Scouse honour

At first glance, Liverpool still looks crummy. Boarded up windows in the heart of the commercial district and used car dealerships where bank headquarters ought to be. The Three Graces (the Liver, the Port of Liverpool and the Cunard Buildings, the reigning icons of Liverpool’s waterfront) seem to want to put as much distance as possible between them and the squalor at their backs.

I went there in July and it was far too quiet for a Thursday evening. But once in a while you’d catch sight of small knots of young people heading for the shiny new bars in the Ropewalks. Disembodied laughter echoed around empty squares. As the setting sun warmed the cathedral walls and bouncers took up their positions, it felt like something was definitely going on.

And it is. Once known as the UK’s sick city, Liverpool can properly be said to be heaving – and that applies to more than just the students spilling out of the pound-a-pint pubs.

Underneath the sudden chic Liverpool acquired by winning Capital of Culture status for 2008 and getting a chunk of its centre and waterfront designated a World Heritage Site by UNESCO, a more profound economic transformation is taking place. Between 1995 and 2001 Liverpool grew its GVA per capita (Gross Value Added) faster than most other English core cities. It is creating jobs far faster than the UK national average. The city centre is re-populating. Retail rents are rising.

This month Grosvenor Estates will start channelling £800m into the Paradise Street scheme. It’s one of the biggest urban regeneration programmes in Europe, radically overhauling the downtown shopping and commercial districts. (See ‘Make way for Paradise’, page 19.)

The waterfront is changing beyond recognition, even if plans for Will Alsop’s controversial ‘Cloud’ (intended as the ‘Fourth Grace’) have been dropped. A £300m-plus arena and conference facility on the Kings Waterfront will address Liverpool’s criminal lack of live event facilities, and an £11m landing stage is planned to lure 75 cruise ships per year starting in 2005.

Away from the headlines, scores of planning applications are lodged for new builds, extensions and refurbishments in the city centre, reflecting a boom in the hotel and leisure sectors.

The pipeline is bulging so much that Sir Joe Dwyer, chair of urban regeneration company Liverpool Vision, is trying to set up a not-for-profit recruitment agency to solve what he reckons is a looming capacity crisis.

How did it happen? Where does regeneration, and the flurry of construction that follows, come from? Is it an accident, the invisible hand of the market? No. A global economic boom helpedgreatly, but this was a ball Liverpool could have dropped. The city didn’t. Key people made good decisions. It’s an important story because there is nothing stopping CIOB members from helping to orchestrate similar revivals in their own localities. In other words, this is something you certainly could try at home.

Let’s put it into perspective. In 1914, Liverpool was the British Empire’s second city, handling one third of all British exports. But as the docks became redundant after the Second World War, it began a descent into misery. A shallow manufacturing bubble burst and between 1966 and 1977, 350 plants closed costing 40,000 jobs. Between 1978 and 1991 just under 9000 jobs a year vanished, a far worse decline than elsewhere in the country. It became known as the Bermuda Triangle of British capitalism. It’s population shrank by nearly 50%. It hit bottom in the 1980s with the Toxteth Riots of 1981 and the Labour Council’s fatal standoff with Thatcher in 1984-87. The Hillsborough Stadium disaster in 1989 wasn’t a civic affair, but for many the grief and ignominy of it typified the city’s misfortunes.

Problematic politics

Liverpool’s problems may have been caused by ongoing shifts in the way the world works, but destructive political leadership exacerbated them. Warring factions in the council prevented sound financial management for years, and in the 1980s a hard line socialist majority brought Liverpool to the brink of collapse in its fight with the Tory government. The council adopted a ‘no cuts in jobs or services’ stance in response to Thatcher’s strategy of slashing the public sector. It went further, borrowing millions through unorthodox methods to fund a monumental social housing programme it couldn’t afford, and threatened to bankrupt the city unless Whitehall made up for its cuts in subsidies.

The battle took the form of convoluted budgetary manoeuvrings, but the flamboyant deputy leader Derek Hatton, with an eye on a parliamentary career, used it to promote the Militant Tendency and attack Thatcher directly. He jeered her and her cabinet in provocative public statements, stirred up other city councils to resist her rate-capping policies and called for industrial action to support Liverpool’s case.

Liverpool took a long time to throw off the legacy of hard-case militancy. It shocked the city

Professor Michael Parkinson

Ultimately, of course, the government won. The courts disqualified a majority of councillors in 1987 for setting illegal budgets. The Council would remain Labour in name for another 10 years but it was a divided bloc after that, and the traditional inertia set in.

Hatton himself was kicked out of the Labour Party by Neil Kinnock in 1986 for belonging to Militant. Now “Degsy” seems thoroughly domesticated. He’s an after dinner speaker and has his own chat show on Manchester’s Century FM radio station.

But the conflict had far more serious consequences for Liverpool. It was saddled with a bloated, inefficient direct labour force. Services were appalling and yet Liverpudlians were the most highly taxed city-dwellers in the country. And, crucially, the private sector, always of the imported franchise type anyway (and perceived as ‘outside money’ rather than a home-made success story) became even more alienated. This rift between the public and private sectors left the city helpless to respond effectively to disastrous closures, like Tate & Lyle sugar factory in 1984, or British American Tobacco in 1990.

Picking up the pieces

“It was an economic disaster,” said Liverpool John Moores University professor Michael Parkinson, the government’s leading advisor on urban regeneration. “Whatever their motives were, however misdirected, it was a shambles and it took a long time for the city to throw off that legacy of hard-case militancy. It shocked the government, it shocked the city, it shocked the private sector and probably wasn’t even bloody necessary.”

So how did Liverpool pick itself up? Mike Storey, leader of the Lib Dem majority that swept Labour under the rug in 1998, naturally focuses on his achievements.

He curried favour with business. He visited city leaders in Dublin and New York mayor Rudolph Giuliani. How did you guys do it? he asked. “They told me they all talked the place up like mad and within months they were counting the cranes on the horizon.”

Storey also presided over the kind of radical streamlining Thatcher had craved 25 years before. Six public-private joint venture companies now look after everything from online services to taking away people’s old sofas. They cut annual cost of running the city by £120m, and axed 4400 staff. They froze rates for three years to 2002, cut them by 3% in 2003 and for the past two years allowed hikes in line with inflation only. Last year Liverpool was named Most Improved Council by the Local Government Chronicle, and earlier this year chief executive David Henshaw, who joined in 2000, was knighted for services to local government.

You can’t overestimate the effect good governance had, said Professor Parkinson: “It’s boring stuff. These people started by emptying the bins, cutting the grass, cleaning up the place, doing all the blindingly obvious.”

The fact that Liverpool meant business also helped get the private sector to join what was by then a cooperating network of quangos and government agencies. Whereas Liverpool’s civic culture in the 1980s was characterised by mutual loathing, by 2000 everyone was getting along famously.

Sir Joe Dwyer’s Liverpool Vision is a prime example. The country’s first urban development company, as recommended in Lord Rogers’ Urban Task Force report in 1999, it’s a kind of management company with a board representing all the different fiefdoms without whose buy-in nothing much would happen: landowner English Partnerships, government funder the North West Development Agency, Liverpool City Council, both ruling and opposition parties, and, wait for it, big business. (Sir Joe is joined on the board by fellow scouser and Tesco chief executive Sir Terry Leahy.)

Sir Joe, former chair of George Wimpey and CIOB president, wasn’t convinced when he was asked to chair Liverpool Vision back in 1999.

I thought that for the first time in a long time, there was an opportunity for getting something done

Sir Joe Dwyer, Liverpool Vision

“I was a bit sceptical at first because I knew the place too well,” he said. “The council has been pretty awful over the last three decades and the private sector didn’t engage too well with anyone.”

Cue the quango

But having been out of Liverpool for some time, he spoke to the people involved, including Mike Storey, and was impressed by what appeared to be a genuine air of cooperation.

“I thought perhaps for the first time in a long time there really was an opportunity for getting something done.”

Liverpool Vision’s job is to focus just on the city centre and to make development happen, from coming up with a coherent overall plan, to luring the developers and securing a steady stream of funding from various sources. Above all it gives the private sector confidence that the city knows what it’s doing. It articulated a vision of Liverpool as a leisure, cultural, tourist centre back in early 2001, and has been implementing it since.

It has had a bumpy ride. The Kings Dock development had a false start when an initial plan to lead with a stadium for Everton Football Club failed for lack of funds. And July’s scrapping of Will Alsop’s Cloud beside the Three Graces will stoke the quango’s reputation for fumbling big projects.

Labour group regeneration spokesperson Steve Munby for one feels vindicated. He says the whole waterfront strategy has been a disaster because the administration (and this would include Liverpool Vision) barges ahead without thinking.

“They decided what they wanted was a football stadium and basically that drove the whole process, but they didn’t work out whether they could do it.

“I was one of the few people who were saying the emperor’s got no clothes for a long time. The administration said, it’s gonna happen, it’s gonna happen and eventually the whole thing collapsed in a welter of recrimination.”

He said the administration took the same bull-headed approach with the Fourth Grace, insisting on what turned out to be the least popular proposal, and bailing out when costs started to spiral. He said the basic problem is that waterfront developments should be funded publicly. That’s because they are so expensive. Developers need to build in enough housing to make a profit, which can swell the original concept out of shape and draw fire from with public watchdogs like CABE and English Heritage. He predicted the collapse of the Fourth Grace the week before the announcement came.

Overall, he’d like the pace of development to slow down a little.

“However good you are and however much you try there is a limit to your capacity to manage many major schemes at once. I think ‘eyes bigger than stomach’ might be a relevant phrase. For 2008 if we can pull off Paradise Street, the tram, probably the improved Kings Dock, we’ll be doing well.”

However good you are, there is a limit to your capacity to manage many major schemes at once

Steve Munby, Labour Group Regeneration spokesman

But even Munby would agree these are glitches, and that Liverpool Vision, as a new sort of body, is doing well. Out of the waterfront’s spotlight, complete transformations are in train for other key parts of the city centre, including the blighted area around Lime Street station, and the ailing commercial district. One insider at the quango said that despite shrill headlines, developers are still confident and eager to get a piece of the action.

The roots of Liverpool’s renaissance go back further than the Lib Dem victory in 1998 and the birth of Liverpool Vision in 1999, though. As Professor Parkinson quips, it takes 20 years to make an overnight success.

Two important intellectual shifts occurred in the early 1990s. First, leaders in Merseyside were pushed to start thinking strategically about the future of the region. Parkinson says it hit home as Merseyside applied for millions in European funding under the Objective One status (which it achieved in 1993). What are you going to do with the money? European asked. Merseyside didn’t really know. That’s when strategists began circling around themes of tourism, culture, leisure and waterfront.

So, make everybody waiters? Many would hardly call this progress. “It’ll be one, big, Victorian theme park,” scoffed one member of the diaspora. What about real jobs? Making things or digging minerals out the earth? Parkinson bristles at this.

“Let’s not be romantic about the kind of work people had to do. There’s absolutely nothing wrong with service sector jobs where people are reasonably paid and reasonably trained. I think it can be as rewarding doing really menial, dirty jobs down mines and in factories.”

The second shift was to focus attention on Liverpool’s city centre, not the suburbs.

“That is the wealth-creating part of the city,” said Dwyer. “Usually when you get public sector initiatives they focus on populated areas, not the commercial areas, so that was a new thing.”

Word on the streets

The final piece of the puzzle, and perhaps the most important, is the change in outlook among ordinary Liverpudlians. A legacy of failure had a profound effect on Liverpool’s psyche. “If it all goes wrong for a very long period of time people get cynical,” said Parkinson. “The Scousers didn’t think there was a way out. They probably did, classically, whinge, including myself. It was all somebody else’s problem.”

But no more. “I think we’ve gone from a self-pity, blame culture to one where we realise the world’s wicked, the world is changing, nobody owes us a living, we’ve got things to do and sell, we should get off our backside and do and sell them.”

He thinks it’s even time to stop blaming Derek Hatton, whom he counts as a close friend. “I knew him when he ran the place. I knew he was a scal. Derek was a lad on the make and we got taken in. Who do you blame, him for trying it on or us for buying it? We should have seen through the swagger and the bravura. We should have said ‘Piss off, Derek, don’t be daft’. But we didn’t.”

So there you have it. A little stab at what happened and why. But Liverpool is changing so fast, even this exercise has come to feel dated. Parkinson, who has studied Liverpool for at least two decades, has lost interest in the whys and wherefores. On Liverpool’s winning World Heritage Site status, he just laughs.

“Not one bit of the jigsaw matters terribly much. It just matters that when you’re on a roll, they just keep rolling in. I don’t care. I don’t know what it means, nor does anybody else. It doesn’t mean billions and squillions in money or tourists or whatever. It simply means, you know, we’ve come in from the cold.” cm