Northern cities must ensure their planning structures are better prepared to attract foreign direct investment to fund the Northern Powerhouse, according to global infrastructure services firm AECOM. As public sector and business leaders descend on Manchester for the UK Northern Powerhouse International Conference tomorrow, AECOM argues that to achieve the truly transformational change required to turn the North’s individual cities and towns into a connected economy, much greater levels of funding are needed than the government or our city regions can afford.
AECOM, which is involved in some of the UK’s most vital infrastructure projects including HS2 and Crossrail, believes that foreign direct investment will be crucial to help fuel the Northern Powerhouse. Local, regional and planning authorities will therefore need to create the right conditions to attract this inward investment.
Richard Green, Director – Design, Planning & Economics, at AECOM’s Manchester office, explained: “Investors don’t back countries, they back their best bet of getting a return. The North has to compete for investment like any other potential recipient project in every country. It is therefore critical that transport infrastructure isn’t planned in a silo. Other important enablers such as housing, employment, schools and hospitals all play a crucial role in ensuring that people will want to live and work in an area. Real estate values will increase as a consequence, making infrastructure projects an attractive investment proposition.
“Investors need certainty around planning issues and the length of time a project will take to be delivered. A potential threat to the Northern Powerhouse has always been that it would be derailed by infighting, with multiple different planning authorities creating uncertainty and difficulty for potential investors. The Bernstein/Leese combination in Manchester has dealt with that admirably, which has paid off with some significant investments in projects such as Airport City.”
The US has a long history of investing in the UK. But China is another potential source of foreign direct investment that could be further tapped. The Chancellor showcased £24 billion worth of investment opportunities in the North of England during his visit to Chengdu last autumn. Developed Western economies are increasingly seen as attractive safe havens for Chinese investors given China’s current economic climate. President Xi Jinping’s recent visit also led to a perception of the UK as a more appealing investment destination than many of its global rivals.
AECOM believes that other cities in the North would do well to replicate the Manchester governance model. In addition, the mayoral option tabled by the government could bring significant benefits to other cities in their ability to plan and deliver projects extending to the wider commuting and economic city regions.
However, AECOM warns that achieving this level of success with transport infrastructure projects encompassing multiple conurbations, which is vital to achieving greater connectivity between cities and to the rest of the world, will be more complex.
AECOM’s Richard Green added: “In a world where the economic battleground is increasingly between cities rather than countries, the UK winners will be those that are best connected to each other and their overseas counterparts. Large-scale transport infrastructure projects are therefore a vital component of the Powerhouse project – but in planning terms, they present many more challenges.
“This is why Transport for the North has such a vital role to play in bringing local transport authorities together – not only to speak with one voice to UK government, but also to potential foreign investors.”
Enquiries:
AECOM
Muna Al-Azzawi
0207 798 5158 / 07917 574 766
muna.al-azzawi@aecom.com
Citigate Dewe Rogerson
Patrick Donovan
0207 282 2915 / 07767 445531
Patrick.donovan@citigatedr.co.uk
Toby Mountford
0207 282 2820 / 07710 356611
Toby.mountford@citigatedr.co.uk
Ian Morris
07940 797 560 / 07940 797560
Ian.morris@citigatedr.co.uk
