Northern promise
Article Date: Jun 05 2006
The North of England used to hum to the sounds of heavy industry: mining, manufacturing, engineering, ship-building. But in the quarter of a century since the last large-scale mines closed down, the cities and towns of Northern England have spent billions of pounds reinventing themselves and their economies. It’s no longer the sound of metal-bashing that calls the tune in the North. Increasingly, it’s the buzz of enterprise and innovation.
In 2005, when most towns in England and Wales reported a decline in the number of new start-ups, Rotherham, in the heart of South Yorkshire, reported a 15 per cent increase, one of the highest rises in the country. Just up the M1, Leeds has seen more job growth in the last 20 years than any other major UK city outside London; and a report from employment agency Manpower revealed that businesses in the Northeast were the UK’s most optimistic in terms of recruitment intentions for 2006.
‘For many years, people’s perceptions of the Northeast were 20 years out of date, harking back to an industrial era that hasn’t existed since the mid-1980s,’ explains John Holmes, director of regeneration and tourism at One North East, the regional development agency for Northeast England. ‘The solid foundations on which those industries were built are still here, such as labour, skills and infrastructure, but they have been realigned with the modern economy.’
Labour of love
It was the potential of the local labour pool that convinced John Jones, chairman of HM Plant, to relocate his business 320 miles from Somerset to Hebburn, just outside Newcastle, in 2005.
HM Plant is a supplier of excavator equipment and Jones was considering moving the business from Somerset to be closer to the shipping routes used by his main supplier, based in the Netherlands. That gave him several locations to consider, including Bristol, just down the road from his existing headquarters in Somerset, but in the end it was the Tyneside workforce that swung it.
Says Jones, ‘The workforce is the area’s greatest asset. Employees are generally flexible, loyal and reliable. The level of staff turnover is less than 8.5 per cent and the absenteeism rate is the lowest in the UK.’
Labour in the North can be more cost-effective too – but only if you look in the right places. Kim Collins, Northern operations manager at Manpower, estimates that labour costs can be up to 30 per cent cheaper in secondary centres like Hull, Middlesbrough and Doncaster. But she cautions against the blanket perception of the North as a centre for cheap labour. ‘Very generally, it probably is cheaper than, say, the Southeast. But there are also pockets where salary levels are much the same as anywhere else in the UK, in major cities like Leeds and Newcastle or industry sectors such as professional and financial services,’ she says.
Labour costs were a surprise for Toby Thwaites, founding director of recruitment consultancy Purple, which opened a Leeds office in January 2006. Purple specialises in recruitment for advertising, marketing and design – sectors that are booming in Leeds. ‘I was expecting salaries to be comparatively lower,’ says Thwaites, ‘but there isn’t a massive difference to London. What makes a difference, though, is that the cost of living is significantly less, which means a lot if you’re trying to tempt people into the region.’
Unique skills base
One aspect of the North’s industrial heritage that continues to have a positive impact is the residual industry expertise that remains. In South Yorkshire, the metal-bashing foundries and steel-making plants have largely closed down, but in their place has developed one of Europe’s leading advanced engineering and metals clusters, which accounts for around 60 per cent of Yorkshire’s total exports.
The cluster is centred around the buzzing, hundred-acre Advanced Manufacturing Park (AMP) in Rotherham, the site of the former Orgreave colliery that saw some of the worst violence during the 1984 miners strike. Today, the site is a hi-tech manufacturing hub to rival any in Europe.
Tenants include the Advanced Manufacturing Research Centre (AMRC), a £15 million joint venture between the University of Sheffield and US aerospace giant Boeing, and the Cambridge-based joining technology specialist TWI (the operating arm of The Welding Institute). Just down the road is the National Metals Technology Centre (NAMTEC), the UK’s research and skills centre for metals technology.
Excited by the proximity of such niche expertise, Dr Graham Cooley, chief executive of hi-tech metals processing firm Metalysis, moved his business up from Cambridge to Rotherham in 2005.
‘I didn’t know the area before we moved here, but nowhere else in the country can match South Yorkshire’s expertise and understanding of the metals industry. It has the right skills, the right partners, and the right end users for our business,’ he says.
Further north, in Leeds, it’s the booming professional and financial services sector that grabs all the headlines and with good cause: the sector employs a quarter of the workforce and accounts for a third of the city’s GDP. It has recently been selected as the location for one of four regional skills academies being set up by the Financial Services Skills Council, but Leeds is about more than just professional and financial services.
‘It was the strength of the creative and digital industries sector that was the clincher for us,’ says Purple’s Thwaites. ‘We looked at a couple of other options, including Manchester, but it was clear that the creative and digital sector is one of the fastest-growing in Leeds – and the fastest-growing part of our business.’
Elsewhere in the region, clusters of expertise include marine engineering and renewable energy on Teesside, site of the UK’s second-largest port in terms of tonnage, and home to the National Renewable Energy Centre; automotive in Sunderland, where the massive Nissan plant supports a whole community of suppliers; food manufacturing in Yorkshire, now the county’s second-largest manufacturing sector; and business services in Newcastle, where 50,000 people are employed in customer contact centres. Or if it’s niches you’re after, try medical textiles in Huddersfield or video games in Sheffield, a world leader in computer games design.
