Yet in recent weeks the Northern Powerhouse rhetoric has take a more negative turn.
Last month, transport secretary Chris Grayling announced that planned electrification of railway lines in the North, the Midlands and Wales had been scrapped, replaced instead by ‘bi-mode trains’. The project had been labelled the “Crossrail for the Northern Powerhouse” and Grayling’s decision to scrap it was met with criticism.
Meanwhile, Liverpool City Region Metro Mayor Steve Rotheram was quoted in the Financial Times calling for the Northern Powerhouse project to be ‘jump-started’, claiming the scheme had stalled over the past year.
But how important is the scheme to the development industry in the North? And how detrimental will it be if the plans continue to be watered down?
“The last few years have seen a good increase in new investment coming into the North, however this really is just a small amount in terms of what is required to help significantly lift the micro-economies in this part of the country,” says Ashley Ilsen, head of lending, Regentsmead. “The problem I have with schemes such as the Northern Powerhouse is that they make for excellent political soundbites but when it comes down to substance there is very little in terms of actions being taken to improve the current situation. I’m not surprised that much of this has already been scrapped.
“Infrastructure improvements should be the priority however as a development finance provider I think more should be done to bring jobs and incentives for housebuilders in the northern regions; this is already an area where we have dramatically fallen short. My concern over the coming years is that with our impending exit from the EU I suspect we are going to see housebuilders struggle as costs are set to rise. The ones who are likely to be worst hit as a result of this will be those with tighter margins and a slower sales period, so unless we see government led incentives and serious levels of investment come into the North then I suspect the gap between the North and South of England will continue to become greater.”
James Bloom (pictured), managing director of development finance at Masthaven, is more positive about the initiative but says the whole of the region must benefit.
“I think it’s important that any further funds reach other areas so it’s not just concentrated on a few places (for instance, Greater Manchester is getting nearly twice as much funding as Leeds, which has a similar sized population).
“Areas that will benefit from the new high speed rail links, and strong commuter links to major cities, are really interesting hotspots to keep an eye on. However, the ‘watering down’ of rail route plans could potentially adversely affect returns; I think the devil will be in the detail.”