Cities across England that successfully introduce measures to help increase local employment should be entitled to claim "cashback" from the Treasury, according to a new report from a Northern think tank.
The report by IPPR North says the region needs a “Boris of the North” to lobby for investment plans and make the case for further powers and controls. It urges the leaders of Manchester, Liverpool, South Yorkshire and West Yorkshire to join with the North East to speak with a single voice so that they are better heard in the corridors of Whitehall and Westminster.
The report adds that the North is losing out on public spending on economic development which is skewed towards London and the South East and instead is compensated with welfare payments and grants, leading to a vicious cycle which needs to be reversed.
Ed Cox, director of IPPR North, said: “The Prime Minister used to talk about the public ‘sharing in the proceeds of growth’ and that’s the same logic he should apply to cities in the North of England. Cities which have the greatest potential for growth also have the worst poverty and unemployment. An ‘earn-back deal’ would provide an even greater incentive to invest in employment schemes which will not only finance growth, but will also help relieve poverty. Boosting northern prosperity would in turn boost national prosperity.
“The next Spending Review in 2015 provides an opportunity to reform how public spending is allocated and break the vicious cycle which promotes growth in London and shores up decline in the North. By 2015 there will be five combined authorities in the North which will be well placed to take on regional spending responsibilities and rebalance investment towards Northern cities.”
The report argues that investment into schemes to support the unemployed into work would benefit the country, with more taxes being paid and benefit payments reduced.
Other measures recommended by the report that would help to rebalance investment in the regions and drive forward growth in the North include the identification of top priority infrastructure priorities for the North on a similar scale to Crossrail and the Thames Gateway in London, the doubling of research funding for universities outside London and the South East, and 10% of the income tax take in combined authority areas being assigned to those areas.