The North East After Brexit: Impact and Policy

The author sets out the development of the Northern Powerhouse initiative since it was launched by George Osborne in 2014. The chapter reflects on where the policy initiative and programmes are now in 2019 as we await Brexit. The new Conservative Boris Johnson premiership in 2019 has backed Northern Powerhouse Rail between Leeds and Manchester, and in advance of the major UK Spending Review after Brexit and the smaller towns have been promised investment funds. This chapter presents the wicked issues involved in seeking to address the North–South divide and re-balancing the UK at a time of increasing and deepening social and economic inequalities. The chapter calls for the strengthening of the Northern Powerhouse initiative due to its phenomenal brand. This requires greater collaboration between the public, private and voluntary sectors across the North of England to address the key strategic policy issues and yet there is no one organisation driving the Northern Powerhouse initiative. The author argues the Powerhouse may well be both underpowered and ungovernable and that Politicians and what she calls the Policy Qualgecrats, need more compelling Imagineers of the North, if we are to benefit and make more sense of this new pan-regional scale of governance and turn it into a real force for rebalancing the North as a whole.

The chapter sets out the framework and responses to devolution since the demise of the Regional Development Agencies and Government Regional Offices in 2010 and the slow emergence of two new key Combined Authorities for the North East. It illustrates how fragmentation and austerity are impacting on local government and public services. Taking stock of the 2019 local election results, it appears that local government is becoming weaker and more diverse in terms of its leadership and it poses the question of whether in 2020, the North East will be well-equipped to develop its new economic and social and environmental strategies for the next decade. The region must respond to the challenges of involvement in the Northern Powerhouse and increased competition for investment within the UK and Europe and attend to its widening disparities. This chapter argues for closer collaboration between local government and the private and third sectors to respond to the post-Brexit challenges and calls for stronger responses to national finance and the procurement of new replacement funds for regeneration and development and Industrial Strategy.

The long-term plan for the National Health Service (NHS, 2019) identifies a blueprint to make the NHS fit for the future with a greater focus on prevention, improving services for patients and the importance of integrating services to make them more effective and efficient. The challenge is in the delivery and who is responsible to implement changes. The key is to enable staff at local levels to have responsibility for ensuring that the health and social needs of their local population are met.

Established to oversee the implementation is the NHS Assembly with 50 individuals from across the health and care sector to advise NHS England and NHS Improvement on the implementation. This requires shared commitment and motivation to change; ensuring patient centred care is at the forefront of any changes to delivering care. At regional level, Sustainability and Transformation Partnerships and Integrated Care Systems are groups of local NHS organisations, local councils and other partners, who are working together in the region to develop and implement the NHS plan. There are many challenges ahead to ensure the plan delivers better regional health and social care, including the impending UK’s decision to leave the European Union. Brexit may present some opportunities but if freedom of movement and membership of the single market and customs union end as planned, NHS and social care face several significant threats in the region.

With the triggering of Article 50, the uncertainty around Brexit and the outcomes of the UK/EU negotiations process associated with the UK leaving the EU have catalysed British political debate. This situation has had and still has significant economic implications for thousands of businesses operating in the UK and in the region.

It is likely that impact of Brexit will be much larger for the North East of England compared to the other English regions, despite the Leave vote winning an overwhelming majority in the region. Many areas in the North East have heavily relied on public sector jobs and investments in the past and benefited from substantial European funding provided over the last few decades to support infrastructure, regeneration and training activities. Over 70,000 jobs were created in the region because of EU investments between 2007 and 2013, and thousands more jobs still depend on the investments being made under the 2014–2020 programming period.

This chapter analyses the economic implications that Brexit will generate for the North East of England. Focussing on data gathered from the post-crisis time, the author examines the most recent policies and findings in the literature, critically evaluating and presenting what a post-Brexit North East will be like from an economic and social perspective.

Industrial strategy has been officially out of favour at the national level since the 1980s, although some form of tacit industrial policy has existed for many years under different governments, often partial and usually not codified in official format. The new national Industrial Strategy of 2017 sets out a much clearer intent for how the 2016 Conservative government wants to rebuild the UK industrial base through both national level activity and through local and regional strategies.

At a regional level this is not so new, since the North East has had a variety of regional development strategies and innovation strategies dating back to the 1990s, associated with the implementation of the EU Structural Funds, with the former Regional Development Agency and now with the North East Local Enterprise Partnerships. These typically involved many aspects of the new local Industrial Strategies, so what’s new and what should the region be doing?

This chapter considers the impact of Brexit on devolution within England, focussing particularly on the implications for the governance of the rural North of England. It captures how Brexit adds uncertainty and complexity to the devolution deal process that has been criticised for its lack of clear principles, lack of rural focus and the creation of artificial governance boundaries. In contrast, the chapter argues that Brexit has served to allow space for devolution to take shape locally – as the centre is preoccupied by ‘high’ politics – and has reinforced the importance of taking on the interests of rural areas and small towns more seriously.

In focussing on the recent developments in devolution in Northern England, including the Borderlands Growth Deal and the new 2019 North of Tyne Combined Authority, the chapter concludes by outlining how order is emerging out of chaos in terms of the decluttering of devolution governance, how new forms of place-making can emerge in the Northern Powerhouse and how more genuine rural devolution deals are achievable in the period ahead.

The North East of England has entered the global bazaar in which its landscape, once pock marked by the scars of industries like coalmining, shipbuilding and steelmaking, has been cleaned up, beautified, and it has now entered the global competition between post-industrial places for inward investment and the spoils of the ever-expanding UK tourism industry. With this, the North East’s visitor economy now generates around £3.6 billion of expenditure each year, supporting some 54,600 jobs in 2018. The visitor economy is not only important as a stand-alone sector in the North East, but is integral to the whole North East economy, and needs to be a major driver of social change and diversification within it. As the Newcastle Gateshead Initiative says: the twenty first century North East is a place of vibrancy, with a quality of life that makes it a great place to visit, live and work, study and invest – which is a strapline narrative that clearly signals how tourism is indeed both an essential and integrated part of North East life. Brexit may provide the North East tourism industry with a stronger global stage.

This chapter charts the logic of that development and asks: is it a good thing, who benefits and who loses from the sectors development. It asks whose North East are we talking about as we prepare to enter what is anticipated to be a difficult and an uncertain third decade of the twenty-first century?

The spirit of our times is uncertain with scholars and practitioners agreeing that complex problems need more innovative multifaceted solutions. Now as we witness the potential demise of the political classes in the chaos that is Brexit, the challenges in the North East are unprecedented, unpredictable and difficult to untangle. It’s time for a different way of leading, managing and even thinking.

This chapter advocates a stronger Entrepreneurial Leadership for the development of bespoke North East strategies and argues we need to build capacity through collaboration across sectors to achieve better results in the decade ahead. This chapter presents a view of how the agenda for SME growth and development needs to change in the region in the period ahead. It suggests a stronger collaboration between the North East and northern universities could help to build a better Brexit strategy and more appropriate interventions.

Business support programmes are characterised by the combined efforts of government, industry, universities and businesses, among other institutions, as interventions intended to contribute to the regions’ growth and economic development. In England, these programmes have been promoted by different governments under different names, the most recent historical incarnation being the regional Business link programmes which used an IDBT – information, diagnostic, brokerage and transaction – model under the auspices of the Regional Development Agencies (RDA) for over a decade. When the RDAs were replaced in 2010 by the establishment of 39 Local Enterprise Partnerships (LEPs) in England, a new programme for Business Support was initiated – Business Growth Hubs. This chapter briefly reviews the literature related with business support and an analysis of the Business Growth hub programme and the initial responses of LEPs across England. It then reports on a project the authors were engaged in which applied a sociotechnical system framing of the problem utilising a Living Lab model approach to change. This new approach was aimed at engaging the stakeholders in a co-creation process, with the LEP, to work with the ‘installed base’ of business support activities in a northern region of England, UK. This new approach allows for long-term planning based on the interests of the member of the network, rather than on often narrow, short-term prescriptive understandings and interests of the policy-makers or the organisations enacting such programmes. The implications of the model proposed contributes to the current debate on regional economic development about business support by proposing a change in the role of the businesses from merely customers, to potential co-producers of advice and services, based on developing a shared vision and better infrastructure for development of the region.

There are increasing expectations and demands being placed on the universities to become more entrepreneurial. This entails universities becoming more entrepreneurial in their culture and processes as well as supporting entrepreneurship within and beyond the university setting. Entrepreneurial universities are key institutional actors in supporting entrepreneurship and economic growth.

For poorer regions, like the North east of England, entrepreneurial universities have an even more vital institutional role in supporting entrepreneurial ecosystems and taking a lead in supporting entrepreneurship and innovation. The growth of public sector entrepreneurship through government policies and programmes targeted at increasing the levels of entrepreneurship and innovation at national and regional levels provides new opportunities for entrepreneurial universities. The focus of this chapter is to explore some of the challenges and opportunities faced by entrepreneurial universities as they engage more with public sector entrepreneurship programmes, designed to increase the collaboration intensity between universities, industry and society. The chapter concludes by considering the implications of Brexit for entrepreneurial universities in the North East and their regions.

The Institute for Local Government is a research and knowledge exchange partnership which was established to facilitate collaboration between some of the North East’s major public sector institutions and its academic community drawn from the region’s Universities.

This chapter presents a summary and reflection on its roles, activities, funding, outputs and outcomes, operational experience, the problems of long-term sustainability and the lessons that can be drawn from this pioneering initiative in the North East throughout the last decade and the implications for the next decade.

The North East has five universities: Durham, Newcastle, Northumbria, Teesside and Sunderland as well as over 20 colleges. The five universities in the region employ over 14,000 staff and generate another 15,000 jobs through their activities (Universities UK, 2014). In total their activities generate gross value added (GVA) of nearly £1.6 billion, equivalent to 3.8% of the total 2011 North East GVA (Universities UK, 2014). This is higher than in any other region of England meaning that any post-Brexit funding threat to the UK university sector represents a disproportionately greater threat to the North East economy.

This chapter looks specifically at the opportunities and threats for teaching and research of public administration and public services within the North East as a consequence of Brexit. Potential threats include the impact of any reduction in European funding (particularly research funding); reduction in the number of European students and reduction in the number of European staff working at universities in the North East. This chapter concludes by making the case for greater collaboration in teaching and research across UK and European universities. Irrespective of the final result of Brexit, pan-European research and teaching of public administration seems needed now more than ever. Northumbria University has a unique place within the North East region as a centre of expertise in public administration and public leadership.

Will the Northern Powerhouse bring a new deal for the North East region? Can the region respond to the challenges ahead now with Brexit? Can one still consider the North East as one region or does the rise of two Combined Authorities demand a rethink?

The conclusions discuss developments brought about by the replacement of European funding – the UK Shared Prosperity Fund and the debates on the new Industrial Strategy Challenge and how to respond to the new Town Challenge Funds. It considers what is needed to strengthen the role of local and regional public services in the decade ahead in the region. Policies and priorities need to change, and new partnerships are needed to tackle ever growing inequalities. New interdisciplinary challenges must face demands to accelerate the low carbon economy and bring new hope to non-metropolitan communities and towns. How best to strengthen the core city role of Newcastle-Gateshead? The question remains whether the governance framework fits the Challenges which lie ahead in the post-Brexit age.