Foreign investment key to funding Northern Powerhouse

Attracting foreign investment will be key in to achieving the transformational change that will turn Northern towns and cities into a connected economy, says AECOM director KATE MORRIS.

The UK Northern Powerhouse International conference that takes place in Manchester this week provides an opportunity for representatives from the private and public sectors to come together to steer the discussion around the best ways to deliver economic growth in the North of England. A key element of the debate will no doubt be the delivery of improved transport infrastructure. After all, plans to drive a stronger and more balanced UK economy rely heavily on improved transport connectivity. 

 Further clarity on the main investment opportunities for improving connectivity in the north is expected next month when the latest update of the Northern transport strategy is published by Transport for the North. Potential projects being mooted in the rail sector alone include the construction of substantial sections of entirely new line between Manchester and Sheffield and Manchester and Leeds; extending the HS2 network; and upgrading and electrifying existing lines. 

Transport projects like these are essential for economic growth, but it is also important that they are developed alongside plans for social infrastructure and housing. In addition to transport, jobs, schools, hospitals and housing are also important enablers that will help ensure people want to live and work in the region. 

 It is unlikely that government and city regions alone will be able to cover the cost of ambitious transport schemes at the scale required, so different ways of funding may need to be explored. To achieve the truly transformational change that will turn individual towns and cities into a connected economy, attracting foreign direct investment will be key. And with countries such as China already starting to show interest in the northern cities, the UK is clearly attractive to foreign investors. 

Success of the Northern Powerhouse will rely heavily on transport improvements, so attracting foreign direct investment from China – a country that truly excels in this space – could be beneficial. However, attracting these types of investments requires promotion from key project stakeholders. 

 And as a key stakeholder, government will need to help assure the right environment. Removing barriers that slow delivery, such as uncertainty around planning conditions and local policies is key. Aligned regional leadership that encourages integration between neighbouring towns and cities helps create the conditions for certainty and is attractive for inward investment. 

The multiple planning authorities that operate in the region could discourage potential investors, so the focus must be on making the investment process simple. It is therefore critical that cities in the Northern hub look beyond their own boundaries and work together, not only to establish a joint vision, but also as joint enablers. 

 Strong leadership from elected city-region mayors for example may provide a more joined-up approach, but it would need to be coupled with meaningful powers to make cross-authority decisions. With their influence extended to wider commuter communities, the new city mayors could play a significant role in making the delivery of projects more certain and therefore more attractive to the right levels of foreign direct investment. 

This connectivity between cities must remain the primary focus if the UK is to realise the true potential of the Northern Powerhouse. 

Kate Morris is a director, strategic planning and advisory, transportation at AECOM


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