Economy and Infrastructure

23.08.17

Early learning from a City Deal

Source: PSE Aug/Sept 2017

Newcastle City Council CEO Pat Ritchie explains how the area's City Deal is providing ambitious places with the funding they need to drive inclusive growth locally.

I’m certain anyone who hasn’t visited Newcastle for a while can’t help but be impressed by the pace and scale of new development being delivered right in the heart of the city centre. 

Just a two-minute walk behind Central Station is the city’s Stephenson Quarter – which sits alongside The Boilershop where George Stephenson created his famous Rocket – helping to invent the modern world. Now, the site boasts a world-class hotel development together with Grade A office space. And in future years there are plans for new spaces to support the continued growth of our impressive creative and digital sectors, including a University Technical College (UTC) specialising in information technology.

Turn left from the station and a five-minute walk brings you to Science Central.  Originally Elswick colliery until the 1940s, then later the home of the Scottish and Newcastle Brewery, this site has been a key part of Newcastle’s industrial landscape for over 200 years. As the region’s new landmark location for science, business, living and leisure, Science Central now defines the city’s economic future.

Spanning 24 acres of prime city centre development land in Newcastle, Science Central is designed to support a thriving community, rewarding jobs and groundbreaking scientific advances.

As one of the biggest urban regeneration projects of its kind in the UK, it is connecting and restoring previously run-down areas in the west end of Newcastle upon Tyne and creating a new urban quarter in the city centre.

Combining cutting-edge architecture with new public spaces, world-renowned scientific expertise and leading-edge companies, it is a growing innovation hub where investors, businesses, entrepreneurs, students, scientists and citizens collaborate to plan and develop solutions for tomorrow’s cities.

Together, Stephenson Quarter and Science Central send out the strongest possible message that Newcastle is a city on the up, at the forefront of science and innovation.  

What is perhaps less visible is both sites have been driven forward using our City Deal and the borrowing and investment powers it gave us to pump-prime development with private sector and university partners.

And we’re not finished. Our City Deal has also been crucial to unlocking development in our third Accelerated Development Zone (ADZ) site – East Pilgrim Street – where development has been thwarted for a generation by large upfront costs and necessary highways work.

There is no doubt that the ADZ we secured as part of our deal has been pivotal. This has given us the financial tools to fund infrastructure works alongside other partners (including the Local Enterprise Partnership), underwritten from future business rate income from sites.

But, the ADZ is only one part of the picture in creating successful outcomes from a City Deal. Access to finance and providing long-term investment is important but we have learned that ADZs (Enterprise Zones) by themselves do not create economic growth and development. 

Success also required us – the council – to behave differently and to rethink how we work with partners across sectors. In some cases, we have done things we would never have considered in the past like, for example, investing in the fantastic Crowne Plaza Hotel site. 

We took the managed risk of getting into the hotel business because, at the bottom of the recession, commercial investors were cautious. We were in a position to step in to make sure the development moved forward and we knew the city needed more top-class hotel space, with the jobs and further investment it brings. Of course, the deal also made commercial sense to the council and our partners. It also gave us a voice on key issues around jobs and skills for our residents. 

So far, our experience of City Deals has been that success comes from combining access to funding with bold investment decisions and long-term partnerships based on a shared vision for the city.  And sometimes we’ve had to be brave – making the case for investment in the city’s long-term economic future whilst adjusting to public sector austerity. 

Through Newcastle’s City Deal we have achieved much and the city’s skyline is being transformed. But we are not finished. I don’t see our City Deal as an end but part of a journey, giving ambitious places the powers and funding they need to drive inclusive growth locally. Next stop, North of Tyne devolution?

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