The Humber region's image problem. Stuart Anderson reports.

It has excellent transport links and some of the most competitively-priced housing in the country, but the Humber region still suffers from deprivation and image problems.

There is a city nestled on a riverbank in the heart of the English countryside, which enjoys a unique combination of road, rail, maritime and international air transport links. A city that is home to nationally-important museums and a well-respected university, yet where it is still possible to purchase a six-bedroom home for £200,000. That city is Hull.

Its charms, sadly, remain largely undiscovered by the outside world and, although it boasts major multinational employers and is the country's gateway to Rotterdam and, thus, Northern and Eastern Europe, Hull's residents suffer some of the worst deprivation in the entire Yorkshire and Humber region. Unemployment, for example, is running at 8.2 per cent, against a regional average of five per cent.

The Humber sub-region is composed of the local authority districts of the East Riding of Yorkshire, Hull, North Lincolnshire and North East Lincolnshire. The East Riding economy is dominated by agriculture (grain and pigs) and manufacturing in the form of BAE Systems' plant at Brough and the caravan industry, to which it claims to be the British home. The district's residents, though, also make up much of the skilled and managerial labour force for the city of Hull.

Across the estuary, meanwhile, it's the old story of recovery from the decline of a dominant industry. North Lincolnshire's main urban centre, Scunthorpe, was built on the iron and steel boom that, at its peak in the 1970s, employed 20,000 people. Now the town's 62,000 residents are looking to logistics to revive their fortunes.

North East Lincolnshire, the most remote corner of the sub-region, is another mixture of old and new, with 10,000 jobs in food processing and a newly-opened training centre for the chemical industry, a major employer in the area. Grimsby, however, is pitching itself as a hub for new media businesses and the district council is offering a variety of serviced offices at bargain basement rates (46-79p per square foot per month in the Grimsby Business Centre).

SHORT HAUL
In addition to Hull, Grimsby and Immingham in North Lincolnshire are major ports at the mouth of the Humber estuary. At the other end of the river's navigable length, where it becomes the Ouse, Goole, in the East Riding, is the East Coast's most inland port. It's also located right on the M62.

On the face of it this isn't a massive advantage - it takes a lot longer for a (relatively small) ship to wind its way upriver than it does for a lorry to drive 30 miles along the A63 from Hull. However, as Alan Menzies, assistant chief executive of East Riding Council's economic development department, explains, "It's good for HGV tachographs". The round trip to Hull or Immingham takes a significant bite out of a driver's ten-hour day.

This argument certainly worked on the German Logistics firm Gruber which has just purchased a 5,000 sq m site at the Goole Intermodal Terminal with a view to specially-designed container ships in future being able to sail directly from the continent to the port. As things stand the Allied British Ports-owned facility cannot accommodate the largest ships but, nonetheless, has become a centre for the transport of steel, wood and other bulk goods and is enjoying its highest levels of traffic for 40 years.

As with the rest of the UK's logistics infrastructure, the Humber ports as a whole have seen increased private sector interest over the past year or two, and not just at the big multinational level. At the beginning of the year, for instance, £22 million-turnover port operator RMS Europe added coastal deepwater facilities at Immingham and Grimsby to its existing inland operations at Goole, Flixborough and Gunness when it acquired family-owned Freshney Cargo Services for a rumoured £3 million.

RIDING HIGH
Designated "strategic investment sites" in the East Riding are based upon the M62/A63 corridor and its parallel railway line.

"Centreport" is a 237.5 million, 300-acre mixed-use development site located off Junction 36 of the M62, at Goole.

This development is anchored by a £100 million factory built by US glassmaker Guardian Industries. Tesco has also lodged a planning application for a regional distribution centre at the site - a scheme that it hopes to have up and running by October 2007. This would employ 1,000 people: equivalent to almost seven per cent of Goole's entire population.

Centreport (developed on behalf of Yorkshire Forward by Leeds-based Sterling St James) has not been without controversy. Local newt fanciers and vocal residents affected by the scheme have been up in arms, while small businesses have complained about a policy that has kept them off the site in order to maintain its physical integrity for any large employers that may sign up.

Near junction 37 of the motorway, meanwhile, the Horncastle Group's £15.5 million Ozone distribution and light manufacturing park is being built on the outskirts of Howden. This now has its first occupier - a digital printing facility for Willerby-headquartered Image Data Group.

The small port of Howden Dyke has also seen investment, with computer and electronics vendor Ebuyer building a 300,000 sq ft warehouse on a site between the motorway and the wharf. Menzies says that there is scope for a manufacturer to relocate next door to this facility.

Another Horncastle development is being promoted for industrial and warehouse use at junction 38 of the M62 and, moving into the City of Hull, a development site which has hitherto been constrained by problems accessing the A63 is about to be opened up. Heading out again, the East Riding has three office development sites near the Humber Bridge.

TOWN AND OUT
While logistics, logistics, logistics has become a mantra for the Humber, the main urban centres are also the focus of regeneration activity.

In Hull the biggest scheme is the £160 million St Stephen's shopping centre. Scheduled to open next year, this Foster & Partners-designed centre is owned by ING Real Estate. Councillor Andy Sloan, cabinet member for economy at Hull City Council, estimates it will attract up to £1/2bn in private investment.

He also points to the development of waterfront offices across two assisted areas, with the aim of attracting up to £900 million private investment over the coming five years.

Outside the city, East Riding Council's Menzies says the priority is to strengthen the retail offer in market towns like Beverley and Driffield.

The coastal town of Bridlington, at the North Eastern tip of the district, is also ripe for reinvention. It already has a developed tourist offering but plans are afoot to attract a new type of visitor with the creation of a marina that would take advantage of what Menzies describes as "probably the best sailing bay on the East Coast".

He highlights the potential "substantial" economic benefits to the town, creating around 600 jobs. However, it was a spat over the proposed layout between the council and the town's Harbour Commissioners that led planners to reject a previous scheme two years ago. Menzies hopes new proposals will emerge by the end of October.

Regeneration activities, while welcome, are not particularly urgent in the East Riding. Although the district's domestic economic output is relatively low, it is actually the sub-region's wealthiest area because so many residents commute to well-paid jobs in Hull, York or Leeds.

Down in North and North East Lincolnshire, however, the "urban renaissance" projects are a little more pressing. Scunthorpe lost out in the same way as Sheffield when the bottom fell out of the British steel industry but, unlike its larger sibling in South Yorkshire, has not had the benefit of European Objective 1 funding since.

In an attempt to redress this, the regeneration community has come up with not merely a "masterplan" (you'll be hard-pressed to find a town centre in the sub-region that doesn't have one of those) but a "strategic development framework". While aiming to build on the town's favourable location for the logistics sector, the core aim of this 10-20 year strategy is to revive the town centre's retail and leisure offerings.

Much of this will need to be rebuilt from scratch because, unlike the market towns in neighbouring North East Lincolnshire and the East Riding, Scunthorpe has no pre-industrial roots, and therefore no attractive medieval square or Georgian architecture to attract shoppers. Residential accommodation is also an issue, with narrow terraced streets and a lack of local amenities.

These problems have led to population decline in Scunthorpe and, indeed, retention of a skilled labour force is an issue for the sub-region as a whole.

One major project that aims to reverse this trend is the Centre for the Assessment of Technical Competence Humber (CATCH), an £8 million training facility for the chemical industry located near Grimsby. Uniquely in Europe, it is a fully equipped plant giving school-leaver trainees a "real-life" environment in which to learn the skills necessary for employment in an industry that turns over £8 billion a year in the Yorkshire and Humber region.

Half the project's funding came from Yorkshire forward, with the remainder from the European Regional Development Fund, the Learning and Skills Council and in-kind donations of equipment from the industry. It is owned by the local authority.

Another ambitious development in North East Lincolnshire is Europarc, located on the Western outskirts of Grimsby. Owned by Yorkshire Forward, this 1.35 million sq ft site is being developed by Hull-based Wykeland. It includes a large serviced office complex, and the rest of the site is zoned for office, general industrial and storage/distribution uses.

TAKEN FOR GRANTED
Doing business in the Humber sub-region should be easy. Hull City Council publishes a 74-page guide full of business support organisations, both publicly and privately-funded. Chief among the latter is Sirius, an enterprise agency created and supported by BP at Saltend.

Venture capitalist YFM Group manages a number of investment and loan funds focused on the area, some with the backing of European Objective 2 money. The regional development agency, Yorkshire Forward, also offers a variety of grants and loans to growing businesses and start-ups.

While there may be no shortage of funding (you can even get a grant to do up your shop front if you are located in a heritage area of Hull) and advice out there, knowing which scheme is for you is another question altogether. According to Don Stewart, head of strategy at Yorkshire Forward, the various agencies should operate a "no wrong door" policy, pointing all enquiries in the same direction.

For those who don't want to take their chances with this arrangement, he says Business Link should be the first port of call. Cllr Sloan, however, says that Hull Citybuild, the city's urban regeneration company mandated by Yorkshire Forward, which is currently itself being regenerated and taking on new responsibilities, will in future "consolidate access to business support".

This comes as news to Jo Barnes, economic development director at Hull Citybuild. While acknowledging that nothing has been finalised, she says, "Business Link will still have their role. We are aiming to be more involved in sector support and actively going after new business leads, but not small business support."

What, though, of the future for the sub-region? The European Objective 2 funding that the Humber has thus-far enjoyed is due to end in 2008 as the EU refocuses its regeneration budgets on Eastern Europe.

Everybody involved is keen to point out that the demise of Objective 2 will not be felt so keenly as the more generous Objective 1 handouts in neighbouring South Yorkshire. It seems, though, a remarkable coincidence that so many regeneration projects should suddenly come onstream during the final couple of years of EU cash.

More broadly, a recent review by the Humber Economic Partnership paints a bleak picture, suggesting that the sub-region's dependence on manufacturing will see it fall further behind a UK economy driven by financial services and "knowledge-based" industries.

Ideas on how to counter this differ. Cllr Sloan, who can't be too rude about his electorate, says, "The biggest issue is our perception outside the East Riding. We need to get people to come here and see the quality of life for themselves."

For Stewart, however, "The big threat is the skilled labour force. Aspiration and ambition are not where they need to be - encouraging children to achieve more is the big challenge for the next ten to 15 years."

In terms of investment priorities, Hull Citybuild has recently commissioned a report from IBM's relocation consultancy that identifies three main industries for the future: the port and added-value logistics; healthcare and pharmaceuticals (major current employers include Smith & Nephew, Reckitt Benckiser and Seven Seas); and renewable energy. The first two of these are seen as mature strengths of which more can be made, while the latter is a more recent, but growing, sector.

While Barnes acknowledges that it is naïve simply to identify sectors, throw money at them and expect everything to work out according to a grand plan, she believes the exercise is worthwhile.

"The IBM report addresses what to do next," she says. "If you don't have an idea of where you are going, it's hard to get there."

---