Journalists on red alert over Liverpool recession report

 January 26, 2009         Leave a comment

On the back of what’s generally considered to be a hugely-successful Capital of Culture year, people across Liverpool will be dismayed to see the city described as being on ‘red alert’ in terms of the impact of the recession.

The city has been given a dire warning over how susceptible it is to the ravages of what’s likely to be a lengthy recession – unwelcome news given that the city is only just emerging from several decades in the doldrums.

“The capital of culture and the associated investment did provide a boost to Liverpool and the £1bn investment in retail means Liverpool is now the fifth busiest shopping destination in the country,” says Dermot Finch, director of the Centre for Cities, who authored the report with the Local Government Association.

“What is more, its secondary schools are now producing GCSE results which are just above the national average. But none of that can insulate Liverpool from the effects of the recession in the next couple of years.

“It has the lowest rate of employment in the whole country and the highest number of benefit claimants. It is in for a harder ride than it might think.”

The Centre For Cities report makes much of what is termed an Economic Prosperity Index, which places Liverpool 48 out of 64 major UK cities – well below Manchester, Leeds and Newcastle.

Worse still, Liverpool comes bottom of a Social Deprivation Index, while a Built Environment Index places the city 53rd out of 63.

As a result of these indices, Liverpool comes bottom of 12 major UK cities and receives a pretty desperate report card.

As would be expected the usual suspects have come out of the woodwork to give the usual responses about how boss Liverpool is, but the data bears more analysis than the predictable responses have drawn.

I’m not sure exactly what hard conclusions we can draw from the methods CFC has used and the data available. Indeed, in the report itself CFC admits:

“A city’s performance is made up of a large and untidy aggregate of economic, social and physical indicators, some of which can only be measured through estimation and some of which do not really lend themselves to any sort of meaningful quantification.”

To compile these indices, the report seems to have drawn information from a variety of sources: including employment growth and rates, population growth, earnings growth, percentage of benefit claimants, qualification levels and more.

A closer look at the figures indicates that some of the the data that makes up these indices come from as far back as five years ago, while most come from 2006-2007.

So it’s impossible to discern what the estimated £1bn of cash that has been ploughed into the city in 2008 might mean.

Certainly the headline figures in the CFC report may not be as calamitous as indicated, but that will depend on the bounce effect that is hoped for from the Capital of Culture year, and will also depend on the city sustaining those levels of investment and tourism.

Another oddity is the stress the report places on the declining industries of Distribution, Hotels and Restaurants; Banking , Finance and Insurance; and Construction. Liverpool doesn’t figure in the top ten – and by implication worst hit – cities for any of these industries.

What’s more, between 1997 and 2007 Liverpool added 70,000 jobs. 70,000! Benefit claims also decreased significantly and GCSE success rates are on the way up.

What to make of all this, then? Not much, by my reckoning. The data is contradictory in terms of where Liverpool is going, so it’s difficult to make out significant patterns and much of that negative data does not take account of the vast boom that took place in the city over the last twelve months.

What’s more, it’s not as if Liverpool has been a thriving, booming centre of global finance for the last decade.

London has, so I find it hard to believe that Liverpool is going to be a centre of devastation. It’s not possible for certain industries to decline calamitously if they didn’t exist in Liverpool in the first place.

Centre for Cities’ inevitable conclusion is that cities need more devolution – what else from a report cowritten with the Local Government Association? – so they are better placed to tackle the recession more quickly and more ably than local government.

When that means more power for Liverpool’s famously inept and bungling council, I’m not convinced that our salvation lies in that direction.

What is certainly a problem is Liverpool’s shrinking population, which prompted the suggestion last year that everyone up sticks and move to Swindon.

Whether CoC can halt that and whether Liverpool can overcome the donut effect (the theory that wealthy city centres are surrounded by poor areas, which are themselves ringed by affluent suburbs) evinced by Liverpool’s poor placing in inequality stakes, are issues that will only become evident in time.

Once again, the main question is whether Liverpool’s council, Culture Company, businesses and local government planned beyond 2008 when they were slapping themselves on the back.

Red alert then? Actually yes, but only because the entire world economy has gone to the dogs. If Liverpool is fucked, then so is everywhere else.

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