North should get the cash

The drive to close the North-South economic divide is failing and should be abandoned, a controversial report to ministers claims.

The study, by the Centre for Cities think-tank, urges the Government to focus simply on boosting investment and jobs in the North, without worrying about the wealth gap with London and the South-East.

It also calls for the North-West Regional Development Agency to be merged with its counterparts in the Yorkshire and the North-Eest, to create a single Northern Development Agency.

The shake-up would make it easier for powerful city-regions to develop, taking on extra powers to deliver on housing, transport and jobs, it argues.

The three northern regional development agencies (RDAs) already cooperate closely on economic development through the Northern Way‚ group.

The call to scrap attempts to close the North-South divide will also anger Labour MPs, who have long argued that more needs to be done to prevent London outstripping the rest of the country.

The report says: “Despite the fact that the RDAs passed National Audit Office inspection (2006-2007) and are meeting most of their annual output targets, they have made only minimal progress towards the Government’s wider strategic goals of driving up regional growth rates and closing the North-South growth rate gap.”

It continued: “The strong political focus on growth rate gaps has encouraged unhelpful competition between regions, and has distracted ministers from the most important task: improving the fundamental strength of the Northern and Midlands economy, which would in turn deliver greater prosperity.”

Although the report claims a lack of success, the last Treasury assessment found that growth rates were higher across the North than in London and the South-East - reversing the trend of many decades.