Too many smart northerners leave for London. The 'Powerhouse' must draw them back

The UK is one of the most centralised and economically unbalanced countries in Europe. Seven of the eight biggest cities outside London perform below the national average in terms of GDP per person; in Germany, by contrast, the eight largest cities outside Berlin all consistently outperform the national average.

To address this, the UK Government has promoted the concept of a “Northern Powerhouse” – encouraging the great cities of Northern England to work more closely together, and offering more power and money if they do so.

And the North of course already has much going for it, not least being home to eight world-class universities. There is no shortage of smart people being educated in these top-class institutions.

However, new data from the UK Office for National Statistics (ONS) underlines the scale of the challenge in building the Northern Powerhouse. According to recently released data from the ONS Quarterly Labour Force Survey, the brightest and best students studying Science, Technology, Engineering, Math and Medicine (STEM, explicitly including Medicine) from the so-called N8 universities are moving to the South East of England, often working in jobs that they are over-qualified for.

The figures speak for themselves: overall only 48 per cent of the STEM undergraduates who were educated at N8 universities stay in the North for their career. And London and the South East are undeniably the brain drain destinations for the Northern workforce: 28 per cent of Northern-educated STEM undergraduates move to London and the South East for work.

What’s worrying for policy makers is that those who move from the North to London and the South East are more likely to be the students who achieved a better degree classification. According to the ONS, 68 per cent of the graduates relocating to London from the North hold a 1^st or 2:1 bachelor degree, whilst 61 per cent who stay in the North will hold a 1^st or 2:1.

Moreover, those Northern graduates who move South are more likely to be working in more junior roles than their education would normally lead to. According to the ONS, 36 per cent of movers are working in jobs not considered to be higher managerial or professional occupations, whereas only 31 per cent of those who stay in North are working in jobs that they may be over-qualified for.

So what is to be done? The laissez-faire argument is that, eventually, graduates will get tired of living in shared shoe-box apartments in over-crowded and over-priced London, that they will move elsewhere in the UK and that the multinational companies that compete for their labour will do the same.

However this argument ignores the fact that in order for a new economic cluster to emerge to counter-balance and complement London, economies of scale and network effects must be fostered by both the private and public sectors.

The lessons from history are clear that size matters and inter-connectedness matters: London’s underground tube network was expanded to outlying areas in the 1930s to kick start growth during Great Depression; the most recently completed Jubilee tube line was extended to Canary Wharf to foster that part of London as a new financial business district.

The lesson then is that for the Northern Powerhouse to really succeed, it requires smart people in the North to be able to hang around with other smart people more easily. That ultimately means not just political and financial devolution (welcome as that is), but better connectivity – i.e., mass transportation systems between cities, superfast broadband and collaborative platforms to enable open information sharing across the North.

That way, policy makers can set a course for attracting Northern Stars back home and rebalancing the British economy in the process.

Dr Vincent O’ Sullivan is a lecturer at Lancaster University Management School, Dr Hakim Yadi is Chief Executive of the Northern Health Science Alliance