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IPPR - North/South divide widened by Spending Review

Single Local Growth Fund is a pigeon step in the right direction

Reacting to the Chancellor’s announcements in yesterday’s Spending Round the think tank IPPR North has warned that the north south divide will widen.

On capital spending, Ed Cox said:

“Having cut infrastructure investment in the early part of this Parliament, capital spending announcements are badly needed and long overdue. Tomorrow’s announcements are unlikely to change the north-south divide in transport infrastructure, with £9bn already pledged to Crossrail 2 meaning London looks set to swallow up more than 90% of all regional transport infrastructure investment in the coming decade.”

On the Single Local Growth Fund, Ed Cox said:

“The Single Local Growth Fund is a pigeon step in the right direction, but given that Lord Heseltine proposed a £49 billion fund over 4 years, the announcement is less than one fifth of that which LEPs might have hoped for, only going to prove once again how hard Whitehall finds putting the rhetoric of decentralisation into practice.”

On Local Government cuts, Senior Research Fellow, Anna Turley said:

“Local government was one of the big losers in this spending round. Having already absorbed cuts totalling 33% of their budgets councils are now having to find a further 10% of cuts in 2015/16.

”The Chancellor claimed that when changes affecting local government are taken into account including local income and other central government funding, local government spending would be reduced by around two per cent. It is not clear how that figure has been reached. If it is taking into account changes to local income through the health spending and the localisation of business rates, there is real concern that this could increase inequality still further.

“Councils who refused to take up the Chancellor’s previous offer to freeze council tax for fear they would face a cliff-edge at the end of the period, will be cursing the fact that he has extended the it until 2015, but they may still have the last laugh in the long-run as this is surely unsustainable.”

Notes to editors

The Treasury Spending Round 2013 document can be accessed from:

IPPR North’s recent report - Still on the wrong track – was published on Monday 24 June and is available to download from:

The Northern Economic Futures Commission published its final report, Northern prosperity is national prosperity: A strategy for revitalising the UK economy,  in November 2012, setting out a new economic agenda for the north of England. It is available to download from:


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