While this may or may not be true (he took back his words swiftly), until recent years, Liverpool was a city with a severe self-esteem problem. The grand Georgian buildings that dominate the city centre belied the down-trodden, depressed feel of the place.

Once one of Europe’s great cities and for decades the second city of the British empire, Liverpool fell on hard times in the 1970s and 1980s, suffering a raft of business closures and job losses, accompanied by social unrest and political instability. “As a city, Liverpool lost its way,” recounts Mike Storey, leader of the city council.

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At the time, survival was the main priority, not bringing businesses into the city or creating jobs. This led to an often antagonistic relationship between the business community and political leaders. “The council’s mantra was ‘don’t cut jobs and services’. It had no real understanding of how business was changing and did not relate to the business community at all,” Mr Storey says. “Business was seen as the enemy.”

Time for a shake-up

Watching with dismay what was happening to the city, Mr Storey – who was head teacher at a local primary school and had served on the council since 1973 – felt a shake-up was needed in the political structure before Liverpool’s many ills could be cured. “The only way you can change things is not shouting from the sidelines, making worthy speeches or writing worthy articles but by having power,” he says.

He got that power when he took over as leader in 1998, after his Liberal Democrats won overall control of the council (the party has since not only retained power but increased its majority).

Since taking charge of the council, Mr Storey has set out to make amends with the business community with a stated goal of making Liverpool the UK’s most business-friendly city. “We realise that city councils don’t create jobs; it’s businesses that create jobs,” he says. “What I have done and will continue to do is make the conditions right for jobs and businesses to flourish here.”

The city is now enjoying its lowest unemployment rate in decades (though, admittedly, still higher than the national average). And the population has increased for the first time in 70 years as more jobs have been located in the city and as more of the 50,000 local university students have begun to stay rather than fleeing to London.

“Businesses coming here find a can-do culture: they know we will do all we can to help them be successful,” Mr Storey says.

Less red tape

The city has acted on a number of fronts to ensure that. In 2001, the Liverpool Business Centre – a partnership between the Chamber of Commerce and Industry, Business Link and the city council – began to act as a one-stop shop for business support and a single point of entry for investment queries. The aim of the move was to “cut through the red tape and make things happen”, says Mr Storey. In December 2004, the partnership was rebranded as Business Liverpool and it was announced that a joint venture company would be formed, headed by a predominantly private sector-led board.

To beef up the city’s science credentials and woo the pharmaceutical and biotech industries, there are plans for a Liverpool Science Park. The park will operate on two sites: a purpose-built facility near Liverpool Metropolitan Cathedral and an extension to Wavertree Technology Park, with a total of 350,000ft2 of space. The Northwest Development Agency is funding the park with a £900,000 grant.

Change of image

But changing Liverpool’s business climate was the easy part; changing its image proved more difficult. “The view of Liverpool was as this sort of grimy, militant, crime-ridden city,” says Mr Storey. “It’s just not true so we had to make sure we changed people’s perception of this city.”

However, to reclaim the city’s proud heritage and reposition it for the future, the citizens first had to believe in themselves. The city needed to get its self-confidence back, says Mr Storey. “If you look at other great cities that have re-established themselves – like Dublin and New York – you can see that it is about confidence building. Because if people outside think this is a confident place then they will feel more like investing here,” he says.

Being named the 2008 European Capital of Culture provided a much needed boost, not just to the citizenry’s self esteem, but also to its burgeoning tourism industry, says Mr Storey. “We think the position of Liverpool is strongly linked to tourism. That’s why we went after capital of culture.”

The council wants to capitalise on Liverpool’s location on the estuary of the River Mersey, and lure cruise liners to dock at its UN World Heritage Site riverfront so that passengers can come onshore and spend money in local shops and restaurants. The city is building a landing stage and terminal and is appointing a director to target the cruise liner market. After the docking facilities open in 2006, Liverpool hopes to attract 40 ships in its first year.

Retail development

The city used to be one of the UK’s top retail destinations but has slipped out of the top 15. In an effort to climb back up the rankings, it has broken ground on what it says will be Europe’s largest retail development, a £800m Grosvenor development on Paradise Street with 2.5 million feet2 of new shops, housing and leisure facilities. Construction began in October and the shopping centre is scheduled to open in 2008.

And because Liverpool had to turn away 200 conferences last year due to lack of exhibition space, it is also building a 10,000-seat arena, complete with conference facilities and hotels, Mr Storey says.

Project wins

Liverpool’s new-found confidence, coupled with an improved investment environment, is bearing fruit in the form of FDI. The city began finding itself on short-lists for projects that previously it would never have been in the running for – and then began winning some of them.

It has made use of its high-quality workforce to carve out a niche as a location for specialist call centres that value skilled labour more than merely cheap labour. Since 2001, £225m of inward investment has come into Liverpool and about 5000 jobs have been created or safeguarded, the council says.

Despite such successes and the progress made during his stewardship of the city council, Mr Storey tries not to sound too self-congratulatory. “I don’t think you can get too carried away with your own self-importance as political parties or as individuals, because there comes a time when the pendulum swings back,” he says.

Whatever the political future holds for Mr Storey and for Liverpool, the city seems to be on an upswing at long last.