Boris Johnson to tear up rules to boost spending for the north after election landslide

Lizzy Buchan

Boris Johnson’s government is looking at ripping up spending rules to divert cash to the north as the Conservatives seek to repay voters who deserted Labour at the ballot box.

Ahead of the spring Budget, Treasury officials are understood to be drawing up plans to rewrite how the government calculates value for money, in order to shift spending away from London and the home counties.

The move comes as Mr Johnson attempts to hold onto voters in Labour’s traditional heartlands in the north and the midlands who handed him a landslide election victory earlier this month.

Under the plans, investment decisions for transport, infrastructure and business would evaluate improving people’s wellbeing or narrowing the productivity gap with the south rather than overall national economic growth.

Dominic Cummings, the prime minister’s top aide, is said to believe current value-for-money rules favour London and the southeast of England as they focus on maximising economic return.

A senior Treasury source told The Times: “It is a very big thing. You have to think about the outcomes you want to achieve and work backwards.

“The traditional way to look at it is the simple GVA per head. There is a question of whether you change that to take into account wellbeing productivity discrepancies. It is an exciting debate and you’re going to hear a lot more about it in relation to the budget.”

Lord Jim O’Neill, a former Treasury minister who is now vice chair of the Northern Powerhouse Partnership (a non-party political organisation formed to boost growth in the north), said the present system “does not make any sense”.

He said: “By definition, it adds to the attraction of projects in heavily populated, economically vibrant areas – usually London – and doesn’t allow for potential major productivity-enhancing projects elsewhere, including many in the north and especially Northern Powerhouse Rail.”

The prime minister is also considering shifting civil servants outside of London and creating government bodies in the north, including an advanced science agency to boost research, according to the Financial Times.

Northern Rail could also be split into two franchises ahead of potential renationalisation of the under-fire operator, reports suggested.

Mr Johnson made a symbolic trip to Sedgefield, Tony Blair’s former seat in County Durham, on a victory lap of the north where he vowed to “repay the trust” of Labour voters who helped him into Downing Street.

He even quoted the ex-Labour prime minister’s 1997 conference speech, where Mr Blair famously said his party were the “servants” and the people were “the masters”.

Meanwhile, Mr Cummings has told allies he is keen to shake up Whitehall in the new year, which will include the closure of the Brexit department after the 31 January deadline.​

The prime minister is also expected to carry out a major cabinet reshuffle in February in an attempt to shift the government’s priorities beyond Brexit.

A Treasury spokesperson said: “We work across government to ensure investment is focused on where it is needed across the UK and delivers value for money for the taxpayer.”

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