Business Guideto Sunderland

SPECIAL REPORT

Wednesday October 31 2012 www.ft.com/reports | twitter.com/ftreports

Manufacturing an economic futureBusiness diversity, skills for the young and a bridge that unites its people are part of the city’s masterplan Page 2

Driving employmentAutomotive hub is selling itsservices to the worldPage 3

Arts thrive by the WearAccommodating the artisticto the purely functionalPage 6

Inside »

Innovative industriesA can-do attitude and newpartnerships offer hopePage 4

Old industrial assetsPlans to give a city centrethe heart it needs to growPage 7

Booming businessFather and daughters teamexports to 60 countriesPage 5

Engineering better linksTrains, trams and a newbridge offer greater accessPage 8

Premier league faithfulSunderland FC stands as abeacon during tough timesPage 6

Hi-tech transformationSpeedy rollout for softwareand digital companiesft.com/reports

2 FINANCIAL TIMES WEDNESDAY OCTOBER 31 2012 FINANCIAL TIMES WEDNESDAY OCTOBER 31 2012 3

Business Guide to Sunderland Business Guide to Sunderland

Once it was ships; now it is cars.

Physically demanding indus-tries – shipbuilding, coal mining,glass making – were for centuriesat the core of Sunderland’s econ-

omy and self-image.Today, Sunderland is proud to be linked

in the national consciousness with its Nis-san plant, feted for manufacturing produc-tivity and the source of more than one inthree UK-made cars.

Commitment to manufacturing – “It’ssomething we are really good at,” saysDave Smith, Sunderland city council’s chiefexecutive – puts it at the heart of the gov-ernment’s determination to rebalance theUK economy.

Success in car manufacturing, an indus-try that did not exist there 30 years ago,gives Sunderland a head start in proving topotential investors, and to its residents,what it can achieve. Manufacturing, saysPaul Watson, the city council’s Labourleader, is “in the DNA of the people”.

“We have this propensity for it.”However, rapid technological change and

immense global pressures mean presentsuccesses in manufacturing are noguarantee for the longer-term future.

Sunderland, like other manufacturing-orientated areas of the north, faces bigchallenges. It needs to increase the localsupply of people with engineering-relatedskills and aptitudes suitable for existingemployers. It must also respond to the ris-ing skills needs of increasingly knowledge-intensive industry.

It must encourage more indigenous,smaller companies to dare to export andfind new ways to tackle youth unemploy-ment. And it must continue efforts toincrease its rate of business formation,which is running at only half the UK level.

Sunderland’s leaders – private and publicsector – are very aware of these challenges.They are using the tools at their disposal,and lobbying government for more, totackle them.

The council is determined to raise thecity’s profile and aspirations with a grace-ful new bridge, England’s tallest, a £117mproject which has just received the govern-ment’s go-ahead. It will improve road linksand provide a great marketing image. Fit-tingly, for a place with a practical disposi-tion, this will be a “functional landmark”.

“We need to demonstrate to people whatwe are,” explains Mr Watson. “We haven’tbeen very good self-publicists.”

The city’s 15-year economic masterplanwas launched in autumn 2010, before it wasknown that UK growth would remain sosluggish for so long. But the plan’s vision,“an entrepreneurial city at the heart of alow-carbon regional economy” remains thegoal. Software, offshore energy and electric

vehicle production were among the keyeconomic opportunities highlighted.

Thanks to automotives, Sunderland’seconomy this year has enjoyed more posi-tive news than many areas of the UK.That fact was not lost on George Osborne,UK Chancellor, who visited in August tosee construction progressing on a £22.5mwarehouse for Vantec Europe, an automo-tive logistics supplier and the first majorinvestor attracted to any of England’s newwave of Enterprise Zones.

Manufacturing a long-term futureDiversifying the types of businesses the city attracts is key to ensuring growth and prosperity, writesChris Tighe

Market driven: growing the auto industry is part of an economic masterplan Bloomberg

Nissan’s car-making opera-tion in Sunderland –already Britain’s biggest –is about to become evenbigger.

The Japanese group has,over the past year, commit-ted several new models tothe plant in a move thatwill create 3,000 new jobs,including at suppliers, andensure the plant remainsbusy well into the 2020s.

Nissan is investing £921min its new UK-built models,including a replacement for

its popular Qashqai smallsport utility vehicle, thenew Note small car and aforthcoming mid-size hatch-back people-mover. Nissanwill also build its Leaf elec-tric car at the plant fromnext year. The factoryemploys 5,800 people andlast year made 480,000 cars.

Nissan exports the cars itmakes there via the Port ofTyne to more than 90 mar-kets, from France to NewZealand. Around the clock,supply trucks rumble inand out of the factory,alongside which sits a testtrack for low-carbon carsand whirling turbines thatmark the location of a powerplant. A cluster of suppliershas followed Nissan to thesite, including Faurécia,Valeo, TI Auto and Sanoh.

A vast shed, nearly half amillion square feet in size,is rising in a business park

alongside the factory, builtby Sunderland-based Van-tec Europe, Nissan’s biggeston-site supplier of logistics.

City officials like to talkup their automotive hub’simportance, but in this caseit is no exaggeration to saythat Sunderland is sellingits services to the world.

Nissan’s UK managersare proud of having wonthe new models. However,they are not smug, but vigi-lant about the need to keepthe operation cost-effectiveand industrially relevant ina globally competitive busi-ness. “We’re in a good posi-tion because we’ve re-

sponded to the challengeswe faced,” says Kevin Fitz-patrick, Nissan’s vice-presi-dent of UK manufacturing.

To a degree, the operationhas been lucky in the mod-els it produces, notably theQashqai – a blockbusterearly entrant to the globallypopular small SUV seg-ment. However, the indus-try has also worked hard tokeep new investments flow-ing. Nissan makes cars in20 countries, and Sunder-land had to bid against aplant in India to make thenew Note, and against Mex-ico for the hatchback.

Just two years ago, the

mood in the factory wasless buoyant after it lost thenext-generation Micra smallcar. “It was a pretty bleaktime,” says Mr Fitzpatrick.

When Toshiyuki Shiga,Nissan’s chief operatingofficer, came to the UKfor the groundbreaking cer-emony for the new batteryplant, a worker asked himwhen it would get somenew products. “You showme your competitiveness,and I’ll show you thework,” Mr Fitzpatrickrecalls Mr Shiga saying.

As the plant sought tosecure its future againstintense internal competi-tion, it looked for a uniqueselling point. Alongside theplant’s own cost-effective-ness measures, managerslooked at new ways ofstanding out competitively,including by improvinglogistics routes, transfer-ring more activity to on-sitesuppliers, and working withthem to help bring theirown costs down.

“The internal processlooks at quality, efficiency,and, what we internallycall, total delivered cost –the cost of getting thecar to the dealer,” explainsAndy Palmer, Nissan’sglobal head of productplanning. “In that overallscheme of things, Sun-

derland does well,” he says.Sunderland’s automotive

suppliers have had to maketough calculations too asthey fight for new business.The Sunderland plant ofTRW, a US group that sup-plies clients such asVolkswagen and GeneralMotors, is competing inter-nally with a factory inlower-priced Slovakia – andexternally with companiesthat include South Korea’sLG group – to make a newpower steering element.

Piggybacking on Nissan’ssuccessful operation, localofficials have in recentyears sought to promote theregion as a centre forresearch and developmentof low-carbon cars. Gates-head College is organisingthe effort, which includestraining future workers tomake electric cars and bat-teries. Nissan has lent theventure a track alongsideits plant to serve as anopen-access testing facility.

“We can’t compete onconventional technology[such as engines] becausethe west Midlands is doingthat,” says Colin Herron,managing director of ZeroCarbon Futures, a subsidi-ary of the college. “Whatwe’re doing is looking atthe advanced technology –hydrogen and electric.”

Auto hub helpsdrive regionalemploymentAutomotive

The Nissan plantemploys 5,800people and exportsto 90 markets,says John Reed

Investment: £921m spent on UK-built models Bloomberg

Nissan’s plant is now a £3.5bn invest-ment; recent model announcements willboost its workforce to 6,225 and raiseannual plant volume to more than 550,000units next year. Both production lines willsoon operate around the clock for thefirst time in the plant’s 26-year history.Nissan’s investment has triggered a waveof supplier investment too. Next year seesthe launch of Sunderland production of thezero-emission Leaf.

The low-carbon commitment extends tothe municipally owned port, which formuch of its 300-year history exported coal.Recent investment in the port, which hasimmediate access to the open sea, hasenhanced its pitch for offshore wind andsubsea engineering support work.

Software is vital to Sunderland’s growth.In partnership with BT, it is poised tobecome the first city in Britain to offerwall-to-wall superfast broadband coverage.It has also built a private city cloud, inpartnership with IBM, which has desig-nated Sunderland its first UK “smartercity”. This cloud, one of Europe’s first,should help local businesses and start-upsand cut the council’s operating costs. A£10m Sunderland Software Centre, a basefor new software companies and innova-

Chris TigheNorth-east Correspondent

John ReedMotor Industry Correspondent

William HallFT Contributor

Aban ContractorCommissioning Editor

Steve BirdDesigner

Andy MearsPicture Editor

On the coverAn artist’s impression of theNew Wear Crossing, whichwill become the tallestbridge in England.

For advertising details,contact Julia WoolleyPhone +44 1473 652 964Email julia.woolley@ft.com

All editorial content in thissupplement is produced bythe FT.Our advertisers have noinfluence over, or prior sightof, articles or online material.

Contributors »

tion, will shortly open in the city centre.Despite its success in replacing the 30,000

jobs the area lost in vanished mines andshipyards between 1975 and 1989 with newactivities, including automotives, call cen-tres, logistics and digital businesses, Sun-derland’s unemployment rate still runs at1.5 times the national average. June’sannual population survey showed unem-ployment in the area at 12.2 per cent whenthe UK figure was 8.1 per cent.

Prospects for young people are a particu-lar worry. Sunderland has, at 11 per cent,the sixth highest rate in England of 16-18year olds not in education, employment ortraining. Moreover, employers are tendingto choose slightly older apprenticeshipapplicants. To try to improve its youngpeople’s life chances, the city has been driv-ing up educational standards. And, if itwins powers in round two of the govern-ment’s City Deal initiative, it plans to cre-ate a manufacturing and advanced engi-neering Academy, to raise skills levels.

Sunderland’s city centre is a weaknesstoo. This is partly the consequence of suc-cess in developing office and business spaceon the city fringes and in Washington, theformer new town within its area.

The Economic Masterplan bluntlyobserved that the city’s heart “lacks thescale, quality, vibrancy and variety of uses”normally found in a regional city centre.

Centre for Cities, the think-tank, warnedrecently that this may drag on future eco-nomic performance and may well be at theroot of existing weaknesses – a narrowindustrial base and lack of career progres-sion. The city council hopes its proposedLocal Asset Backed Vehicle, a public-pri-vate development partnership, will boostthe central area.

The council, now seeking a joint venturestrategic investment partner, will contrib-ute an investment portfolio of about 400property assets. The private sector partnerwill need to provide evidence of robustfunding and a track record of large-scaledevelopment delivery. Jones Lang LaSalleare leading the establishment of the LABV.

With regional development agencies nowabolished, Sunderland must make commoncause with six other local authorities viathe North East Local Enterprise Partner-ship to boost economic growth. Whilst TeesValley, the other LEP in the north-east,immediately presented a united front, theNE LEP’s gestation was protracted.

To those who ask why unity, on the linesof Manchester’s LEP model, has been diffi-cult, Mr Smith says: “We have two eco-nomic bases; a Sunderland-based economyand a Newcastle-based economy.” But, headds: “The issue is, what works?”.

“They are saying they are workingtogether better than before; I’m beginningto see some evidence of that,” observesKevan Carrick, principal partner in New-castle-based JK Property Consultants. “Wecan only grow if we grow collaboratively.”

Sunderland and Newcastle cannot affordto be “hostile brothers”, says Bernie Calla-ghan, dean of Sunderland University’s busi-ness and law faculty.

Sunderland used to like to point out thatits population was bigger than Newcastle’s.Today, it has 283,500 people, and Newcastle292,000. But, Mr Callaghan observes, Chinahas 120 cities with more than one millionpeople and, by 2025, it will have eight mega-cities with more than 10 million people.“Compared to that, the north-east of Eng-land is a dot,” he says. “We all need tochange the way we think.”

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Business Guide to Sunderland Business Guide to Sunderland

British Government ministersoften talk enviously of thesuccess of Germany’sMittelstand, the family ownedbusinesses that are thebedrock of Germany’s export-led economy. If only the UKcould replicate the Mittelstandbusiness model, with itsemphasis on fostering long-term investment and exports,then the UK economy wouldbe in a much better shape,they argue.The next time Vince Cable,

the UK business secretary, isin the north-east, he coulddo a lot worse than check into see Brian and LianneWalker, the father anddaughter team behind WalkerFiltration, which manufacturesa wide range of filtrationequipment for compressedair, compressed gas, vacuumpump and medicalapplications.Walker Filtration, based

close to the A1 inWashington, could easily bemistaken for a member ofGermany’s Mittelstand. It hasrevenues of £22m, 220employees, and exports closeto 90 per cent of its outputto more than 60 differentcountries. The company hasjust moved into a newfactory, three times as big asits predecessor, and has nineacres of adjoining land forfuture expansion.Over the past three years

it has increased its workforceby close to a third, grown itssales by more than 50 percent, and boosted its exportsby more than 75 per cent.Its success has not gone

unnoticed. Earlier this year itpicked up its fourth Queen’sAward for International Trade.Brian Walker, 65, who

founded the company in 1983along with his wife Carol, wasawarded an MBE for servicesto international trade in 2001.Daughter Lianne, 42, who hasbeen running the businesssince 2005, was given thesame award in 2009.Clearly, Walker Filtration is

no flash-in-the-pan operation.It is a fast-growing, family-runbusiness (Lianne’s sisterBarbara is also a seniorexecutive), with a long-termtime horizon whose growthhas been built on the back ofexports, not the UK market.“As a family business, as

opposed to a large corporate,we are interested in creatinga successful and long-term sustainablebusiness. We are notin it for short-termgains,” says MsWalker, who has anMBA from SunderlandUniversity. Overthe past yearWalkerFiltration hassent 87 per

cent of its staff on trainingcourses, ranging fromindustry specific diplomas inCompressed AirManagement through toengineering and MBAqualifications. It is ameasure of where thecompany stands in themanufacturing value chainthat 10 of its staff arestudying for MBAs,compared with sevenapprenticeships.Ms Walker is reluctant to

name her company’s majorcustomers, but many arewell-known, originalequipment manufacturersin Europe.“What we are good at is

finding a niche market andthen really focusing on ourinnovation and providingsome really high-valuemanufactured products inpartnership with ourcustomers,” says MsWalker, who has been withthe company for 24 years.While many UK

engineering companies haveoutsourced their productionto low-cost centres, such asChina and India, WalkerFiltration has always kept itsmanufacturing base in theUK, and has been expandingit significantly over the pastfew years.“Historically, the north-

east has been known for itsfantastic engineering skills.As a family we are born andbred within the region andhave a loyalty to the area,”says Ms Walker.Right from the start,

Walker Filtration’s growthwas export driven. The keyto its export success isresearching its markets verythoroughly and an ability tomake quick decisions.It started by exporting to

the UK’s immediateContinental neighbours,where sales leads could beconverted into ordersquickly and easily, beforemoving into markets whichare more challenging, andfurther away.The UK has a lot of

lessons to learn from theGerman economy, says MsWalker. “They are veryprogressive and verycommitted towards businessgrowth,” says the womanwho appears to have pickedup a few tips on how torun her own businessfrom Walker Filtration’s

Germancustomers.

Walker Filtration William Hall looks at acompany that exports to 60 countries

Brian andLianneWalker

Sunderland has a clear agenda forcompanies within its area – to bethe easiest place in the UK to dobusiness.

One of its biggest assets in ris-ing to this challenge has been its largetracts of readily developable industrialland, served by fast dual carriageways. Ithas now enhanced this potential by secur-ing 32ha of the North East Local EnterprisePartnership’s (NE LEP) Enterprise Zone.Sunderland’s three EZ zones offer occupiersenhanced capital allowances or businessrate discounts.

Green sites in Washington, the formernew town, and adjacent to the A19 andA690, have, over recent decades, attractedinward investors and helped them growand reinvest. Space to expand has alsohelped develop strong indigenous compa-nies, such as Walker Filtration (profiled).

Land availability has been vital in theexpansion of Nissan’s operation, which is

served by a cluster of synchronous suppli-ers who transport their componentsdirectly to the car production lines. Twentyautomotive-related manufacturers arebased in the Sunderland area.

Readily available sites have also fosteredcall centre clusters, particularly at DoxfordInternational and Rainton Bridge, and araft of logistics companies. Call centres in2010 provided about 10,000 of Sunderland’s109,130 jobs. Big employers in this sectorinclude nPower, Barclays, T-Mobile, EDFEnergy and UK Asset Resolution. Andlogistics operators, such as Asda, servingsectors including food, drink, automotivesand outdoor clothing, employ about 2,500.

Outdoor clothing is an important Sunder-land sector; Berghaus and Brasher areheadquartered there, and Nike has its UKhead office there too. The city is the UK HQfor Deutsche Bahn, the German rail opera-tor, which acquired home-grown Arriva.Sunderland is also the base for a significant

printing sector as well as for Gentoo, thehousing group, and Hays Travel, the UK’slargest independent travel agent.

Previous government incentives helpedreclaim former shipbuilding land, creatingnew business locations such as the Sunder-land Enterprise Park. This houses theNorth East Business and Innovation Cen-tre, home to 120 smaller companies.

Keen to create employment, Labour-controlled Sunderland city council has longadopted a can-do attitude to attract busi-ness investment, emphasising the partner-ship approach. This is appreciated by man-agers of inward investor plants, who oftenhave to compete within their global parentorganisations for new projects. Paul Will-son, plant controller of the Rainton Bridgeplant of TRW, a US-owned automotive sup-plier, praises the council’s support and thepower of its friendship agreement withWashington DC. “They are selling us backto America; it helps us get on the map.”

Can-do attitudeoffers businessand residents aneconomic lifeline

Economy Innovation is key if the city is to find itsway in the new industrial landscape and attract thecompanies of the future, reportsChris Tighe

The calibre of the local workforce mat-ters too. “As a place to do business, Sunder-land is a wonderful place,” says RobertForrester, chief executive of Vertu Motors,the UK’s ninth biggest motor dealer, whosehead office is in Gateshead.

“It has one of the hardest working work-forces I’ve ever come across.” Vertu’s Sun-derland dealership is the best performing ofits 86 nationally.

Commitment to manufacturing hashelped sustain its importance; the council’slatest business promotion, “Make it Sunder-land” was launched in mid-2012.

Automotives account for more than12,000 of Sunderland’s estimated 15,744manufacturing jobs – a potentially worry-ing dependency.

Recent investments include the UK’s firstfoam manufacturing plant, opened byDetroit-based Lear Corporation. Thisbrought the total of new jobs announced inSunderland to 15,000 over the past 10 years.

The historical domination of big indus-trial workplaces has resulted in low levels

of entrepreneurship which initiatives suchas Software City aim to tackle. It has alsoleft a legacy in some communities of lowskills and benefit dependency.

The council – like all UK local authoritiesunder pressure to cut spending – haspledged to avoid compulsory redundancies.It has shed 890 staff and now employs 7,000,excluding education.

Paul Woolston, senior partner at PwC inNewcastle, says Sunderland, his home city,is key to the future success of the NE LEP,which he chairs. “It has a well-earned repu-tation of being innovative, entrepreneurialand a city in which companies find it easyto do business.” The city is more resilientnow than in his youth in the 1960s, he says.

The challenge for the future is to movethe city’s economic activity up the technol-ogy and value chain, says Ian Williams, thecouncil’s business investment director.

“If you do that, you are less vulnerable tocost and other competitive type pressures.”

Improving education andskills is one of Sunderland’stop priorities, if not itstop priority. The city, incommon with the rest ofthe north-east, has long suf-fered from a below averagenumber of school leaversgoing to university, andserious deprivation hasbeen reflected in poorschool exam results.

According to the annualCities Outlook 2012, pub-

lished by the Centre for Cit-ies think-tank, 13.3 per centof Sunderland’s workingage population had no for-mal qualifications, againsta national average of 11.6per cent.

Only 23 per cent of itsworkforce had NVQ 4 quali-fications (equivalent to acertificate of higher educa-tion) against a nationalaverage of 31.3 per cent.

While Sunderland’s levelof skills and qualificationsis not much different frommany northern cities, itcontrasts poorly withregional cities such asCambridge, Brighton andYork, which are increas-ingly competing with Sun-derland when it comes tocreating new jobs in high-tech industries.

However, Sunderland’seducation system has beenimproving steadily over thepast five years.

Keith Moore, executivedirector of children’s serv-ices at Sunderland, saysthat, regardless of the levelsof deprivation in the city,Sunderland children arenow performing above aver-age against national stand-ards.

Children achieving Level4 or above in English andMaths at the end of KeyStage 2 have risen to 81 percent in 2012 – an increase of10 per cent over the pastthree years. Meanwhile,children achieving five ormore A*-C grades at GCSE,including English andMaths, have risen to 63 percent. This is 5 per cent

above the national averageand the best result of all the12 north-east regionalauthorities.

The city’s EducationLeadership Board, chairedby John Mowbray, presi-dent of the North EastChamber of Commerce,focuses on the city’s educa-tional strategy to make surethat pupils leaving Sunder-land’s schools have theright sorts of qualificationsneeded by local employersacross all phases of educa-tion from early years to uni-versity.

Sunderland College,which has 4,000 studentsstudying a mix of A-leveland vocational courses, hasachieved a 99 per cent passrate for A-levels for thefourth year in a row.

“Young people are recog-nising the importance ofan education in helpingsecure jobs in the future.Whether they’re choosingto study A-levels or voca-tional courses, we’ve seen anoticeable increase in enrol-ments for this academicyear, up 5 per cent on last,”says Nigel Harrett, the col-lege’s acting principal.

The college is building anew engineering facility atits Hylton campus, close tothe Nissan plant, which hasbeen designed specificallyto meet industry’s needs.When completed, it will in-clude the latest equipmentfor student learning acrossthe subject, including man-ufacturing, production tech-nologies and welding.

Sunderland University,

Young to benefit as partnerships offer new skillsEducation

Millions have beenspent on facilitiesand it is paying off,writesWilliam Hall

which has about 17,000 stu-dents, has also been enjoy-ing rapid growth. Studentapplications have risen 39per cent over the past fouryears and the facilities atthe university’s two maincampuses, on either sideof the River Wear, havebenefited hugely from a£75m capital investmentprogramme.

The look of the universityhas been transformed witha new £8.5m science com-plex, a £12m investment inthe City campus, a £12mstudent village with 550rooms, and a £7m invest-ment in the Priestman

Building, the university’slargest teaching space.

The university, one of sixshortlisted for this year’sTimes Higher EducationAwards for university ofthe year, has recentlyopened a new campus atLondon’s Canary Wharfwith a projected capacity of3,000 students, and contin-ues to expand its distance-learning operations interna-tionally. It runs pharmacydegrees in Malaysia, andwas the first UK universityto win a licence to offer itscourses in Vietnam.

The university’s researchstrengths lie in areas suchas computer science, phar-macy, and automotive. Ithelped create the Sunder-land Software City initia-tive. Its strong pharmacy

tradition has been under-lined by the decision ofSCM Pharma, a local drugcompany, to relocate part ofits business to the univer-sity’s new science complex.Carmaker Nissan worksclosely with the university’sInstitute for Automotiveand ManufacturingAdvanced Practice.

Sunderland University iscritical to the city’s long-term success, and this factis embedded in the city’sEconomic Masterplan.

“The university hasalways been very closelyconnected to the city andits people. It has always hada very strong sense of civicmission – economic, socialand cultural,” says Profes-sor John Macintyre, dean ofthe applied sciences.

Heads down: SunderlandCollege has a 99 per centpass rate for A-level students

City focus: SunderlandUniversity is estimatedto contribute more than£100m to the localeconomy a year●Employment rate: June 2012, Sunderland

63.7 per cent, UK 70.3 per cent.●Unemployment: Sunderland 12.2 per cent,UK 8.1 per cent.●Manufacturing Gross Value Added (2009):Sunderland 24.2 per cent of GVA, UK 13.7per cent. Overall, GVA per head: (2009)Sunderland £16,469, UK £20,341.●Percentage of manufacturing jobs inSunderland (2010) 14 per cent, GB 9 percent. Centre for Cities ranks Sunderland 10thof 63 British cities on this measure.●Working age benefit claimants (Feb 2012):Sunderland 20.6 per cent, GB 15 per cent.●Business start-ups per 10,000 population2010: Sunderland 16.8, UK 37.8. Centre forCities ranks Sunderland 64th out of 64 UKcities on this measure.

●Inward investors in Sunderland: 72.Ownership (in full or part): US 30, France 8,Germany 7; Japan 7. Total jobs: 23,555.●Sunderland city council 2012-13 total grossexpenditure: £729m. Budget reductions made2010-13: £99m. Total likely reductions overnext three years: £80m plus.●Sunderland University’s annual turnover:£130m. Estimated annual contribution to theSunderland economy: more than £100m.Staff: about 1,400. Ongoing programme ofcapital development: £75m.FOOTNOTE: Sunderland-based EdwardThompson is the largest supplier to theworld’s bingo industry. It has the capacity toproduce 200m bingo tickets a week.(Sources: Sunderland city council, Centre forCities, ONS: NOMIS)

Figures that are beginning to stack up

‘It has a well-earned reputationfor being innovative,entrepreneurial and a cityin which companies find iteasy to do business’

6 FINANCIAL TIMES WEDNESDAY OCTOBER 31 2012 FINANCIAL TIMES WEDNESDAY OCTOBER 31 2012 7

Business Guide to Sunderland Business Guide to Sunderland

It should perhaps be nosurprise that LS Lowry,that most distinctive andindividual of painters,should have adoptedSunderland in the lateryears of his life as hissecond home, staying inRoom 104 of the SeaburnHotel – today the Marriott.

Lowry, a Mancunianwhose paintings ofindustrial street scenes areinstantly recognisable, wasa bit of a loner and, in away, Sunderland is too,says Tim Brennan, a

contemporary art specialistand associate dean inSunderland University’sfaculty of arts, design andmedia.

Like Lowry, Sunderlandis, he says, slightly on theedge; engaged but, due toits geography, offering asomewhat differentperspective from thecentre. “It’s the importanceof a place or individualthat has a real input overa long period of time, buthas that outside kind ofquality,” says Mr Brennan,

who is intrigued by theway his home city ischanging, yet retaining itsidentity. This view castsnovel illumination, wellbeyond art, on thelongstanding pricklyrelationship betweenMackems and Geordies andalso on Sunderland’ssense that its importanceand contribution to the

north-eastregion hasoften been

underrated.It also helps

make sense ofSunderland’s diverseinfluence, over centuries,on visual arts. Thatinvolvement starts,arguably, in 672 or 673ADwith the birth of Bede inWearmouth, nowMonkwearmouth, by theWear. Bede was taken atthe age of seven to themonastery of St Peter atWearmouth, just yardsfrom the presentSunderland University StPeter’s campus, where helived until he was 12. He

A walk through the ages and a plethora of skillsArt and leisure

This spot by theRiver Wear hasalways been at easewith modernity,finds Chris Tighe

then moved to nearbyJarrow, now in southTyneside, and became thefirst man to write books inEnglish. The VenerableBede’s works, includingThe Ecclesiastical Historyof the English People, arebeautiful as well asinformative.

Within two years ofBede’s birth, glassmakingwas established in Englandwhen St Benedict Biscopbrought glaziers from Gaulto make stained glasswindows for the newmonastery at Wearmouth.Glassmaking in Sunderlandin subsequent centurieswent through manyphases, from high art tohighly functional.

Twentieth centurySunderland glass rangedfrom Jobling’s graceful ArtDeco pressed glass toPyrex casserole dishes,used in millions ofkitchens.

The closure in 1997 ofHartley Wood raised fearsthat art and craft glassmaking would be lost toWearside, but thattradition is kept alive atthe National Glass Centre,now part of SunderlandUniversity, just besidethe ancient St Peter’sChurch. Commercialglass manufacturingin Sunderland ended in2007.

Roker, a residentialsuburb near the North Sea,

is the location of StAndrews, an imposingchurch often described as“the cathedral” of the Artsand Crafts movement, withWilliam Morris carpets,Ernest Grimson furniture,and a tapestry, TheAdoration of the Magi, byBurne-Jones. St Andrews,consecrated in 1907, waslargely funded by JohnPriestman, a wealthy localshipyard owner.

In 1939, he opened thePriestman Building, incentral Sunderland.Originally a library forSunderland technicalcollege, it has just beenreopened, following a £6.5mrefurbishment, toaccommodate Sunderland

University’s Fine Art,Performing Arts, Cultureand Social Sciencesdisciplines. It houses anart gallery soon to open tothe public withexhibitions ofmodern works.

For thosewanting to viewLowry originals,painted anddrawn inSunderland,the place togois theSunderlandMuseumandWinterGardens. Whilethere, admire, out in

the gardens, the bronzeWalrus statue by AndrewBurton.

This commemorates theSunderland connections ofanother hugely individual

creative spirit –Charles

Dodgson,better

known asLewis

Carroll,writer of Alice

in Wonderland.Lewis

Carroll’sfrequent visits

to Sunderland alsoinspired the

curious graphicnovel, Alice

in Sunderland,

by Bryan Talbot, whomade the city his home.

And there is TerryDeary, creator of theone-man phenomenon, theHorrible Histories series.Son of a butcher, he wasborn and brought up inSunderland.

In the Sunderland spiritof innovativeindividualism, Mr Brennanis himself in the forefrontof a methodology, calledthe manoeuvre whichdevelops guided walks asperformance art.

Visitors to the city canexperience this on theSunderland Connect 700bus, by using a CampusTrails smartphone app thatMr Brennan has developed.

The VenerableBede: the firstman to writebooks in English

When Sunderland and New-castle United clashed in thismonth’s Wear-Tyne Derby,Sunderland fans were follow-ing the action with live match

commentary – in Swahili.The visit to the Stadium of Light by

Ulimwengu wa Soka, BBC Swahili’s flag-ship football programme, enabled support-ers in locations such as Nairobi and Dar esSalaam to keep up with the action, just asthey did on New Year’s day when the BlackCats beat Manchester City in the lastminute of play.

Rising interest in Sunderland gamesamong football fans in east and centralAfrica illustrates the increasingly globalperspectives of Sunderland AssociationFootball Club. The Invest in Africa logo onthis season’s new strip underlines thetrend.

Sunderland AFC’s existence, its brandprofile and success, remain at the core ofits home city’s sense of well being andcommunity life. As Niall Quinn, its muchrespected former chairman used to remark,Sunderland, lacking a cathedral, has theStadium of Light.

Its entrenched rivalry with near-neigh-bour Newcastle, a somewhat fractiousrelationship that can be traced to the Par-liamentarian-Royalist divide of the 17thcentury’s civil wars, now finds overtexpression in derby matches. This month’swas the 147th of an epic series of gladia-torial contests dating back to the 1888-89season. It resulted in a 1-1 draw, the 48thout of the 147 games. Newcastle have won53 and Sunderland 46.

But alongside this intense local rivalry,Sunderland AFC’s Invest in Africa partner-ship, the first of its kind in British football,shows how it is looking outwards andahead. This objective coincides with its aim

of finishing in the top 10 of the Premiershipthis season and qualifying for the EuropaLeague. It invested more than £20m duringthe summer’s transfer window.

Invest in Africa, a not-for-profit initiativebacked by Tullow Oil, promotes Africa asan attractive investment destination and afast growing economy, challenging thebelief that the continent is only about pov-erty and distress. It has become the club’sprincipal partner and shirt sponsor fromthe 2012-13 season onwards, a deal thatgives the Invest in Africa brand potentialexposure to the Premier League’s world-wide audience of 4.7bn people.

For Sunderland AFC, whose current firstteam includes Stephane Sessegnon fromBenin, the deal brings not only sponsorship– the value has not been disclosed – buthuge potential to build a fan base in acontinent of 1bn people and deepens theclub’s affiliation with African players.

“It’s building awareness of the club,”says Gary Hutchinson, Sunderland AFC’scommercial director.

“We hope to become the club in Africapeople want to support. We want to be aninternationally known and respected brandplaying in Europe.”

Ellis Short, the London-based Americanbusinessman who acquired Sunderland in2009, says the deal sets a new benchmarkcommercially. It has also triggered involve-ment from other sponsors, including TeamKorea. Mr Short regularly attends homegames, but is a much lower profile figurethan Mr Quinn.

But another sign of the club’s opennessto fresh perspectives was the appointmentof David Miliband, the former foreign secre-tary and Labour MP for neighbouringSouth Shields, as non executive vice-presi-dent.

“He’s a fantastic ambassador for the UK

and this region,” says Mr Hutchinson. Sun-derland is also unusual in having a femalechief executive, Margaret Byrne.

The club is itself part of Sunderland’sbusiness fabric, employing 1,200 people fulland part-time and turning over £80m annu-ally. The 19 league and two cup gamesplayed each year bring about £45m intoSunderland, much of it going to businessesoutside the ground.

The Stadium of Light, which seats 49,000,has also developed a reputation for big rockconcerts. Bruce Springsteen, Coldplay andTake That are among the acts to haveplayed so far, to audiences totalling 650,000people. The economic benefit to the club

and Sunderland is estimated at £42m. Moreconcerts are under negotiation.

Charitable activity that involves morethan 42,000 young people and their familieseach year across the north-east is also apart of the club’s activities, addressingneeds within its own community. Its Foun-dation of Light, whose team includes morethan 100 professional teachers, healthworkers, football coaches, family learningofficers and youth workers, encourageseducation and community enrichment.

Mr Hutchinson, Sunderland born andbred, says the club feels a moral duty to itshome area. “The club’s a leading light inthe city. It’s a beacon,” he says proudly.

Fans cheer a teamnow thriving in aleague of its ownFootball community The club stands as a beacon ina place that has seen tough times, writesChris Tighe

Battle lines: Sunderland and Newcastle take to the field in this year’s derby PA

The cold winds of recessionare being felt in Sunderlandas keenly as elsewhere. Inthe 20 years since it wasgranted city status it hasgrown as an automotivecentre and diversified itsemployment base.

But there is a downside tothe striking office develop-ment on the city fringes,such as the Doxford Inter-national Business Parkwhere 8,000 people work.

As well as having to facethe competitive forces buf-feting well establishedretail areas all over the UK,Sunderland’s city centrehas had to cope with a lossof economic vibrancy fromits heart as office develop-ment focused on the fringesand on Washington newtown.

While 33 per cent of New-castle’s jobs, and 25 percent of Leeds’, are in theircity centres, the Sunderlandfigure is just 16.5 per cent.“We need more people inthe city centre earning andspending,” says Vince Tay-lor, the city council’s headof strategy and perform-ance.

A report, Hidden Poten-tial, by Centre for Cities,the think-tank, published inmid-2012, identified Sunder-land, along with Preston,Derby and Wakefield, asplaces whose weak city cen-tres are restricting eco-nomic growth. Of 105 busi-nesses that moved into Sun-derland between 1998 and2008, just three moved tothe city centre.

The mid-1990s closure ofVaux Brewery compoundedthe problem. It cost jobs,

sapped morale and createda highly visible, neglected25 acre central site, lyingdormant amid wranglingover its redevelopment.

History and topographyhave not helped; steep citycentre riverbanks and thepattern of developmentspanning centuries preventSunderland feeling at itsheart like a riverside or sea-side city: both these aspectsremain underexploited.

As the city council’s eco-nomic master plan candidlyacknowledged, it lacks that“city feel”, the elusive buzzfactor. “This is a city with auniversity but it doesn’tfeel like a university city,”observes Mr Taylor.

One successful north-east

businessman, who workedfor some years in Sunder-land, suggests the centresuffers from having “nobourgeoisie”.

Bernie Callaghan, dean ofSunderland University’sfaculty of business and law,says Sunderland remains insome ways a relativelysmall working class town.“There are only small pock-ets of what you might termrelative wealth,” he says.

But there is progress; thecity centre is seeing newinvestment and capitalisingon key assets – the univer-sity, the Vaux site and theBridges shopping centre.The university, which hastwo main sites, St Peters,on the riverside near the

river mouth, and City Cam-pus, the other side of thecity centre, has investedheavily in its facilities andsought to integrate thembetter with the city centre.An example is its City Cam-pus, focus most recently ofthe £7.5m Sciences Complexredevelopment, whichincludes a new publicsquare, the Quad. It hasalso developed a number ofstudent residences, givingthe city more youthful andcosmopolitan inhabitants.

Current city centreinvestments include the£15m extension of theBridges shopping centreinto High Street West, witha 60,000 sq ft Primarkdue to open this autumn.

The Bridges attracts morethan 20m visitors a year.

Sunderland’s hotel defi-ciency is also beingaddressed, with progress onthree hotels by Hampton byHilton, Premier Inn andTravelodge. The opening isalso imminent of the new£10m Sunderland SoftwareCentre.

The long debate overTesco’s plans for the Vauxsite has been resolved, butsubsequent developmentplans did not go ahead. Thecity council, which nowowns the site, has beenclearing and landscaping it.It plans to realign St Mary’sWay, which will form partof the strategic corridorfrom the new bridge acrossthe River Wear to the port,to create a riverside centralbusiness district and a siteabutting the retail centre,giving great potential toenhance that area.

The council, which hasallocated £12m over thenext five years from itsbudget to support city cen-tre development, believesthis site can attract thou-sands more jobs into thearea. Given the currenttight financial climate, itwants to maximise poten-tial by setting up a LABV, aLocal Asset Backed Vehicle.This proposed 50-50 partner-ship with a private sectorpartner, which the councilwill begin seeking shortly,should accelerate develop-ment of key sites, includingthe Vaux land.

“At the moment our largeindustrial portfolio just sitson our balance sheet,”explains Malcolm Page, thecouncil’s executive directorof commercial and corpo-rate services. These assetsmake money for the councilbut are not, he says, “beingsweated”. “We think we canuse our assets more effec-tively to leverage both pri-vate sector investment andexpertise.”

Old industrial assets offer a way forwardDevelopment

Chris Tighe looks atplans to give a citycentre the heart itneed to grow

The Bridgescentreattracts20m visitorsa year

8 FINANCIAL TIMES WEDNESDAY OCTOBER 31 2012

Business Guide to Sunderland

Modern cities crave landmarks –and what better than an eye-catching new bridge, the tall-est in England, that looksstunning and fosters economic

regeneration?That is the thinking behind the proposal

for a bridge across the River Wear in Sun-derland: a graceful crossing of two curvingsteel towers, the smaller about 140 metreshigh and the taller, western one 190 metres.The project, costing nearly £120m for thebridge and approach roads, has justreceived government consent and contrac-tors are being invited to tender.

“It will give Sunderland a totemic land-mark to recognise ourselves by,” says PaulWatson, leader of the city council, whichhas championed the project. “It will engen-der a feeling of place in the community.”

Once, a sense of identity was engenderedby shipbuilding and mining along the river-banks the bridge will link. The new Wear

crossing will connect Castletown, east ofthe main A19 route, to brownfield landneeding regeneration on the south bank atPallion.

The bridge forms part of a transport cor-ridor that will provide quick access fromthe A19 to the city centre and the port. Thisabuts the North Sea and is seen by thecouncil as an important asset in pursuingoffshore renewable energy and subsea engi-neering business activity. This improvedaccess could also benefit occupiers of theLow Carbon Enterprise Zone, west of theA19, and existing businesses in Washing-ton. The project has a target completiondate of the end of 2015.

This road corridor also enhances thedevelopment potential of the former Vauxbrewery site, now publicly owned andSunderland’s best city centre regenerationopportunity. The new road will give thesite – with one area forming an extensionof the central retail area and the other

offering a riverside development belt –excellent road access. The coalition govern-ment has offered £82.5m towards thebridge, from a national £630m fund for localauthority projects that assist economicregeneration and provide jobs.

Mr Watson, who leads a council where 64of the 75 councillors are Labour, says hehad feared a coalition government might bea disadvantage, but the bridge suggeststhat has not proved the case.

“We’ve wanted a new bridge over theRiver Wear for 50 years. This governmenthas granted us the money for that.”

The council, which estimates the bridgewill deliver a return on investment of £4 foreach £1 invested, has committed about£30m to the project from its strategicinvestment reserve for capital projects.

A bonus of the graceful design is that itis the work of a local architect, StephenSpence, who also designed the InfinityBridge in Stockton on Tees. Structural

engineers are Techniker. The bridge will bethe second biggest civil engineering projectin the north-east in recent years; the first isthe £260m new Tyne tunnel, completed inNovember 2011.

The new Tyne Crossing, commissionedby the Tyne and Wear Integrated PassengerAuthority, and designed and built byBouygues Travaux Publics UK, has justwon the top civil engineering award at theBritish Construction Industry Awards inLondon. By doubling the road vehicle tun-nel capacity the new tunnel has greatlyimproved the flow of traffic along thenorth-south route running between Sunder-land and Washington.

Sunderland’s direct rail link with LondonKings Cross, launched in 2007 by GrandCentral after a 20 year gap, continues,although the open access operator wasacquired in November 2011 by Arriva.

Sunderland-based Arriva, one of Europe’slargest transport services organisations, isitself now part of a much bigger entity,Deutsche Bahn, having been bought by theGerman passenger and logistics service pro-viders in 2010. Arriva still has its headoffice in Sunderland, where it began in 1938with the opening by the Cowie family of asecond-hand motorcycle shop.

Deutsche Bahn subsidiary DB Regio oper-ates the Tyne and Wear Metro, the lightrail system that links Sunderland to Metroservices around Tyneside and to NewcastleAirport. DB Regio won the Operator of theYear accolade for the Metro at the 2011Light Rail Awards.

All five local authorities in Tyne andWear, including Sunderland, jointly hold a51 per cent stake in Newcastle airport;negotiations on the sale to another party ofthe 49 per cent stake held by CopenhagenAirports are in progress.

Creative landmarkoffers better linksTransportGreat feats of engineering are once againset to help the city thrive, writesChris Tighe On track: light rail offers commuters choice