Key facts
- Andy Burnham is establishing a new department in Manchester to lead growth policy, aiming to reduce the Treasury's influence.
- The initiative draws parallels to historical attempts to create counterweights to the Treasury's power.
- The new unit, No. 10 North, will focus on local growth and devolution, overseen by Louise Haigh.
- The Treasury will retain control over tax and spend, leading to questions about the new department's effectiveness.
- Coordination across various policy areas like housing and education is seen as key to the new unit's success.
Prime Minister Andy Burnham is initiating a significant restructuring of economic policy, aiming to wrest control of growth strategy from the powerful Treasury and establish a new department within No. 10, based in Manchester. This move is intended to foster long-term economic planning and overcome what is perceived as the Treasury's inherent caution and short-term focus.
Burnham's plan echoes historical attempts to counterbalance the Treasury's influence, drawing comparisons to Harold Wilson's Department for Economic Affairs (DEA). The new unit, dubbed No. 10 North and overseen by Louise Haigh, is expected to coordinate growth policies currently dispersed across Whitehall, leveraging devolution and additional powers for metro mayors.
Experts like Ruth Curtice of the Resolution Foundation suggest that coordinating policy across various areas such as housing, education, and planning could be the most effective use of the new unit. Michael Jacobs, professor of political economy, likens the potential structure to the Office for Climate Change, emphasizing cross-departmental coordination.
However, the Treasury's fundamental control over tax and spend remains a significant factor. Former Conservative minister David Gauke argues the Treasury will inevitably be the most important department, and stripping growth policy might exacerbate its focus on fiscal prudence. A Treasury source clarified that No. 10 North will concentrate on 'local growth' and devolution, with the Treasury lending staff and collaborating on its own Northern outpost, the Darlington Economic Campus.
Key questions persist regarding how policy clashes between the new No. 10 unit and the Treasury will be resolved, particularly concerning spending commitments. Jonathan Portes, a former senior government economist, highlights this as a historic challenge when No. 10 seeks greater power. The new department's relatively modest resources also raise concerns about its ability to enact significant change, despite the appointment of Sam Lister as director.