Osborne announces plans for greater devolution in order to build a ‘northern powerhouse’

14 May 2015

In his first speech since the general election, George Osborne has reiterated his vision of a ‘northern powerhouse’, in which greater powers are devolved to northern cities in order to redress the economic imbalance between north and south.

Osborne’s vision builds on existing plans to introduce an elected mayor to Manchester by 2017, which he states will lead to the development of a legal framework enabling any city to implement a Mayoral devolution deal as part of the new City Devolution Bill, to be announced in the Queen’s Speech on 27 May.

Osborne said at his speech to an audience in Manchester:

‘Now it’s time to think whether we could go further down the road of fiscal devolution. So that you take control of raising more of the money you spend – and, from my way of looking at things, see the rewards from the taxes you cut.’

Following the devolution deal for Greater Manchester, the city has already taken control of its £6bn health budget. These powers will extend to control over transport, policing, skills, housing and enterprise. Shadow health secretary, Andy Burnham and others have raised concerns about this resulting in the increasing privatisation of the NHS, and further break up of the welfare state.
It has been suggested by the Core Cities Group that this process of devolution could create 1.6m jobs and raise £2.2bn. However, concerns have also been raised that not everyone will be able to access the ‘benefits of this metropolitan revolution’.
The plans have come under criticism from some who state that vesting powers in Manchester could disadvantage the rest of the region and propagate, on a smaller-scale, ‘the current imbalance between the north and London’.
Richard Carter, leader of Yorkshire First, commented to the BBC that: ‘What might be right for Manchester is definitely not right for Yorkshire’.
Leo Hollis, writing for the Guardian, commented that: ‘There will be winners in this new era but there will also be plenty of losers: communities that are still struggling in the face of wanton austerity and a bleak economic outlook’.