In November 2020, the city of Liverpool was the site of a mass Covid-19 testing scheme. Involving the armed forces, local authorities, the health services and volunteers, more than 200,000 people in a population of about 500,000 were tested in the space of two weeks and cases of Covid-19 were brought down by more than two-thirds. It was a remarkable display of organisation, logistics and, perhaps surprisingly, compliance.
The reason such compliance is surprising is because Liverpool has often been viewed within the UK – sometimes fairly, often not – as a city with a rebellious streak, one that takes great pride in its reputation for defiance. It is also surprising given that Boris Johnson, the UK’s prime minister and therefore the figurehead in the country’s fight against the virus, has had a terse relationship with Liverpool in the past. The Spectator, under Johnson’s editorship, accused Liverpool of wallowing in its victim status in an editorial in 2004. Conservative politicians are rarely popular in Liverpool, but Johnson seems to draw a special kind of ire.
“We could see that if we were to get the Covid-19 virus under any sort of control in the city, then we had to work with other partners, work with our community, and do everything that needed doing on a local level, because we knew where the hard-to-reach people would be, and where the messages we needed to get out would be heard,” says acting mayor Wendy Simon (see our interview with Simon here).
Post-Brexit, trade with the US will rise in importance and Liverpool will be very well positioned there. With regards to building trade with the US, Liverpool’s culture, sport and music goes a long way. Stephen Cowperthwaite, Avison Young
“To do this we had to work with our community leaders and community organisations. We asked for a mass pilot trial here because we knew we had the infrastructure, we had strong experience from the major events we have hosted in the city. We knew that with the help of the army and their logistic skills that we could pull this off and deliver.”
Another Liverpudlian looking on proudly was Stephen Cowperthwaite, principal managing director at Avison Young in Liverpool, and the chair of the Liverpool City Region MIPIM Steering Group, a private sector-led delegation promoting the city region to attract inward investment.
“It sent out a big message in terms of leadership on behalf of both the city and the city region, because you can’t carry out that kind of programme without very strong civic leadership,” he says. “Everything was seamless. We are a Labour heartland working with a Conservative government, and I think the way we worked together shows a real maturity in the politics in the city that perhaps hasn’t always been there. That’s a positive message that we are sending out to investors.”
Liverpool’s message to investors
This message is something that many people in Liverpool have spent a long time deliberating over. The city’s image took a battering in the 1980s, when events such as the Toxteth riots in 1981 made unwanted headlines, and numerous TV shows and comedies portrayed the city in a less-than-flattering light. These crass stereotypes jar with the modern Liverpool, culturally enriched with a growing reputation in pharmaceuticals and life sciences, and it is this message that the city’s leaders are taking to would-be investors.
“The port plays a big part of Liverpool’s attraction to investors, but we have got strong appeal in advanced manufacturing and pharma too, and health and life sciences in general,” says Cowperthwaite. “Then we have got Jaguar Land Rover in the city. Every city likes to claim that they do health and life sciences well, but for most of them it tends to be in a very limited way, whereas Liverpool has big pharma players present such as AstraZeneca and Unilever.”
This life sciences message is backed by Liverpool’s impressive array of institutions, such as the School of Tropical Medicine, the University of Liverpool, John Moores University and the Royal Liverpool and Broadgreen teaching hospital. Somewhere the size of Liverpool, however – the city has a population of about half a million while the city region, which takes in most of Merseyside, goes north of two million – inevitably has a number of strings to its bow, and this is something Jennifer Lee, the head of KPMG Liverpool, is keen to stress.
“We have a very strong business community, which in turn supports a whole host of areas,” she says. “So yes, we are very good at R&D and there are areas of the city where we most certainly outshine other cities, but we have got a broad number of businesses that are great at a lot of things, and to narrow that down is difficult, simply because it is so diverse here.”
It is manufacturing, however, that remains the bread and butter for Liverpool, with a gross value added of 13.8%, beating human health and social work activities (11.6%) into second place in 2018 figures, according to ONS statistics.
Liverpool looks beyond Covid-19 and Brexit
Despite Liverpool’s much-praised Covid testing scheme in November, the B.1.1.7 ‘Kent’ strain of the virus led to the whole of the UK coming back under lockdown in January. However, Liverpool is already looking beyond the pandemic. Regeneration developments such as Bramley-Moore Dock and the Festival Gardens Scheme, which will be built in some of the more socially deprived areas of the city, are a cause for local optimism, but Cowperthwaite is putting his faith in the city’s existing strengths.
“We will meet this challenge by focusing upon the strengths of the city and the city region,” he says. “We have an excellent digital infrastructure, a pipeline to the US, the super computer in Daresbury – we are not looking at things on a granular level, but we do want to join the dots between our strengths, between digital and health for example, which post-Covid will be vital.”
Another challenge for Liverpool is, of course, coping with the new business landscape brought about by the UK finally leaving the EU. According to the New Statesman‘s Brexit Vulnerability Index, the city is one of the best placed to survive in the coming years, ranking as the 360th least vulnerable out of 379 local authorities. This resilience does not surprise Lee at KPMG.
“The mergers and acquisitions market at the moment is buoyant, and we are certainly not seeing any slowdown in appetite from foreign investors who are looking to invest in the UK,” she says. “Liverpool’s connections with the US are something we already publicise as a city region, but it is something we should look to make a lot more of. Immediately after the Brexit vote, a lot of businesses wanted to know how to reorganise their supply chains, and had to decide if they wanted to retain a UK base for their European operations, but on a deeper level, it didn’t fundamentally change their attitudes towards us.”
This is something backed up by Cowperthwaite, who stresses that Liverpool’s US-facing geographic positioning, as well as other strong links across the Atlantic, should give it an advantage over other cities in the UK. “Post-Brexit, trade with the US will rise in importance and Liverpool will be very well positioned there,” he says. “With regards to building trade with the US, Liverpool’s culture, sport and music goes a long way.”
A cultured approach
Liverpool’s rich culture opens doors in the US and beyond. This is probably the longest that any article about the city has gone without referencing the Beatles. Liverpool’s culture takes in its maritime heritage and football teams (Liverpool and Everton have internationally known brands), as well as the arts, and this means the city’s name is known from Tokyo to Texas. The city was chosen as Europe’s Capital of Culture in 2008, which helped to reset its image on a national scale and acted as a catalyst for regeneration.
“Our motto has been that culture is the rocket fuel of regeneration, and our culture gives us an environment and an ecosystem that means people who are working in Liverpool aren’t just going to just be sitting in a building,” says Cowperthwaite. “In the Knowledge Quarter in Liverpool, people walk out of the building where they work and they can see the Everyman Theatre, the Philharmonic Hall. When it comes to ‘live, work, play’, Liverpool offers people a real experience.”
An investor has to think of where people want to live, where people want to spend their weekends, and Liverpool ticks a lot of boxes there. Jennifer Lee, KPMG
With investors paying more and more attention to the quality of life a potential investment destination offers, cities are becoming keener to emphasise their cultural identities as something that will attract talent and retain it.
“You can have all the government grants and the best facilities but if you haven’t got the talent then you are struggling from an investment perspective,” says Lee. “People who study in Liverpool tend to stay in Liverpool. An investor has to think of where people want to live, where people want to spend their weekends, and Liverpool ticks a lot of boxes there.”
Indeed, Liverpool offers a youthful population (see chart above), but it also suffers from high levels of unemployment. According to the Centre for Cities, it has the fifth-highest unemployment rate of any city in the UK. Its youth have been hit particularly hard by the Covid-19 lockdowns too, with unemployment claims rising from below 4% in December 2019 to about 7% in December 2020.
Such statistics bring into focus just how important the city’s recovery from Covid-19 will be, as well as how well it fares in a post-Brexit UK. Real estate services firm Avison Young has a more positive outlook in its UK Cities Recovery Index for 2021, however, stating: “Liverpool has a growing reputation as a centre of excellence in life sciences, particularly infectious disease and digital health, together with advanced manufacturing. These sectors along with the traditional professional and financial services, present opportunities for increased inward investment in addition to onshoring of operations and government relocations.”
Escaping London’s shadow
In order to enjoy this post-Covid resurgence and make the most of the foreign direct investment (FDI) opportunities that Avison Young highlights, Liverpool must make a case to UK-bound investors who – if they want a big city to locate in – would normally view London as their first port of call. This is something that Lee doesn’t necessarily see as a disadvantage.
“We might see a company choose to make their first investment in London, but then we see them establishing facilities in Liverpool as well,” she says. “This involves working with London rather than against it. Many cities see London, and competing with it, as a barrier to attracting FDI, but we see it as an opportunity. We should work to help businesses grow across all their UK operations, not just in Liverpool.”
Cowperthwaite adds: “There was a time when getting investors to get on a train and coming up from London was more difficult than it should have been… [but] Legal and General – through its joint venture with Bruntwood – has put a 25% equity stake in Scientec, which is Liverpool’s Knowledge Quarter development company, and they have invested in the HMRC hub in the city too, so you start to see a flow of funds coming into the city.
“We have to get the narrative right about what the city’s strengths are, and the focus upon not trying to be all things to all people. That’s where our narrative has changed over the past few years. We are now saying, ‘We’ve got real strengths, come and be a part of it’.”
Liverpool has enjoyed a resurgence in the 13 years since it was the European Capital of Culture, and it seems to have gone a long way to banishing the negative stereotypes it picked up in the 1980s. Social and economic issues still dog the city, however, and while it appears to be in a strong position to cope with what Brexit may throw at it, the full impact of the Covid-19 pandemic remains to be seen. Liverpool has bounced back from worse, however. After the 1981 riots in Toxteth, then-prime minister Margaret Thatcher was advised to ‘let Liverpool decline’ by some influential members of her inner circle. As a city, Liverpool clearly relishes a challenge, and few would be so foolish as to write it off again as it looks beyond Brexit and the Covid-19 pandemic.
This article forms part of Investment Monitor’s ‘Future of British Cities’ series. Other UK cities and regions covered are: