UHY Hacker Young | Chartered Accountants

Will Sheffield really be part of the Northern Powerhouse?

21 January 2020

In 2014, a report prepared by the National Infrastructure Commission recommended major improvements to rail links between Northern cities to assist ‘agglomeration’ and its economic benefits. Following Boris Johnson’s electoral victory, dependent as it was on northern votes, it is likely that Northern Powerhouse Rail will be expedited during the span of this parliament. Will Sheffield feel the benefits?

Costs and benefits

The industrialised corridor that stretches across England from Liverpool in the west to Hull in the east has historically been an essential part of the UK’s economic success story. But since the second half of the twentieth century it has been left behind. The London region has become the country’s economic powerhouse and its transport infrastructure continues to attract the lion’s share of government investment. Major spending on infrastructure is guided by the Treasury’s Green Book. This requires a particular type of cost-benefit analysis, which, in the case of transport projects, measures the reduction in journey times rather than the propensity to boost economic activity. Because wages are higher in the South-East, the benefits of shorter journey times measured in terms of fewer working hours spent travelling appear greater than in the North.

Ready for the Powerhouse

My regular readers will know that I have a particular interest in productivity; I acknowledge that low productivity has many causes, but poor transport connectivity is one of the most damaging. Recent statistics published by ONS reveal that the North generally has a productivity rate of less than 90% of the UK average. Yorkshire and the Humber has one of the lowest rates in the UK: in 2017 its productivity was only 58% of that of London. Worse still this had declined from 66% since 2002.

Now that we have a Government that has a vested interest in The North, and that it has promised to increase public sector spending on capital projects from 2% of GDP to 3% ( an increase of £20 billion p.a.), what improvements can we expect to see and in what time scale? Will we in fact get the Northern Powerhouse that George Osborne promised us nearly a decade ago? To quote High Speed North, a report published in 2014 by the National Infrastructure Commission: “Improving connectivity between the cities of the North will not be sufficient to create the northern powerhouse, but is necessary. Transformations in transport connectivity should form part of a broader strategy incorporating improvements in education, workforce training, research and innovation, spatial planning and wider infrastructure investment.”

Sheffield as a footnote

High Speed North describes a process it calls ‘agglomeration’ in which the links between major cities are so close and efficient that those cities effectively function as one economy, seriously enhancing growth and productivity. The major cities that it envisages to be part of this potential ‘powerhouse’ are Liverpool, Manchester, Leeds, Hull, Newcastle and Sheffield, although it also mentions other significant centres such as Bradford. It speaks of current inter-city rail journey times and aspirational times. For example, Leeds to Manchester is on average 49 minutes but should be reduced to 40 minutes by the introduction of Northern Powerhouse Rail [HS3]. But journey times are only an indicator of the underlying issue; along with the apparently insignificant 9 minute improvement comes much increased capacity and greater frequency.

Emphasis is placed on the Manchester to Leeds route as being the one where agglomeration is likely to achieve the most beneficial outcomes. Sheffield is almost a footnote, and it is implied that the best route between Manchester and Sheffield will be the HS3 link to Leeds combined with HS2 to Sheffield. (At the time of publication the preferred HS2 connection with Sheffield was a station at Meadowhall; since then there has been a new plan to run a non-high-speed spur through Sheffield City Centre.) So, even with high speed trains Manchester to Sheffield (Meadowhall) would have taken 70 minutes plus time to change trains in Leeds – not an attractive proposition even compared to the current Manchester link via Hope Valley which takes 50 minutes and runs twice an hour.

Still waiting for the train

It is not surprising therefore that Sheffielders welcomed a plan put forward in February 2018 by Transport for the North to improve the Hope Valley line by constructing passing loops for freight trains, thus reducing journey times to Manchester to 40 minutes and improving frequency to three trains per hour. This is a very low cost project compared to HS3 and the lack of a genuine high-speed link is justified by the commuter statistics: 2,200 daily commuters between Manchester and Leeds, but only 600 between Manchester and Sheffield. But which came first, the low number of commuters or the bad rail service?

Of course, we Northerners are very sceptical of government promises, and so it is no surprise that the improvements to the Manchester line scheduled to start in April 2019 are now delayed until 2022, or possibly later. Who knows?

If you have a view on how Sheffield can get the transport links it deserves, why not contribute to the debate and follow us on Twitter, or contact me at a.hulse@uhy-uk.com.