Laying the foundations for a prosperous future

WHAT IS THE PRESENT PICTURE ACROSS THE REGION’S BUILT ENVIRONMENT SECTOR?

Devolution and flagship projects such as Blackstone’s planned £10 billion artificial intelligence data centre in Cambois, near Blyth, Northumberland, have provided renewed hope the region is finding its feet following years of austerity and previous Westminster failures to truly deliver on Northern Powerhouse and ‘levelling-up’ slogans.

Such cautious optimism was echoed by Kevan Carrick, co-founder of JK Property Consultants LLP.

Opening the discussion at Gateshead’s Northern Design Centre, he said: “Development in the North East has always been a challenge.

“But if you’re in regeneration, you’ve got to be an optimist.

“And we’ve got a lot of opportunities in the region, though we are very exposed to the national and global economy, and we really need to find ways of attracting the private sector to invest and work in close partnership with the public sector.”

The sentiment was shared by Alastair Willis, planning director at Lichfields’ Newcastle office, who added: “There are a lot of opportunities in terms of regeneration.

“The National Policy Planning Consultation, on the face of it, is really good for the region.”

Alasdair Greig, director of Newcastle-based investment house Northstar Ventures, highlighted the importance of attracting funding and investment to unlocking growth goals.

He said: “The North East offers an untapped opportunity as a venture capital industry; it’s still pretty nascent.

“When you look at the value creation that’s happened from investment activities being built on the back of infrastructure and universities’ activities, we’re only just scratching the surface of what’s possible.”

Richard Podd, senior tax partner at accountancy firm PwC, which operates a Newcastle office, added: “We have received an awful lot of private equity funding into the region, and there is a real appetite to invest.

“Yet, we are probably slightly behind where we would like to be in terms of public sector and private sector collaboration.”

 

WITH KIM MCGUINNESS TAKING THE REINS AS NORTH EAST MAYOR AND A £4.2 BILLION DEVOLUTION DEAL NOW IN PLACE, WHAT STRATEGIES DOES THE NORTH EAST COMBINED AUTHORITY NEED TO EMPLOY TO CAPITALISE ON CURRENT MOMENTUM AND CREATE SUSTAINABLE GROWTH OPPORTUNITIES?

With the election of Kim McGuinness as North East mayor and boss of the newly-created North East Combined Authority has come refreshed optimism around the region’s economic and social ambitions.

Central to the regeneration body’s blueprint is its local growth plan, which officials say will set out a ten-year strategy to “turbocharge” the region.

And Rob Hamilton, assistant director of innovation strategy at the combined authority, told fellow roundtable members he was keen to hear from businesses to get their input into the best way forward.

He said: “We’ve got a new mayor, who is incredibly ambitious for the region, and who comes with an overriding message about creating opportunities for all.

“That is a fantastic rallying cry.

“What I try to champion is building coalitions across sectors, because we need our money to work much, much harder.

“We believe that to close the investment gap between the North East and the UK, for every pound we invest, we need about seven pounds from the private sector.

“So, we need to work with others.”

Phil Redman, area director at management, engineering and development consultancy

Mott MacDonald, called on the North East Combined Authority to provide greater clarity for the business community moving forward.

He said: “The authority needs to be certain about the things it wants to do.

“Once you have certainty, the investment will follow.”

Phil was supported by Ross Markwell, director of business development at Bowburn-headquartered construction firm Esh Group, who also sits as a regional chair for the Civil Engineering Contractors Association.

Citing Stockton Borough Council’s “radical but bold” decision to demolish a section of the town’s high street, including the Castlegate Shopping Centre and Swallow Hotel, and replace it with a sprawling riverside park, Ross urged the combined authority to “look for new ways and means to stimulate the region”.

He added: “The construction industry, as a whole, is waiting to see what’s next.

“There’s a lot of noise coming out, but we don’t really know where that’s going to go and where those funding pots are going to be.”

For the combined authority to be successful, said members, it needs to create circumstances that engender confidence for the private sector.

One way it can do this, they said, is through upfront investment to get projects off the ground, something which has often been in short supply in the past.

Providing the example of Esh Group’s ongoing restoration of the Tyne Bridge in preparation for its 100th anniversary, he said: “Funding is a major issue because authorities have been particularly squeezed and haven’t been able to get schemes to move forward.

“That is where the combined authority can really make a difference.”

Earlier this year, housing and homelessness charity Shelter gave the stark warning that the North East is in the grip of a housing “emergency”, with more than 75,000 households on a waiting list for social housing.

Housebuilding was outlined in mayor McGuinness’ manifesto, and she recently approved almost £4.5 million to support the regeneration of Horden, in East Durham, declaring the “investment is a downpayment on my ambitions for housing in the North East.”

The move gained the approval of Kevan, who, as a member of the RICS Group that has just finished consulting with the Government on the new National Planning Policy Framework charter, suggested the current housing need assessment – based on historic statistics of population – is an ineffective yardstick and has contributed to a long-term property undersupply.

He said: “In future, assessment for housing should be predicated on the economic growth plans of combined and regional authorities, as well as the needs of the population.

“I really hope this is established by the national framework, because then it gives some certainty and stability to the market.

“It’s crucial that happens, otherwise we continue to best guess, and will perhaps build houses in the wrong place that don’t fit with the economic growth plan.”

 

• Vicki Mordue

 

AS THE NORTH EAST POSITIONS ITSELF AT THE FOREFRONT OF THE UK’S GREEN ENERGY TRANSITION, WHAT STEPS SHOULD BE TAKEN TO MAXIMISE THE REGION’S EXPERTISE IN THE RENEWABLES SPHERE?

The North Sea is fast becoming the UK’s energy powerhouse of the future, with its place within the previously-announced North East Investment Zone providing great optimism around the creation of thousands of jobs and lucrative private sector backing.

Referencing such, Rob cited a recent Crown Estate report, which identified “the seabed off the North East coast is the best place in the country to place offshore wind turbines”.

He said: “I’m extremely excited about the opportunity for businesses in the North East, and see it as my job to help us take that opportunity, and to try and help unlock it and make it happen.”

Richard added: “The scale of investment taking place in the North Sea is absolutely eyewatering; we need to capture that for the benefit of our region.

“We can’t afford to be complacent.

“But I don’t think we currently have a cohesive strategy to attract that input investment as much as some other parts of the country.”

Vicki Mordue, director of Northumberland-based environmental consultancy Biodiverse Consulting, pointed to the largely untapped advantages the North East enjoys around biodiversity and sustainability.

She said: “We have a hugely rich biodiversity asset, and we should be monetising that.

“The region is rich in space and land capacity, so a lot of the issues that renewables traditionally bumps up against – such as nimbyism – are less applicable.

“With a bit of creativity and a clearer strategy, the North East offers genuine opportunity.”

In a similar vein, Alasdair cited how advances in green energy and the transition to a net-zero economy provide real opportunity to the region’s universities.

Highlighting the Northern Accelerator programme, wherein the region’s universities collaborate to harness academic knowledge and expertise to help catalyse the companies of tomorrow, he gave the example of Advanced Electric Machines, the Washington-based, Newcastle University spin-out which last year raised £23 million to push forward plans to become the world’s most sustainable and high performing electric powertrain maker.

He added: “That is an exemplar of what the universities are doing locally.

“When I look at a spin-out from one of our universities, it’s much more mature and market-ready than it would have been ten years ago.”

 

WHAT BARRIERS ARE HOLDING BACK REGENERATION? AND HOW CAN THEY BE OVERCOME?

For all the high-profile growth areas that have developed, or are progressing, the region is replete with projects that have stalled or been mothballed.

No more than 200 yards from Gateshead’s Northern Design Centre is the designated site for the 12,500-capacity Sage Arena and International Conference Centre, which promises £300 million regeneration investment, 2000 jobs and the potential to attract more than a million visitors to the North East every year.

And yet, despite Gateshead Council securing £20 million from the Government’s Levelling Up Fund in January 2023, the project has suffered a number of setbacks.

Roundtable members were universal in their view that the present planning process was not fit for purpose, and that one of the major roles of the combined authority, while not a statutory planning body, was to encourage local planning authorities to adopt a far more proactive approach.

Jennifer Welch, co-founder and partner of JK Property Consultants LLP, provided further context.

She said: “We need to accelerate the planning process.

“The one thing that dogs the planning service is litigation, and the huge cost and delay that’s incurred in dealing with litigation.

“That is an area which could really accelerate growth and remove a block.”

Jennifer found support from Amandeep Dhillon, a senior associate at Newcastle-based law firm Hay & Kilner, who, as a member of the disputes team, has seen how property litigation and resolution procedures can cause both frustration and delay.

He said: “On the development front, there seems to be a lot of third-party interests which are causing issues.

“If sufficient due diligence has not been carried out, it can really frustrate developments and push them back.”

Members also acknowledged how local authorities often lack the requisite resource to avoid procedural delays.

Ross said: “Planning is a huge issue, and the resource and skill set within local authorities isn’t what it once was due to cuts.

“We’ve got to find a more consistent model.

“A one or two-week delay of an application getting off someone’s desk could be two to six months’ delay of a job hitting a site.”

Alastair said: “Go back 20 years and we were literally submitting a red line boundary, with an outline planning application, and very little else.

“But now we’ve got a long list of reports, and there is no longer enough time to actually consider them, nor the staff to actually look at the reports and understand what they are saying.

“So, how on earth do you get to a position where you’ve got all these additional requirements, the same amount of time, and less people and less funding?

“It just doesn’t work.”

Rob said: “When I speak to local authorities, I sense they recognise the resourcing challenges.”

However, he was quick to suggest there was “positive intent in terms of wanting to see development.”

He added: “There have been some amazing examples of projects that could have become stuck but, from a planning perspective, didn’t.

“We’ve had the Helix project, in Newcastle, where the most sustainable solution to ground remediation was to extract coal from the city centre and truck it away.

“Likewise, we had the Wellstream Duco development along the river, which went through planning in 12 weeks, despite the building being taller and bigger than a space shuttle.

“These are examples when there’s been the opportunity for focus.

“For future big projects, we need to make sure there’s enough capacity to maintain the pace, as they are so important for the region’s future prosperity.”

Members also identified a need for more effective community consultation.

Jennifer said: “There has to be a change of culture in terms of community consultation at the very start, when local plans and neighbourhood plans are being prepared.

“We need to involve the community in a positive and proactive way, in terms of selling the benefits of a project.

“Councillors on planning committees are going to have to be brave to make decisions that fly against nimbyism, especially if it’s good for the community and good for the area.”

She found support from Amandeep, who said: “Part of the challenge for developers is gaining public support.

“Local authorities must do more to explain the benefits of development.

“A lot of people just want to say, ‘well, that’s just too close to my house’, and yet the impact on them is minimal, while the actual benefit the development can bring is huge.”

 

 

HOW CAN IMPROVEMENTS TO THE NORTH EAST’S TRANSPORT INFRASTRUCTURE ENHANCE CONNECTIVITY AND SUPPORT THE REGION’S DEVELOPMENT GOALS?

For a region that gave the world rail travel, its present infrastructure has left many communities feeling isolated and abandoned by a lack of available and affordable public transport.

Ross said: “Our infrastructure needs to be improved; there are a lot of pinch points across the region.”

Phil added: “We’ve got to better join ourselves up.

“I grew up in the 1980s when I could buy a single ticket on a bus, which also got me access on the Metro and got me everywhere in the North East.

“Talent is classless but opportunity isn’t.

“We’ve got talent in communities that just can’t access opportunity because there’s no credible way for them to get from A to B.

“We must change that.”

Finding a solution to the problems encountered at Moor Farm Roundabout, on the A19 in Cramlington, which is one of the major pinch points in Northumberland’s road network, was identified by Alastair as being “absolutely critical for everything in the North East”.

He said: “You’ve got Newcastle, North Tyneside and Northumberland councils with massive increases in housing requirements.

“Yet these authorities can’t build anything without National Highways finding a solution at Moor Farm.

“To do so will hugely unlock development potential.”

Rob addressed the ongoing work to reopen the Pelaw-to-Ferryhill Leamside rail line, which has stood idle since the early 1990s when freight trains joined Beeching-hit passenger services in the sidings.

The line forms part of mayor McGuinness’ redevelopment blueprint, with the regeneration boss having previously said she is “absolutely determined” to see a renaissance of the route  to ease congestion on the East Coast Mainline and provide scope to extend the existing Tyne & Wear Metro network.

Rob said: “We’ve been negotiating around land value capture agreements, so that if the infrastructure goes in, landowners will see values increase and we can then capture some of that and share the uplift with them.

“The proceeds can then be used to help fund the infrastructure.

“It’s about trying to create a virtuous circle from the ground.

“The Leamside Line has the potential to connect existing communities, but also unlock new housing sites; we must make sure that development is located in places where people can get to work and access public transport.”

 

FINALLY, HOW CAN THE NORTH EAST PROMOTE ITSELF MORE POSITIVELY TO ATTRACT FURTHER INVESTMENT?

Despite being a region whose industry and toil helped spark global development, the North East has long struggled with self-promotion.

Yet to truly succeed, said roundtable members, it must shed its reticence.

Ross said: “We are quite a quiet region; we don’t shout about what we do.

“We’re working-class people who just want to get the job done, and do it well.”

Vicki added: “We’re not very good at being creative or pivoting quickly in this region.

“We often get entrenched in, ‘oh dear, it’s the poor North East’.

“And yet there is so much opportunity – if we just change that mentality.”

Removing this introspective and, at times, self-deprecating nature will be vital moving forward, added members, with devolution offering the vehicle through which the region can project a new narrative.

Rob added: “We need to get – and keep – the attention of the Government, as well as our own residents and those at our universities.

“We need to attract and keep hold of more of our graduates, and not lose them to the rest of the country.

“We’ve got a lot of the components, but we need to make more of these parts to make the whole even bigger.”