Why Regional Governance Could Deliver Greater Prosperity

Why Regional Governance Could Deliver Greater Prosperity

John Hall Alliance for Yorkshire

For decades, governments of every political persuasion have searched for ways to improve Britain’s economic growth performance. Reports have been commissioned, strategies launched, departments reorganised, and billions spent.

Yet the answer is staring at us in the face.

At the national level, Britain does not primarily have a problem with its overall economic performance. At the regional level, however, the problem is a very real one.

Outside London and the South East, virtually every region of England fails to achieve its potential. Yorkshire, the North East, the North West, the Midlands, the South West and East Anglia all contain skilled people, strong businesses, world-class universities and deep economic potential. Yet year after year, they lag behind the prosperity concentrated in London and its surrounding region. When every English region outside London is under-performing, the problem is not the regions. The problem is the system. England remains one of the most centralised countries in the democratic world. Decisions affecting transport, infrastructure, housing, skills, planning and investment are still overwhelmingly controlled by Westminster and Whitehall. Those decisions are made far from the communities that live with the consequences.

The result is not hard to see. Persistent regional inequality. Weak productivity outside the South East. And infrastructure that is consistently slow to deliver, expensive to build, and uncertain in outcome.

The question we should be asking is simple: if centralisation was going to work, would it not have worked by now?

Learning from Countries That Get Better Results

Other countries have answered this question in a very different way.

Germany, Switzerland, the Netherlands and the Scandinavian nations all place far greater trust in regional and local government. They understand that decisions are usually better made closer to the people affected by them. Their regional institutions are not advisory bodies. They are centres of real power, responsibility, and delivery. Investment is planned over decades rather than election cycles.

Infrastructure is developed through stable regional systems rather than constant negotiation with a distant capital. Economic strategy is built around place, not imposed uniformly from above.

Spain offers perhaps the most striking evidence. Madrid built an entire 81-mile underground network in just eight years (1995–2003) at a fraction of the cost of comparable British schemes. The expansion was completed in two distinct phases — from 1995 to 1999 (56 kilometres with 37 stations) and from 1999 to 2003 (75 kilometres with 39 stations) — yet both stayed on time and on budget. The reasons were not geological or cultural — they were structural. Regional and municipal authorities had clear decision-making authority, used standardised designs, and were not required to seek repeated central approval. Six tunnelling machines operated around the clock. Decisions were made by those with the power to do so, and the result was infrastructure delivered quickly and cheaply.

Germany’s Länder also provide genuine regional authority over transport planning and economic development, particularly for regional and local public transport. The critical point is not that either system is perfect but that both demonstrate high-quality infrastructure can be delivered when regions have real authority rather than merely advisory roles.

The lesson is consistent: proximity to decision-making, combined with genuine authority, produces better outcomes. The question for England is why we continue to resist a model that works elsewhere.

Britain’s Infrastructure Cost Problem

Nowhere is the failure of centralisation more visible than in the cost of infrastructure.

The UK consistently builds transport infrastructure at a significantly higher cost than comparable countries. Underground railways cost roughly twice as much to build as in Italy, three times as much as in Germany, and six times as much as in Spain. Tram projects run at around two and a half times the French cost per mile. High-speed rail has proved even more extreme: HS2’s London to Birmingham section costs in the region of £232 million per kilometre, compared with £71 million per kilometre for a comparable German line built through Alpine terrain.

This is not because of weaker engineering or higher material costs. It is because of the process.

In Britain, major infrastructure schemes must pass through an exceptionally complex system of planning approvals, regulatory checks, consultations, legal processes, and departmental oversight. Multiple agencies operate in parallel, often with overlapping responsibilities and conflicting priorities.

Projects can spend years in development before construction even begins. By that point, costs have escalated, designs have been altered, and political momentum has often been lost.

The result is predictable. Delay becomes cost, cost becomes delay, and projects become progressively harder to justify. This is not efficiency. It is structural inefficiency built into the system itself.

The consequences for the North of England have been particularly severe. HS2 has become the defining symbol of this failure: a centrally controlled project that consumed vast sums, was repeatedly redesigned and delayed through Whitehall processes, and ultimately delivered far less than promised to the regions it was supposed to benefit most. This was not a regional failing. It was a product of the centralised system. Regions operating under their own frameworks — as this paper proposes — would not inherit these pathologies.

The Cure: The Power to Rewrite the Rules

The answer is not simply transferring responsibilities from Westminster to the regions. The answer is to transfer power. There is little point in creating regional governments if they are only expected to operate within the same system that has already failed. The real change comes when regions are given the authority to redesign that system entirely.

The Alliance for Yorkshire is advocating a settlement for our region based on the Scottish model: genuine legislative and fiscal powers, not advisory roles dressed up as devolution. Without powers of this scale and character, regional governance becomes a talking shop. The mechanism for achieving this is the central political challenge, and we are explicit about it: the Scottish precedent demonstrates that Westminster can transfer substantial powers when the political case is made compellingly enough. That case must now be made for England’s regions.

A Yorkshire Parliament, Midlands Parliament or North East Parliament should not inherit Whitehall’s processes. They should have the power and authority to replace them, to create their own planning and infrastructure frameworks, subject only to national standards for safety, environmental protection, and financial accountability.

They could create single, unified regional planning systems rather than fragmented approval chains. They could integrate transport authorities, local councils, utilities, and environmental bodies into a coherent delivery framework. They could standardise procurement and design to avoid constant reinvention. They could set clear timetables for decisions, preventing projects from drifting for years without resolution. Most importantly, they could ensure that infrastructure decisions are made according to regional economic priorities, not distant competition for Treasury attention.

Projects that currently take a decade to move from concept to construction should take three to four years. Projects that currently cost far above European averages should be driven closer to those benchmarks. This is not about lowering standards — it is about removing the unnecessary procedural barriers that drive up costs without improving outcomes.

Funding Economic Performance through Regional Investment

Greater power must be matched with a fundamentally different approach to investment finance. The Alliance for Yorkshire proposes a two-tier financing model designed to reduce dependency on central government grant funding while aligning investment with regional outcomes. Each approved regional infrastructure project would be financed through a stand-alone arrangement specific to that scheme. This project-by-project approach ensures that individual projects live or die on their own merits, reduces the need for cross-subsidy from successful to poorly conceived schemes, and creates clear accountability for outcomes.

The first tier would be government grants, where available, applied to reduce the base cost of a project to the community. This grant element is particularly important for ensuring that less commercially attractive projects in less prosperous areas remain viable, compensating for the lower private investment appetite that might otherwise disadvantage already struggling communities.

The second tier would be a public bond issue at a guaranteed interest rate, allowing citizens to invest directly in the infrastructure of the places they live in and understand. This creates democratic buy-in, aligns investor interests with project success, and taps genuine public appetite for place-based investment.

Any balance not taken up through the public offer would be made available to pension funds. This is a natural fit: pension funds require stable, long-term assets that match their long-term liabilities, and regional infrastructure bonds provide precisely that. Billions of pounds currently invested internationally could instead be working in the communities where pension holders live.

It is important to note that grants would reduce, not eliminate, the regional government’s financial responsibility. Westminster grant funding would flow to regional projects, but without the controlling strings that currently allow the central government to dictate design, procurement and delivery. Money would follow regional priorities, not the other way around.

This model has clear precedents. Municipal bond markets operate broadly on these principles in the United States. European regional development banks combine public subsidy and institutional capital in similar ways. The approach is not experimental — it is proven, and it is adaptable to the English regional context.

A Better Way to Fund Economic Performance and Realise Economic Potential

Regional government would not simply change how projects are delivered; it would change how they are funded.

Using a combination of regional revenues, infrastructure bonds and private investment, regions could finance many projects themselves. Where possible, projects should generate income through fares, business growth, land value increases, and other local economic benefits, helping to repay the original investment.

Not every project will be profitable, and some will require regional subsidy. However, decisions would be made locally by those who understand local priorities.

Over time, successful projects would help fund future investment, reduce reliance on Treasury grants, and ease central government borrowing. Stronger regional economies would ease pressure on the national debt while creating a more sustainable model for improved economic performance and realising economic potential.

A Stronger Nation Through Stronger Regions

Critics often present devolution as a risk to national unity. The opposite is true. A country is stronger when all its parts can contribute fully to its success. For too long, England has attempted to run a modern economy through an outdated model of extreme centralisation. The consequences are clear: entrenched regional inequality, persistent infrastructure failure, and economic performance that is overly dependent on one part of the country.

The diversity within any English region is real, and a Yorkshire Parliament would need to ensure that its own less prominent areas — the coastal towns, the rural communities, the smaller cities — are not simply dominated by its largest economic centre. But this challenge is far more manageable at a regional level, where feedback loops are shorter, political consequences more immediate, and local knowledge genuine. It is precisely the challenge that regional government is designed to handle and handles better than a distant capital ever could.

England’s regions do not need more consultations, more advisory boards, or more Whitehall initiatives. They need the power to make decisions for themselves, to raise investment and deliver infrastructure on their own terms — with the full legislative and fiscal authority that makes such power real rather than cosmetic.

Yorkshire would benefit enormously from such a change, but this is not just a Yorkshire issue. It is an English issue. If we are serious about economic growth performance, better infrastructure and a more balanced economy, we must stop asking Westminster to solve every problem.

The future prosperity of England depends upon trusting its regions with the power to resolve these challenges themselves.

The choice facing England is not between centralisation and devolution. It is a choice between continuing with a model that has delivered decades of regional underperformance, rising infrastructure costs and mounting public debt, or creating regional governments with the power, responsibility, and financial incentives to build their own prosperity. The regions of England are not the cause of Britain’s economic problems. They are the key to solving them.