this substantial work stream was a clear and evidence-based assessment of each LEP’s local position, in terms of current economic performance and sectoral strengths, and assessment of how these might shift over time, allowing for market and technology change.
  • A top-down view at the level of the North’s economy as an aggregate whole, including a detailed location-quotient analysis of sectoral strengths and supply chain interactions, depicting these in terms of a high/low location quotient vs. high/low productivity matrix for 47 industries. This work stream provided ultimately a clear depiction of Northern sectoral strengths, and potentials for growth.
  • A synthesis of bottom-up LEP-level strengths with top-down aggregate Northern strengths, so as to identify discrete areas of pan-Northern ‘capability’. By ‘capability’, we mean sectoral, institutional, and infrastructural strengths of international class. The four capabilities identified were:

1. Advanced Manufacturing, in particular Advanced Materials and Processes
2. Energy generation, storage, and low carbon technologies. 
3. Health innovation, taking in Life Sciences, Med Tech/Devices, and e-health and service delivery processes (recognising the Health Devolution opportunities breaking in the North
4. Finally, Digital, taking in computation, software design/tools, data analytics, and simulation/modelling

  • A final analysis on the economic prize to be secured by the North were the defined ‘capabilities’, underpinned by the wider economy, to achieve their full economic potential. This work highlighted that, by 2050, an additional £100 billion could be added to the existing Northern economy (at present £300 billion).

How we did it

We provided three people to the 12-person team – one Director, one Associate Director, and one Assistant Consultant, all drawn from our Leeds office to give our inputs a strong Northern flavour. The overall Lead Director for the work (Simon Pringle, then with SQW), has joined SDG recently to build out its economic development offer. 

The finalised Review was presented to Lord Jim O’Neill and leaders of the North’s City Regions at an event in Liverpool in June 2016, attended by 300 partners from across the North. The Review is now being used by TfN and wider partners to support strategy development and action planning across the North and its component geographies.

For more information contact Simon Pringle.

 


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