On the waterfront: new life for Liverpool

4 Jul 12

Liverpool is undergoing a business-led transformation under its newly elected mayor. Can the makeover be made to work for all its citizens, asks Peter Hetherington

For a city that became a byword for turmoil during the 1980s, Liverpool’s physical and political transformation from municipal basket case to regional commercial centre appears remarkable.

Thirty years ago, ministers considered sending in commissioners to run a city brought to its knees by a combination of hard-Left revolution in the town hall and ideological monetarists in government.

Now senior ministers – supported by Tory grandee Lord Heseltine, who was ‘Minister for Merseyside’ in the 1980s – sing the praises of a pragmatic council. Instead of name-calling, they are on first-name terms with the city’s newly elected mayor, Joe Anderson.

‘We get on, understand each other,’ says Anderson. He explains: ‘With the greatest respect to them, they don’t know the needs of Liverpool and there’s a recognition from them that that’s the case.’

And all this after the city has suffered disproportionately from Local Government Secretary Eric Pickles’ austerity programme, enduring cuts of £150m in two years that slashed a fifth from the town hall budget.

Equally alarmingly, the city is living with the consequences of £120m being withdrawn from a housing renewal programme to address neighbourhoods, mainly in north Liverpool, that are littered with boarded-up houses and abandoned streets. One statistic graphically underlines the problems: almost 12,000 properties out of a total of 215,000 are empty.

Despite this, Ann O’Byrne, the council’s Cabinet member for housing, refuses to be downbeat. ‘We are not going to moan and say it is all the fault of the government,’ she says. ‘We are determined to plough on with a housing renewal programme.’

But Liverpool, in short, is a city of contrasts. The grim consequences of urban decay sit cheek by jowl alongside a seemingly prospering city centre and renewed waterfront. For the regeneration of the central area has been as remarkable as the transformation of the city’s political climate.

The city now has the UK’s largest open-air inner-city shopping district in Liverpool One – 17 hectares of new streets, arcades, public squares and all, much of it financed and delivered by private capital. This is coupled with the revamped central waterfront, which contains an international convention centre (the venue for CIPFA’s annual conference this year) and an arena.

More contentious is a £5bn plan for a Canary Wharf-style business district along the waterfront. This proposed 60-hectare high-rise ‘city within a city’, labelled ‘Liverpool Waters’, has been slammed by English Heritage and – more ominously – by Unesco for obscuring the city’s fine listed buildings and thus threatening its ‘world heritage’ status.

But from the city’s Victorian municipal buildings, where a Militant-led city council once challenged a Conservative government and came close to setting a deficit budget, a pragmatic Joe Anderson will have none of this criticism. ‘What I say to these [critics] who don’t live here is that the vast majority of Liverpudlians want the business and employment opportunities this offers.’

Anderson, a former seaman and social worker, can only reflect on the irony of his authority enduring heavier government cuts than its hard-Left predecessor in the 1980s. The council famously clashed with incensed former Labour leader (Lord) Neil Kinnock, who subsequently forced the expulsion of- Militant ‘entryists’ from the party.

The cuts are ‘almost unprecedented’, laments Anderson, a long-serving Labour councillor who was council leader from 2010 to 2012, after the previous Liberal Democrat administration was ousted. But, he says: ‘I have managed to maintain confidence in our city, keep its reputation intact and make it a place for investment. I could easily have come to power and led people marching with placards, set an illegal budget, tried to become a martyr. But leadership is about leading people through difficult times.

‘The leadership in the 1980s did not do that. They [Militant] had no answer. They took the easy option by being thrown out and labelled martyrs.’

Such pragmatism was underlined when Anderson joined forces with cities minister Greg Clark at an international urban summit in Paris recently. Both were happy to write a blog for the Guardian headlined: ‘Tory minister, Labour mayor: we fight together for Liverpool.’ They enthused: ‘Our united message is that Liverpool isn’t just open for business, but is committed to a course that will restore its position as a world-beating centre of trade, culture and innovation.’ Merseyside politics, it seemed, had turned full circle.

Anderson recalls: ‘The cameras were on me; we got a huge round of applause when Liverpool was mentioned. Mayors from all over the globe were shaking my hand and wanting to come to Liverpool.’

Greg Clark added: ‘Joe was the centre of attention. Everyone at the conference wanted to talk to him.’

Clark is being advised by Heseltine, who is also a former deputy prime minister. Both agree the city has huge potential. ‘It’s the job of everyone with responsibility in the government to move heaven and earth to achieve that and not let politics get in the way,’ Clark told Public Finance.

Yet until relatively recently, Liverpool had seemed a shadow of the mighty city at the centre of the trade with the Americas and, ingloriously, with slavery. Beset by heavy unemployment, fuelled by a contraction of traditional industries, from the once-mighty dock labour force – significantly, not the port itself, where throughput remains high – to food manufacturing and much else, it was written off by (London-based) critics and the odd Right-wing think-tank.

With a fast-declining population, an ageing housing stock and thousands of empty properties, the future of Liverpool seemed uncertain. The clinical term ‘thinning out’ entered the political lexicon. Veterans like Heseltine, who first came to help the distressed city after the well--publicised riots in the Toxteth area in 1981, would not contemplate a policy of partial abandonment advocated by some Cabinet colleagues.

Now marvelling at the rebirth of a city, Heseltine told Public Finance: ‘I am not in politics to take such a negative view. We have shown consistently that the renaissance of our great Georgian and Victorian heritage is not only possible but actively takes off when you get in. My whole ex-perience of these areas tells me you’ve got to find the strengths in them and build on it, make them suitable for investment.’

Heseltine passionately believes in targeted state intervention. This was a policy he applied as vigorously as he could as Margaret Thatcher’s environment secretary when creating the London Docklands Development Corporation in 1981, which spawned Canary Wharf, and the smaller Merseyside Development Corporation.

Last year, Heseltine returned to Liverpool to prepare a report for the government with the former Tesco boss, Liverpudlian Sir Terry Leahy, on how to reignite the local economy. A directly elected mayor was high on the agenda as part of a ‘city deal’ negotiated between the government and Liverpool. This included devolution of some powers and plans for a mayoral development corporation. Unlike most other Labour cities, Liverpool decided to go for a mayoral election two months ago without having a referendum to test support for the concept. Anderson stood and won easily with 57% of the vote.

The government has duly delivered another part of the city deal bargain, namely, giving Liverpool an extra £75m to  boost economic growth. This money, combined with £55m from stretched council funds and other public sector pots, will go towards a newly created enterprise zone in north Liverpool and the central business district. It is hoped that extra cash generated from additional business rates will be used to fund five other mayoral development zones, while Anderson himself will chair a public-private sector mayoral development board.

In spite of acute housing problems in parts of the city, Professor Michael Parkinson, director of the European Institute for Urban Affairs at Liverpool’s John Moores University and a long-standing government adviser on urban policy, is in no doubt that Liverpool has turned the corner. The tide, he believes, started to turn significantly with the creation of the country’s first urban development company – Liverpool Vision – in 1999, a public-private partnership of business people and councillors based on the recommendations of Lord (Richard) Rogers’ urban task force. Significantly, this was followed by the city becoming European Capital of Culture in 2008 – a seminal moment, believes Parkinson.

‘In the early 1990s, Liverpool was lagging behind many other English cities in its thinking,’ he wrote in a history of Liverpool Vision. ‘It was declining economically and physically, backward-looking and introspective.’
He recited a litany of problems: a series of ‘economic and political traumas’ from the early 1970s to 1990s reinforced by the decline of traditional industry; huge job losses leading to industrial militancy, with the city losing half its population (now at around 445,000) in 40 years. And then, he recalls, riots in the Toxteth area in 1981 ‘cast a cloud over community relations’.

As it happens, just before those riots, Heseltine had launched the Merseyside Development Corporation – with planning and compulsory purchase powers – on 600 acres beside the river.

‘The riots came and I felt responsible because I had taken a partnership role in Liverpool,’ he recalls. ‘I said to the prime minister [Margaret Thatcher]: “It’s no good just seeing this as a law-and-order issue, asking the police what went wrong. I want to spend three weeks in Liverpool, getting under the skin of it all, coming face to face with the people”. She agreed.’

Heseltine soon diagnosed the problem. ‘There was absolutely no dynamism, or local decision-making, or leadership. We started drawing up plans. I called myself the “clerk of works”. I got a task force of civil servants, and secondees from the private sector. We became a team.’

Then came the Militant years and, Heseltine accepts, his initiative stalled. ‘I remember sitting in Cabinet discussing sending in commissioners around 1985. It was that serious.’ Leahy recalls those years in Michael Parkinson’s book: ‘Only now can we admit how bad it really was. Markets had stopped working. It was like (former) Poland.’

But Heseltine refuses to be over-critical of a city he clearly loves. ‘This was not a community bursting to go,’ he remembers. ‘London had huge investment and magnetism. You were dealing with two ends of the polar, [but] it would be quite wrong to be too harsh on Liverpool in the early years because it had a hell of a lot further to travel than London and far fewer national assets.’

Touring the city last year with Leahy, Heseltine noted a sea change in attitudes. ‘We visited the city over several months, arranged meeting after meeting with a very impressive range of people. We found real optimism on the ground.’

Now, in parts of Liverpool at least, markets are thriving. Without any public sector pump-priming, wasteland across a busy dual carriageway from the magnificent, nineteenth-century Albert Dock has been turned into the £1bn open-air shopping complex.

-‘Liverpool One’ is divided into six districts and designed by 20 -different architectural practices working to one overall master plan, which was nominated for the Royal Institute of British Architects’ prestigious Stirling Prize.

Nearby, on the old King’s Dock, the £164m arena and convention centre – this time built with considerable pump priming from the public purse – has put Liverpool firmly on the international conference and entertainment circuit, staging global conferences and music events. Work is due to start soon on a £40m adjoining exhibition centre while, a mile away, a new, £120m ‘central village’ is planned to rejuvenate the city’s traditional shopping area.

But as Kate Henderson, chief executive of the Town and Country Planning Association, discovered on a recent tour, Liverpool remains a divided city. ‘The retail- and cultural-led regeneration involving the new shopping area and the waterfront is clearly a success, with thriving shops and bustling restaurants bucking the trend of other towns and  cities,’ she observed.

‘But a different picture emerges only a short walk away. Magnificent buildings lie empty, reminding us that Liverpool, once an industrial powerhouse, has lost its economic pathway.’ Worse, Henderson noted, the physical scars left from the government’s withdrawal from the housing market renewal programme blight parts of north Liverpool ‘with boarded-up houses and abandoned streets’.

But for all that, there’s cautious optimism both in sections of the government and in the town hall. What, then, of the future? Hailing ‘extraordinary leadership’ by Joe Anderson, Greg Clark promises more goodies for Liverpool in the second phase of its ‘city deal’.  Asked if these would include greater powers to borrow and build to support new business investment, he replies: ‘I think you will find in the next phase these will be very substantial in terms of powers. It is important that places should be able to invest in infrastructure when they know it will lead to an increase in business rates.’

But while Clark remains upbeat, it is still unclear how much extra power others in the government will cede to Liverpool so that it can stand as an equal alongside the European and North American cities represented at the recent Paris urban summit.

Anderson insists that only real devolution, from Whitehall to town halls such as Liverpool, will help to narrow a yawning North-South divide between London and the rest of England. ‘If they are serious about rebalancing the economy, they’ve got to loosen the shackles of councils like ours, let them be entrepreneurial and lead,’ he says.

In short, he’s taken the government at its word, fulfilling his side of the bargain: elect a mayor, with a strong mandate, and we’ll deliver the goods. But will the government, in spite of Greg Clark’s warm words, follow suit? It’s an open question.

This article first appeared in the July/ August 2012 issue of Public Finance

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