Centre for Cities’ Realising Regional Growth event brought together Lord Sainsbury and West Yorkshire Mayor Tracy Brabin, alongside other local leaders, to discuss the future of the region’s economy and its potential as an innovation hub
Last Thursday (9th June), Centre for Cities hosted the second in a series of three regional growth events at the Royal Armouries Museum in Leeds, alongside Lord Sainsbury, West Yorkshire Mayor Tracy Brabin, and other local leaders and business representatives. The guests and panellists discussed and took questions on West Yorkshire’s economic history and future, their priorities for driving growth, and how they aim to deliver their ideas for the region.
The Government’s levelling up agenda was designed to address the UK’s ongoing geographical disparities. Economic growth and the higher productivity that drives it have been concentrated in specific parts of the country (particularly in the South East), whilst many of the North’s cities have struggled to grow at all over the last few decades. The most recent regional GVA data from the ONS shows that Yorkshire and the northern regions are growing only either as quickly as or slower than the UK average.
Lord Sainsbury explained how much of this is due to the loss of traditional industries in Northern cities, such as manufacturing, which have not been replaced by high value-added jobs – such as those in financial services, legal services or management consulting – which are traditionally the drivers of economic growth. Instead, it is the low value-added service jobs, such as those in retailing, hotels and restaurants, which have tended to substitute these declining manufacturing and production industries.
Although these service jobs are of course important to local economies, they are vulnerable to technological change and competition from abroad. Meanwhile it is the high value-added jobs that create demand for these local services jobs.
For West Yorkshire in particular, analysis by Centre for Cities highlighted how Leeds has led the shift away from manufacturing jobs towards knowledge production over the last 40 years. The share of private sector knowledge-intensive business services jobs has increased from seven per cent in 1981 to 19 per cent in 2019, which is positive.
However, productivity (a measure of economic growth) has yet to reach its potential in the West Yorkshire region. According to the ONS, productivity per head (measured by GVA) is £34 per hour for the UK, and £32 for Leeds, with the gap most apparent amongst West Yorkshire’s other cities of Calderdale (£28), Wakefield (£27), Huddersfield (£27) and Bradford (£26). This low productivity ultimately translates into lower standards of living for the people of West Yorkshire.
The importance of innovation in driving economic growth for the region was best summarised by Tracy Brabin, who in a Q&A session declared that “innovation will save us”. Speakers recognised that the necessary conditions are in place for the region to perform well, with Brabin pointing to Leeds’s strength as a tech sector destination. However, there was unanimous agreement that more needs to be done. So, how does the region grow?
The various panellists agreed that driving growth had to start with the region’s skills base. Leeds City Council Chief Executive Tom Riordan noted that West Yorkshire’s demographics, namely a young and dynamic population, “are in our favour”. However, the issue lies with how companies can attract talent, as discussed by Andrew Greenwood, Deputy CEO of Leeds Building Society, who stressed the importance of early stage interventions at school level in addressing the skills gap.
Brabin highlighted the importance of addressing the digital skills gap in West Yorkshire, where 25 per cent of the population do not have basic digital skills. She praised the usefulness of programmes run from Whitehall, such as the Multiply numeracy programme, but reiterated that these do not address the full picture of the region’s skills gap.
To solve this, Brabin echoed the comments made by Mayor Andy Burnham at our Manchester event as she called for metro mayors to have powers over the post-16 skills agenda to allow them to coordinate the needs of local labour markets with the courses offered by FE colleges. The devolution of skills powers was also presented by Lord Sainsbury as one of his key policy asks to central government.
Greenwood reiterated the importance of private-public partnerships working together to build skills pipelines across sectors, where a long-term view of skills demand and profiles needs to be taken by employers providing training, rather than short-term upskilling for companies’ specific projects.
SMEs are integral to driving economic growth as they tend to be at the frontiers of the innovations that drive technological change. However, all four panellists in the levelling up and innovation panel spoke about the current uncertainties faced by businesses.
Zandra Moore, CEO of Panintelligence, highlighted how the only real way for a business to grow is to identify a specialism and “stick to that niche”, yet SMEs tend to feel there is neither enough support nor advice available regarding their concerns on growth, financing, and exporting. Moore noted these lessons should be applied to cities themselves, where local leaders need to identify a city’s existing strengths in their specialist sectors and leverage these strengths to grow.
Speakers were also keen to emphasise the importance of collaboration between the region’s businesses, universities, and public sector organisations in driving innovation. This has been previously recognised by the Mayor, who established the West Yorkshire Innovation Network in 2020 to provide SMEs with access to support and encourage innovative ideas through two regional hubs (Nexus at the University of Leeds and the 3M Buckley Innovation Centre at the University of Huddersfield).
Moore reiterated the importance of physical spaces to bring together these networks, citing the presence of innovation hubs across Boston in the US as a key contributor to the city’s strong innovation system. Riordan noted this Boston model was successful due to taxation powers being devolved to the local level, allowing the city to absorb costs and waive fees for entrepreneurs to use these hubs.
James Mason, Chief Executive of the West and North Yorkshire Chamber of Commerce, added how anchor organisations, such as large corporates and universities, are critical for creating this sense of place and supporting SMEs with their supply chain creation and development.
Moore also highlighted the importance of funding streams from organisations rather than reliance on unpredictable, and at times absent, support from central government. This was emphasised by Brabin, who noted the disappointment of West Yorkshire missing out on the £100m allocated to three new Innovation Accelerators in the Government’s Levelling Up White Paper.
Regarding innovation success stories in the region, the standout case study was Channel 4, where the broadcaster’s Managing Director for Nations and Regions, Sinéad Rocks, discussed how moving the organisation’s headquarters to Leeds in 2021 created a domino effect for attracting other innovative companies and start-ups to the city.
Channel 4’s unique business model, which is commercially-funded but publicly-owned, operates such that it commissions independent producers for its programmes, therefore providing support to the media sector’s SMEs. Rocks also highlighted the value and benefits the broadcaster gained from proximity to these companies and a highly-skilled workforce in Leeds city centre, and that this agglomeration was key to realising the benefits of innovation.
Another frequently mentioned issue was the region’s transport network and the importance of connectivity within the region. This was reiterated by Brabin, who noted that much of the focus from central government was to connect London to individual cities across the region, rather than integrating travel across the key cities of the North.
Susan Hinchcliffe, leader of Bradford Council, discussed how West Yorkshire’s network is “full” and called for more infrastructure to increase capacity. Centre for Cities published research on how intra-urban public transport plays a role in the economic underperformance of British cities, noting how Leeds needs to both increase the size of its public transport network and densify its neighbourhoods through new mid-rise housing.
Brabin highlighted the importance of buses to the region; this has been recognised by the Combined Authority and from September, single fares will be capped at £2 and a new “M-Card” will see any number of journeys across the region costing only £4.50 a day. However, key bus routes, for example in Wakefield, are being cut to address funding constraints; Brabin discussed how in order to optimise the bus network for the general public, the process of bus franchising is key.
Ultimately, as Mason noted, the focus by policymakers must be on unilateral policy approaches to innovation and economic growth, which supersede political parties. He used the example of the reunification of Germany, which occurred over a thirty-year time span with a substantial budget, as best practice for levelling up. Similarly, Shirley Congdon, Vice Chancellor of the University of Bradford, added that the distribution of R&D funding through a competitive bidding system was “unhelpful”.
Lord Sainsbury concluded by saying that the Government should prioritise “easy policy wins”, such as devolving powers on skills, infrastructure and R&D to Mayoral Combined Authorities, for the remainder of this administration. He added that this should be balanced with considering how to solve more difficult issues, such as the future of fiscal devolution.
Centre for Cities’ hosted the first in a new series of regional events exploring what the Levelling Up programme means in reality for local economic growth around the country.
The second in our series of regional events exploring what the Levelling Up programme means in reality for local economic growth around the country.
Part three of Centre for Cities series of Realising Regional Growth events exploring what the Levelling Up programme means in reality for local economic growth around the country.
Centre for Cities’ Realising Regional Growth event brought together Lord Sainsbury, Andy Burnham and Gordon Brown, alongside other local leaders to discuss the future of Manchester’s economy and its potential as an innovation hub.
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