Spending Review deemed ‘missed opportunity’
LEADERS SAY MEASURES WON’T HELP TO ‘LEVEL UP’
NORTH East business leaders have rued the “missed opportunity” of the Chancellor’s Spending Review after questions on the Government’s muchvaunted ‘levelling up’ agenda remained mostly unanswered.
Chancellor Rishi Sunak used the Spending Review to highlight the devastation wreaked by the pandemic on the economy, which will shrink by its largest amount for 300 years and is not forecast to recover to pre-crisis levels until the end of 2022.
But as well as announcing measures to cope with the pandemic, Mr Sunak aimed to point to the future with the establishment of a £4bn Levelling Up fund and indications a new infrastructure bank would be sited in the North.
There was also a commitment to reform the Treasury’s ‘Green Book’, the system that decides which spending projects the Government will back and is widely thought to favour the South.
But a number of measures highlighted to benefit the North East – including the dualling of the A66 and new trains for the Tyne and Wear Metro – were re-announcements of already known projects, while business and political leaders criticised the decision to control the Levelling Up fund from Whitehall, rather than allowing local leaders to decide their own spending.
There is also growing concern over the lack of information the Shared Prosperity Fund to replace EU development funds, which have been a major boost to job creation in the North East.
Jonathan Walker, policy director at the North East England Chamber of Commerce said: “The Chancellor’s speech had been billed as the next step in the Government’s ‘levelling up’ agenda at challenging time for our regional economy. While we acknowledge the pressure on public finances, the statement was a missed opportunity to restore confidence and many announcements were poorly targeted and too short-term in their scope.
“On the face of it, a Levelling Up Fund sounds good, but is far too small in scale and ambition to be effective.
“The Government’s own documents recognise the particular impact Covid has had on Northern regions but we fear £4bn won’t go very far if spread across the country.
“The lack of targeted funding is disappointing at a time when the Chancellor is at pains to stress how little money there is to go around.”
He added: “In contrast, the reform to the Treasury’s ‘Green Book’ funding rules is something we have long campaigned for and should, if implemented correctly, help to shift the balance of infrastructure spending in the long term.
“Since the Brexit referendum we have constantly asked what will replace EU funding which has been so beneficial to our region over many years.
“We welcome the reference to the UK Shared Prosperity Fund which will replace it. However as with other elements of this Statement, we lack reassurance it will be effectively targeted, based on regional need, or that it will be delivered swiftly.”
The Chamber’s disappointment was shared by Henri Murison, director of the Northern Powerhouse Partnership, who said: “It feels like a hollow victory to create a £4bn levelling up fund when Whitehall will still get to decide how it is spent.
“It is disappointing we’re yet to see targeted investment at the biggest barriers to driving up productivity which can only be done by trusting directly elected Metro Mayors and their combined authorities – this is the only way we will close the North-South divide.”
But there was a welcome for the Spending Review from the Northern Research Group of Conservative MPs, who said: “We welcome the tearing up of the Green Book rules that favours investment in London and the South East, a near £3bn three-year Restart Programme helping more than one million people who’ve been unemployed for over a year, the new £4bn Levelling-Up Fund and Infrastructure Bank located in the North of England.
“It is clear this Northern Chancellor has actively engaged with the Northern Research Group’s agenda as set out in our letter to the Prime Minister dated 26 October 2020. In building back better, we cannot just hope our way out of this crisis ... we need to plan for one.”