Sheffield in the 1980s: From radical intervention to partnership

Sheffield in the 1980s

In the late 1970s and early 1980s Shef- field experienced dramatic economic decline. More than a thousand manufacturing jobs were being lost per month. This scale of retrenchment, combined with a radicalization in the controlling Labour group, led to the implementation of an interventionist local economic strategy in the 1980-85 period. A number of innovative projects were effected during this time but the overall impact of the approach was marginal. From 1988 onwards an alternative programme based on public-private sector partnership came to dominate local economic development in the city. This strategy has led to a considerable increase in property development and has been associated with the implementation of a number of prestigious projects. Partnership, however, raises a number of considera- tions in relation to equity and efficien-

cy.

The authors are with the School of Urban and Regional Studies, Sheffield City Polytechnic, Pond Street, Sheffield Sl lWB, UK,

‘P.A. Cambridge Economic Consultants (PACEC), Sheffield Employment Study: Economic forecasts for the Sheffield City Study Area, 1989. 2P. Foley and P. Lawless, Sheffield: Eco- nomic Change 1971 to 1985 and Policies to Reduce Decline, School of Urban and Regional Studies, Sheffield City Polytechnic, 1985; P. Lawless, Severe Economic Recession and Local Govern- ment Intervention: A Case Study of Shef- field, School of Urban and Regional Stu- dies, Sheffield City Polytechnic, 1986; P. Lawless and P. Ramsden, Sheffield into

continued on page 203

202

From radical intervention to partnership

Paul Lawless and Peter Ramsden

The 1980s were to witness considerable changes in economic perform- ance and urban leadership in many UK cities. But what happened in Sheffield must surely be unique. For much of the first half of the decade the council presided over an interventionist package of policies which was widely perceived as among the most radical ever effected by any local authority in the post-1945 era. Yet by the end of the decade the city was being held up by central government as a classic example of how public-private sector partnerships might operate. Within a few years Sheffield moved from governance rooted in a radical, public sector driven ethos to one in which many of the key leadership issues were being formulated within, and implemented by, the private sector. This paper attempts to chronicle and to assess this transformation in strategy. Initially, however, some of the key economic and political realities impinging on the city should be presented.

Economic and political context

For much of the 20th century Sheffield could reasonably accurately be described as a manufacturing city. As late as 1971 40% of a labour force of 301 000 was active in just two industrial sectors: the extraction of minerals and the production of metal goods. By 1988 only 16% of a local labour force (amounting to 242 160) was still so employed. This loss in manufacturing jobs, although concentrated in certain sectors, notably metal goods, and in certain periods, especially the early 198Os, has continued to affect the local economy. A recent estimate suggests that by 1996 employment in all manufacturing sectors will have fallen to 20%. l

This decline in manufacturing employment can be ascribed to a number of factors.’ International competition in certain sectors has proved fierce; overproduction of steel products has been regulated by the European Commission; capital investment by both the private sector and by BSC before its privatization was inadequate and mis- guided; domestic demand virtually collapsed in the early 1980s; and public-private sector steel amalgamations (the so called Phoenix mer-

0264-2751/90/030202-09 0 1990 Butterworth-Heinemann Ltd

Shefield in the 1980s

gets) led to substantial job loss. Of course, many of these forces were at work on other cities. However, a number of additional factors collec- tively conspired to make Sheffield’s position especially problematic. Firstly, although the service sector has expanded in the city, it is still relatively and absolutely less important than in other Northern cities. Manchester has a computer service sector twice as large as Sheffield’s, for instance.3 Second, the city continues to be dominated by the public sector. In 1988 half of the 20 largest employers were in the public sector where opportunities for growth and even job retention may be less likely than in the private sector. The largest single employer is the city council with 24 000 employees. By contrast the largest single private sector employer, British Telecom, and the two major relocations from London, the Midland Bank and the Training Agency, each employ between 2 000 and 2 600.4 Third, local economic autonomy has seeped away from the city. In 1976 22 of the country’s largest thousand firms were located in Sheffield. By 1987 that figure had fallen to 13.” Many decisions relating to output, growth, investment and employment within the city are being made elsewhere.

Just as the city’s economy has traditionally been heavily dependent on steel and heavy engineering, so its political base has remained with the Labour Party. Apart from two years in the later 1960s Sheffield has had a ruling Labour council since 1926. Until the 1970s the Party’s power base lay with the craft and manual trade unions associated with the steel industry. But despite its roots in manufacturing the local council was largely concerned with issues of consumption until the early 1980s. Emphasis was placed on education, transport, housing and environmen- tal programmes and questions to do with production were left with business. However, this relatively neutral and even collaborative rela- tionship between the city and the private sector was to receive a substantial jolt in the late 1970s.

continued from page 202 the 1990s; Urban Regeneration: The Eco- nomic Context, School of Urban and Re- gional Studies Working Paper No 20, Shef- field City Polytechnic, 1989. 3J. Henneberry and P. Lawless, Advanced Producer Services in Areas of ~a~ufacfur- ing Decline: The Computer Services Sec- tor in Sheffietd, School of Urban and Re- oional Studies Working Paper No 16, Shef- seld City Polytechnic,-1 98% 4P, Gibbon, Capital Restructuring in Shef- field, Department of Applied Social Stu- dies, Sheffield City Polytechnic, 1989. 5H.D. Watts. Non-Financial Head-Offices: A View from the North, in J. Lewis and A. Townend, eds, The North-South Divide, Paul Chapman, London, 1989, pp 157- 174. ‘Sheffield City Council, Employment De- partment: An Initial Outline, 1982.

The era of radical intervention, 1980-S

For the first half of the 1980s Sheffield witnessed an extraordinary experiment in urban leadership. The council, in common with a handful of other authorities - notably the metropolitan counties and the Greater London Council - embarked on a radical strategy designed to enhance public sector intervention in aspects of production. In retrospect it is possible to see that a number of factors were encouraging this. Power in the local Labour Party moved from its traditional blue collar and largely pragmatic base to a new group of white collar, better educated, more radically minded councillors. These local politicians were determined to try and moderate the impact of Conservative national economic policy which, by virtue of policies such as high interest rates and an overvalued pound was causing local industry to contract at the rate of more than a thousand jobs a month,

This new and radical approach to local economic intervention was most obviously manifest in the creation in 1981 of a Department of Employment. The Department was given a relatively broad brief.” It was to coordinate the Council’s activities in order to prevent further job loss; to alleviate the worst effects of unemployment; to stimulate new investment; to create new types of jobs; and to explore new forms of industrial democracy. It was given an initial budget of about f2.5 million pa.

CITIES August 1990 203


“A parable of how things might be done differently’, Critical Social Policy, No 9, 1904, p 83. ‘D. Blunkett and K. Jackson, Democracy in Crisis: The Town Ha//s Respond, Hogarth Press, London, 1987; A. Cochrane, ‘In and aoainst the market? The development of s&ialist economic strategies in Britain, 1981-1986’. Policv and Politics, Vol 16. No 3, 1988;pp 159-168. QEmployment Manifesto Working Group, Introduction, Sheffield City Council Labour Group, 1983, p 1. “‘C. Bet&., ‘Building a new future’, The Sheffield Star, Sheffield Comes to London Supplement, 23 May 1988.

The creation of an employment department was as much a political as an economic initiative. Its first director, John Benington, argued that the primary aim of the Department was ‘to liberate the resources of the local state and put them at the service of the working class movement, the women’s movement and community based movements’.’ There was a realization that very real constraints limited what any local authority could do. But equally so what Sheffield, and other similar local authorities might do, was seen as likely to inform national policy within the Labour Party and hence potentially guide government strategy.

Although in the later 1980s much of what the city council did in the first half of the decade came in for increasing criticism, a range of innovative and worthwhile initiatives were set up under the general aegis of the Employment Department.s These included the formation of a number of new industrial cooperatives, enhanced training and equal opportunities provision by the city council, innovative approaches towards product design and manufacture and support for socially useful goods.

Nevertheless the programme of radical intervention apparent within Sheffield in the early 1980s ran into some difficulties. Not all depart- ments within the authority were as convinced as the Employment Department of the viability of this radical strategy. Some ideas such as investing in the equity of local firms proved marginal. And crucially, too, resources available to the Department were relatively small. Certainly extensive intervention in steel and heavy engineering was not going to happen within the Employment Department’s budget which amounted to about f18 million for the first seven years. Not surprisingly the overall impact of the strategy of radical intervention was limited. Unemployment within the city rose from about 20 000 to 44 000 between 1980 and 1984 at a time when optimistic appraisals of the Department’s impact suggested that it was perhaps creating a thousand jobs each year. At the same time the authority’s overall antimarket stance may have reduced private sector investment in Sheffield. The experiment was to receive considerable academic and institutional support and at a time of devastating economic decline it was an understandable if somewhat heroic position to take. Its immediate, practical benefits were, however, hard to identify.

In 1983 the Labour Party’s Employment Manifesto Group argued that the authority should claim the right for ‘greater community and workers’ control and influence over employment and the local economy’.’ Just five years later the leader of the Council was arguing instead that the way forward for the city was through public-private sector collaborative partnerships. lo In the mid-1980s attitudes towards urban leadership and governance were to change dramatically.

There were a number of obvious reasons why partnership came to dominate the debate from about 1986 onwards. Very little had happened in the city in the first half of the 1980s. Commercial, industrial and retail development ground to a halt. Some of the key figures who had pushed the city into an era of radical intervention left. Other rather more pragmatic officers came into the local authority, especially from South Yorkshire County Council which was abolished in 1986, as well as other metropolitan counties. The abolition of the counties was also important in a political sense. Sheffield’s radical strategy was mirrored by that of a number of counties and by the GLC. It was clear from the mid-1980s that Sheffield would become somewhat isolated if it con-

CITIES August 1990


tinued to pursue interventionist policies. Few other Labour councils were prepared to go down this road. And the Labour Party nationally was beginning to adopt a more centralist position in relation to state investment and other policies. Retaining a radical attitude towards local economic development was clearly going to place the city in an invidious and somewhat lonely position.

Whatever the reasons ultimately responsible for a redirection of strategy there can be little doubt that a real change in attitudes towards the market occurred within the city in the mid-1980s. A new partnership was to be forged between the council and the local business community; confrontation was to be replaced by collaboration.

The era of partnership

In retrospect it is clear that much of the drive for partnership has come through the Sheffield Economic Regeneration Committee (SERC), which was formally created in 1987. SERC consists of representatives from a range of interests groups but is dominated by two: the local authority and local business. A relatively small number of key council officials and politicians together with a small number of local business- men are in practice increasingly setting the agenda for economic development in Sheffield.

The increasing influence of SERC within the ordering of economic and physical development in Sheffield can be seen as one example of a ‘growth coalition’, a concept widely explored in the USA but only recently entering the UK debate.” In brief, the argument runs that in an increasing number of UK cities ‘growth coalitions’ are emerging which are setting the economic development agenda. These coalitions typically embrace a number of interests. In the Sheffield context, for instance, business, the city council institutions of higher education, the media, trade unions and the voluntary sector are all represented, if only marginally, on SERC or allied committees.

In the case of the business community it is clear that its power base is only partly located in SERC. SERC has acted as a catalyst, a broker and a coordinator trying to galvanize other organizations and agencies to make investment decisions beneficial to the city. Of itself it has limited resources or direct powers, although business representatives on SERC often hold executive responsibility on other influential bodies. In 1989, for example, the city was named as one of the first 19 Training and Enterprise Councils (TECs) (the employer led institutions designed to deliver government training and enterprise initiatives).i2 But the most obvious manifestation of the privatization of urban policy within the city occurred in 1988 when the government announced in Action for Cities that Sheffield was to receive an Urban Development Corporation.

Much of the economic devastation which hit the city in the late 1970s and early 1980s occurred within the Lower Don Valley to the north-east of the city centre. In less than 10 years employment within the valley fell from over 40 000 to less than half that figure. The area had always seemed a possible location for a development corporation, although in

“M.G. Lloyd and D.A. Newlands, ‘The the event it proved to be the last of the 11 declared in the 1980s. The growth coalition and urban economic development’, Local .Economy, Vol 3, No 1,

Sheffield Development Corporation was given an initial budget of f50

1988, pp 3140. million, later raised to $70 million, and was required to oversee the

“Centre for Local Economic Strategies, regeneration of about 2 000 acres. In late 1989 it produced a strategy for Local Work, No 14, 1990. its urban development area largely based on retail, commercial, indust-

CITIES August 1990


Figure 1. Sheffield 1 rechnology Park.

rial and leisure projects framed around a central spine road.13 Interes- tingly enough some of the Development Corporation’s board members from the business community and indeed the Corporation itself are represented on SERC.

Partnership and urban regeneration

Within the partnership context set by SERC and other organizations a number of programmes have been implemented which have undoubtedly benefited the city. Some of these are mentioned below.

SERC, in common with other agencies, has been effective in impro- ving the image of Sheffield within the market. Promotional material stressing the virtue of partnership has been produced, the basic message of which is that ‘Sheffield is a good place to make a living, a good place to invest’.r4 This material has been widely disseminated and efforts made to target key decision makers in London.

It is difficult to identify the exact consequences of promotional material. But there is no doubt that the kind of proinvestment message at the heart of partnership has coincided with a spectacular increase in investment within Sheffield. Between 1986 and 1988 over a hundred fl million plus schemes received planning permissioni and by the late 1980s over &2 billion of property investment was in the pipeline. This has to be seen as a remarkable transformation in a city which received next to no investment in the early 1980s. Much of the new investment is in relatively small retail and commercial developments. But a number of substantial projects are likely to be undertaken. High technology developments have been effected by the city council and English Estates (Figure 1); the Norwich Union has moved over 200 jobs into a refurbished listed building; and several retail projects are planned for the city centre including a flO0 million redevelopment of a derelict canal basin, prompted in part by a f10 million City grant. But on the development front the most spectacular project is undoubtedly the f250 million Meadowhall scheme due to open in 1990 which will eventually

‘%heffield Development Corporation, A prove one of the largest retail and leisure complexes in Europe (Fig-

Vision of fhe Lower Don Valley, 1989. ure 2). ‘%heffield Partnerships and SERC, Shef- Perhaps the most surprising development to occur in Sheffield, field Vision, 1989. “Sheffield City Council, Major Develop-

however, was the decision taken by the International Federation of

ment Proposals in Sheffield: Department University Sport (FISU) to hold the 1991 World Student Games in the of Land and Planning, 1988. city. The Games, while never receiving a great deal of attention in the

206 CITIES August 1990

Sheffield in the 1980~

Figure 2. ~eadowhall out of town shopping centre.

UK, are nevertheless second only to the Olympics in size. Much of the infrastructure required for the Games is being built within Sheffield. By early 1990 about f150 million had been spent primarily on an indoor events arena, an athletics stadium, a swimming complex, a leisure centre and, as part of an associated cultural festival, the restoration of a theatre. Most of this money has been borrowed by the Sheffield Leisure and Recreation Trust, a separate company which will own and run many of the facilities after the Games take place. About f18 million is also to be invested in the refurbishment of Hyde Park flats, a massive public sector high-rise development dominating the city centre, in part for competitor accommodation.

A number of other projects announced in the era of partnership in the late 1980s ought briefly to be mentioned. A city airport is to be developed within the urban development area, partly financed by prior opencast coal mining. There are plans, too, for a north-south supertram link perhaps with a spur through the Lower Don Valley although (writing in early 1990) funding for this appears far from certain, The city has tried through the urban programme to enhance its cultural indus- tries quarter in part by converting industrial and commercial buildings into municipal studios, an audiovisual centre and other facilities.‘” A number of innovative education-business initiatives have been created under the umbrella of Sheffield Education-Business Partnerships including a compact between schools’and local employers. And, finally, on the housing front the city council has come to an agreement with the United Kingdom Housing Trust to develop 4 000 dwellings for rent and sale funded by bank loans, mortgages and housing association finance.

Partnership: an evaluation

The emerging partnership which came to dominate political and policy debate within Sheffield in the mid- to late 1980s has brought real benefits to the city. Its market image has improved, an important consideration when resources available to the public sector for urban regeneration are so limited. Property development has risen dramatically. A number of key flagship projects, notably Meadowhall and the

“Planning Exchange, Sheffield Develop- World Student Games, have been secured. Unemployment has fallen. ment: cultufat tn&stries Quarter, Urban Development Area Initiatives A 36, Plan-

And generally the city has an altogether more optimistic and purposeful

ning Exchange, Glasgow, 1989. atmosphere. Indeed its achievements have been seen as a model for

‘%ritish Chambers of Commerce, A Tale other cities contemplating a similar approach.17 But, while partnership of four Cities, London, 1988. has brought benefits and developments to the city, it should not be

CiTlES August 1990 207


18HMS0, Action for Cities, London, 1988. 19P. Lawless, Britain’s Inner Cities, Paul Chapman, London, 2nd edition, 1989. *OJ.A. Rodda, ‘Hard sell for Sheffield’, The Guardian, 21 October 1988. ‘IT. Pritchett, ‘Games, set and catch’, Sheffield Star, 6 February 1990. 22C. Bet&, P. Price and N. Adsetts, ‘Great dream becomes reality’, Sheffield Star, 2 February 1990.

imagined that this has been a cost free exercise. It is too often assumed that public-private sector partnerships are an ‘inevitable’ or ‘objective’ focus for urban regeneration. The approach contains its own deficien- cies, constraints and inconsistencies.

One of the issues here is that of efficiency. It is often assumed that market driven urban regeneration will inevitably prove more efficient than public sector led strategies. The private sector is perceived as more able to devise and effect viable projects which reflect demand.‘s However, evidence from some approaches to regeneration show that private sector involvement can create difficulties in relation to infras- tructural inadequacies and lack of strategic vision.” Some of these issues are becoming evident within Sheffield. This is particularly true with the World Student Games. Doubts were expressed at an early stage about the longer-term financial viability of this project.20 By 1990, after a major reorganization of the company running the Games, these doubts had proliferated. 21 The longer-term rep a y ment of loans taken out to construct sporting facilities is likely to amount to at least f50 per annum for each household in the city for more than twenty years. If the high projected user rates for the facilities are not achieved longer-term costs will increase. In addition major sponsorship of about $27 million was still required in early 1990 for the running of the Games and central government support for the supertram to link the Lower Don Valley, where many of the facilities are located, into the city centre seemed increasingly improbable. Market led regeneration tends to be based on the implementation of specific flagship projects. These are often viewed as success stories for the city concerned. Too often, however, longer- term implications are initially played down. In the longer term they cannot be ignored.

Equity as much as efficiency has figured in national debates surround- ing urban regeneration. Too often market led strategies appear to have benefited certain sectors of society, notably land owners, developers and the better off, to the detriment of other interests. In Sheffield, to be fair, both SERC and especially the council have made valiant efforts to redistribute the benefits of regeneration to all groups within the city. In relation to the sporting facilities, for example, a very high proportion of construction labour is locally recruited and about 40% of the f53 million of work under way in early 1990 was being undertaken by local firms.22 Nevertheless on the broader canvas it would be hard to deny that partnership within Sheffield has created gainers and losers. Interest groups such as trade unions, community and voluntary groups and even the council have, to varying degrees, lost power and influence to the business community. And it should not be forgotten that in 1989, despite a number of years of partnership, unemployment stood 250% higher than in 1979. In some parliamentary constituencies rates remain at or around 20% for whites and more than twice that figure for ethnic minorities. Urban entrepreneuriahsm as espoused by the city may in reality accentuate its divisions.

A third area of criticism in relation to partnership is its longer-term viability. Decisions relating to urban regeneration are ultimately, at least in part, political. The mid- to late 1980s was a good time for partnership to be launched because the local economy, in line with what was happening nationally, showed marked signs of improvement after the disasters of the early 1980s. In such an environment of growth the political divisions between partners could be papered over to a consider-

208 CITIES August 1990


able degree. But these political and policy divisions still exist. They have perhaps most obviously been apparent in relation to the restructuring of the Lower Don Valley by the Sheffield Development Corporation. The latter’s strategy of enhanced commercial development in the valley has been the subject of considerable local authority criticism.*-? The council argues that too much good industrial land in the valley will be lost and an oversupply of commercial property will eventually occur. Whatever the merits of this position those sorts of disagreements suggest that the partnership is a fragile alliance of interest groups. Any substantial downturn in the economy in the early 1990s could well see a sharpening of traditional political positions and commensurate weakening of partnership.

A fourth issue of interest here is the question of additionality. It is easy to argue that partnership, as epitomized by SERC, has been responsible for various projects in the city. It is certainly true that a great deal has happened to the city in the last few years at a time when SERC and other formal manifestations of partnership have been active. It is, however, far from clear that SERC is actually responsible for many of these developments. Projects such as the Games, Meadowhall, the airport and retail projects within the city centre would probably have occurred irrespective of partnership. Many of the private sector schemes are the consequence of the credit boom. SERC has been important in focusing debate within the city on the future of economic development and has certainly helped change Sheffield’s image nationally and internationally. But the key projects developed within the city owe their origins to agencies such as the council, English Estates, and mainstream market investment. Indeed it could be argued that partnership is itself a consequence and not a cause of the local economic upturn apparent in the second half of the 1980s.

Finally in relation to partnership it should be remembered that much of the debate engendered by SERC and other organizations inevitably addresses questions of local economic development. Other policy issues tend to become marginalized. Yet in common with many other cities, Sheffield certainly has its fair share of problems. In 1987, for instance, the council argued that it needed about f650 million to modernize its 89 000 dwellings and over 270 million to refurbish educational facilities.24 In addition the city has an especially high proportion of elderly people within its administration, a fact which has inevitably impacted on demand for welfare facilities and social services. These kinds of consumption based questions relating to education, social services and housing are not really central to partnership. Yet for many people in the city they remain of crucial im~rtance.

Z3Sheffield City Council, Joint Report of the Director of Land and Planning and the Director of Employment and Economic De- velopment, Sheffield Development Cor- poration: A Planning Framework for Dis- cussion, 1989. 24Sheffield City Council, Working it out: An Outline employment P/an for Sheffield, 1987.

Conelusion

In the 1980s Sheffield witnessed two approaches to urban leadership. For the first half of the decade a radical interventionist strategy was promulgated by the council. Eventually this was seen both within Sheffield and by many other actors and agencies as a marginal and even self-indulgent experiment; but a number of innovative and successful projects were implemented at that time and a great deal was learned within Sheffield and other cities about the viability and consequences of radical local programmes. The second half of the decade was character- ized by a totally different approach based on partnership within which

CITIES August 1990 209

Shefield in the 1980s

210

the private sector played an ever more important role. In some respects this perspective on urban leadership proved successful: a range of new projects was implemented and property development took off. It is too easy, however, to assume that this partnership strategy is cost free. It is not. Private sector driven urban regeneration creates winners and losers; it marginalizes some sectors, some people, some areas and some policies. It is not the total answer to urban governance. Cities contemplating enhanced partnership with the market would be well advised to remember this.

CITIES August 1990

Documents

Sheffield in the 1980s: From radical intervention to partnership