03Policy priority 3: A longer term vision

Make the most of Middlesbrough city centre to attract more high-skilled, high-waged firms and jobs in a range of industries

• Concentrate investments in Middlesbrough city centre rather than out-of-town sites
• Support the conditions for growth including the built environment

Over the last few years there has been much political focus on the Tees Valley economy. This attention from national media and central government has understandably centred on the 2015 closure of the SSI plant and resources have accordingly been allocated to react to the major job losses. As a result, the Heseltine review and resulting South Tees Development Corporation was formed and became a priority for the Government. There was much to be celebrated in this response, most particularly its focus on improving skills in the area.

However to make the most of the opportunities that the political attention, allocated funds and newly devolved powers bring to Tees Valley, the metro mayor should use their scope and influence to focus interventions on attracting the types of firms that will make the economy more resilient and less reliant on a single industry – therefore bringing more and better-paid jobs. This will require making the city centre as attractive a place for firms to locate in as possible.

Concentrate investments in Middlesbrough city centre rather than out-of-town sites

Although there will be significant political pressure to find alternative employment options for the former site of SSI, the metro mayor must consider the ability of Tees Valley to attract, and foster the kind of businesses that are likely to create more jobs in the coming years. Most economists and commentators agree that knowledge intensive firms such as professional services, digital and creative businesses are likely to drive employment and wage growth in the near future. Typically, these firms tend to locate and thrive in city centres.

Centre for Cities research has shown that one of the persistent weaknesses of the Tees Valley economy is that, unlike other, more successful cities, Middlesbrough’s city centre has struggled to attract high-paid, high-skilled services jobs. In Tees Valley, 11 per cent of jobs are in knowledge-intensive businesses, compared to 14 per cent at a national level, and this is also reflected in the lower average wages on offer in the area (£456 per week average weekly workplace wages compared with £525 nationally). The temptation politically will be to channel funds and direct investment towards the sites that once housed the SSI plant. However, this has been done before with the Teesdale Park and Teesside Park business parks – which, while leading to the creation of thousands of jobs, may have undermined Middlesbrough’s city centre economy. Instead of incentivising firms to locate in isolated, out-of-town complexes, the mayor should make the city centre the most attractive place to locate and do business in.

Support the conditions for growth including the built environment

The Mayor should focus investment in the built environment and transport on improving the conditions for growth for a broad range of sectors in the city centre. This enables these businesses that locate in the city centre to enjoy the benefits of agglomeration, where a variety of firms from related industries can share inputs, supply chains and infrastructure, match their needs with the largest pool of workers and learn from competitors and exchange ideas and information.

The mayor must use their profile, powers and networks to convene relevant partners and knowledge of the local area to bring together the funding and attention the Government have given the area to be more than the sum of its parts. As the highest profile politician in the city region, he or she should co-ordinate these activities to ensure they make a coherent plan for the city centre, and the whole Tees Valley.