Picture by Jon Super for The Financial Times newspaper. Pic fao Marcus Cotton re story by Paul McClean. Picture shows the recently unveiled Beatles statue on the Pier Head in Liverpool. The statue, which weigh 1.2 tonnes, was sculpted by Andrew Edwards, and cast at Castle Fine Art Foundry Ltd. Picture re Budget special, Liverpool, Wedsnesday Feb. 26, 2016. (Photo/Jon Super 07974 356-333)
Liverpool's port area © Jon Super

Over the past decade some £5bn of investment has transformed the centre of Liverpool.

At the city’s port, once the foundation of its wealth, the owner Peel Group is, with public sector support, investing £300m to double its container capacity.

On the other side of the river Mersey, Cammell Laird, a shipyard once in administration, is humming with activity. Cruise ships are again docking alongside the Three Graces, the trio of Unesco-listed Edwardian buildings on the water front.

The private sector is creating jobs at a faster rate than before the recession and big companies such as Deutsche Bank, Jaguar Land Rover and Unilever are making investments in the wider Liverpool city region, which includes Merseyside and Halton in Cheshire.

The city’s population of 466,000 is growing after decades of decline and it is gaining a reputation as an economic magnet that can attract investors. Next year, a region-wide metro mayor will be elected.

Joe Anderson, Liverpool’s elected mayor, is convinced its best days lie ahead but even he admits Liverpool’s resurgence is a “tale of two cities”.

Maura Cummins, from Blackburne House, a social enterprise that helps jobless women find work, says: “Liverpool as a city is growing. There are more hotels, more tourists, and there’s the construction work at the port. But how is that trickling down to Mr and Mrs Normal who are on zero-hours contracts and struggling to pay the rent?”

Since 2010 nearly 26,000 private sector jobs have been created, but during the same period 20,400 public sector jobs have gone and the government has cut £650m from grants to the city region’s six authorities. This equates to £329 a head, the most in the country.

George Osborne, the chancellor, has warned of more cuts to come, meaning further painful adjustment in a city where 22 per cent of people work in the public sector, compared with a UK average of 17 per cent.

Meanwhile, one in four households in Liverpool has no one in work, unemployment of 12 per cent is twice the national average, and many simply do not have the skills to find jobs. Just 27 per cent of the population is classed as “high skilled”, compared with 36 per cent nationally.

Optimists point to the growing digital and technology scene. A record number of start-ups were created in 2015, and in the past six years the number of companies classified as high growth has risen 56 per cent.

Budget Liverpool map

Graduates are increasingly staying, they say, because of the low property costs and lively nightlife.

Ellen Cutler, the director of Invest Liverpool, the city’s inward investment agency, says: “Business start-up data tell us the city region is developing a more entrepreneurial ecosystem, with that homegrown enterprise supplemented very significantly by a number of important inward investments.”

Budget Liverpool and region gross value added

The city region will host its second International Festival for Business in June, which will give tourism a further boost. It is also receiving £1bn from central government over 30 years as part of a devolution deal giving it more control over skills, transport and planning.

The government’s northern powerhouse project has also promised to improve transport, with the aim of melding the north’s big cities into a single economy.

Budget Liverpool and region unemployment

But these plans have been met with some scepticism. A £600m Mersey crossing near Runcorn opens next year but the proposed HS2 high-speed rail line will stop 20 miles from the city, leaving it on a slower route to London than Manchester and Leeds. Business is lobbying fiercely for a fast east-west link to Manchester to be built earlier than HS2, which is due for completion in 2033.

Budget Liverpool local and national economies

Mark Thomas, the director of Evolution Costs, a legal services business, said: “If we’re cut off from [HS2], it’s like taking away the oxygen from our commercial viability. The northern powerhouse stops at the other side of the M62.”

Michael Parkinson, an expert on the city’s economy at the University of Liverpool, believes devolution is crucial to the region’s success. “We are off our knees, but not out of the woods,” he said.

This article has been amended since original publication to adjust the population of the City of Liverpool

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