Region emerges from recession but battles still lie ahead
By Jamie Martin, managing partner at Ward Hadaway
IT WOULD take a brave person to say with certainty that we have finally emerged from one of the deepest and longest economic crises in recent times.
However, there are increasing signs that the worst would appear to be over and that many companies – not least those in the Fastest 50 for this year – are well on the way not only to recovery but to real growth.
It has been a rough ride for all over the past two to three years, but the private sector in the North East has come out of recession in relatively good shape, with manufacturing and exports both on the up again.
What has been heartening, particularly in the North East, is the extent to which staff and management have worked together to get through the bad times, with pay freezes and flexible approaches to working patterns helping to keep redundancies down.
The prospects for the public sector in the region appear less promising. As a region, it is more dependent on the public sector for jobs than the rest of the country, something the Government has pointed out on a number of occasions.
Consequently, forthcoming public sector cuts are likely to have a greater impact here than other areas.
Not only will the inevitable job losses mean there will be less money for the region’s people to spend, but cuts in spending will have a notable effect on the private sector too.
The North East has been hit particularly hard, with the cancellation of the £464m Momentum hospital project on Teesside, as well as a series of school building schemes under the Building Schools for the Future banner.
Prudent businesses with exposure to the public sector are already putting into place plans to cope with the downturn they expect to see.
The Government has also brought about a change in the regional development regime with the planned scrapping of One North East.
The agency’s planned abolition and the lack of clarity about its successor in the shape of Local Enterprise Partnerships (LEPs) make the future more uncertain.
Whatever happens, I think it would be a great mistake for the North East to lose its unity and fragment as a result of the new structures which are being discussed.
As we have seen over the past few years, our strength as a region lies in standing together to face the challenges which confront us.
Both the public and private sectors have a contribution to make in that regard and now is a time for some real leadership from business and industry and from local authorities, to join forces and face the future with confidence – together.
