Written evidence submitted by Liverpool
City Region
INTRODUCTION
The Liverpool City Region comprises the City of Liverpool
and the surrounding local authority districts of Halton, Knowsley,
Sefton, St. Helens and Wirral. This is an economy of 1.6 million
people and 47,500 businesses, worth £22 billion to the UK
Economy. The City Region is the sea and air gateway to the North
West of England. It connects to North America, Ireland, the Isle
of Man, Europe and beyond; serving international, national and
regional markets, investors and visitors.
The response is made by the Liverpool City Region
Local Enterprise Partnership secretariat on behalf of public and
private sectors across the Liverpool City Region. It highlights
the excellent progress that the Liverpool City Region has made
in its regeneration efforts over the past 10 years, as well as
reflecting future priorities relating to Government's proposed
approach to regeneration.
RECENT RENAISSANCE
Over the past 10 years, the Liverpool City Region
(LCR) economy has experienced an impressive economic renaissance
and provides one of the UK's best examples of regeneration-led
transformation.
Visitors to the City Region will recognise the physical
transformation of Liverpool City Centre underpinned by Grosvenor's
£1 billion investment in Liverpool One, a substantial expansion
of the City's commercial and knowledge districts, and new visitor
and cultural assets. Significant investment has also been made
in new housing and housing market renewal through the NewHeartlands
Pathfinder. There has also been investment to create significant
new employment opportunities at Daresbury, 3MG, Wirral International
Business Park, Knowsley Industrial Park, Atlantic Gateway and
Haydock Business Park.
Between 1999 and 2008,[135]
the economy grew by around 50%, with personal wealth (as measured
by GVA per capita) growing at a comparable rate to the UK. Over
the same period, the number of jobs grew by 50,600—an expansion
of 8.2% since 1999, similar to that of the UK overall. Added to
this is the strong growth in the business base, driven by robust
enterprise start-up rates.
Improvements have also been made in education and
skills, with the GCSE attainment now matching the UK average (a
closing of a 7% gap in five years), and a closing of the gap across
NVQ levels.
As a result of this decade of renaissance, the economy
was far more resilient entering the recession than in previous
ones and, consequently, has performed relatively better than many
other cities across the UK.
ECONOMIC CONSTRAINTS
Despite these positive trends, a number of significant
challenges remain for the City Region—a legacy of the economic
fracture caused by the long-term de-industrialisation.
— The
City Region still contains some of the most chronically deprived
neighbourhoods in the UK. One in three of the UK's most deprived
neighbourhoods (in the bottom 1%) are in the City Region (as measured
by the Index of Multiple Deprivation).
— A relatively
high level of benefit claimants, with especially large numbers
of people claiming inactive benefits, including Incapacity Benefit
and Employment and Support Allowance.
— An
over-reliance on public sector employment. According to the Annual
Population Survey, around 30% of the population work in the public
sector compared to about 25% nationally.
A major cause of these challenges has been the persistent
and continuing divergence in wealth in the LCR compared to other
areas. In 2008, GVA per capita stood at £14,700 compared
to £21,100 for the UK as a whole. Analysis suggests that
this gap is primarily a result of a deficit in productivity in
the local economy—a deficit that is forecast to grow.
LCR: OPPORTUNITIES
FOR GROWTH
There is a recognition that the investment into the
LCR's basic infrastructure now needs to be supported by a greater
drive to support the growth of the private sector. In particular,
local economic development policy has three overarching objectives:
"accelerate the rate of growth, improve productivity
and rebalance the economy towards the private sector."
Overseeing the delivery of these objectives is the
LCR Local Enterprise Partnership, which was established in Autumn
2010 with a membership drawn from a number of private- and public-sector
stakeholders. A Growth Strategy is currently being written that
will set out the actions that will support the delivery of these
actions.
Complementing this activity, four Growth Sectors
have been identified that provide the potential for strong and
sustainable employment growth. These growth sectors build on areas
in which the Liverpool City Region is distinctive, have the market
potential to deliver both employment and productivity growth over
the next 10-15 years, and are recognised as opportunities within
the private sector.
In each of the four sectors, a dedicated private
sector led committee has been established, who have subsequently
agreed a detailed action plan for growth, including job targets
and specific investment opportunities. This is a distinctive approach
to delivering growth, and provides the method to draw together
the tools outlined in "Regeneration to Enable Growth".
Visitor Economy: The Liverpool
City Region has the UK's strongest package of cultural, sporting
and visitor assets outside of London, with strong growth in visitor
numbers and overnight stays yielding growth in hotels, bars and
restaurants across the City Region—reflecting the importance
of the visitor economy and Liverpool's position within it to the
UK economy.
Liverpool SuperPort—the
combined strengths of LCR's port, airport and logistics operations
provide substantial opportunities in a national and global context.
Liverpool City Region has a strong maritime and logistics heritage,
specialist provision in its professional services, existing physical
assets, a strong Atlantic location and a project pipeline that
will be able to deliver both goods and visitors directly into
the North West in the next 20 years. Major capital investment,
led largely by the private sector, is at the core of developing
SuperPort. It will create an infrastructure with the capacity
to handle significantly higher volumes of freight and passengers
and support thousands of new and existing jobs.
Economic and business opportunities are arising at
a significant pace from the radical changes that need to be made
to technology, methods of production and forms of consumption
to become a low carbon economy. The challenge for businesses and
economies, including Liverpool City Region, is in being ready
to capture and realise these opportunities. The Low Carbon
Economy for the Liverpool City Region centres on the four
key areas of energy, networks, transport and buildings. These
areas show the greatest growth potential for the City Region,
based on the existing business and research base and geographical
location.
The City Region is home to a wide range of significant
Knowledge Economy assets and, over the last decade, employment
in knowledge intensive businesses has grown by over twice the
rate of the rest of the economy. More effective application of
these assets in support of the growth and development of those
business sectors will create more jobs and raise productivity
and GVA. In particular, activity will focus on the following sectors:
life sciences; creative and digital industries; advanced manufacturing;
and financial and professional services. It will also include
maximising the benefit of Daresbury Science and Innovation Centre
and the re-development of the Royal Liverpool University Hospital
and associated Bio-Innovation Centre.
These four growth sectors are not the only opportunities
for regeneration and growth in the Liverpool City Region. The
delivery of the Mersey Gateway crossing will open up enhanced
access to and from the Liverpool City Region by 2015, delivering
4,640 jobs and £61.9 million per year. The first planning
permissions have been granted for Wirral Waters, the biggest scheme
of its type anywhere in the UK, with £4.5 billion private
investment and 20,000 potential jobs over the next 30 years. Liverpool
Waters will transform 150 acres of disused docklands in North
Liverpool to create a world class mixed use waterfront quarter,
an investment of £5.5 billion. The outline planning application
for this was submitted in October 2010. Major regeneration initiatives
are also underway in Kirkby Town Centre, North Liverpool / South
Sefton and St.Helens.
The initiatives outlined in "Regeneration to
Enable Growth" in specific geographies are not sufficiently
comprehensive to reflect the major opportunities that exist within
the Liverpool City Region.
REGENERATION POLICY
In recent years, much of the regeneration effort
has focused on addressing market failures left over from de-industrialisation,
thereby improving the attractiveness of the City Region as a location
for private-sector investment. This has primarily been achieved
by public-sector pump-priming of major developments using funds
distributed through the European Regional Development Fund Objective
1 programme and the North West Development Agency. This has underpinned
significant successes:
— Redevelopment
of the Liverpool City Centre and Waterfront.
— Housing
market renewal.
— Physical
redevelopment of strategic employment sites.
— Meeting
the commercial gaps in investment capital in both revenue and
capital markets.
— Significant
investment in education and health.
In some parts of the Liverpool City Region there
is a requirement to continue this physical regeneration, but ultimately
regeneration is about people and not buildings. Increasingly the
focus needs to shift away from physical infrastructure, and towards
skills, enterprise, innovation and business growth.
"Regeneration to enable growth" provides
comprehensive coverage of physical regeneration issues, but one
of its weaknesses is the lack of coverage of complementary policy
areas. In particular, further integration is needed between the
economic requirements (ie to create jobs and start and sustain
businesses—key drivers for the Liverpool City Region) and
neighbourhood management, including health, education, and climate
change.
Liverpool City Region needs to create jobs and accelerate
growth, but also needs to ensure that local people are able to
access these opportunities, and that private investment not only
delivers major schemes, but provides benefits at a local level
(for example, the impact that energy company investment can have
on local housing).
A study,[136]
by IPPR North, looking at different growth trajectories of communities
within the north of England, including two located in Liverpool.
It provides evidence that supports the case for a multi-dimensional
approach to local economic development. In particular, it shows
that while economic growth is necessary for addressing deprivation,
it is not sufficient in and of itself, and needs to be supported
by the coordination of local supporting services.
PRIVATE SECTOR
INVOLVEMENT
Given the economic challenges set out above, as well
as Government's programme of reducing the national deficit, continued
delivery of regeneration for growth will be heavily dependent
on the private-sector playing a lead role in delivery, with support
from local authorities. Liverpool City Region welcomes the emphasis
put on private sector engagement, and the work that we have already
undertaken (through private sector led committees and action plans,
and progress made with our Local Enterprise Partnership) demonstrates
our commitment to this way of working.
The Liverpool City Region has been shown to be an
attractive location for major investment, and the policy, planning
and regulatory environment needs to continue to be conducive to
such activity.
We expect there to continue to be gaps in the commercial
model for development, be that in new housing, commercial or industrial
property, or in small business finance. We are currently reviewing
the availability of finance, but initial work points to the need
for additional funding.
We would welcome the early implementation of innovative
new schemes that remove barriers to investment and provide tax
incentives for growth, such as Enterprise Zones, and Business
Improvement Districts, within the Liverpool City Region.
ROLE OF
LOCAL AUTHORITIES
IN REGENERATION
The paper does not provide enough detail about the
role of local authorities in supporting regeneration and growth.
Local Authorities within the Liverpool City Region
are fully committed to growth, and see themselves as important
enablers, working with the private sector where appropriate, to
deliver this. We have a track record of a joint public and private
partnership approach to regeneration which will be further strengthened
through the Local Enterprise Partnership.
We recognise the Government is intending radical
changes to the planning system, and the very broad principles
of this change are set out in "Regeneration to Enable Growth".
However, Liverpool City Region would like greater dialogue on
the detail of these proposed revisions. The local planning framework
plays an important regulatory role in ensuring the supply of appropriate
development land, protects assets of key economic importance (world
heritage status for example) and providing some confidence to
the developer market.
A balance will be required between taking away constraints
whilst protecting assets, and clear guidelines for regeneration
will need to be established.
Local government provides the democratic accountability
at a local level, and the conduit for neighbourhood management
(above). Local Authorities are also powerful drivers for regeneration
in their own right, particularly through their collective purchasing
power. We would encourage the further exploration of innovative
public / private models of investment.
SKILLS AND
EDUCATION
Liverpool City Region has set out ambitious plans
to create jobs and accelerate growth over the next 10 years. This
will be done by focusing on key sectors of the economy and on
private sector investment opportunities.
We need to ensure that there are sufficient and appropriate
skills within the local economy in order to maximise these opportunities,
and to reduce dependency on welfare.
"Regeneration to Enable Growth" details
a number of policies aimed at improving skill levels and linking
them to employment opportunities, but it is critical that these
are able to be tailored locally, responsive to business needs,
and meet the likely demand of the future economy. The key issue
here is how providers can be encouraged and assisted to be more
responsive to business needs.
We have taken measures through our Employment and
Skills Board to link employers and providers more closely together.
The lead-in times for training in appropriate occupations means
skills-providers need the freedom and incentives to ensure they
can provide courses that reflect the skills needs of employers.
Current skills funding provision, driven by learners, does not
necessarily fit this agenda. There needs to be consideration given
to supporting providers to develop courses where there may not
necessarily be a business case at the moment.
Employers locally have identified underlying educational
attainment, particularly in science, and maths as crucial to meet
the likely future demand in technical, engineering and science
based industries. In addition, the careers service needs to play
an important role in raising aspirations in young people to drive
demand for courses in likely growth sectors of the future—this
is particularly important in advanced manufacturing sectors. This
will become more difficult with the potential fragmentation of
information, advice and guidance provision.
Given the number of people currently claiming benefits
within the Liverpool City Region, welfare reform will have a major
impact on the local economy. There is recognition that benefit
dependency is a significant problem for the City Region. However,
the introduction of the universal benefit system needs to be complemented
by progressive policies to help vulnerable people adapt to this
change. Particularly important will be enforcing contactors to
the new Work Programme to enter into dialogue about local needs.
FUNDING AVAILABILITY
The suite of policies outlined in Regeneration to
Enable Growth provides a broad range of tools for undertaking
local regeneration, there is concern and doubt over whether their
impact can be maximised during a period of fiscal tightening.
Smaller local authority budgets will constrain the ability of
partners to encourage private-sector growth and achieve a rebalancing
of the local economy away from public sector dependency.
Given the size of the public sector within the LCR,
the ambitiousness of the area's plans in relation to economic
development and the leading role of the private sector in delivering
it, there is a strong desire to adopt new and innovative models
of funding. Liverpool City Region will seek to be involved as
a test-bed for new funding models, to ensure that funding is available
to continue our economic renaissance in the future.
CONCLUDING COMMENTS
Over the past 10 years, Liverpool City Region has
undergone a remarkable transformation. There is a positive and
vibrant atmosphere, increased private sector confidence and a
clear vision for the future. The Liverpool City Region Local Enterprise
Partnership provides the foundation to deliver this vision. We
will continue to work constructively, across both the public and
private sectors, to implement "Regeneration to Enable Growth",
to ensure that it fits with our ambitious agenda, and to tailor
new initiatives that build on progress made to date.
March 2011
135 All quoted data is the most recent available at
the time of writing Back
136
Rebalancing Local Economies, IPPR North, October 2010 Back
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