Does crime deter investment and growth on Merseyside?

Sep 12 2007 by Bill Gleeson, Liverpool Daily Post

Business Editor Bill Gleeson discovers the issue is not top of the list of concerns for investors

LAST week, a shocked and appalled nation looked on in horror as two heartbroken parents buried their 11-year old son.

Rhys Jones was gunned down as he was making his way home after playing football with friends.

His death was perhaps the most notorious, and certainly the most reported, of the many killings of young people over the recent school holidays.

Many other parts of the country have experienced some gun crime. In the same week Rhys died, two men survived an attack in the normally peaceful Letchworth Garden City in Hertfordshire.

Yet some places suffer more than others.

London, Manchester and Birmingham have experienced high rates of gun and knife crime this year, and last week Merseyside’s Chief Constable told the Home Secretary that Liverpool was the fourth worst place for gun crime in the UK.

It is well established that variations in local crime rates are considered by potential inward investors when deciding where to locate. But how much of an impact does crime have on the decisions of inward investors when they come to decide where to locate staff and operations? After all, they often need the consent of senior management before they will uproot their families.

Certainly, the South West of England believes that crime is an important factor. In its State of the South West report published earlier this year, the South West Observatory boasted: “The people of the South West live longer, enjoy the lowest rates of reported crime and unemployment, and give more of their time to social, civic or volunteer activities than the rest of England. No wonder it has the fastest growing population in the country, driven entirely by people moving into the region.”

The idea that crime, whether it be dreadful murders that make the national headlines or lower level crime such as vandalism, deters local economic and business growth is not new. During the 1990s, former United States vice president Al Gore conducted a campaign to improve the “liveability” of American towns and cities.

Mr Gore called this the “broken window” theory. If a place looked vandalised and rundown, local businesses would be deterred from investing and growing there. Mr Gore’s idea was that cleaning up and improving the environment of a place and reducing crime could lead to improved local business performance.

The thinking has influenced government policy in the UK, where schemes such as the New Deal for Communities and Business Improvement Districts have been tried. The Liverpool BID was set up three years ago with the aim of improving security and the trading environment in Liverpool city centre.

Professor Tom Cannon runs a company that specialises in advising some of the world’s biggest cities about how they can improve business performance. He is currently carrying out a study for Knowsley.

Prof Cannon says crime is an issue they are all concerned about.

“We know commercial crime is a problem in Liverpool. Insurance companies impose a premium on firms operating in the area. Premiums charged are much higher than the actual crime rates would justify. There is also evidence that a lot of local firms use 0870 numbers to disguise the fact that they are from Merseyside.

“Certain types of crime, such as gun crime, get so much publicity that it overwhelms the story about the decline in overall crime that we have seen in Merseyside in the past decade.”

PROFESSOR Michael Parkinson runs Liverpool John Moores University’s European Institute for Urban Affairs. He says that studies conducted around the country show that crime is an issue for inward investors, but it is not as high up the list of priorities as proximity to transport links, markets, raw materials and skilled labour.

“Serious inward investors look at things like innovation and connectivity, things like the universities and airports a place has. Then when they have done that, they will look at qualities of the place such as the quality of housing, the quality of green areas and crime. Crime is important for 100 different reasons, but if you look at the weight put on it by investors, it is not right up there at the top,” said Prof Parkinson.

According to The Mersey Partnership, which is tasked with attracting inward investment to the region, Liverpool’s image in the eyes of inward investors continues to improve. TMP bases its claim on its own image tracking survey. In research published earlier this year TMP said companies had rated Liverpool top in a list of UK cities for “investment likelihood”, which measures whether businesses are considering the region as a potential location for investment over the next 12 months.

Liverpool saw an 11% improvement in its overall rating, with 40% of all the companies asked saying they would consider the city, the biggest improvement of all the cities measured.

The survey tracked the perceptions of Liverpool in comparison to six other major metropolitan areas: Belfast, Glasgow, Manchester, Newcastle, Nottingham and Sheffield.

The review also assessed the cities against 10 investment criteria, such as availability of sites and premises, competitive operating costs and as a region embracing new technologies. Liverpool recorded a solid score, up to joint third from fifth last year.

Mark Basnett, director of operations at TMP, said: "Major inward investment decisions are typically based on well-researched and measured business cases rather than emotional reactions to specific crimes no matter how horrendous they may be.

‘OTHER cities where gun-related crime commands widespread media attention sustain inward investment and there is no reason why Liverpool should be any different."

Liverpool Chamber of Commerce coordinates efforts to reduce crime in the city centre. It rents out radio sets to security staff at city centre businesses who use them to track the movements of known shoplifters and other criminals. It runs a Pubwatch scheme and the Chamber was instrumental in keeping the Mathew Street area under surveillance during the recent August bank holiday festivities.

The coordinated approach appears to be having a major effect on crime statistics in the city centre. “We have the lowest crime levels in the city for a decade,” said Chamber chief executive Jack Stopforth.

The Chamber runs its own crime fighting unit called Business Crime Direct. It is staffed by former and serving police officers. As well as Pubwatch, its schemes include the “Best Bar None” programme.

Joe Curran, BCD night-time economy manager, said: “Pubwatch has been very successful at dealing with alcohol-related crime and disorder.

“We meet the pubs and clubs every six weeks. We get 60 to 70 members every meeting. The meeting is chaired by the trade. The police, council and other agencies are partners involved in the meetings but it’s the licensed trade that organises it.”

Banning orders are used to prevent violent offenders or drugs users or dealers from entering the premises of Pubwatch’s 117 members. Mr Curran explains: “If you get taken to a custody suite, the custody sergeant has the power to ban you.” Members include big chains such as Mitchell & Butler pubs, JD Weatherspoons and Regent Inns as well as independents.

Pictures and details about banned offenders are posted on a secure website that Pubwatch scheme members and their staff have access to.

MR CURRAN said: “When people are getting locked up, the first thing they ask is not to demand a solicitor but whether they are going to get banned.”

The use of Polycarbonate glasses by city centre members has led to a reduction in the number of glass-related injuries.

“Over the past three months, we have had only one glass-related incident in the city centre.

“In common with many other cities, we have a problem with gun and knife crime. We have issued premises with detectors. They can be used to search people for weapons. We have 10 of them out at the moment,” said Mr Curran.

billgleeson@dailypost.co.uk