Insider Media Limited

Regional government, or no government?
Do you know the name of your local councillor? Or do you even know which party is in control of your local council? What about the name of more than one single member of the European parliament representing your region?
If you don't, then you will be forgiven for your lack of engagement. There's a lot of it about. We are rightly angry about the increase in council taxes, as we have every right to be, but we do very little about it.
In an age when we work harder than we have ever done before, it has proved difficult to attract people of vision to the business of government, local or national. Politics has appeared to attract the same kinds of people that hold the non-jobs the burgeoning public sector has created. What most senior politicians think about local councillors would be unprintable in a respectable magazine as this one. The results of this are also seen in the way local government works in practice. Most councils, good and bad, are really run by the tightly-knit cabinet surrounding the elected leader. Probably a committed and diligent member of the community, in truth. The ones I have met appear to be genuine in their quest to regenerate and improve their cities or towns.
Like central government, the cabinet takes most practical decisions at a borough or a city level. The chief executive, often a dynamic civil servant with a sense of vision, drives much of the detailed policy.
So it must seem odd that at a time when most people - most businesses - are not engaged with government, that there is an opportunity to vote for regional government in this country.
It's easy to sympathise with those who rail so passionately against plans for an elected regional assembly as they can trot out self-evident popular totems like the image of a talking shop full of politicians. One can't help but escape from the feeling that they are actually making an argument against any government at all.
Yet we now have a real chance to get the governance we deserve. By linking the possibility of a regional assembly for the North West to a shake-up of the current muddle of unitary authorities and county councils makes such good sense. It is a process that business should support because it cuts public sector waste. A regional assembly with a small number of elected members for a region of this size can punch its weight at every level.
Like it or not, we already have unelected regional government. The powers afforded to the Northwest Development Agency and the Government Office for the North West are considerable. There has been a welcome cutting of duplication in business support services and a concerted effort to use its single pot of funding to link transport improvements to business development objectives. There is a will at leadership level to cut wastage, which may fall short of our wish for a bonfire of the quangos, but is the best we can hope for.
But while those entities have a degree of autonomy to deliver policy and to co-ordinate resources in the region, on an international stage they suffer from a lack of mandate from the people.
Business has chosen to engage with the regional development agencies, with some positive results. Let us assemble.
Michael Taylor, editor

Food for thought
I used to work for an editor in London who would announce proudly to the office, every week, that he was about to embark on the most important job of the week: arranging his lunches.
This was the late 1980s and it was in the television industry, so you can comfortably and accurately imagine him amongst the black clad hordes of creatives, dealers and luvvies in such Soho watering holes as the Ivy and the L'Escargot, quaffing the finest wines known to humanity before retiring to the Groucho Club to snort champagne from the stilettos of virgins. At least that's what he told us.
I've also worked with hardened hacks whose idea of a nourishing lunch would be several pints of nutty brown in the Dog And Duck, pausing only to file some news to the copy desk from the pay phone in the corner of the tap room, after some tip-offs from a snout in the local police force.
It's different now and although there are plenty of invitations to meet, greet and discuss matters of great import over fine food, in some of the best restaurants and cafx8es the region has to offer, the truth is we are no different from most of you out there - we journos simply have too much work and too little time to do it.
So while there is a lively lunchtime culture in the cities of the region, there are few places that you could say are actually bursting at the seams. Over the last four years I can count on one finger the number of times I've attempted to get a table at a city centre eaterie and been turned away, because the restaurant is full. Most times, if I'm meeting someone for lunch, we'll make our minds up where we're going that morning and take our chances.
Lunch culture is as much a product of its time as anything else. Most of us grab a butty, which at this time of year we're happy to eat at our desks. And as the feature by Glynn Davis on the wars for your lunch money in the region shows, it's a fascinating test case in the importance of real marketing and market intelligence. Not how to advertise, but how to position your business, where to locate, how to price your product and how to offer a range of services and when to account for local tastes.
I well remember the effect of Pret A Manger on the sandwich-munching classes of London when I worked there. It was nothing short of a revolution. And while I think Pret has done OK in the regions, there are confident rivals who we have interviewed who think it's not sufficiently aware of local tastes.
Much of that comes down to a simple matter of opinion, but as with most things in business, the market will ultimately decide who is right.

Michael Taylor, editor

The Core Cities cock-up
Michael Parkinson (no, not that one) delivered a pretty damaging assessment of our region's two great cities at the tail end of January. In a report for John Prescott's Core Cities programme the Professor of Urban Affairs from Liverpool John Moores gave Manchester and Liverpool a bit of a pasting.
Among the hundreds of pages of close-set analysis, the league table that really hit the headlines arranged us all according to the number of euros we make per head. Bad news.
Further afield, Newcastle suffered, as did Birmingham. In fact, all four came in the bottom six out of 61.
So is that fair? And in response should we search our souls for a way to improve and to try and emulate those that did so much better, like Hanover, Helsinki or Stuttgart? Should Manchester seek to become a carbon copy of Frankfurt, top of the GDP league? Of course not. Anyone who has been to half of these cities could tell you that they're boring, lifeless commuter towns that are suffering shrinking urban cores and an increased level of disaffection. Stuttgart? Dusseldorf? Don't get me started. I'd rather relocate back to London, and that's saying something. If I was pushed to say something nice, then at best I'd describe them as 'clean'.
The index I preferred to turn to - and not just Manchester because did well - would have to be the BOHO index by the think-tank Demos. It placed Manchester at the top of a creativity league table and had more of a sense of what makes a real city. Let's remember what makes it great to live in Liverpool, Manchester and the North West. We have optimism. We are inventive. We have world-class universities and a major airport. We have inventive businesses, a strong sense of community, real characters in all walks of life and a strong industrial heritage that is the core of a renewal in economic growth. We have true and improving quality of life. All the things that the other sections of the Core Cities report cites as being vital in a vibrant city of the future.
Are we complacent? I don't think so. Our cover story this month makes a passionate case for radical action on transport projects. Let's get the region moving. Let's back people of vision with a continuation of the legacy of the builders of the Ship Canal, the Liverpool to Manchester railway.
GDP is a distraction. The South East is overheating as a result of the budget-busting binge they've been on (subsidised by the rest of the UK) and is becoming unlivable for key workers and rat racers alike. Don't sell our two cities short. Capital of Culture or Capital of Knowledge, let's remember that we are not Frankfurt - or London - and long may we remain so.

Michael Taylor, editor

In the red
In sport, in order to enjoy winning, you have to know how to lose. But the price of defeat in football has become one that clubs in the region can no longer afford to pay.
At least three North West clubs are currently perspiring at the prospect of relegation from the Premiership and a crash in revenues from which they may never recover. The once great Liverpool are contemplating the horror of failing to qualify for the Champions League. Even Manchester United are under siege from shareholders over corporate governance, captured in excruciating detail in the notorious 99 questions asked by shareholders Cubic Expression.
In an age when the technical standard of English football is supposedly better than ever before and there are world-class stars from virtually every footballing nation plying their trade in the English leagues, how did football get into this mess?
Every balance sheet is riddled with debts, extraordinary items, changes to accounting policy. It is the economics of the madhouse, but then football has never been about running a sustainable, growing business that can be planned and budgeted for over five years. It is about chasing the dream, but in so doing football has paid a very high price.
In the pursuit of success and supposedly attracting the best players, our leading clubs have tried virtually every financial trick in the book: media partnerships, stock market flotations, selling or remortgaging the stadium, re-evaluating the property assets, taking out loans secured against future season ticket sales, even signing players in complex sale and leaseback arrangements and keeping the transaction off the balance sheet.
In Charlie Lambert's excellent biography of Jack Walker, The Club That Jack Built (Milo Books, 2001), one commentator was quoted as saying: "To achieve what Jack Walker did at Blackburn in the 1990s would require someone of the magnitude of Rupert Murdoch." What that commentator didn't appreciate (it was me, by the way) was the rise of the Russian oligarchs, so what price an entry ticket to football now? We have now been treated to the unedifying spectacle of club directors jetting around the world in search of rich Russians, Chinese, Arabs or Lancashire kettle makers prepared to write off a proportion of their personal wealth in return for a slice of the dream. It can't last.
What we hope our cover story demonstrates is that the dream is over. The mess we have inherited has surely proved that football can't be judged as a business, because it has a different role to play. There is a school of thought, lucidly argued by Professor Tom Cannon, well-known in this parish as an expert on the football business, that football has only one place left to go - to the fans. This time they're wealthier, better organised and better informed and surely will make a better job of it than the suits have done.

Michael Taylor, editor

PS. We've produced this magazine for you without access to the internet for a week, and although we're a bit fed up, most of us have got on with it and reverted to a time when there was no web or email.
Our friends in Buxton have been even more inconvenienced. Can you imagine the media wailing and gnashing if this had been in London? It would have been the lead item on every news bulletin all week. Yet by Tuesday it was old news and we struggled on with a disrupted service and without the rest of the world aware of the extent of the problem.
Spirit of the blitz, my arse.

A chip on the shoulder
During a recent conference, Enterprise Nation, at the Lowry Hotel, a panel debate provoked irritation. The panel brought together various representatives of the London-based media, chaired by Matthew Gwyther, the poised editor of Management Today.
As inevitably happens in situations such as this, the subject of southern bias came up. Why weren't the London media up in our neck of the woods more often, covering our business stories in the so-called national press?
The short answer, from the business editor of the Sunday Express, was that here is no bias and anyone who thinks so "should lose the chip on the shoulder". He then went on to say he didn't care where a business was from, but as far as he was concerned, "virtually every company has a head office in London" anyway. Bias? Couldn't sum it up better myself, Mr Parsley.
That the Sunday Express is far from being the first paper to turn to for business news should mitigate the petulance of his outburst. And perhaps businesses in the regions that are still getting the hang of selling their stories effectively to the media should use it as a clarion call and get themselves in the fray.
The worst accusation you can throw at the London media is they are lazy - why spend three (or five or ten) hours on a train to get a story when you can fill your pages with the hot gossip the guy in the next office building told you? That they reflect bias in places like the City is also a problem: when London hacks sneered about the chances of Boots finding a half-decent CEO willing to move to Nottingham, they were reporting the point made by an anonymous adviser, perhaps over lunch. And with almost every story about Morrison's making a bid for Safeway inevitably referring to flat caps and whippets, can these people actually be trusted to tell our stories?
Of course, an obvious plug for the efforts we make on behalf of the region's business at Insider - and its sister publications in the Midlands and Yorkshire - can be inserted here. It's true that some London media are worse, some are better. But our research into the region's fastest-growing companies (p23) is unique, informative and indicative of the region's economy. And our cover feature on the region's games industry (p36) - a story of frustrated hopes, perhaps, rather than untainted success - also informs about the companies that continue to thrive despite the neglect of the too-powerful South East.
And it's the whole of the region that we cover, not just the urban Liverpool-Manchester-Chester triangle. Which is why we are pleased to introduce our new columnist, Steve Brauner (p13), editor of the North West Evening Mail in Barrow and a former editor of Insider. If we haven't done so already, he should get some tongues wagging. And if we keep it up, maybe the people who get a nosebleed when they leave EC2 will start listening.

Erikka Askeland, deputy editor
Michael Taylor is away.

Power to the people


This is my Gwyneth Paltrow moment. Last month, while I was sat around the pool in our holiday villa on the Algarve, I had nothing more troubling to contemplate than a further assault on the troubling second hole at Balaia golf course the next day. But that night at around 10.30, my trusted (and soon to be departing, sniff) deputy editor phoned me from the Merseyside Media Network Awards to tell me that our staff writer Lisa Miles had won the best newcomer award and that I'd won best business journalist award (sponsored by Littlewoods). Apart from the pride at seeing one of my team so recognised I just feel so very, very humble.
I love my job. Sitting writing this letter to our readers as we reach the final straight on what has been an epic achievement by all putting together the biggest magazine of the year so far is immensely satisfying.
I love working with a sparky and enthusiastic bunch of sales people who share my goals and values for delivering a quality magazine to the business community of the region. Our new residential property section, which one of my favourite freelancers has put together, came from the team. I have an incredibly supportive managing director. I work with a remarkably talented group of journalists and a quite exceptional designer in James Hepworth, who makes our clumsy ideas come to life.
But the real reason why I love it is because I get so many opportunities to meet some very inspirational people. This month I've interviewed Michael Todd, the chief constable of Greater Manchester Police. How cool is that? I went to two private dinners and sat amongst... well, I'm not supposed to say, but they're in high positions in our Power 100.
In the course of putting this edition together you will see that we have covered three of our own events: the mammoth 700-seater Insider property awards; a superb economic forum for Greater Manchester; and a think-tank session at the National Football Museum to kick off our 42 Under 42 programme for 2004.
We have included coverage of three of our round table seminars. These have brought us up close with more than 30 super-bright people in biotech, business leadership and property development.
It's not all sweetness and roses. Sure, there are people along the way who I have fallen out with. They may think I've been unfair to them, not given them a fair crack of the whip, or maybe they just take themselves so bloody seriously they can't understand why I don't.
And then there's one company I've shared correspondence with recently which took exception to something that was written about them, but we sorted it. Not once was it mentioned in our discussions that they advertise with us.
So, the awards mean a lot, and there are some serious stories we will continue to tackle. But none of what we have achieved would be possible without the continual support, encouragement, tip-offs, briefings, soundings, access, insights, wisdom and ideas from the business community of this region.
Thank you for indulging me. It could have been worse. It could have been a Russell Crowe moment. Or Michael Moore.

Michael Taylor, editor

ock up or conspiracy?
I've always tended towards the cock-up theory of history. Much as a good conspiracy yarn excites us hacks there is always something so much more believable in the course of human events taking a comical and unexpected turn, than the more sinister alternative.

Now I'm not so sure. After preaching the mantra of regeneration and so-called joined-up government, the decision to axe funding for the Manchester Metrolink, the Liverpool tram and Blackpool's tram makes neither political nor practical sense. Calling in a scheme for cost reasons and urging a fresh approach is one thing, axing it completely smacks of cynicism and of a wilful contempt towards the very people who voted for this increasingly shambolic and disgraceful government.

If the decision to cut Manchester's dreams off at the knees wasn't bad enough, the floating of ludicrous ideas for road charging and for the woeful London Crossrail scheme to support the doomed Olympic bid smacked of the very crass.

So yes, it feels like a betrayal; but is it? There is surely more to this than meets the eye. Within weeks, if not months, expect the caring, sharing, listening government to reconsider and redeploy resources towards an expanded Metrolink in Manchester. There will be a sting in the tail and there will be a selling out of Rochdale or Stockport. Blackpool may get some crumbs from the table for its transport system, but either way a back tracking sell-out will be dressed up as a triumph for democracy and good sense.

But there really is only one simple explanation for the postponement of the referenda on regional government: Labour knew they couldn't win. That's not to say a Yes vote wasn't possible; but at a time when Tony Blair appears more out of touch than ever with the average voter, then the only possible rallying cry towards the flag of regional democracy would be to put the regional agenda forward as a direct opposition to the outrageous buffoonery from the likes of John Prescott and Alistair Darling.

This magazine has said all along that the regional settlement currently offered is weak. But it's a start. And it may still be offered to us. And there is nothing sensible in a city region strategy that would cast adrift many of the communities of Cheshire, Lancashire and Cumbria.

But we now have, in effect, two governments and no realistic alternative.

Blair deserves our respect, support and thanks for having the courage to stand shoulder to shoulder with the United States against the evil threat posed to our way of life from the scourge of militant Islam. But he has lost the plot at home.

The problem all of us in the private sector now face is that we have a government with neither care or understanding for our aspirations. It has morphed into an administration without conviction or an apparent reason to exist, save for the prime minister's own eagerness to be regarded as a Churchillian hero, or for the other ministers and MPs jostling for position in a more overtly socialist government led by Gordon Brown.

A plague on both their houses.

Michael Taylor, editor

Going on a diet does you good

The market for buying and selling businesses
has gone through some curious twists and turns in recent months. And we are likely to witness more of the same. Whisper it, but these are boom times to be a dealmaker in the regions of England.

The fact that this has followed a period of relative famine appears to have focused the best minds in regional corporate finance. Having it too easy for too long makes any business lazy and slow to react. Having to fight to feed your children aids concentration.

Once upon a time it was the case that a strong deals market didn't necessarily translate into good news for the established business base. Companies would be advised on spicy acquisition strategies, highly geared expansion drives and ill-judged flotations. As long as there was a fee at the end of the process the advice could be reckless and the motives questionable.Business owners have sensibly battened down the hatches over the last four years, which has created a lot of time for a lot of people to come up with new ideas.
As the best ideas these days are more tailored, more crafted and more clever at creating value than they have ever been. So too are the financial models and funding structures to make these businesses work. Consequently deals take longer to do and everyone has learned to be a bit more patient.
The products on offer have got better and more sophisticated. It's more common to see a cocktail of debt, equity and so-called integrated finance. We have seen more complex levels of debt with different warranties. We have seen the rise and rise of invoice discounting. Meanwhile, the accelerated IPO (initial public offering) where a special-purpose vehicle floats and immediately acquires an existing business has shattered perceptions about floating a business. And whatever they tell you in the capital city, the spiritual home of this lies in the activities of the "shellmeister", Michael Edelson and his brainy young advisers in Manchester in the late 1990s. Its refinement and widely aped strategy is now a much more appropriate fund-raising strategy for a growing business in a proven niche. As one director of such a business told me recently, it was the cheapest money on offer.

But it is the ability of private equity investment to extract greater value from a business and motivate a management team that has caught the eye. I wish I had the price of a long lunch in Piccolino for every time a green-eyed corporate financier sneered at the investment record of the Manchester office of LDC over the last four years; yet the performance on LDC's investment in retail business Ethel Austin - based on its cash generation, not the ability to flog the business to Matalan in three years - has been eye-wateringly good.

The hunt for such gems also led to a situation where the bid list for interested parties looking to invest in Pets At Home ran into double figures. It read like a who's who of private equity. And the eventual purchase by Bridgepoint Capital represented what everyone is describing as "a very full price". Not that Anthony Preston, its founder, is complaining.

There has emerged a much richer and more sophisticated approach to corporate finance than we have witnessed at any other point in corporate history. There are at least a hundred people listed in the magazine this month that have at least 30 million very strong reasons to applaud that.

Michael Taylor, editor

Have faith in the happy clappers
So much in business history has been about making a leap of faith. Having a world-beating idea is no good unless you can market and sell it.
Believing in an idea and having the personal drive to sell it to customers and empower your staff to flog it is the most important aspect of any business. But you don't need a numpty like me to tell you that. If you're in business you live and breathe it every day.
If there's a common theme running through this issue of our magazine then it's business people having faith in their big idea.
All of the people we have featured in our 42 under 42 feature this year share a vision in their own ability and what they are doing.
When Bernadette Spofforth (Working Lunch, page 20) started investigating digital radio as a new consumer market it was because she saw a niche for her ideas, her touch and her approach to make a step into a new area for her company. Thanks to her, a digital radio is something you actually might want to own.
And those we have revisited know what works, so they try it again. Take Mark Hallam, whose business we've followed for four years. He built up an internet hosting company Business Serve to be one of the most innovative businesses in my home town of Lancaster. From an original idea that started in his dining room Hallam has sparked a generation of budding internet entrepreneurs in the North West's Bay Area.
He's now doing it again at Iomart, and giving hope and heart to housewives, ex-van drivers and people who want to get on. He's a Lancaster entrepreneur who still believes he isn't taken seriously because at his heart he's a salesman. He's sold everything from milk to double glazing and most recently he's built a boiler room full of eager sales people who sell internet connections and websites to small businesses. Someone has apparently sneered behind his back that he's "a happy clapper". Well thank the heavens for happy clappers everywhere, or the internet would still be a bulletin board for techies.
We have often come across people from the quangos who want to know how they can encourage young people to consider a career in business. They want to know how the Business Link and Small Business Service can deliver its key performance indicators.
Instead they should spend time with the businesses we've featured in this magazine this month. They should organise school trips to these companies to meet the people who run them. Get kids to work on a market stall for a month. Then take them to gaze in awe at the tin in the car park at Mere Golf Club and say "if you work hard this can be yours."
It might sound like a stupid idea, but it has more chance of stimulating economic growth in the North West of England than John Prescott's Northern Way.

Michael Taylor, editor

The Culture of Capital


There has been an awful lot of tittle-tattle recently about the supposed character of Liverpool. Let's get something clear from the outset: Liverpool is unique; it does have an extraordinary civic character.
Brighter authors than this one have recognised that a vibrant culture is one of the important contributing factors to a bustling economy. The two are linked. "And an economy driven by ideas has more chance of success within regions and companies with a culture of dissent, dispute, disrespect for authority, diversity and experimentation."* Sounds like Liverpool to me?
There is something so very typically Scouse about the passionate stances on all sides in the row over the different routes for the proposed trams system.
There's even something endearing about the fact that a new organisation, Downtown Liverpool, has split in two, just a year after the organisation was set up to debate the future of the city and represent the private sector interests.
And there's a sentiment around that seems to mutter darkly about what went on in the 1980s as if the city should be ashamed. One commentator said recently: "Liverpool was a politicised city. It was buzzing with resistance to Thatcher and her now discredited policies. Surely we should be celebrating this period as an example of solidarity rather than being embarrassed about it or trying to erase it from our sanitised history." **
Even the response of the private sector was a positive development, a positive coming together of minds and deeds from which the seeds of private/public partnership, property investment and urban regeneration were born.
Throughout the magazine this month there are examples of the unique nature of the Liverpool mind, the spirit and the attitude that Professor Tom Cannon has been charged with bottling and harnessing in order to generate a business culture in the city region.
Everywhere you go around the world the English accent you are most likely to hear is the Scouse one. Liverpool is a net exporter of talent across the world, and some of our most successful business leaders come from the city of Liverpool.
Conversely, there are others who pop in and eventually stay for life. Our guest columnist this month is one of those. Arabella McIntyre-Brown didn't so much like the city so much she stayed, but she's also written a terrific book about the hidden history of the city - the culture of industry and enterprise.
At a time when Manchester has drifted through a process where a former record sleeve designer has come up with the phrase "original, modern" as a set of guidelines for everything we think and do, then please can I have a ringside seat for the opening night of the fight for Liverpool's identity.

Michael Taylor, editor

Win a flight to Las Vegas in Insider's end of year quiz for 2004. Pit your wits against the region's greatest business brains and be in with a chance to date one of the cover models