Manchester’s economy, and its population, is growing, But the decision to ‘pause’ the electrification of the Manchester-Leeds rail line underlines the reality that important decisions are still controlled nationally, explains Professor Diane Coyle.
One of the most telling signs of a successful economy is when people vote with their feet and move there. As the OECD’s annual Local Economic and Employment Programme (LEED) conference took place in Manchester on 24-26 June , there came news that Greater Manchester’s population is booming. Although the growth is not (yet?) as fast as London’s, it is clear the city is a place where growing numbers of people think they have good prospects.
However, as the conference made clear, Manchester has some significant structural challenges to address. The city is one of the case studies in the OECD conference’s accompanying book, Local Economic Leadership, which highlights the following shortcomings:
- congestion and transport capacity;
- limited revenue available to develop critical infrastructure;
- skills bottlenecks and especially a need to improve the system of apprenticeships;
- significant skills shortages in ICT (programming, engineering and databases.
Given the first two of these, it was particularly disappointing to hear the news the following day of the suspension of the planned electrification of the TransPennine Express. That decision underlines the fact that for all the momentum created by the ‘Northern Powerhouse’, the devolution of economic decision-making is at a very preliminary stage. Some steps are better than none, in an economy as centralised as the UK’s, but there is a long way to go.
As the OECD report explains, most cities have limited autonomy, even if the UK’s cities are more restricted than most of their comparators. Only a few – such as Hong Kong, Berlin, Hamburg, Singapore and Zurich – could be described as empowered ‘city states’. Not even London, without doubt a global city, makes that list. Few cities have the financial resources of their own to invest in infrastructure, and so must engage with national authorities for this. Since the financial crisis, this means big investment gaps have opened up in many city economies, putting paid to attempt to engage in long-term strategic planning.
However, Manchester is singled out for praise for the quality of long-term thinking on the part of its leadership. The report cites the 2004 Greater Manchester Economic Development Plan and the 2009 Manchester Independent Economic Review (in which I was involved) as key initiatives that set a strategic framework and provided the evidence base for all the subsequent devolutionary decisions. Speaking at the conference, Sir Richard Leese said that evidence base was decisive in overcoming traditional Whitehall resistance in the GM leaders’ discussions with the Treasury.
Greater Manchester has more opportunity now than at any time in very many decades to build on the current economic momentum that is attracting more people here.
As the TransPennine rail delay shows, however, Manchester is still highly vulnerable to decisions taken at the centre. The OECD’s advice is to stay firmly focused on the long-term aims, whatever the short-term setbacks or issues, because strategic leadership is what enables successful cities to differentiate themselves from others, and develop distinct high-productivity specialisations. That is the challenge for the new political structure and interim Mayor Tony Lloyd.