Powerhouse 2050: Transforming the North

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  • Landmark report sets out details of how North can tackle productivity gap and create an extra 850,000 jobs.
  • The North can be world-leading in four specific sectors critical to the UK economy.
  • Government funding called for, alongside business investment and collaboration across traditional boundaries and rivalries.
  • Evidence-led report, driven by major employers including Siemens, Drax and Manchester Airports Group.

 

Powering Leeds with hydrogen, investing over £1bn in portable nuclear reactors and leading the way on the Internet of Things – just three ways the North can become £100bn more productive, according to a new report.

Powerhouse 2050: The North’s Routemap for Productivity sets out sets out fully costed, evidence-based proposals for four areas of Northern excellence which could, with government funding and business support, rival the best countries and regions in the world.

Months of research, workshops and engagement with more than 500 business of all sizes, universities, interest groups and many others by the Northern Powerhouse Partnership (NPP) revealed the steps needed to be taken to make the North’s prime capabilities – Advanced Manufacturing & Materials, Energy, Digital and Health Innovation – world-class.

These include:

  • £2 billion to replace the entire gas network of Leeds with hydrogen, produced in the Tees Valley, which would significantly contribute to the UK’s 2050 and Paris Agreement commitments on reducing carbon emissions.
  • £60 million for the North to be the first region in the UK to commit fully to Industrial Digitisation – how UK manufacturing can increase its use of digital technology, such as the Internet of Things, and automation to become more productive and competitive.
  • £100 million to reinforce the North as the UK leader in health data by investing in Connected Health Cities harnessing patient data to diagnose, treat and deliver services more effectively and efficiently across the region, as well as further improving clinical trials.
  • £1 billion to creating a new Northern industry in small nuclear reactors, capable of being manufactured at a plant and brought to a site to be built and allowing for better nuclear material security. 

While government funding, much of it as part of the Industrial Strategy Fund, is called for in the report, it is also clear that there is a requirement for businesses to invest and support these and many other initiatives. This support is already happening; with one major bank already committing £2.2 billion to lend to SMEs in 2017 alone.

The workshops across the North were led by senior leaders from some of the North’s biggest employers, listening to views from a wide range of organisations.

Professor Juergen Maier, who led the Advanced Manufacturing & Materials research, said: “This Northern Powerhouse Partnership report sets out bold and original initiatives that could, with appropriate levels of funding and support, have a transformational effect on the North of England and provide a vital boost to productivity.

 

The digital reindustrialisation of the North of England is an essential part of our economic future to ensure that UK growth benefits the country as a whole.

“As digitalisation becomes central to our society and the future of manufacturing, the UK needs to invest in automation, innovation and science to give our UK industries the boost they need to be globally competitive.”

Andy Koss, CEO of Drax Power, who led the Energy engagement, commented: “The North is uniquely placed to deliver the UK’s energy needs. There are huge opportunities for us as a region – not just in terms of potential jobs and the economic benefits, but also the positive environmental impacts associated with decarbonisation.

“In the North we lead the way in existing energy technologies such as bioenergy, offshore wind and nuclear power – all vital in delivering the Government’s Industrial Strategy.”

The Digital theme was led by Stephen Church, Partner at EY. He added: “I believe this report has the potential to create a number of world-class industries in the North of England, which could make a significant contribution to the wider UK economy.

“Enhanced connectivity, such as fibre to the premises broadband or 5G roll-out, and better support for start-ups would be major advances in how we embrace the digital age, but equally important is creating incubators and co-working spaces to suit the needs of a modern workforce.”

Leading the Health Innovation theme was Dr Hakim Yadi, the Chief Executive of the Northern Health Science Alliance (NHSA). He said: “Health Innovation is key to the economic success and development of the North of England.  The North’s health innovation economy has a huge opportunity in this area to deliver, health and wealth benefits to the region, both through the new Life Sciences Industrial Strategy and the Northern Powerhouse agenda. 

“The Northern Health Science Alliance is delighted to have been able to work with NPP on producing recommendations to grow the North into the powerhouse it has the potential to be.”

Acting Managing Director of Manchester Airports Group Collette Roche said: “The significance of this report for Northern businesses such as ours cannot be underestimated – the findings could have a transformational effect on the region in terms of productivity, jobs and growth.

“What is now vital is to ensure that we address the skills gap that exists in the North and ensure that we have the access to a skilled workforce to take these initiatives forward. I am delighted to be leading the NPP’s Education and Skills Board to investigate these important issues.”

The proposals in the report have been submitted to the government for consideration in the Autumn Budget on September 22nd.

One of the key common areas contributors to the workshops agreed on was access to a skilled workforce, and the Northern Powerhouse Partnership’s next major report will focus on what steps are needed to improve educational outcomes and address the skills gap, using an evidence-based approach and working with employers, schools and a rage of educational groups.

Powerhouse 2050: the North’s Routemap for Productivity will be formerly launched today at Veka in Burnley to an audience of Northern businesses, apprentices and civic leaders.

Notes for Editors:

Images from the report are available on request.

Members of the Northern Powerhouse Partnership Board, including the area leads and Lord Jim O’Neill, are available for interview on request.

Media places for today’s launch at Veka in Burnley are available on request.

For media enquiries contact:

Daniel Cochlin
Head of External Affairs
daniel.cochlin@northernpowerhousepartnership.co.uk 
07838 228052
@NP_Partnership
www.northernpowerhousepartnership.co.uk

In addition to the four major proposals, other recommendations include:

Advanced Manufacturing & Materials

· Ensure better collaboration between academia and industry to address specific industry challenges, including technology demonstrator facilities. Examples of planned collaborative centres include the Centre for Sustainable Advanced Manufacturing in the North East (CESAM) focused on automotive, the High Speed Rail Technology Park in Leeds (requiring £9m of investment to match funding from Leeds University), Hartree at Daresbury (which received £113m expansion support as part of the Northern Powerhouse Strategy) and the completed Materials Innovation Factory at The University of Liverpool. All of these are industry-challenge led and further linking of many of the existing programmes for innovation in applied areas would also strengthen their impact and reach.  

· Establish global centres of excellence based on existing expertise, including the Henry Royce Institute and in lightweighting at the AMRC in Sheffield. The Royce Institute can deliver for the North an integrated UK Coatings Technology Centre, two-thirds funded by UK businesses, and the remainder from higher education funders. Alongside existing assets such as the Materials Processing Institute and TWI this would advance the competitiveness of UK industry, improve productivity and conserve materials, as well as meeting forthcoming environmental legislation and adding value across a wide range of products. 

· Invest £25m to allow SMEs to take advantage of pan-Northern supply chain opportunities by mapping them and their capabilities across advanced manufacturing and other prime capabilities. This would be delivered by leveraging existing supply chain programmes, the Growth Hubs as partners and those more widely across the North including the North West Regional Manufacturers Forum. This will complement planned investment in new technologies, including additive manufacturing, which will make re-shoring more cost competitive.

 

Energy

· The government should use all available mechanisms (such as the Carbon Price Floor, Contracts for Difference and Capacity Market) to support Northern generators who are best placed to provide a combination of low carbon electricity and flexible generation, such as gas, to ensure stability on the electricity system at the lowest cost.

 

 · Build on the existing pan-Northern university strengths in energy technologies to establish a Northern Energy Centre of Excellence, funded from the Industrial Strategy Challenge Fund and focused on commercialisation of existing research across the North, engaging both with larger firms and SMEs. This centre of excellence would focus on energy for transportation and energy intensive industries, including a fully-integrated pilot scale-up facility, smart energy distribution, cyber security and sub-sea engineering to underpin offshore renewables,[1] in which the North has significant existing capabilities.

 

Digital

· Establish ‘Digital North’, focusing on how access to finance would create significant economic growth at comparatively low levels of investment, leveraging assets such as Newcastle’s recently awarded National Innovation Centre for Data. This would include a £30m fund for tech start-ups, better utilising money already allocated and under management by the British Business Bank in addition to identifying what further assets will be needed longer term to capitalise on smart infrastructure and digital in the construction industry. 

· Building on ultra-fast roll out pilots in Greater Manchester and West Yorkshire, utilise £70m remaining from the Digital Infrastructure Investment Fund to deliver a step change on full fibre connectivity across the North. Additionally, a further investment of £30m for the development of a North East-wide 5G network and equivalent investment for a Leeds testbed trial.


· Establish a Northern Centre of Excellence for Civic Computation, a hub and spoke approach of an observatory with a network in each part of the North, supported by £20m from the Industrial Strategy Challenge Fund and leveraging private investment. This would create the synergies between the strengths of the North in AI, machine learning and data analytics by bringing together individuals’ data held by public bodies to address real world problems, particularly those arising from social and economic inequalities.

 

Health Innovation

· Bring together public funding and private equity to create a Patient Capital Growth Fund of £100m public investment, leveraging a further £100m private equity for health sciences in the North, to support the commercial potential of the region in alignment with the Treasury’s ongoing review. The North produces the same number of life science patents as London but does not have access to the same commercial growth capital to fully exploit these inventions. For the UK to commercially and economically capitalise on the North’s health innovation strengths, requires a pan-northern growth fund linked to its universities, research intensive teaching hospitals and spin-out/start-up clusters.

   
· Provide targeted investment to support the development of existing city-based and regional capabilities across the Northern Powerhouse, aligned with strengths in Health Innovation to help underpin and catalyse the whole region’s growth potential. There are a series of strategic investments based on smart specialisation. Together these would form a mutually re-enforcing programme aligned with the UK Life Sciences Strategy with a total cost of £160m.

 

Innovation North


· The North’s 11 Local Enterprise Partnerships have come together with the N8 Partnership of research intensive universities to develop Innovation North. This will address the common challenges and identify key actions to improve investment in Research & Development, driving innovation, including challenge competitions linked to the prime capabilities aimed at global challenges and engaging SMEs, up to a value of £50m from the Industrial Strategy Challenge Fund.

Inclusive Growth challenge

· Convene the North’s developers, planners and established businesses to address the need for incubators and co-working spaces, alongside attractive places for start-ups, in communities beyond the major city centres. This should include the development of affordable living and work space for young people with ready access to mentoring and support and connections to local businesses. Re-purposing existing assets, including the more than 1,300 mills identified by Historic England in cities like Bradford and many former mill towns in West Yorkshire alone, demonstrates the potential for this.  The North needs to identify and support a pilot using existing housing and local funding streams.

 

[1] Newcastle University (2017), Offshore Energy; Science and Innovation Audit