A Survey Of Northern Business Leaders Corporate North

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CMS LawTax Negative 28-100.epA survey of northern business leadersCorporate North

79Sectors to watch:%79% of respondents are very or fairly positiveabout growth prospects in the North.AdvancedmanufacturingDigitalFinancial andprofessionalservicesGoing global53% of respondents do businesswith the rest of the world.Transport, transport, transport48% highlight transport as the mostimportant improvement needed.2 Corporate North: A survey of northern business leadersOnly 5% of companies would movetheir businesses from the North.80%80% of respondents are in favourof devolved powers.

ContentsRespondents believeNorthern Powerhouse Rail (HS3) to bethe most important transport project.05Foreword by Jake Berry MP07Methodology09Introduction10Optimistic North13 Interview with Matthew Wright,Ørsted14Powerful PowerhouseConnected North16 Interview with John Cridland,Transport for the North17 Interview with Nick Roberts,SNC-Lavalin89%18The importance of place20 Interview with Sam Chapman,The Floow89% of respondents are positive about theNorthern Powerhouse initiative.21 Interview with Tracey Johnson,Barnsley Digital Media Centre23 Interview with Hakim Yadi,Northern Health Science Alliance48%24Global North26 Interview with Lynda Shillaw,Manchester Airport Group27 Interview with Simon Marshall,Scarborough Group2848% of respondents believe the Northneeds to market itself better.Northern Powerhouse in action30 Interview with Steve Hutchinson,British Steel31Conclusion and recommendations3

4 Corporate North: A survey of northern business leaders

ForewordThe Northern Powerhouse is our vision for a super-connectedand globally-competitive northern economy with a flourishingprivate sector and a highly-skilled population.With the North being home to over 15 million people – nearly aquarter of the UK’s population, half of the UK’s major cities andalmost 30 universities – the potential of the Northern Powerhouseand its 330bn economy is huge.This Corporate North report from CMS shows that there is strong and widespread supportfrom the business community across the north of England to turn the Northern Powerhousevision into a reality. We want to see quick and easy travel between and within the North’sgreat towns, cities and rural communities. That’s why, through the Budget and IndustrialStrategy White Paper, we committed to a funding boost of 436m to improve transportconnections within northern city regions through the Transforming Cities Fund. This buildson the record amounts we’re investing in northern transport – over 13bn between 2015/16and 2020/21 – more than any Government in history. This is helping us to deliver realoutcomes that really matter to those that live and work in the North: reductions in journeytimes, more frequent services, and less congestion on our roads.Through working together with our coalition of private and public sector partners, we cancontinue to attract and retain the best talent and ensure long-term sustainable increases inproductivity and growth in the North for generations to come.Jake Berry MPMinister for the Northern Powerhouseand Local Growth5

Chart 1: What is the turnover of your business?Chart 2: How long has your businessbeen located in the North?45% Under 2m20% 2– 10m13% Under 5 years20% 10– 50m12% 5-10 years3% 50– 100m22% 11-20 years12% Over 100m53% Over 20 yearsChart 3: Which city are you closest tle25%SheffieldChart 4: What sector(s) does your business operate within?Professional, scientific and technical services27%Real estate23%Construction21%Financial services8%Light manufacturing7%Energy4%Health and social care4%Arts, entertainment and recreation3%Telecommunications, media and technology3%Transportation, haulage and storage3%Education2%Heavy manufacturing2%Mining and quarrying2%Water supply, sewerage and waste management2%Wholesale and retail and repair of vehicles2%Agriculture, forestry and fisheries1%Food service activities1%Other6 Corporate North: A survey of northern business leaders23%

MethodologyWe surveyed over 150 leaders of businesses balanced by geography,size and sector from across the north of England.As seen in Chart 3 our survey respondents are based across the region including the CoreCities of the Northern Powerhouse, Sheffield, Manchester, Liverpool, Leeds, Hulland Newcastle.They represent businesses, both large and small, by number of employees and turnover asset out in Chart 1. They are also a mix of well established and new, with varying levels ofinternational activity.Most are from the property and construction or professional services sectors, but a widerange of sectors is represented including education, manufacturing, transport, agriculture,arts, finance and communications (Chart 4).The survey reveals a range of views explored in this report. The interviews are an opportunityto dive deeper into some of the findings on the Northern Powerhouse, as well as core issuesfor the north of England, such as skills, connectivity and devolution.We have also drawn on existing research to build a narrative around the key future-facingthemes for the Northern Powerhouse, and concluded with some recommendations.Our location has had a significant bearing on the success of ourcompany and continues to do so. We are attracting people from all overthe world to complement the people and skills we can find locally.Sam Chapman, The Floow7

8 Corporate North: A survey of northern business leaders

IntroductionAs a future-facing global law firm with a strong and long-standing presence inthe north of England, we want to shine a light on the scale and ambition ofbusinesses in one of the most dynamic regions of the country. This ambition issomething we see day in day out. We live here and we work closely with a rangeof clients – both large and small and across diverse sectors and industries – tohelp build businesses that shape our environment in a myriad of ways.By telling the stories of Corporate North through thevoices of the leaders of some of the region’s mostinnovative and successful companies, this reportshowcases the confidence and optimism of thenorth of England.Few ministerial initiatives have captured the public’simagination quite like the Northern Powerhouse. In justover four years the political landscape has changedbeyond recognition – Brexit, a new Government withnew priorities – but the Northern Powerhouse hasendured. It has gone beyond politics and has become abyword for pride and ambition across the North.This report would not have been possible without thecontributions of our interviewees and surveyrespondents. We would like to take this opportunityto thank all those involved. But it also takes soundingson what the North’s business leaders think are thekeys to unlocking the full potential of the NorthernPowerhouse. We explore some of these themes –transport, devolution and skills – in more detail too.Our survey respondents and report intervieweesdemonstrate pride, passion and enthusiasm aboutbeing in business in the north of England. This rangesfrom hard-headed confidence about their owncommercial prospects, to wider optimism about thecities, towns and regions in which they are operating.Corporate North is confident.Overall there were a number of clear themes whichcome through in our research which we will explorefurther in the following pages:—— Optimistic North—— Connected North—— The importance of place—— Global North—— Northern Powerhouse in actionWe hope this report is read widely. Its findings andinterviews should inspire people living and workinghere, highlight the region’s value to investors; andshowcase a different narrative about the north ofEngland. It is a statement of intent by northern businessleaders to make the Northern Powerhouse a reality.Stephen ScottPartner and Head of Sheffield Office, CMSTT 44 114 279 4237EE stephen.scott@cms-cmno.comMark HaywoodPartner and Head of Manchester Office, CMSTT 44 161 393 4737EE mark.haywood@cms-cmno.comThere were also areas where our respondentsrecognise the need for greater focus, investment, andemphasis on the challenges to be overcome. Anyeconomic development project must recognise wherefurther political and policy attention is needed.9

Optimistic NorthDespite conventional narratives portraying the region as an area of economicdeprivation, our report reveals a strong degree of optimism in the future growthpotential of the North. The leaders we surveyed and interviewed were all optimisticabout the prospects for their businesses to sustain growth and, more importantlyperhaps, for the North’s capacity to contribute more fully to the UK economy.The future is bright.Dr Hakim Yadi, NorthernHealth Science AllianceFor a number of people we talked to, ‘NorthernPowerhouse’ as a marque is seen as both recognition ofexisting capability and an acknowledgement of theneed to ensure the North’s full potential is met.Nearly 80% of survey respondents were either fairly orvery positive about growth prospects for theircompanies for the next year (Chart 5). Only 6% feltnegative. Two-thirds of survey respondents anticipatedrecruiting additional staff over the next six months(Chart 6). Only 1% of respondents expected to reduceheadcount. This is a great story for employmentprospects in the North.Chart 5: How do you feel about yourgrowth prospects for the next year?We must be clear, for many firms,families and communities across theNorth there were 30 painful years ofde-industrialisation. We lost a lot offactories, employment opportunities,income and identity for families andtheir wider communities. What hassurvived and developed through thisperiod and against that backdrop istruly world class.John Cridland, Transport for the NorthChart 6: Do you anticipate recruiting additionalstaff in the next six months?25% Very positive66% Yes54% Fairly positive33% No15% Neutral1% No –Potentiallyreducing staff6% Fairly negative10 Corporate North: A survey of northern business leaders

What lies behind this confidence? The NorthernPowerhouse Independent Economic Review providessome clues on those areas that are increasingly seen asthe prime capabilities of the North – namely advancedmanufacturing, energy and health innovation. Oursurvey responses name digital industries (media,telecoms and IT) and advanced manufacturing as beingindustries likely to have a significant impact onCorporate North in the short to medium term (Chart 7).Special mention should also go to financial andprofessional services. Both Leeds and Manchesteralready have thriving businesses in the sector; which isalso now growing steadily in other northern centres.We also conducted face-to-face interviews with leadersfrom companies and organisations operating in some ofthese sectors. For many of them a recognition of thehistorical footprint of their activities – whethertraditional manufacturing or energy generation – hasgalvanised a capability which gears them appropriatelyto face the future.Chart 7: Which sector(s) are the ones to watch in the north of England?54%Advanced manufacturing51%DigitalFinancial and professional services22%20%Energy19%Health innovation10%TransportFood and drink production9%Logistics9%Other2%11

12 Corporate North: A survey of northern business leaders

ØrstedMatthew Wright, Managing DirectorWe’re investing in the north of England because it iswhere we can build our energy assets at scale. Wehave an exciting pipeline of projects stretching out tothe mid-2020s, which will see billions of pounds offurther investment into the UK. Building these majorprojects will help boost the supply chain forrenewable energy, as well as the local communitieswhere our operations are based. And it will bringforward internationally significant infrastructureassets for our future energy system.To illustrate the scale: our Hornsea2 offshore wind farm, the mostrecent development withGovernment consent, will have anelectricity output of 1.4GW. Incomparison, the last nuclear powerstation built in the UK, which wasSizewell B, is 1.2GW. Hornsea 2 willprovide enough electricity to power1.3 million homes and will be theworld’s biggest offshore wind farm.Importantly, the majority of turbineblades will be made in Hull.We’re in the North because of theNorth Sea and the Irish Sea. TheNorth Sea in particular has windspeeds and shallow water depthsto rival anywhere in the world as alocation to position an offshorewind farm. You can scour theglobe and you will not find many,if any, better places. So, it is noaccident that we are building ouroperations and maintenance forthe east coast at Grimsby and atLiverpool and Barrow to serve ourwest coast operations. Ourinvestments and the employmentwe are providing is helping toregenerate communities whichhave suffered from traditionalindustrial decline.Geography is important, but thereare many other reasons. The UK isthe leader globally in offshore windcapability. We have taken a nascenttechnology and industrialised it.We’re delivering en masse and atscale and critically driving down thecosts. There are 3,500 turbinegenerators in UK waters; that is3,500 opportunities to improvedesign and operate these assets.From a standing start, over the last15 years the UK is now worldleading. It has a supply chain andcapabilities to deploy and operatethe offshore wind project. Wecollaborate closely with a numberof the universities across the North,leveraging their expertise andproblem-solving capability and ofcourse we work closely with ourvarious suppliers.The Government has supportedthe industry which has enabled usto become established and drivedown the cost of electricityproduction. We continue to workand collaborate with governments.We continue to invest, which helpsto develop the supply chain so thatwe then create clusters ofcapability that can then export andbring a benefit to UK plc.The task now is to take the nextstep for UK plc to ensure benefitsfrom all the investment remainhere and to maintain that leadglobally in all that we do and weare in the North.We collaborate closely with a number ofthe universities across the North, leveragingtheir expertise and problem-solving capabilityand of course we work closely with ourvarious suppliers.13

Connected NorthTransport links and connectivity have been a defining feature of the NorthernPowerhouse concept since its inception. It is an issue that has long been acharacteristic of the narrative about the development of the North and camethrough strongly in our survey and interviews. It has often been seen as a brakeon growth and an emblem of under-investment.Transport for the North, the body recently grantedstatutory status, is charged with making the case forpan-northern transport improvements to supporteconomic growth. Its transport strategy has been widelyconsulted on and will form the backbone of a long termand much-needed investment plan for the north ofEngland. As a number of our interviewees commented,Transport for the North is the prime example of theNorthern Powerhouse in operation: working across theregion for the benefit of the whole of the north ofEngland, focused on a strategic issue that can only beresolved satisfactorily at scale.east-west route across the north of England, with 42%stating this as the top priority (Chart 8). Others includedthe enhancement of regional transport networks (24%)and the development and enhancement of internationalairports located in the north of England (13%).HS2, the high speed line which will run north-southinitially from London to Birmingham, eventually linkingup further north to Manchester and Leeds was seen as apriority for just 4% of our respondents.But as Nick Roberts of Atkins points out, innovation andtechnology in transportation will bring freshopportunities for an increasing array of businesses.The digital integration of infrastructure can have asignificant impact on decisions we make about how wemove around our cities and indeed, from a macro pointof view, how we plan and give shape to the future ofour cities. Transport for the North is actively consideringhow we can maximise technology to future proof ourtransport infrastructure to aid the economictransformation of the region over the next 30 years.Our survey respondents overwhelmingly believedtransport is the principal agent of transformation of theNorth. Throughout the survey and the interviews, thebusiness leaders we engaged with placed a strongemphasis on the importance of enhanced connectivityto support businesses and regional economic growth.We asked respondents to consider their prioritisation ofthe various transport projects currently under discussion.The priority for our respondents was overwhelminglyNorthern Powerhouse Rail (or HS3), the proposedChart 8: Which transport project in the north of England is the most important?42%Northern Powerhouse Rail (HS3)24%Enhanced regional rail and transit network13%Development of northern international airportsImproved motorway links connecting major nothern citiesHS211%4%Enhanced bus services1%Other5%14 Corporate North: A survey of northern business leaders

If there’s one thing you could ask government for,what would it be? That’s a hard question. It must be theeast-west link. And I think we’re getting there. It must bere-drawing the map so not all roads lead to London.John Cridland, Transport for the NorthImagine SMART motorways where there are nogantries giving you the information about road conditions,upcoming queues or speed restrictions, but rather it istalking directly to your car’s computer system.Nick Roberts, Atkins15

Transport for the NorthJohn Cridland, ChairImproving connectivity in the North is about givingpeople better life chances. Transport unlocks chancesfor people; for young people and for disadvantagedcommunities. That’s your productivity gap right there.If you take the young person inSalford or Burnley who wants towork for Boeing or McLaren inSheffield, the cost and time oftravelling currently might beprohibitive. However, if we canreduce the journey time, it startsto become within reach. That isour goal.There’s a pent-up frustration whichwants to liberate a pent-uppotential. This potential demands anenhanced transport system for thenorth of England. This is a longterm mission though. Over the next30 years we will transform our road,rail, sea and air connections.Through our transport strategy, weare now translating our economicvision into a working methodology.We are reviewing the investmentdecisions that will need to be madeto better connect our primeeconomic assets. A core part of thiswill be how we ensure that thecorridors of economic activity canbe effectively invested which willdrive economic growth. These arethe sectors where the north ofEngland is globally competitive andhighly skilled. The role of transportis to better connect people,businesses and to facilitate themovement of goods and labour.These are issues that affecteverybody’s lives; it is aboutenabling a person to do somethingnext year that they cannot do today.The context is important. Transportand connectivity are issues thataffect everybody. We must beclear: for many firms, families andcommunities across the Norththere were 30 painful years ofde-industrialisation. We lost a lotof factories, employmentopportunities, income and identityfor families and their widercommunities. What has survivedand developed through this periodand against that backdrop is trulyworld class. It is about how theOrdsall Chord in Manchester canhelp to better connect a city andindeed the wider region. It is abouthow greater numbers and varietiesof job opportunities can becomeviable due to a shorter, fastercommute, how our clusters ofeconomic activity can becomecloser and better connected.The North acting as one andthinking at scale is important,though we are quite early on thejourney. If we go back ten years,there weren’t the LEPs and wedidn’t have Metro Mayors. OurTransport fo

— Northern Powerhouse in action We hope this report is read widely. Its findings and interviews should inspire people living and working here, highlight the region’s value to investors; and showcase a different narrative about the north of England. It is a statement of intent by northern business leaders to make the Northern Powerhouse a .

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