Newcastle must not become 'independent state', says former council leader

Lib Dem Lord Shipley says City Deal is boosting growth but cities must work within a national framework if future devolution is to be a success

Lord Shipley

Experienced workers are flocking back to Tyneside for newly-created skilled jobs, says a North East peer.

Lord Shipley, a former leader of Newcastle City Council, said people with skills in IT, the automotive industry, subsea technology and pharmaceuticals were becoming ‘boomerang Geordies’ and coming back to the region.

The Lib Dem said some of this was down to the success of the City Deal, a programme in Newcastle which gives leaders some freedoms to stimulate economic growth.

But after the House of Lords debate on the future of cities yesterday, he warned against cities becoming ‘independent states’ that failed to work within a national framework.

He said: “In October more than 300 business leaders went to Newcastle Civic Centre’s banqueting hall to acknowledge the role of those who have helped build the IT sector in the area into a thriving sector supporting 32,000 jobs. Indeed, two thousand new posts are expected to be added to the sector very shortly.

“Tech-based entrepreneurship is thriving in the area - fed by active, early-stage investment and incubators, dynamic universities and a thriving corporate technology sector. One of the FTSE 100’s most successful firms SageSoftware was founded and remains headquartered in the city (and is still the world’s 4th largest business software firm).

“Crucial, for growth in this sector, are the growing indigenous independents now coming together as a cluster to drive the local agenda for skills, collaboration and innovation in IT.

The North East IT network, Dynamo, has established that the North East’s current problem in IT is filling vacancies: 2000 jobs were filled this year with, for instance, Accenture hiring 150 and the Government Digital Service expanding to 450 desks locally.”

Following the debate, he said: “I think we are experiencing a sea-change in our understanding of the economic importance of our cities and we must build on it.

“By any comparison with other cities across Europe, UK cities underperform. Seven out of eight of our core cities in England outside London are below national average

“One of the problems is that, unlike our European counterparts, powers have been stripped away from local government outside London over recent decades.”

He added: “This is not about creating lots of independent city states. It is about empowering our cities within a national framework so that they can grow faster, and contribute and retain higher tax revenues. It is about bringing local government closer together across boundaries so that they do not operate as geographical silos.

“Such closer working is essential if substantial powers are to be devolved successfully from Whitehall and Westminster.”

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