by John Forkin.
Today the Government launches its much anticipated plan for growth.The challenge is formidable though the dilemma simple enough.
Can government interventions (or even non-interventions) create employment in a flat economy, especially when so many of our trading partners are also suffering?
Jobs cannot just be created out of thin air and, even if government can provide the right conditions for growth, do we want our jam today or tomorrow? There is no doubt that massive infrastructure investment does produce jobs but only slowly. The real benefit will not be felt for some time. Time that we don’t seem to have.
On the other hand, short-term fixes might bring a rapid rise in employment but would these roles be sustainable or just a flash in the pan?
It’s sometimes difficult to remember how much the world has changed over the past three years.
Not so long ago, debate raged in these columns as to whether or not the UK was about to slide into recession.
Don’t mention the “R” word and it won’t happen. It seems that over 50 consecutive quarters of economic growth had numbed us from thoughts of failure.
Earlier this month, we held our annual Derby City Embassy in London with more than 100 city ambassadors and investors present to hear Derby’s business case.
Thinking about the growth review took me back to our equivalent Embassy held in 2008 on the 34th floor of the Citi Tower in Canary Wharf. The feeling was still confident, bullish even.
That evening, Citibank announced it had bought another bank (the massive Wachovia Bank in the US) making it the largest bank in the world.
Its New York-influenced strapline “the Citi never sleeps” had never felt more appropriate. What’s more, Egg was thriving and Citi were looking at putting even more roles into Derby. Then the world changed. By the end of the week the Wachovia deal was off and within a week Lehman Brothers collapsed.
Three years later, Citi had sold its interest in Egg too.
As the recession approached, debate focused on its potential economic shape, illustrated by using letters from the alphabet. Remember the choice? A V-shape meant a quick fall followed by a rapid rise. A W-shape meant a double dip and a U-shape a longer period in the flat before the return of growth.
So far it has turned out be an elongated U-shape, three years and counting but could still yet become a W. So, is it all doom and gloom or is there any room for optimism here in Derby? The city is certainly not immune but is proving resilient than some others.
Remember, there has been more development in central Derby over the past four years than in the past 40.
Derby’s export-facing economy is finding work across the world, especially in regions with robust growth.
At the embassy we heard from Derby’s largest employer, Rolls-Royce. It now has a record order book of some £60 billion and, at this month’s Dubai Air Show, the company won £680 million worth of contracts. During 2011, Rolls-Royce has recruited and relocated a very significant number of staff into Derby. These are much-needed, highly qualified and well-paid jobs.
We also heard that Derby City Council is about to invest £230 million in capital projects across the city. This starts the next wave of investment and, with private sector investment to follow, will keep the momentum going.
The £40 million that Derby has been awarded from the Regional Growth Fund will give us some headroom in taking employment creation schemes forward over the next three years.
A mix of quick wins and longer term infrastructure.
One thing the Government can be sure of is that its investment in Derby is safe and we will exceed its targets as we did with City Challenge on Pride Park.
The £40 million is very welcome but if Bombardier wins its E-Voyager and Southern contracts and we manage to reel in a replacement for Egg then it could be a happier Christmas for Derby than might have seemed possible even a few weeks ago.
Published in Derby Telegraph on Wednesday 30th November 2011