Business leaders in the North East have welcomed reports that the Treasury’s spending rules could be altered to help boost investment in the North.
As the Tories try to deliver for their newly-won voters in the region, reports suggest that investment decisions would take into account improving people’s wellbeing or narrowing the productivity gap with the South and focus less on overall national economic growth.
Business groups and politicians in the region have long criticised the Treasury’s “green book” rules, which are thought to favour big infrastructure projects in London and the South East because they are most likely to see a quicker return on investment.
The reports come as the Power up the North campaign – in which the Journal has joined dozens of other Northern newspapers to call for a fairer deal for the region – keeps pressure on the Government to act.
The proposals said to be under consideration ahead of the spring Budget would affect how officials work out the value for money of investments in transport, business development and other initiatives.
Prime Minister Boris Johnson has stressed that the Conservatives must work hard to maintain the voters who may have “lent” their backing in order to implement Brexit.
The Tories secured support in Labour’s former heartlands in the North and the Midlands and the Prime Minister will be working to maintain the newfound voters.
Lord Jim O’Neill, a former Treasury Minister who is now vice-chair of the Northern Powerhouse Partnership, said: “I have long since believed, going back to the earliest discussions about devolution when I led the Cities Growth Commission and through to my time at Treasury, that the static, accounting-based approach of value for money in assessing investment projects does not make any sense.
“By definition, it adds to the attraction of projects in heavily-populated, economically-vibrant areas – usually London – and doesn’t allow for potential major productivity-enhancing projects elsewhere, including many in the North, and especially Northern Powerhouse Rail.
“I truly welcome a change to this approach, and hope it is for real. It would be a huge boost for many investments across the country, as well as throughout the Northern Powerhouse.”
The reported change has also been welcomed by the North East England Chamber of Commerce, which has long campaigned for changes to the Treasury rules.
Jonathan Walker, assistant director for policy at the Chamber, said: “This is long overdue and a major win for a long standing Chamber campaign. Government must recognise the potential of investment in our region and change the rules to enable more of it.”
A Treasury spokesperson said: “We work across Government to ensure investment is focused on where it is needed across the UK and delivers value for money for the taxpayer.”
The post Treasury spending rules could be changed to boost North, reports say appeared first on USNewsRank.