In our research on industrial strategy for the region we can see that a wide range of interested groups – from the private, social and public sectors – want to work together.
However, newly-elected metro mayor Steve Rotheram, and the Combined Authority, face many acute problems as a result of regional economic inequalities, which pervade the UK like no other European country.
Over thirty years or more the UK economy has decoupled into a spectrum of fast and slow-speed regional economies. London sits at one end and the geographically peripheral and northern city regions sit at the other.
The picture of Liverpool City Region is one that has emerged from a period of decline in the late twentieth century. The rapid deterioration of the local economy from the early 1970s should not be forgotten because its lessons are still relevant today.
In the 1960s, the port of Liverpool was still regarded as ‘Britain’s front door’. Around the same time, the Liberal local authority in Liverpool were imposing their own version of rate cuts, and global capital was discovering a new mobility.
The collapse of port trade, the flight away of branch plants to new emerging markets, and the fiscal crisis of local government were instrumental in the near breakdown of the local economy. Now, it’s a city region that’s performing reasonably well in comparison to its recent past, but by no means reaching its potential.
Brexit, devolution and a city region industrial strategy present challenges for Liverpool City Region, but can be faced with some degree of optimism.
To put it bluntly, we’ve been here before. We faced the industrial restructuring of the 1980s in a different context to other northern cities and from a much more disadvantaged position.
This time, we know we have some bedrock sectors on which we can build an industrial strategy. We know that we can ‘bend’ the power of public sector spending to support the local economy, and we know that we can find the means to add more democratic accountability into the city economy.
Each of these will open new opportunities for more job creation, and will provide a foundation on which we improve the quality of jobs and businesses in the city region.
Our work shows that manufacturing in the Liverpool City Region is 20% more productive than in England overall.
Manufacturing creates wealth and provides jobs with security, although many of the bigger firms and their suppliers reside in some of the poorest parts of the country. This raises a question about how we retain more of the wealth created to the benefit of local people?
The visitor economy supports around 50,000 people in employment in the city region yet is dogged by perceptions of low value, exploitative jobs. The question then, is how we turn employment in this sector into higher quality with career opportunities, more security and better training.
We also need to consider how people in this sector have their concerns heard, how and who represents them.
Brexit will mean an end to European structural funds, hugely important in the recent development of Liverpool City Region, so we must think about how we bend public expenditure to support social and economic impact.
We can increase the multiplier effect through local spending and hold social value creation at the centre of a strategy for the public sector.
In the short term, devolution provides us with an opportunity to think much more strategically about the city region. The creation of the Fairness and Social Justice Advisory Board should help to consider aspects of local economic development, such as fair employment.
The Skills Commission can help to eradicate low value-added training regimes and address the challenges facing sectors such as the visitor economy. By appointing a lead person for inclusive growth and social value within the Combined Authority, we’ve sent a clear message about what type of local economy we want.
As the second devolution deal is negotiated, it’s important to reinforce aspects of democracy and to be careful with devolved fiscal responsibility.
Yet the overall environment is set by central government and they too need to commit to addressing regional inequality. They can help achieve this by ending austerity and employment insecurity, and carefully managing the instability caused by Brexit.
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