New study reveals that austerity and cuts undermine the Northern Powerhouse and Greater Manchester devolution plans

“This report is a follow up to a previous study carried out in Sheffield and although specific to Greater Manchester, it does highlight the issues common to many cities and a more sustainable approach which may interest politicians and city leaders who are looking to address problems of to uneven growth and social inequality.”

Professor Martin Jones, Deputy Vice-Chancellor, Staffordshire University

A new report, co-authored by Staffordshire University Deputy Vice-Chancellor Professor Martin Jones, says devolution and growth plans for Greater Manchester will be undermined by significant cuts.

Led by Dr David Etherington from Middlesex University London, the report - entitled Devolution, Austerity and Inclusive Growth in Greater Manchester: Assessing Impacts and Developing Alternatives, contains a stark message for newly elected mayor Andy Burnham.

Key findings from the study, which was launched at an event sponsored by the Greater Manchester Association of Trades Union Councils, include:

  • Greater Manchester local authority spending was reduced by £2billion between 2010 and 2016.

  • Welfare cuts will have involved an annual total loss of income to households of £1.4 billion within the region by 2020.

  • Devolution of health and social care faces a substantial funding gap (£2billion) that could be made even worse by Brexit.

  • Cuts to the Adult Skills Budget will have negative impacts on engaging young people and disadvantage groups with Apprenticeships and skills policies.

  • Welfare reforms will have an adverse impact on growth. The Greater Manchester Combined Authority estimates that welfare cuts will lead to potentially up to £1billion reduction in output, equivalent to 2% of total Greater Manchester economy.

Dr Etherington said: “It doesn't have to be this way. The new Mayor should negotiate with the new central Government after 8 June for a different type of devolution deal that is not simply about devolving austerity but that is about genuine local control over policies, and finances that properly cover the true costs of addressing the economic and social problems of Greater Manchester.

Austerity is incompatible with the Northern Powerhouse aims of rebalancing the economy because cuts to local government, skills, health and welfare, are seriously undermining objectives to improve the prosperity of the city and region. Under the current model, homelessness and social inequalities are likely to worsen.” The report also contains specific recommendations regarding what a “Social Devolution Deal” should look like.

These include:  

  • Design growth strategies to address poverty reduction – up-skilling and the quality and type of Apprenticeship schemes will be crucial to this.

  • Redesign welfare to work programmes that work for claimants – integrating welfare to work with skills is essential. Everyone should have free access to the whole range of options offered by Further Education, Higher Education, vocational training and apprenticeships.

  • Pilot social investment project throughout the City Region such as Unionlearn and Jobrotation.

  • Increase public debate and dialogue about the impact of austerity in the City Region and its impact on devolution.

  • Develop a ‘social dialogue’ between key partners to create inclusive policies.

  • Develop a gender perspective for growth given that women are the group most impacted most by austerity.

Professor Jones added: “This report is a follow up to a previous study carried out in Sheffield and although specific to Greater Manchester, it does highlight the issues common to many cities and a more sustainable approach which may interest politicians and city leaders who are looking to address problems of uneven growth and social inequality.”

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