Budget 2020

Dr Peter O’Brien, Executive Director

The Chancellor’s Budget Statement hit the headlines both for the background against which the Statement was made – the COVID-19 (Coronavirus) crisis – and the announcement of significant new investment in infrastructure (including science and innovation) as part of the government’s efforts to ‘level up’ the UK economy.

For Yorkshire, the Budget saw confirmation that the government had agreed a Devolution Deal with West Yorkshire to establish a Mayoral Combined Authority, with a directly elected Mayor from May 2021. The Deal will provide £1.1 billion of investment (split between capital and revenue) over 30 years, as well as devolving new decision-making powers on transport, planning and skills. The government is also providing up to £500,000 to support Bradford in its regeneration and development plans to realise the benefits from potential Northern Powerhouse Rail connections.

Devolution has been something of a ‘labour of love’ in Yorkshire over recent years as local leaders and the government sought to reach some form of accommodation on the terms and conditions of devolution in the region. Given the gaping hole within the middle of the Northern Powerhouse that was the absence of devolution in West Yorkshire, the announcement of a Deal is welcome. Crucially, however, it will be important that the government continues to work with other places in Yorkshire (such as York and North Yorkshire and the Humber) to instigate greater autonomy and flexibility. The forthcoming Devolution White Paper, which will be published over the coming months, will need to set out a clear approach as to how devolution in England, beyond large city-regions, will operate. YU looks forward to seeing the detail and responding to the White Paper in due course.

At a broader national level, the Budget set out plans to increase public research and innovation (R&I) investment to £22 billion per year by 2024-25, as the government attempts for the UK to invest 2.4% of GDP in R&I. Two objectives illustrated in the Budget attracted attention for those of us familiar with R&I policy, strategy and activity within Yorkshire. The first is support for world-leading research in all UK regions and nations. Whilst the second objective emphasises the crucial role of the private sector in increasing their investment in innovation. The changes to R&D tax credits are an attempt to drive greater demand amongst business, but other elements are needed in Yorkshire, including strengthening knowledge exchange between firms and universities, skills development and creating a broader environment that encourages enterprise and improved productivity within a wide range of diverse sectors and industries.

The government did announce that the Comprehensive Spending Review (CSR) would examine how overall R&I funding could be best distributed across the UK. The focus on place as a means of shaping R&I investment is being considered by UK Research and Innovation in its planned Place Strategy, and this has long been a key priority for YU. We will work to influence this Strategy and inform the government’s thinking ahead of CSR, and in particular emphasise the key contribution that our member institutions play in this regard.   

Similarly, YU will look to influence the consultation on the new £2.5 billion National Skills Fund, and how to target the Fund effectively. We welcome the decision to provide £1.5 billion over five years in capital investment for FE colleges, and the proposal to establish up to 8 new Institutes of Technology is positive; we will be looking for Yorkshire to benefit from this.

Signalling his intention to change the ‘economic mindset’ of the government, the Chancellor spoke of establishing a new economic campus in the north of England, which would house officials from HM Treasury, BEIS, Communities and Local Government, DIT and local authorities. We would argue that Yorkshire would provide the ideal location for such an initiative. Finally, how the government assesses projects and programmes seeking capital investment from the public sector could be subject to change as the government reviews the Treasury’s Green Book rules. Whilst there is a need for some form of technical mechanism to consider the merits of specific infrastructure schemes, it has long been argued that the current rules favour and skew investment towards particular, more prosperous, parts of the country.

YU will be seeking to contribute towards this review, and will support our members and partners to take advantage of any new framework that materialises after the CSR.

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