How can the North East capitalise on devolution?

WHAT DOES THE MAYORAL-LED NORTH EAST COMBINED AUTHORITY MEAN FOR THE NORTH OF THE REGION?

As media calls went, it was textbook Whitehall play.

With its exposed lights and utilitarian façade, not to mention the symbolism of its links to the region’s train pioneers, Newcastle College’s Rail and Civil Engineering Academy was the perfect spot to portray Westminster’s hands-on approach to regional development.

Drape a few white cloths over trestle tables, bring along some leather-bound booklets for ceremonial signatures and that would be that – a devolved future for residents and businesses between County Durham and Northumberland.

If only.

Rather than synchronising local authorities, the 2015 photocall instead splintered the power landscape, the resulting North East Combined Authority and North of Tyne Combined Authority silos made yet more distinct by Tees Valley’s devolved mayoral-led regime and its close ties to Downing Street’s open coffers.

But with the political wheel of fortune having spun so dramatically, and Labour’s Kim McGuinness now in control of the north of the region’s multi-billion-pound Westminster power grab, roundtable members said the area has tremendous scope to leave behind its fractured past.

Citing mayor McGuinness’ links to Sir Keir Starmer’s Labour front bench, Darush Dodds, corporate affairs director at Bowburn-headquartered construction, civil engineering and housebuilding firm Esh Group, said: “We have a real opportunity to drive our region forward.

“With Kim as mayor, we have the engine of the Government in our region, we have the fuel to power it – through devolution cash – and we have hands on the wheel to steer in the right direction.”

And Darush called too for the shift to create a more cohesive North East – from the tip of Northumberland to the base of Teesside – through Kim and her three-term Tees Valley Conservative counterpart Ben Houchen.

 

• Richard Hogg, founder and chief executive of specialist recruitment and outsourced talent services partner Jackson Hogg, left, with Aman Chahal, co-founder and chief executive of Stockton-headquartered flat roof design and insulation firm TaperedPlus

 

He added: “We now have a collective voice we can take to Whitehall, which is both loud and proud of our region.”

Darush was backed by Alasdair MacDonald, chief executive of Newton Aycliffe-based marine engineering firm Tekmar Group.

He said: “We need to align as a region, rather than operate with a number of micro economy-driven initiatives.

“A single North East voice is much more powerful than 20 smaller voices.”

Stephen Patterson, chief executive of NE1, the business improvement district company for Newcastle city centre, called for the political shift to engender a “tactical” push on high-ticket projects.

Referencing the £350 million, Sage-branded 12,500-seat arena and sister exhibition and conference space planned for Gateshead Quayside, which has stalled in recent months, he said: “That project needs to be re-started.

“With potential to provide a million additional visitors to the region every year, it would deliver a return as soon as it was built.

“And with national, regional and local government now all of the same political hue, there is no excuse for not getting it over the line.”

 

AGAINST SUCH A FRACTURED PAST, HOW IMPORTANT IS A CLEAR IDENTITY TO THE REGION’S DEVOLVED FUTURE?

The facts are plentiful.

The North East cleaved a quarter of all Britain’s coal in 1913.

Sunderland’s shipyards were once responsible for making a quarter of the UK’s seagoing vessels.

Sleepy Shildon, nestled between Bishop Auckland’s historic splendour and the angled functionality of post-Second World War town Newton Aycliffe, was the spot where, nearly 200 years ago, the world’s first steam-powered public railway turned its first wheels.

All momentous in their own right.

But if the region is to capitalise on its £4.2 billion Westminster power grab, then it must, said roundtable members, cultivate a new identity that resonates with the needs and wants of the modern world.

Spotlighting Greater Manchester, where digital and advanced manufacturing innovations are now dyed into the former Cottonopolis’ industrial output, Stephen said: “What has happened there in a few short years has been fantastic.

 

• Stephen Patterson, chief executive of NE1, the business improvement district company for Newcastle city centre, makes a point during the roundtable. To his left is Paul Butler, chief executive of the North East Automotive Alliance

 

“It now has an identity of being a high-tech hub, and we need a similar story; we can’t keep harking back to coalmines and shipyards.”

Paul Butler, chief executive of the North East Automotive Alliance, the cluster organisation that champions the region as a capital for vehicular advances, concurred, pointing to the impact on global markets.

He said: “Devolution provides us with a once-in-a-lifetime opportunity to get things right, not least to create and project common messages.

“We do a lot of international business across the regional collective, and sharing our regional vision and using a regional strategy with common messages will convey a cohesive approach.

“This can only improve our communication; it will have a better effect and bring more success.”

Richard Hogg, founder and chief executive of Newcastle, Billingham and Leeds-based specialist recruitment and outsourced talent services partner Jackson Hogg, added: “We’re massively missing representation on the international stage.

“A £10 million opportunity in the UK is easily £100 million if you get it right in the US, for example.

“We need to ten-x our thinking.”

 

• Lee Hartley, chief executive of event host Fairstone

 

Darush agreed, encouraging a distilling of the region’s narrative that could be disseminated by mayor McGuinness to markets both old and new.

He said: “Our region is the best connected place to work; we all know each other, but that hasn’t been harnessed well enough to tell a combined message to people outside the North East.

“However, if mayor McGuinness could can our enthusiasm and vision, and project a new image onto the world that goes beyond mining and metal bashing, it would be very powerful.

“And pound for pound, we’d definitely punch the hardest.”

 

HOW COULD SUCH REFRESHED REPRESENTATION HELP THE REGION’S COMMERCIAL SECTOR?

Strip away the catchwords and clichés, and any business growth blueprint is always wrapped around one essential element – funding.

And to help companies expand in the North East’s devolved future, Lee Hartley, chief executive of event host Fairstone, which is the UK’s fastest-growing wealth advisory firm, said access to financial support streams was crucial.

To aid their cause, he called for a concerted marketing campaign – not too dissimilar to those of former regional development agency One North East – to amplify organisations’ voices.

He said: “If we’re going to fuel growth, then people outside our region need to know about both it and its scaling businesses.

“There is no shortage of capital for businesses of scale and substance, but we need more of our businesses – especially our larger organisations – to shout a lot more loudly about their successes.

“If we create a place where big businesses are seen to be doing big things and attracting big cheques, that will create the pull-through effect we need.

“And something like the One North East campaign would help.

 

• Kirsty Wells, chair of Cramlington-headquartered off-site construction and digitalised manufacturing firm Merit

 

“It had a bit of sizzle about it, and there’s certainly something to be said about resurrecting that kind of messaging to showcase our ambition.”

Alasdair added: “One North East had a fantastic promotional video that made people feel proud of this region – and we have lots to be proud of right now.

“We’re building the world’s largest wind farm off the North East coast, there is a lot happening in Teesside around clean energy and we’re world leaders in software.

“But we don’t shout about it enough.

“A video that would create pride, and show the North East is much more than old perceptions, is something I would encourage the mayor to lead on pulling together.”

They found support from Alex Buchan, an investment director at Newcastle-based venture capital firm Northstar Ventures, who stressed the importance of a narrative capable of better illuminating the North East’s industrial prowess to a global audience.

He said: “If you can’t start businesses, you can’t build businesses.

“We’ve got to create businesses with the right profile to attract investment, but we’ve also got to pinpoint areas where we’re going to be world leaders, like climate technology, life sciences and offshore renewables.

“The investment opportunity is huge, but we need to go out and sell it.

“And if we do, we will have the capital to build businesses and create a virtuous circle that leaves the region humming with the additional people and infrastructure we need.”

 

CAN DEVOLUTION PLAY A PART IN HELPING ATTRACT GREATER FUNDING TO THE REGION?

With Britain now on its fifth Westminster leader in eight years, it’s hardly surprising the business community continues to look to the Commons with anxious eyes.

And its gaze will only be eased, said Kirsty Wells, chair of Cramlington-headquartered off-site construction and digitalised manufacturing firm Merit, by re-focusing strategy that provides steadiness to plan and invest across the longer term.

She said: “We’ve had the advanced manufacturing strategy, we’ve had the energy strategy and we’ve had the automotive strategy.

“What we need now from Labour, and through mayor McGuinness, is a strategic piece that supports capital advance.

“We had the North East Local Enterprise Partnership, but it created a new strategy every two years.

“We need more resilience and real clarity around where we are creating productivity – which we stick to – so the capital can come in.”

Leaning on his experiences as a benchmarking expert for the European Secretariat for Cluster Analysis, which helps the EU build more expert-led commercial sector groups, Paul urged replication of a mainland neighbour’s policy.

He said: “Germany’s industrial strategy is a 15-to-20-year vision, which is agreed across parties and doesn’t change if there is a switch in power.

“It means businesses can make informed and long-term investment decisions.”

 

• Alex Buchan, investment director at Newcastle-based venture capital firm Northstar Ventures, with Caroline Anderson, head of marketing at event host Fairstone

 

Paul was supported by Darush, who urged a review of infrastructure processes.

Evidencing Esh Group’s ongoing work to restore Newcastle’s Tyne Bridge, he said: “We need to see, through combined authority support, a clear pipeline of work.

“Whether it is big contracts or work on smaller projects, we need a joined-up strategy that has the region talking as one.

“That, in turn, would help build our local supply chain, which would provide jobs for local people.”

Alasdair appealed for a restructuring of funding streams to help companies navigate a “difficult” landscape.

He said: “There is a plethora of channels available but it’s very difficult for SMEs to chase them, given the resources they have.

“We need to create a pool of experts to provide support; those experts exist, but the dispersed nature of the sector means it is problematic to access them.”

Richard concurred, calling for a “more developed ecosystem” to help nourish not just capital knowledge but risk appetite too.

He said: “A lot of business owners haven’t been through the funding process, but there is so much knowledge in our region, at all levels, that we could use to provide insight and confidence.”

Aman Chahal, co-founder and chief executive of Stockton-headquartered flat roof design and insulation firm TaperedPlus – which recently secured £5.5 million backing from investment house BGF – agreed.

He added: “There’s a fear in our region from some people about taking private equity.

“People like investment but want it on their terms – that, though, can’t always be the case.”

 

A STRONG SKILLS BASE IS FUNDAMENTAL TO ANY GROWTH PLAN. HOW MUST THE REGION’S DEVOLVED POWERS BE USED TO HELP CREATE A STRONGER TALENT PIPELINE?

Every second counts come election night in Houghton and Sunderland South.

Just ask Bridget Phillipson.

Having represented the constituency for more than a decade, she’s comfortably practised in the drama of its dash to declare the country’s first Westminster MP.

And having been installed as the UK’s new education secretary – the 11^th minster to hold the role since 2010 – she’s wasted little time in stating her desire to transform the country’s learning environment.

Such pace was welcomed by roundtable members, who called for similar action at regional level to help leaders plot skills moves with greater confidence.

“One of the key opportunities for the North East Combined Authority is to get a proper strategy in place,” said Paul who, through his North East Automotive Alliance role, has supported the Department for Education’s crafting of a North East Local Skills Improvement Plan that aims to rewrite post-16 technical learning.

He added: “Providers say they don’t get the right demand signals from industry, and employers say they’re not getting the right skills coming out of the education system.

 

• Darush Dodds, corporate affairs director at Bowburn-headquartered construction, civil engineering and housebuilding firm Esh Group, with Aman Chahal, left

 

“We therefore need effective workforce planning that gives providers a three-to-five year view of skills requirements, so they can prepare courses and bring people through the education system.

“And that’s crucial because the numbers are eye-watering; tens of thousands of people are going to be needed in the coming years across sectors such as construction, automotive and offshore energy.”

Paul was backed by Stephen, who described the present relationship between schools and employment as being akin to “oil and water”, adding the former are “almost uniquely focused on sending students to university”.

He found support from Alex and Caroline Anderson, head of marketing at Fairstone, who urged swift revision of employment guidance.

Alex said: “People tend to look at skills as a post-16 issue, but we need to go much earlier than that.

“And we must remove the stigma around someone choosing not to go to university.

“As a country, we’ve always de-emphasised apprenticeships and manual labour, but the skills they provide are so important to our future.”

Caroline added: “There is a huge lack of careers advice, particularly in secondary schools, and not enough of a clear path from year eight onwards.

“Greater longevity of support would help solve a lot of skills issues.”

To support such, Kirsty suggested UK providers take note of a US model, wherein learners are trained on equipment that mirrors future employers’ apparatus, to create a seamless transition.

She said: “At Merit, we buy a lot of automation – our roll mills, for example, come from New Zealand, and the only way we can train staff is to send them to that country and have them pass on their knowledge when they come back.

“In the US, though, it’s different again.

“Employers sign a contract with learning providers that states what equipment they must buy before they commit to taking apprentices.

“We would like something like that.”

 

HOW IMPORTANT IS A QUALITY AND SUSTAINED HOUSING SUPPLY TO THE REGION’S FUTURE SUCCESS?

If the region is to grow, said Darush, then any moves to refresh its identity and bolster companies’ growth ambitions must be matched by a concerted focus on property supply.

With more than 75,000 people waiting for social housing across the region alone, Darush – who chairs the North East Institute of Technology’s construction and built environment board – appealed for a supercharging of the development landscape.

He said: “As a business, we’ve got a pipeline of thousands of homes we could develop.

“But we’re held back by a cumbersome planning system.

 

• Alasdair MacDonald, chief executive of Newton Aycliffe-based marine engineering firm Tekmar Group

 

“If we could use our devolved powers to speed up land acquisitions and remove red tape, you would see a lot more investment and recruitment.”

Darush was backed by Aman, who called for watershed change to retrofitting outlay.

He added: “I would love to see a lot of the Government money that is being spent on decarbonisation of building stock and hospitals to start in the North East.

“The vast majority of Westminster spend sits between Birmingham and London, but devolution provides a great opportunity for more to come to the North East.”

 

HOW CAN THE NORTH OF THE REGION’S BUSINESS COMMUNITY SUPPORT MAYOR MCGUINNESS AND THE COMBINED AUTHORITY TO DELIVER POSITIVE CHANGE?

While elected with a raft of manifesto promises, roundtable members advocated the creation of a business support body to help inform mayor McGuinness’ commercial sector focus.

Harnessing the experience of people “who know what is going on”, Lee said it would better tailor policy to company needs.

He said: “A business cabinet, run by people who have founded and oversee organisations, and who know what they’re doing, would provide expert insight and guide us towards the success we want for our region.”

Richard added: “I’d love to be in a region where there is an industrial strategy led by people in business, who really understand sector growth and know how to deliver it.”

Kirsty concurred, saying such a move would provide greater clarity and help boost output.

She said: “We need greater productivity and innovation in whichever sectors we choose to lead on as a region.

“When it was bombed by the Japanese in the Second World War, the USS Yorktown aircraft carrier was fixed in three days – when ordinarily it would have taken six months – yet, it can take weeks for companies in our region to create a contract first draft.

“We must be more productive.

“Because if we are, everything would be better for everyone.”