ANALYSIS: Why Leeds tops business league

Britain's inter-city battle to attract business is as fierce as it is in the football Premiership. Brian McDougall looks at the lessons to be learned from a new location survey.

In our latest survey of Britain's major businesses, we found that workforce remains the most important location factor, and is decisive in the relocation decisions of more than six out of ten companies. The biennial poll of more than 4,000 major employers ranked Leeds best for business in 2003, overtaking London and Birmingham, and ahead of the 25 other largest cities in the country.

Leeds moved up from fifth to first place, while its larger northern rival Manchester advanced from seventh to second. London slipped from second to fourth place, while Birmingham fell from third to sixth place. The city that most failed to meet expectations in this year's survey was Liverpool, which fell three places to 14th, despite recent successes including being named European Capital of Culture 2008.

The biggest improvements in performance are found in other regional centres, with Newcastle topping the list after rising 16 places to third position.

Brighton jumped from 20th to 12th place and Glasgow rose from 14th to seventh. These centres are increasingly seeing off competition from larger civic rivals on the basis of their workforce profiles and more business-friendly environments. The biggest losers are Leicester, Wakefield, and Wolverhampton, all falling over ten places since the 2001 rankings. Common strands include poor workforce skills and lack of credibility as prestigious business locations. Hull came bottom of the league table.

The rankings are based on the views of all surveyed employers on important location issues, which are then applied to standardised and up-to-date datasets maintained by Omis for every major business city.

Most respondents are looking for a large and preferably skilled pool of labour, a variety of modern buildings to choose from and good access to and from the workplace. Accessibility for staff, whether by private or public transport, is now the third most important consideration. Without the means to get staff to and from work within a reasonable and relatively consistent journey time, businesses simply cannot succeed.

More than 20 per cent reported serious or growing congestion problems in their existing locations, while over 90 per cent are generally dissatisfied with the current state of public and private transport infrastructure.

Mounting congestion, costs and crime are all conspiring to make cities harder places for firms to work from.

National and local government is held to account on these and other recurring themes, such as levels of regulation and the rising tax burden placed on businesses.

With no quick-fix solutions to these problems, more firms are considering moving, with five per cent expecting to relocate some of their activities during the coming year. One in three say they have already looked into or intend to investigate opportunities for moving business abroad. Although more than half anticipate expansion of their UK operations at the same time, the perception of most employers is that the UK has become a less attractive place for new business investment over the past two years.

Satisfaction with major cities varies enormously, ranging from as few as half to as many as four out of five employers feeling satisfied with their existing locations. A low satisfaction score combined with a high ranking, as in Leeds, may simply indicate that employers do not realise they are relatively well off where they are. Similarly, a high satisfaction score and a low city ranking, like Hull, could just be a reflection of local pride, parochialism or lack of personal experience of other cities.

So how can cities improve? Cost, quality and delivery of public services were criticised by many employers and were considered worst in Birmingham, Coventry, Hull and Plymouth, while London and Sunderland fared best.

Image also plays an important role. Manchester and London are regarded as the most effective cities at self-promotion. But attempts at local regeneration through ground-breaking architectural projects or massive public expenditure programmes are not regarded by employers as either a priority or recipe for success.

Fundamentally, our cities need to focus on their fabric and populace to make themselves more attractive to skilled workers and students as places to work, live and enjoy. They need to constantly strive to upgrade the skills base, either through local endeavour or active in-migration. Perhaps most importantly of all, they need to improve their business friendliness and develop the framework and opportunities for future business investment and expansion.

HOW CITIES CAN DO BETTER

These are the main areas in which firms would like to see cities

improve:

1 Public services

2 Transport

3 Less regulation

4 Education standards

5 Planning system

6 Efficiency/better use of resources

7 Urban attractiveness for workers

8 Police/justice system

9 Less meddling/interference

10 Support to local businesses

 

BRITAIN'S BEST CITIES FOR BUSINESS

1 Leeds

2 Manchester

3 Newcastle

4 London

5 Salford

6 Birmingham

7 Glasgow

8 Bradford

9 Edinburgh

10 Cardiff

11 Sheffield

12 Brighton

13 Derby

14 Liverpool

15 Wakefield

16 Bristol

17 Coventry

18 Wolverhampton

19 Sunderland

20 Nottingham

21 Belfast

22 Swansea

23 Stoke

24 Aberdeen

25 Leicester

26 Plymouth

27 Southampton

28 Hull

SOURCE for all tables: Omis


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