Manchester's Economy (updates)

[jrb]

Place North West.

BUDGET 2011: Enterprise zones for Manchester and Liverpool23 Mar 2011, 15:32

Greater Manchester and Liverpool were among the first ten enterprise zones named in the Budget - the precise locations will be unveiled on Thursday.
The market will be waiting to hear if the whole or just part of Liverpool city region and Greater Manchester will qualify for the tax breaks, relaxed planning and capital allowances incentives that come with enterprise zone status. Critics of past enterprise zones claim they are expensive for the number of jobs created and encourage so-called boundary jumping from non-qualifying authorities into qualifying ones.
A further ten will be announced in the summer following a competition. The first enterprise zones will be in:
■Liverpool city region
■Greater Manchester
■Birmingham and Solihull
■Leeds city region
■Sheffield city region
■West of England
■Tees Valley
■North Eastern
■The Black Country
■Derby, Derbyshire, Nottingham and Nottinghamshire
■London
New businesses moving into an enterprise zones will be exempt from business rates and council will be able to keep business rates in the area for up to 25 years.
Mark Radford, head of Jones Lang LaSalle's regional rating team, said: "Whilst we await more detail due to be released tomorrow, it appears that the Chancellor's announcement on the creation of Enterprise Zones is an initiative focused on attracting SMEs into these zones rather than larger corporate occupiers as there is a ceiling on the amount of rate relief, and the benefits will only apply to new businesses moving into an area."
Mike Walker, director and head of the Manchester office of Colliers International, said: "Confirmation of the reintroduction of Enterprise Zones is a welcome sign that the coalition is focusing on growth as well as reducing public expenditure, although £100m will be spread fairly thin across 21 different zones over four years.
"The main criticisms of previous Enterprise Zones were that some of them were in areas of long term structural decline, and that jobs created were simply displacing employment from elsewhere and disappearing when the incentives ran out. To have any lasting impact these incentives need to be focused on areas with high growth potential and which can deliver near term employment rather than just shiny new buildings on derelict land." Stephen Chalcraft, partner and head of public sector and commercial real estate at Pannone LLP, said: "Previous enterprise zones didn't create the level of jobs they were expected to and the worry this time is they could lead to empty buildings being knocked down if they don't work. Spending £100m across 21 is not going to go that far in reality. We might be better off supporting affluent areas that are more likely to produce returns in terms of jobs rather than ploughing more money into areas where there is low demand."
Graham Stock, partner from Drivers Jonas Deloitte in Manchester, said: "The relaxation of planning regulations both nationally and specifically within Greater Manchester's new Enterprise Zone is a well timed shot in the arm for the city's economy.
"It's clear too that this idea is not a like-for-like resurrection of Thatcher's policy from the '80s which was by and large focused on low-grade industrial growth, with Osborne's emphasis on high-speed communications infrastructure and sustainable development.
"Key to their success will be swift implementation of both the radical planning reforms discussed. They will take time to nurture so the Government and Manchester's LEPs must move fast to maintain the impetuous."
Simon Reynolds, head of offices at GVA Manchester, said: "Dependent on the exact location - East Manchester maybe? - of an Enterprise Zone, the rate relief (capped at £275,000 and five years) will help, as will rapid introduction of super-fast broadband in them; but remember it took 25 years from the inception of Salford's Enterprise Zone to result in real success at the adjoining Media City after years of over-development of the wrong type of product. Let's not make the same mistakes again! Peel could be set to benefit from Liverpool's Enterprise Zone if it includes its waterfront landholdings. The retention and re-investment of rate income within the Enterprise Zones by the Local Authority, LEP and/or investors could fast track the creation of Tax Increment Financing schemes."
Simon Rubinsohn, RICS chief economist, said: "It is not clear how effective new enterprise zones will be in stimulating long term sustainable development beyond an initial boost. While the tax breaks and changes to planning restrictions may draw short term investment into an area they also have a number of downsides.
"The total cost to Government can be expensive and there often needs to be other public investment in areas such as transport infrastructure.
"Enterprise zones also draw development from other nearby areas that do not receive benefits, in some cases simply shifting local economic problems from one area to another. While they may have helped some areas in the 1980s, enterprise zones are unlikely to have the same impact now."
John Jones, partner and head of corporate finance at accountants and business advisors Beever & Struthers, said: "The return of enterprise zones sound like a good idea but 21 of them is not enough to make a significant difference to the national economy in terms of driving short-term growth in those selected areas."

[hulmeman2]

According to the MEN, the LEP will be the airport.

http://menmedia.co.uk/manchestereven...nterprise_zone

Greater Manchester earmarked for Enterprise Zone
James Ferguson
March 23, 2011

Greater Manchester is to become home to one of 21 new Enterprise Zones designed to reinvigorate the manufacturing sector, the Chancellor announced.
An area around Manchester Airport is understood to be the likely site, but some have expressed concern that the revived policy – a throwback to the days of the Thatcher governments – does not have a track record of success.

Mr Osborne said the zones would foster enterprise by offering discounted business rates, reduced planning restrictions and superfast broadband.

The Chancellor said: "Manufacturing is crucial to the rebalancing of our economy.

"Over the last decade, the share of the economy accounted for by financial services increased by over two-thirds - while manufacturing's share fell by almost a half."

He said rates discounts in the zones could be worth up to £275,000 over five years for firms that move into the area over the course of this Parliament.

Tax relief on plant and machinery spend will be considered, while UK Trade and Investment will support inward investment or trade opportunities in the areas.

Steve Crompton, tax director at accountants and business advisers RSM Tenon, said: "The zones are a way of trying to kick-start the embryonic growth we are seeing in manufacturing at the moment.

"It all ties in with the creation of new technical colleges and apprenticeships, which is a back-to-basics push for people to learn practical skills."

He added: "The zones could have a wider impact on the local economy through job creation and local businesses in the supply chain."

Chris Fletcher, deputy chief executive of Greater Manchester Chamber of Commerce, said: "Whilst the geography of where this is will be important, the major factor to its success will be what policies will be used to attract businesses to the zone and keep them there for the long term. We await further details on this."

It is not the first time Greater Manchester has been home to an Enterprise Zone, an idea first introduced Nigel Lawson in the 1980s.

In 1981, 483 acres of Trafford Park and Salford Quays were declared an Enterprise Zone.

The target was to create 7,000 new jobs in a decade, but five years later only 2,557 had been created, and in 1987 the zone was superseded by Trafford Park Development Corporation.

While other zones were more successful, a government-commissioned evaluation in 1987 found that, from 1981 to 1986, enterprise zones had cost nearly £300m to create 13,000 jobs.

Ed Cox, director of the Institute for Public Policy Research North, said: "There is little to suggest that a failed policy from the 1980s will work this time round.

"Enterprise Zones have been tried in the past and found wanting - they’re more successful at encouraging businesses from neighbouring areas to relocate than they are at creating new jobs."

Other sites for enterprise zones include Leeds, Sheffield, Liverpool, West of England, Tees Valley, North East, the Black Country and Derbyshire, Nottinghamshire and London.

[WatcherZero]

Will be a pain to get to the zone for the majority of potential non-car driving employees too.

[jrb]

Etihad Execs in town. Manchester has beat Dublin an Brussels to secure Etihads new call centre, which will bring 200 jobs to the City. I fully expect to sponsor COMS aswell. (just guessing)

[jrb]

MEN. Etihad Execs in town. Manchester has beat Dublin an Brussels to secure Etihads new call centre, which will bring 200 jobs to the City. I fully expect them to sponsor COMS aswell. (just guessing)

[heatonparkincakes]

That a fair guess Jrb.

Call centre. I won't mock this If I laid off and that is the only thing I can get, but that's the kind of thing ideal for an enterprise zone.

(Bangs head) Enterprise zone. Why does the free market Tories always come up with these distinctly un free market "zones."

Tell what has changed to believe that these can work in this this century, when they failed in the last?

Frankly if they are to be created, I'd sooner they were under City Region control to allow any development to be sustainable and relevant to the greater regional economy.

Rather than a tax dodging free drinks party for short termism fly boy capitalists, who grab the profits and run off. Thus leaving empty ugly useless metal sheds rotting in the Mancunian ran.

[TheFly]

Originally Posted by heatonparkincakes

That a fair guess Jrb.

Call centre. I won't mock this If I laid off and that is the only thing I can get, but that's the kind of thing ideal for an enterprise zone.

(Bangs head) Enterprise zone. Why does the free market Tories always come up with these distinctly un free market "zones."

Tell what has changed to believe that these can work in this this century, when they failed in the last?

Frankly if they are to be created, I'd sooner they were under City Region control to allow any development to be sustainable and relevant to the greater regional economy.

Rather than a tax dodging free drinks party for short termism fly boy capitalists, who grab the profits and run off. Thus leaving empty ugly useless metal sheds rotting in the Mancunian ran.

A European language call centre will bring work in from Europe and (likely) be staffed by 200 foreign workers spreading the gospel of Manc.

Just because it is a call centre do not knock it. This is proper work and could easily of gone to any other major European centre.

[WatcherZero]

I dont think they will have much trouble recruiting local foreign language speakers, probably what attracted them to the city in the first place.

[WatcherZero]

Damn its confirmed the Enterprise zone is the Airport, selected by Manchester Council apparantly. Wonder if its worth bidding for one of the 10 extra enterprise zones to cover somewhere in the north of the conurbation?

[jrb]

BDNW.

MIDDLE East airline Etihad is to create up to 160 jobs at a new European contact centre in Manchester which will open next year.


The fast-growing Abu Dhabi-based carrier said the facility would be located on the Manchester Airport campus.

Welcoming the news at a press conference today Manchester city council leader Sir Richard Leese said: "This was a commercial decision taken for hard-nosed commercial reasons. I am very grateful for the confidence Etihad is showing in Manchester."
Trade minister Lord Green welcomed the news as a 'boost for Manchester.'

"Etihad has chosen Manchester for its international connections, its strong telecommunications and ICT infrastructure as well as its supply of language talent.”

Etihad's chief executive James Hogan added: "Our contact centres handle around 2.5 million calls each year, and we expect more than half of these calls to originate from non-Arabic speaking markets by 2012.

"As our network continues to grow, it is increasingly important for us to provide high quality, multilingual assistance for customers who choose to book directly with the airline.

"We looked closely at a range of potential locations in the United Kingdom and Europe, and undertook extensive research to find the location that offered us a population base with the right mix of languages and skill sets, as well as a high quality of telecommunications infrastructure.

"Manchester offered everything we needed, and had the added attraction of having strong, well-established business links with Abu Dhabi – a relationship we look forward to developing further.”
Etihad, which recently annnounced an expansion of its Manchester-Abu Dhabi services to twice daily from May, has also opened a new business class loungue at Terminal 1.

The airline, which is also major sponsor of Manchester City FC, chose Manchester over Dublin and Malta.
Its Dubai-based rival, Emirates, is also creating jobs in the North West, as a result of its expansion to three daily flights.

The 35 positions will be created both at the airport and at the airline’s European call centre in Wilmslow. Once filled, the jobs will take the total number of Emirates employees in the region to more than 400.

[Cherguevara]

Originally Posted by WatcherZero

Damn its confirmed the Enterprise zone is the Airport, selected by Manchester Council apparantly. Wonder if its worth bidding for one of the 10 extra enterprise zones to cover somewhere in the north of the conurbation?

The problem with the north of the conurbation is that there's no obvious location that's accessible to such a broad variety of workers as the Airport is in South GM. I suppose Central Park could be made accesible to skilled city centre/south Manchester workers and low income/unemployed north/east Manchester/Oldham/Tameside/Rochdale residents, but the initial/major benefits would be to Manchester itself rather than the northern towns.

[WatcherZero]

Theres a new business park going ahead just south of the centre of Rochdale which would be ideal for the high unemployment zone of Oldham/Rochdale, as well as all the northern districts, would have good links to the centre as well as Lancashire and Yorkshire. Would have good road links (just off the ring road like the Airport) as well as Rail and a Metrolink stop. Would also counterbalance growth as if a lot happens in that area around the Airport..... Well you know what property prices are like round there already.

[Cherguevara]

Originally Posted by WatcherZero

Theres a new business park going ahead just south of the centre of Rochdale which would be ideal for the high unemployment zone of Oldham/Rochdale, as well as all the northern districts, would have good links to the centre as well as Lancashire and Yorkshire. Would have good road links (just off the ring road like the Airport) as well as Rail and a Metrolink stop. Would also counterbalance growth as if a lot happens in that area around the Airport..... Well you know what property prices are like round there already.

None of that catchment area provides access to a particularly skilled workforce nor to the range of clients that a location in South Manchester would. For many businesses this won't matter particularly, but for some it will, which makes Kingsway (or any site in northern GM) more marginal a prospect than one in the south/centre of the county.

It depends what the bid criteria are, but if it's net contribution to private sector jobs in the economy then Kingsway might not be suitable. Somewhere in the Trafford Park-Warrington-Wigan triangle might be a better bet.

[WatcherZero]

Im a bit selfless with where I would support investment, besides that area seems to be doing alright, reports in paper last week that Peels Port Salford has stolen the Chinamex development from Wigan.

[Cherguevara]

Originally Posted by WatcherZero

Im a bit selfless with where I would support investment, besides that area seems to be doing alright, reports in paper last week that Peels Port Salford has stolen the Chinamex development from Wigan.

But that's the point. If it's doing alright then it has the potential to do better than an area that currently isn't doing alright (generally anyway). In a competetive bidding process that will matter, especially to the Tories who will make the decision.

I don't actually think this is right, but I also don't think the GM LEP putting in a bid that can't win just because it's fairer is going to help anybody. Having said that I don't know enough about the Kingsway plans to say whether it would be suitable or not. I'm just pointing out that it has inherent disadvantages.

[WatcherZero]

Just found this recent report very relevant to our conversation (dated Sep 2010), very interesting.

Greater Manchester Town Centres: Stage 5
A Forward Strategy for Greater Manchester Town Centres

http://www.wigan.gov.uk/NR/rdonlyres...eport498kb.pdf

[neil]

Biotech pioneers prosper in Manchester

28th March 2011

MANCHESTER is at the heart of the fastest-growing sector of the biotechnology industry which is said to be worth around £8bn.

Several firms are now based in the city that are leading the way in the field of molecular diagnostics - a combination of diagnostics with genetic analysis.

The 13-year Human Genome Project, which concluded in 2003, mapped the make-up of DNA and this knowledge enabled the biotech industry to move one step beyond testing hormones and glucose to measuring genes and gene variations to indicate the best treatments for certain conditions.

These businesses have emerged from technology pioneered at the University of Manchester or from the existing North West pharmaceutical industry and have attracted investment from larger multi-nationals.

DxS was launched by two AstraZeneca scientists, Dr Steve Little and Dr David Whitcombe, in 2001 and it was acquired in September 2009 by German group Qiagen in a deal which valued it at £80m. Since then it has doubled in size employing 150 staff who develop kits that make it easier for doctors to prescribe the most effective treatments for various forms of cancer.

The other large player is Wythenshawe-based Gen-Probe, a US-owned company which acquired Tepnel Life Sciences in 2009 for £93m and turned it into its European headquarters. The company now bills itself as the largest standalone molecular diagnostics company in the world. Its work includes screening donated blood for diseases, transplant diagnostics - checking donated organs will be accepted by the recipient - and women's health, which involves tests for sexually transmitted diseases.

"There are a number of attractive aspects to Manchester," says vice president of corporate communications Mike Watts. "The employee base gives us the ability to recruit locally and its location, with the airport, helps with logistics.

"Today, the vast majority of our manufacturing is done in San Diego but one of our strategic areas is expanding the European base."

There is also Myconostica - a University of Manchester spin-out based at the Core Technology Facility - and AIM-listed Epistem, which emerged from the university's Paterson Institute for Cancer Research. It carries out research for the large pharmaceutical firms to see how effective drugs in development are in treating particular diseases and has also developed Genedrive, a portable diagnostic machine which the firm says could revolutionise the way in which diagnoses are made.

"Particularly because of Tepnel and DxS the region has emerged with real strength and depth in molecular diagnostics which is just about the hottest area in biotech," says Qiagen's Dr Little, pictured.

"If I was going to set up another molecular diagnostics firm in the UK I'd be coming to Manchester. There's an awful lot of talent in Manchester but five years ago there was little experience. But now with us and Gen-Probe there's a lot of experience and if you want to find experienced staff this is where you would come. We'd struggle to compete with Boston or San Fransisco but in Europe this is the place."

All these companies manufacture products in Manchester, a decision which Dr Little, pictured, believes will help further entrench the sector in the region.

"A lot of companies our size and in our position would say 'we're not going to do manufacturing ourselves'. But we want to and once you've got manufacturing in place with a hi-tech business it's difficult to shift. The margins in our business are high so it's much more important to do it right. By putting manufacturing into the business you create an anchor.

"The lesson is if you want to do it don't just be a research and development group that could be moved anywhere around the world, but a proper manufacturing base. It's not immobile but it's more difficult to shift."

[Cherguevara]

Three Greater Manchester winners in the first round of the regional growth fund allocation. They are:

Bruntwood/MCC: Royal Eye Hospital Biomedical Research Centre
Muse Developments: I think this is the Ashton Moss industrial park.
Holroyd Precision Ltd and sister companies: Development of a cutting edge factory & R&D laboratory for Holroyd Precision Ltd in Rochdale

[jrb]

BDNW.

ROYAL Bank of Scotland is to create 80 more jobs in its investment banking arm by the end of the year as its shifts work from London to Manchester, group chief executive Stephen Hester told TheBusinessDesk.com.
Mr Hester, who was in the North West for a three-day visit, which saw him meet with staff and key business customers, including Peel Group and Crown Paints, said Manchester, where it has 6,000 staff is proving to be a "good location for the bank"
"We' are always looking at efficiency and how we can best serve our customers around the world. With this in mind we'll be moving more work for our investment bank to Manchester, taking us from about 120 to 200 by the new year.
"While it won't always be one-way traffic - there will be occasions where roles may be moved to other locations for business reasons - but at the moment Manchester is proving to be a good location for us to do business."
The 50-year-old former boss of property investment firm British Land, who took over at RBS from much-criticised predecessor Sir Fred Goodwin in November 2008, conceded that the North West operation was in a state of flux and that some staff and customers were being impacted.
To meet EU rules after its £850bn bail-out from the Government, RBS is having to sell off nearly 320 branches, more than a third, 120, of which are in this region.
"I think morale is generally good and people are seeing the uncertainties are being put behind us, I think think some people do still feel a little bit beleaguered, and there are still some uncertainties among staff in our branches being sold to Santander.
He said he hoped the transfer process would be completed in 2012.
Asked about his role, and the future of banking and regulation, he revealed that he had had just two hours to decide whether to take the job.

Mr Hester said he had be "surprised" by how politicised the role had become, but said he sees his role in helping RBS - which is more than 80% state owned - back on its feet and in private ownership once more, as key to the UK's economic recovery.
He gave a broad welcome to the findings this week of the Independent Banking Commission - but pointed out that ring-fencing banks' retail arms from their investment functions, is not the only device to prevent bank failure.
The proof of this he said was that Northern Rock and Bradford and Bingley had not had investment banking units, yet had still needed rescuing.
Mr Hester ruled out ditching the RBS brand name, saying customers were able to draw a distinction from what they heard or read in the media and their day-to-day experience.
"I don't think the damage to our brand has really damaged our business with our customers - customers take us as they find us and that is why our business has stayed strong. It is why our primary focus is to continue to improve how people find us."

On the issue of pricing of loans to business he said the average interest rate for a small business was just 3.5% - the lowest in 20 years, which he acknowledged was higher than the base rate.
"It's a fact of life that the costs of raw materials has gone up, whether you are a supermarket or if you're selling petrol.
"Banks' raw material is money and the price has risen. What we have to do is make sure we are competitive and efficient - sometimes that's bad news for jobs."

[jrb]

BDNW.

Leese upbeat on prospects for next round of RGF14th April 2011
By Chris Barry - Editor, North West
SIR Richard Leese, leader of Manchester City Council, has played down Greater Manchester LEP's limited success in the first round of bids for the Regional Growth Fund.
In fact, he said the successful bid with developer Bruntwood for £2m for the £21m transformation of the landmark former Royal Eye Hospital site on Oxford Road, was by a "clear margin" Greater Manchester's "number one project."
Manchester submitted more than 20 bids for funding from the Regional Growth Fund, which was set up by the Government to boost private sector job creation in regions heavily reliant on the public sector.
Speaking to TheBusinessDesk.com, he said: "The first round for the Regional Growth Fund was massively oversubscribed, I don't think anyone was going to get anywhere near what they put in.
"I've had a brief discussion with the Chief Secretary and explained that Greater Manchester took a particular approach, which looks at an evergreen approach, to recycling investment.
"This is far more suited to the second round. We will learn from the first round and go in that second round with confidence."
He said the partnership between the public sector and private sector developer Bruntwood for the successful Former Royal Eye Hospital site on Oxford Road would be a blueprint for the future.
Sir Richard also believes that some successful RGF bids may run into difficulty in complying with state aid rules on grant funding.
"The approach that Manchester has put forward is not a grant-funded model and means we have very little issue with state aid. What we are proposing sees the public sector effectievely take an equity stake in a project, but there is as we all know, a risk to this.
"We are in a time of very tight resources so our ability to recycle investment and to keep pumping money back into economic development is very important."
His views were echoed by Bruntwood chairman Mike Oglesby, who said the approach to recycling investment was the right one.
"Manchester has never been a grant-led city, recyling investment is very important. If a project needs any grant funding, the odds are it won't succeed."
Sources close to the Regional Development Fund told TheBusinessDesk.com that Manchester should 'learn lessons' from the first round, and return with more private-sector led schemes, rather than complex, lengthy documents.
"Manchester simply got it wrong in the first round - but all is not lost. They need to look and see who has succeeded - and it's clear that the pivate sector has to take the lead."