The structure of the Merseyside economy and the sort of economic development it had been subject to, that of the typically Keynesian era (Hall, 1992), composed of firm incentives and infrastructure
investments, had created a manufacturing economy to replace or complement the existing port- focused economy. As the transition of the port from one integrated into the local economy into a hub for transhipment took place, wider forces of industrial decline set in, affecting Liverpool especially badly due to the fact that its industrial base was overwhelmingly branch plant oriented and overrepresented in declining sectors. The basis for the sort of industrial district-led,
agglomeration economy-dependent, growth that has been described in the new regionalism literature was, in the early 1990s, extremely weak in Liverpool (Meegan, 1994). In addition, the city was disinclined to engage in economic development activity due to its lack of institutional
experience of this, having been the subject of Keynesian-type regional policy investments rather than performing the role of an active agent in development itself. While ‘alternative economic strategies’ were generated by some left wing local authorities, among the products of which were the Merseyside Enterprise Board (Cochrane and Clarke, 1990), Liverpool City Council did not engage with this process, instead retreating into matters that were strictly local (interview with former Liverpool City Council planning officer, 2012). The evolutionary changes taking place in regional policy that had been fostered and embraced by the Commission therefore represented a step change in attitudes among both sub-regional and national scale actors.
The approach to regional policy favoured by the UK government was, as described in greater detail in chapter two, characterised by the shift from regional to urban policy. This was associated with a drastic limiting of the geography of the assisted areas policy such that only those areas most in need were affected, a loosening of the prerequisites to obtain an industrial development certificate, such that control over the location of new industrial development was much reduced, and highly targeted initiatives that were addressed at the problems of the declining inner cities (Hall, 1992). Urban policy was noted for the sheer number of separate initiatives, and the lack of coordination between them, as described by one academic active in the field during this period:
‘Because I’ve been doing this for so long I’ve got most of the acronyms attached to every urban programme and the sheer volume of these things is just utterly stunning, it’s just wave after wave of ... you know, a single minister wants another programme and it lasts for two years and the criteria are this and it’s got to join up with everything else and ... it was very chaotic, I have to say, in a way that at least the principles of regional policy weren’t, it seemed to me. And can you, after the event, come up with some sort of logic? Yes, you could, but I don’t think it would be what drove people at the time, or maybe they had a logic in their head, but then politics is the art of the possible so they did what they could.’ (Interview with senior academic active in policy-making discussions.)
The Single Regeneration Budget (SRB) and City Challenge initiatives had provided a greater degree of integration than had previously been possible under urban policy, though it remained the case that regions and sub-regions were able only to deliver the policies of central government, rather than to generate strategies and plans for their areas. Another salient issue was the scale of the initiatives, which was, by comparison with the funds subsequently released by the Commission, extremely limited. A former senior officer at Liverpool City Council commented with relation to the scale, both monetary and spatial, of these more coordinated programmes:
‘They were puny; SRBs were puny. They were very small scale ... they integrated the initiatives that they were concerned with, but it was very small scale spatially and in volume terms.’ (Interview with former Liverpool City Council senior officer.)
The Structural Funds thus provided a contrast to the prevailing shape of economic development policy, both in terms of the level of local and regional involvement and the degree of strategy involved. That an absolute shift in the application of development policy would result was perhaps too much to ask though. The extent to which the partnership-based programmatic approach had resulted in a more integrated exercise in economic development planning in Merseyside has been challenged, as the programme design stage gave way to the more prosaic process of drawing down resources among well-practised Structural Funds beneficiaries. As Lloyd and Meegan (1996: 93) put it, ‘the principle of take came to dominate the principle of partnership’. This observation is
congruent with the notion of ‘grant coalitions’ put forward by Cochrane et al (1996) to describe the governance arrangements in Greater Manchester in the early 1990s, and points to a correspondence between the influence on partnership of higher tiers of government in the case of the UK national government’s funding of local and regional economic development and that of the European Commission (Wood, 2004).
Indeed, the SPD was only formally published following the completion of the calls for bids against it, indicating that bids received were exclusively from bodies to which draft versions of the SPD had been informally circulated. Questions arise over whether the programme identifies genuinely local priorities, or whether it is simply a conduit for national policies to be delivered in a regional setting. Boland (1999: 790) refers to the Objective One partnership as ‘having degenerated into an
institutional battleground where “partners” engage in contests over policy and resources’. In terms of overall strategic direction, the programme was also found to be lacking. Interim
assessment found a lack of strategic integrity, in which the operationalisation of the programme was poorly connected to its strategic vision. It was suggested, for instance, that the fact that the
business support strategy had been criticised as being too broad in its focus, echoed subsequently in the UK Objective One programmes’ ex-post evaluation (Ecotec, 2003), was a fault of necessity owing to a lack of information with regard to the sub-region’s SME base, rather than one of design
(McAllister, 1999). Similarly, a number of tourism strategies at the local authority level, together with a Merseyside strategy for tourism, ran concurrently with the Objective One programme, yet none of these were referred to specifically in the SPD, with the result that the overall tourism activity in the sub-region was fractured and contained unnecessary duplication of effort (ibid). The programme’s lack of strategy once in train was in part attributed to its management, with the GOM criticised for harbouring a concern with administrative processes and project appraisal over
management and coordination, and the Monitoring Committee seen as more interested in administration than strategic direction (McAllister, 1999; Evans, 2002).
The 1994-99 programme did in some sense represent progress towards the model of place-tailored programmes of interventions that was coming into being at that time though, ushered in by the Structural Funds regulations, especially through the investment in transport improvements targeted at particular peripheral parts of the city and the Pathways initiative, which was specifically designed with Merseyside’s problems of social inclusion in mind. The investment in research and
development, together with the involvement of HEIs in knowledge transfer activities was symbolic of the trend in regional policy towards harnessing regional growth to innovation (Farole et al, 2011). Support for business was seen as having been insufficiently tailored to specific sectors and stages of firm development, though this was rectified to an extent by the labour market survey published in 1996, two years into the programme (Ecotec, 2003). The Merseyside Special Investment Fund (MSIF), providing venture capital to SMEs that narrowly missed out on access to finance from mainstream sources was universally seen as a positive aspect of the part of the programme that addressed SMEs. The MSIF was run entirely by the private sector and levered in private investment at a ratio of 1:3.2, considered impressive in the circumstances (McCloughan et al, 1999). The
initiative was singled out by the business community for particular praise (Evans, 2002). The balance struck between supply side measures, invested in under the priority addressing inward investment, and demand side measures, focused on indigenous growth and the knowledge economy, was seen to be measured (Ecotec, 2003).