The Midlands is almost certainly better together and, crucially, it needs to get it together if it is going to ride this economic wave. But alliances might not be made with the usual suspects and neither is its competition coming from the obvious contenders.
A panel bringing together the public and private sector, both from the region and outside, tackled the topic of creating a Midlands powerhouse at an exclusive roundtable event last week hosted by Coventry city council and the Warwickshire local enterprise partnership.
Call it a powerhouse, a power station or something else, there is strength in numbers, but the Midlands region has to pull together. “Foreign direct investors don’t think of East Midlands and West Midlands, they think of the Midlands. We’ve got to stop the parochial view,” said Louise Brooke-Smith of the RICS.
But it is important to distinguish between devolution and economic union – a term Martin Reeves of Coventry city council was keen to use over and above the “super council” tag that has been applied by some media outlets to the negotiations between Birmingham, Coventry, Solihull and Black Country councils. He believed it was a distraction from the real issue of working together to create an economic powerhouse.
OECD research, as Adam Carter of Centre for Cities pointed out, shows that disjointed governance at a metropolitan level has a 6% drag on productivity. “Given that we are in a productivity crisis in the UK, anything that can be done to ease that productivity gap needs to be done,” he added.
If the “economic union”, to use Reeves’s term, comes to fruition, it would create a West Midlands combined authority rather than a Birmingham super council. He explained: “Even with those councils you are looking at a population of probably 4m and a GVA potentially higher than our friends in Greater Manchester.”
It is an important step on the road to realising the region’s potential and ensuring it remains competitive, particularly with so much of the spotlight on Manchester. The capital of the North has had time on its side, said Carmel Booth of Atlantic Gateway.
Years of work has already gone into putting the foundations in place – it already had a combined authority, for example, before devolution negotiations began. But not all the Northern cities are in the same situation.
And perhaps Birmingham is looking in the wrong direction, as CBRE’s Gary Cardin suggested. He said: “The Northern powerhouse has put out its stall and it is a phenomenal beast. The Midlands has London, it should see it as an ally and be tying itself to London.”
Carter agreed, pointing out that how London is perceived by the regions needs to change. “Can you imagine a conversation in the South East where somewhere like Cambridge said ‘London is so successful it’s such a burden on us’?”
Indeed, proximity to the capital, which is under pressure from rising business and housing costs, could work in Birmingham’s favour. And rather than thinking of competition within the UK, the Midlands and the rest of the UK need to think globally.
“Investors coming in don’t see the boundaries,” said Brooke-Smith.
Booth agreed: “It isn’t region against region. Everyone needs to get their head around that. A successful North and Midlands is good for the South. It could be win-win all round.”
The panel
Paul Disley-Tindell, director, Telereal Trillium
Louise Brooke-Smith, president, RICS
Jonathan Browning, chairman, Coventry & Warwickshire LEP
Andrew Carter, acting chief executive, Centre for Cities
Jackie Sadek, chief executive, UK Regeneration
Gary Cardin, senior director, CBRE
Martin Reeves, chief executive, Coventry city council
Carmel Booth, chief executive, Atlantic Gateway
Chaired by Lisa Pilkington, Midlands editor, Estates Gazette
What powers the Midlands economy and what might
keep it in second gear?
Five powers
Location
“The North would give its back teeth to have this location.” Carmel Booth
Manufacturing
Rebalancing of the UK economy away from the service sector means the Midlands’ reputation for manufacturing is a key strength. “There is nowhere better placed.” Jonathan Browning
Start-ups
“Strength is in the burgeoning entrepreneurial sector – the area is great for start-ups.” Gary Cardin
Freight
As with manufacturing, the region has a good reputation when it comes to freight. “The Midlands is known for freight and it can build on that.”
Paul Disley-Tindell
Weight of money
There is a lot of money looking for value uplift outside London and the South East. “A rich seam.”
Jackie Sadek
Five weaknesses
Global perception
Associations with industry are one thing: “People will know the automotive industry, but then they recognise Manchester for different reasons and Birmingham fades into insignificance.” Louise Brooke-Smith
Skills gap
“Too few high-skilled workers and too many low-skilled.” Adam Carter
Coasting
“If we as an area carry on delivering as we have done, we won’t get the same back, we’ll get less.” Martin Reeves
Development viability
Market rents in many of the cities do not make development viable: “If the stock isn’t there, then business won’t go there.” Paul Disley-Tindell
Inaction
Talking the talk is one thing: “The threat is talking about it, debating it, going around in a circle and not actually getting on with it.” Gary Cardin
