Going to town on progress

The philosophy of city-oriented growth is central to the economic rebirth of England's regions

Gone is the time when Liverpool and Manchester saw each other as deadly competitors, says Bryan Gray, chairman of Northwest Regional Development Agency. True, the friendly rivalry remains, but it hides a mature understanding that what is good for one is broadly good for the other, and also the wider North.

Gone is the time when Liverpool and Manchester saw each other as deadly competitors, says Bryan Gray, chairman of Northwest Regional Development Agency. True, the friendly rivalry remains, but it hides a mature understanding that what is good for one is broadly good for the other, and also the wider North.

The evolution of the Liverpool-Manchester relationship from combatants to partners symbolises the character of the modern regional economy. Healthy regions need healthy cities and strong cities drive forward the economy of their whole region. Reinvigorated car making in Liverpool's Halewood is good not just for Merseyside, but also for car parts suppliers and service companies in Manchester and the rest of the North. Developing the regional supply chains and strengthening clusters of companies working in the same sector is an important element of the strategy adopted by RDAs to get the most for their regions from successful businesses and industries.

This philosophy of city-oriented growth underpins the Northern Way concept. Key to the economic rebirth of the North is the success of what the Northern Way process has identified as eight city regions, the areas where most people live, where most businesses are located and where most people work: from Liverpool to Hull, through the North-east to the Scottish Borders, with Manchester and Leeds at its heart. Many of these cities have already seen impressive regeneration improvements - Leeds is the country's fastest-growing city; Manchester hosted the Commonwealth Games; Sheffield, Manchester and Newcastle have all achieved dramatic city centre transformations; and Liverpool will be European Capital of Culture in 2008.

However, it is important that everybody benefits from the growth of the cities. This means that attention must be given to both the areas that are speeding ahead and those left behind. In recent years, despite the strong growth felt in some of the North, many people have headed South for better jobs. This has been a key factor in blighting large tracts of social housing in some Northern cities. Sustainable regeneration needs both the economic stimulation of commercial growth and major investment in housing stock that has declined.

Success in turning around the housing market will only be possible through a partnership of several key players, with the Government's regeneration body English Partnerships taking a major role, along with the Housing Corporation as the funder of housing associations.

Paul Spooner is English Partnership's regional director for the North-west and the West Midlands who has worked with RDAs since their establishment, previously as director of development for Birmingham City Council. He is impressed by the impact RDAs are having. "The most important thing is to attract back the private sector," he says. "The Northern Way builds on this type of work, identifying the city/regions as areas of growth, not just areas of problem."

Where 20 years ago public bodies might have been involved in more speculative investment, the focus today is very much on research to identify which sectors will be attracted in and how - with much of that research conducted by the RDAs. But in line with the principles of sustainable communities set out by the Office of the Deputy Prime Minister, the regeneration partners are committed to the creation of a mix of housing stock and occupants. Central city areas, for instance, should have diverse housing provision available, some to attract high-income residents and some categorised as "affordable housing".

John Prescott, the Deputy Prime Minister, has stressed that bringing stability to local housing markets and increasing demand for housing in Northern cities is key to his vision of sustainable communities. But reinvigorating housing stock to stimulate housing demand is just one element in a package of measures to drive the regional economies.

"We need a long-term vision, as well as investment," says Prescott. "So I look forward to working with the regional development agencies and the regional planning bodies on a plan to exploit existing infrastructure - airports, motorways and rail lines." He says that, particularly in the North, there has to be "a transregional view so that the sum of investment and regeneration is greater than the parts".

But recognition of cities as a driver for regional economic growth should not imply that rural development is marginalised. John Tomaney is senior lecturer at the Centre for Urban and Regional Development Studies at Newcastle University. "Some of the people working in the cities are living in the rural areas," he says. "RDA support for business services in rural areas is making the links [between urban and rural] even stronger. These linkages are very important. For farming, the localisation of markets and the explosion of farmers' markets indicate the way in which things will go in the future. RDAs are best placed to think about those links and to intensify links between urban and rural areas."

However, it is fair to point out that regional priorities differ - particularly between North and South - which is the underlying rationale for RDAs. Southern RDAs, such as SEEDA (the South East England Development Agency), recognise that problems can be caused by the magnetic pull of London, which means that one of SEEDA's priorities is to strengthen market towns with populations of fewer than 20,000.

Despite recognising the importance of cities, RDAs have to deal with the specific challenges of their own regions. What might be right in one place is not appropriate everywhere.

The Northern Way

The Northern Way was launched by the Deputy Prime Minister John Prescott in February 2004 as an initiative to drive forward social and economic development in the north of England.

The project is being led by the three northern regional development agencies, One NorthEast, Yorkshire Forward, and the Northwest Regional Development Agency.

Using the models of the Thames Gateway, where growth is coordinated through 13 local authorities, and the north-eastern United States, where cities such as New York, Washington and Boston are seen as the regional driving force, the initiative intends to build on the combined strengths of the entire northern region as a counter-balance to the draw of London and the South-east.

The initiative aims to coordinate the work of the three development agencies, planning bodies and central government to exploit the economic and infrastructural links of eight city regions which it has identified as key to the economic rebirth of the North: Central Lancashire, Liverpool, Manchester, Sheffield, Leeds, Hull-Humber Ports, Tyne and Wear and Tees Valley, with all the economic, social and cultural might they contain.

A steering group has been set up to push the plan forward, chaired by Sir Graham Hall, former chief executive of Yorkshire Electricity Group and chairman of Yorkshire Forward until 2003, and including Ed Balls, chief economic adviser to the Treasury.

Sir Graham says: "Our vision is to establish the North as an area of exceptional opportunity, combining world-class economy and a superb quality of life. There are clear synergies between the three northern regions. We need to have greater flexibility to make better use of the money and have the power to make the necessary decisions to achieve a real difference to business and society."

Cross-regional work is also ongoing further south, where the East Midlands Development Agency and Advantage West Midlands are working on a similar initiative, the Midlands Way, to drive forward development in the Midlands.

Gareth Chadwick