Manchester needs to up its game to fend off UK and global competition according to the panellists at our North West Question Time held at MediaCityUK in Salford Quays
How does the North West attract more corporate HQs?
Alice Webb: Celebrated HQs here already include the Co-operative Group, Umbro and the BBC (our second largest office in the UK). We need to build on the success that exists in the region. The creative and digital industries are really taking off, but we need to make sure we tell and sell our story really well.
Patrick Joynson: What we do well is pickoff elements of companies in London and the South East and attract them to this area. But it’s also important we focus on companies looking to set up UK and European HQs. We’ve started to do that with Aegis and Eon Reality. A lot of people assume Etihad was a foregone conclusion because of its relationship with Manchester City but that was a hard-fought competition between Manchester and Dublin and we came out on top.
Does London recognise Manchester as a lower-cost alternative?
AW: Is London taking this place seriously? Absolutely. The wealth and heritage of creative industries was the reason that we located here. But it’s not just about a single place. It’s about being able to create a cluster for ideas, energy and work to generate and have access to expertise around the UK and globally. We need to make sure that we’re not just about fortress North West or fortress Greater Manchester but we’re a front door where people stay and we’re connected in this digital world.
What is the education sector doing to nurture talent in creative and digital?
PJ: In the North West we forecast a growth in that sector of about 1,500 to 2,000 jobs over the next 10 years. However, the number of students applying for ICT courses in its schools and universities has dropped by five per cent. There is a demand for these skills but it looks like the schools may be failing us. There are accountants now and some solicitors who are picking up school leavers and training them internally because they feel they get a better product than what is being churned out by universities. Maybe the old apprenticeship system is what we should be doing.
AW: Salford University has made a bold statement about its commitment to creative and digital by relocating to MediaCityUK. And schools such as the Oasis Academy are starting to look at media and digital. So I’m more optimistic. The challenge is to work out what the right skills are to be creating and at what level.
Do more companies need to fail to correct the market?
PJ: This recession is a lot worse than the ’90s recession and a lot of companies are being kept afloat by fiscal stimulus, quantitative easing and low interest rates. The hope for the government is that the rising tide will lift them all back up again. So, I’d like to say ‘no’ but I suspect that’s not entirely true. Gordon Brown just delayed boom and bust by five years through a regime of low interest rates. So, if you accept the fact that the boom went on for five years longer than it should have done then the recovery is going to take a lot longer.
Tom Bloxham: The property industry is driven by valuation but how the valuation occurs has practically no impact on what happens with property values. So developers who never built anything actually made money because they were riding the crest of a wave. There are plenty of examples of property companies who are running more efficiently than they ever have done yet their results still look poor because the values are going down every year. Should those companies fail? I think not. Should a company that’s inefficient and too expensive fail? Yes.
How long until the banks start lending again?
Ruairidh Jackson: Banks are lending to businesses that don’t actually need the cash. As a co-op we’re fundamentally different because we only lend the money we have and our business accounts and customer accounts are growing exponentially as a result of people feeling that we’re a place they can put their money and trust. So, the amount of money we have to lend is increasing. The Evergreen Funding mechanism is a new idea, using public money to fill that risk gap between where the private sector finance will go and where the development needs to be, and expecting a return out of it. The council has been talking about it and we’ll see how that works.
Will the UK follow Australia’s lead in implementing a carbon tax?
PB: Reducing our carbon footprint makes good commercial sense. It also encourages investors. However, there’s a lack of leadership with regards to carbon reduction commitments and a lack of an organisation. We probably all use different carbon calculators, so where’s the benchmark? Should the government hit us with a big stick and tax us? Absolutely not. The government should actually incentivise.
Have business rate incentives as part of the Manchester airport enterprise zone enticed business to locate there?
PJ: It makes no difference. The enterprise rate over five years is £250,000 and companies are not going to make a location decision based on that. The scheme’s website has had 4,000 hits from 50 odd countries so it’s good for creating awareness but it’s having no effect on companies deciding to move in there.
The panel
Chaired by Damian Wild, editor, Estates Gazette
Pete Bradshaw, Manchester City Football Club
Alice Webb, BBC North
Patrick Joynson, Savills
Tom Bloxham, Urban Splash
Ruairidh Jackson, NOMA (The Co-operative Group)
