We’re already more than half way through 2017 and there’s no doubt that nationally there is still a lot of uncertainty about what the future holds – be it how long the minority government lasts or how successful the Brexit negotiations are going to be. Liverpool City Region now has its metro mayor in the shape of Steve Rotheram and while this should remove many of the uncertainties at a local level, he is still faced with addressing a long list of challenges.
I studied in Liverpool for four years and since I left in 2003, large parts of the City Region have been transformed – notably the city centre through Liverpool One. More than 600,000 now work in the area and its economy generates around £30bn per annum in economic output, having grown by almost £2.5bn over the last two years. This was a bigger rise than Greater Manchester (4.3% versus 3.3%) but while it is clearly an encouraging sign, Liverpool City Region still faces several challenges – notably:
- Population growth and an ageing population: From 2006 to 2016, the City Region’s population has grown by 2.9% (44,000 additional people), below the increases seen in the North West (4.6%) and UK (7.9%). Like many other parts of the country, the majority of growth has been accounted for by a rise in the number of people aged 65 and over.
- Employment growth lags behind other parts of the country: While 20,000 jobs were created in the City Region between 2010 and 2015, the increase equates to a rise of 3.4% and this is lower than the corresponding rises seen in the North West (4.9%) and Great Britain (6.8%).
- Raising productivity: As of 2015, gross value added per hour worked was 91% of the UK average in Liverpool City Region.
- Lower levels of entrepreneurship: As of 2015 there were around 70 new business start-ups in the City Region per 10,000 working age population. This was an improvement on the rate of 64 in 2014, but well below the likes of Greater Manchester (90 per 10,000 WAP) and the North West and UK averages of 81 and 93 respectively.
- Skill levels of the resident population: The City Region’s skills challenge is two-fold – it needs to increase the number of people with higher level skills and reduce the number of people with no qualifications. Almost one third of working age residents now have an NVQ 4+ qualification (which includes degrees), but this is still below the UK average of 38%. There are also more than 115,000 people in the City Region with no qualification.
The challenges I’ve outlined above aren’t unique to Liverpool City Region. If you look at the other five areas that have elected a metro mayor, they will all in some way shape or form be facing similar issues. For the City Region, there are a number of growth priorities for the Mayor to focus on and I’ve outlined three issues to consider in this respect:
- Attracting people and jobs: The pace of jobs growth needs to increase in the City Region and this means creating employment and attracting investment in sectors such as digital/creative, life sciences, financial & professional services, logistics etc. Developments at Liverpool2 and the Knowledge Quarter will help in this respect, with the latter becoming home to the Northern HQ of the Royal College of Physicians in 2020. The HQ is expected to create 100 jobs and this should help in attracting people to the area and in retaining graduates – there are more than 50,000 Higher Education students studying in Liverpool.
- Improving the commercial property offer: To attract people and jobs, the City Region needs to have a commercial property offer that meets the needs of the future workforce and can bring jobs to the area. Long-term projects such as Peel’s Liverpool Waters scheme will play a significant role, but in the short-term more needs to be done on improving the development pipeline for office space – especially in the city centre. This can help in attracting investment from outside the area and allow existing businesses to expand. In Chester for example, the council and Muse Developments went into partnership on a new 70,000 sq ft of grade A office space, City Place, and the council agreed that if it wasn’t let they would buy it at a pre-agreed price. It is good to see something similar proposed in Liverpool at Pall Mall where Kier Property and CTP are working with the council to build 400,000 sq ft of offices
- Promoting Liverpool: One of the things that Greater Manchester has done well in recent years is to promote itself, both nationally and internationally. Liverpool already has a strong tourism and heritage offer which it promotes and it needs to invest more in marketing the wider offer to boost its profile. It’s shown it can do this with the Royal College of Physicians Northern HQ, beating off competition from Manchester and Leeds, and successes like this should be used to promote the City Region as a destination for people, jobs and business – its recently announced bid to bring Channel 4 to Liverpool being a prime example of this.
Richard Cook is associate in economics at Pegasus Group.