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Underinvestment Leaving Northern England with £34bn “Economic Potential Gap”, Report Claims

Written by: Keith Tully

Reviewed: Friday 11th September, 2015

A new report has claimed that underinvestment is leaving the north of England with an “economic potential gap” worth as much as £34 billion.

The report, which has been put together by the IPPR think tank and is being supported by KPMG, calls for major new investments to be made in the north in order to increase its “output per head”.

In fact, the newly-released document calls for £50 billion to be invested into improving the transport networks across northern England in order to provide a boost to the economy of the region.

“Underinvestment in transport connectivity is preventing the north from behaving as a single economy and developing the strengths of similar metro-regions internationally,” commented Chris Hearld regional chairman for KPMG in the north.

“Worryingly, a long-term pattern of low investment levels relative to other parts of the UK looks set to continue. The national infrastructure pipeline shows the route for the most transport spending is set to bypass the North unless spending decisions are changed.”

According to the IPPR’s report, national infrastructure spending in the UK is allocated at a rate of £2,604 per person in London but at no more than £400 per person in Yorkshire, the North West and the North East regions.

The report states that an extra £33 billion would need to be invested in the north in order for transport spending to match up across the region with the money being spent on transport across London.

“The north has huge potential; it should be in the premier league of world economies but is currently condemned to mediocrity because of lack of investment,” said Richard Threlfall, KPMG’s head of infrastructure, building and construction for the UK.

“The poor connectivity within and between our northern cities is throttling our productivity, and weak national and global links are restricting our trade,” he said.

Earlier this year, chancellor George Osborne used his Budget speech to outline the government’s backing for economic development in the north of England and called for the creation of a “Northern Powerhouse” to counter the dominance of London.

However, the then Labour Party leader insisted that the Conservative government “is no friend of the north”.  

Keith Tully

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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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