Britain’s economic growth is moving to Manchester. At least ministers will no longer need to keep looking for it in London.
Prime Minister Andy Burnham says No 10 North, his new government operation in Manchester, will take responsibility for economic growth from the Treasury. He presents the move as part of a wider transfer of power away from Whitehall.
The Manchester office opened in July. At the time, the government described it as a new “situation room” for growth and devolution.
This is an exciting development in administrative theory. Economic growth was once thought to depend on productivity, investment, trade, skills, energy costs and interest rates. Apparently, it can also change offices.
Growth has changed department
The real arrangement is less magical than the headline suggests.
The government’s original description of No 10 North said it would bring together local economic growth, local growth policy and devolution strategy. Reuters later reported Burnham describing the change more broadly. He said No 10 North would take responsibility for economic growth from the Treasury.
Either way, Whitehall has managed to make GDP sound like a shared inbox.
One can imagine the internal email:
“Please note that all growth-related enquiries should now be directed to Manchester. The Treasury will continue to handle taxation, borrowing, spending and discovering that the numbers are worse than expected.”
No 10 North is based at Heron House in Manchester. Its purpose is to move more economic decision-making away from Westminster.
Burnham also argues that the new operation will help clear blockages in central government. In addition, he wants local leaders to have more influence over decisions that affect their areas.
A new centre of economic gravity
There is a serious argument underneath the reorganisation.
Successive governments have promised to give more power to regions outside London. However, the usual result has often involved another minister, another committee and a conference table covered in untouched biscuits.
No 10 North is different in one important respect. The Prime Minister’s own operation now has a permanent base in Manchester.
That gives the new office a clearer role in the growth agenda. It may also give regional leaders more direct access to the machinery of central government.
Of course, the Treasury has not disappeared.
The Treasury remains in London
Chancellor John Healey is reported to support the arrangement. That is useful, because learning that another office has acquired responsibility for economic growth could otherwise make Budget preparations awkward.
Healey is expected to set out the government’s economic strategy next month. Burnham has also said that a ten-year programme of economic and constitutional reform will follow the Budget, which is scheduled for 28 October.
Britain therefore has several centres of economic responsibility.
The Treasury controls the public finances. No 10 North is intended to drive growth. Regional mayors will help shape local decisions. Meanwhile, businesses can continue their traditional role of asking whether anybody knows what happens next.
There may be practical advantages to the new structure. Combining growth policy with devolution could give local leaders more influence over investment and development.
Likewise, bringing ministers and mayors together could reduce duplication between departments.
However, government reorganisations have a habit of creating their own weather systems.
Every attempt to remove a blockage eventually requires a blockage-removal unit. That unit needs a cross-government taskforce. The taskforce needs a dashboard. Finally, someone commissions an independent review into why the blockage strategy became blocked.
Manchester awaits delivery
No 10 North now has a clear political test.
If investment, growth and decision-making become less concentrated in Westminster, the change should eventually be visible across the country.
If not, Britain will simply have acquired another government office from which to explain why growth remains difficult.
For now, imagine a Whitehall removal team loading a huge brass economic-growth lever into a van marked for Manchester.
Nobody knows exactly what the lever does. Several departments insist they were previously responsible for pulling it.
Manchester should check that the instructions are in the box.
