Amid the hills and concrete of Sheffield, I step through a scruffy front door and climb narrow stairs into a cavernous building called Castle House. Outside, almost all the shops except budget homestore chain Wilko are boarded up. But inside, I find the Kommune food hall, Kurious—a “home to a community” of “digital and creative businesses”—and Kollider—“a connected place to work, socialise and play”. The trio of Ks sound a lot more Shoreditch than South Yorkshire.
I’m at Kollider for the South Yorkshire Economic Summit: a gathering of political, business and university leaders, plus a sprinkling of dignitaries from banks and government departments down south. The question that’s brought me here is whether the conurbation’s future can open up in the same unexpected way as this building. It’s an urgent one: opportunity in this area has sagged so far that its productivity statistics are more typical of countries behind the former Iron Curtain than western Europe.
During the summit plenaries and coffee breaks, people talk defiantly about how the city that forged the first industrial revolution is ready to recast its future again. On one level the national mood is promising: surveys suggest that voters care more about regional inequality than any other kind. On his first day as prime minister, Rishi Sunak restated the 2019 Tory manifesto commitment to “levelling up”. Labour is on the march, and on its behalf Lisa Nandy has said a muscular regional strategy is “the only answer for the country”.
Having recently moved back “home” to West Yorkshire after 20 years in London, I’m roused by such rhetoric. Yet I’m also painfully aware of the many regional development policies that have ended in disappointment. From the Special Areas Act of 1934 through to New Labour’s Regional Development Agencies and the European Social Fund, schemes have come and gone. Countless commissions, quangos and industrial councils have alleviated distress but never truly closed the gap. Can Sheffield have any faith that, this time, things will be different?
Sheffield’s ingenuity and manufacturing skill can be traced back to long before the Industrial Revolution. In “The Reeve’s Tale”, the third story in The Canterbury Tales, Chaucer wrote: “A Sheffeld thwitle [whittle or knife] baar he in his hose.” There are written records of local “coetlers”, or cutlery-makers, even before that.
A rich civic and cultural life grew out of the smelting and shaping of metal. Victorian steel magnate Mark Firth founded a college, which generous public donations expanded into the University of Sheffield in 1905. Workers struggling against deadly conditions created some of the countries’ strongest unions. These combined to form England’s oldest trades council in 1858, a decade before the national Trades Union Congress.
Theatres, including the Crucible, are more densely clustered here than anywhere outside London. Musically, this is the home of Joe Cocker, the Human League, Pulp, the Arctic Monkeys and Richard Hawley. And it’s the only English city that has the beginnings of a national park within its borders: the Peak District is only a short bus ride or cycle away. Ask citizens about their neighbours, and you’ll be told that they are humorous, warm and unpretentious. No wonder people love it here.
At the summit, it wasn’t hard to uncover inspiring stories of fervent South Yorkshire citizens. People like Julie Kenny, a mum who sold her house to found an electronic manufacturing business, ended up showered with honours and—most recently—converted Wentworth Woodhouse, the region’s grandest tumbledown stately home, from a dangerous wreck into a job-creating heritage attraction. Or Deborah Bullivant, a social entrepreneur who left school without qualifications but still carved out a career in education and created a “story centre” in Rotherham which does such great things for disadvantaged kids that people have flown in to see it from east Asia. Initiative, then, is not the problem.
At the University of Sheffield, I dropped in on a sparky class of triple-A grade students who had been recruited for a new PPE (politics, philosophy and economics) course, a variant of the Oxford degree that produces half of Britain’s political elite. There are 10 engineering departments and programmes too, including aerospace and automatic control systems engineering. These, like neighbouring university Sheffield Hallam’s specialisms in sports science and food engineering, are the kind of research that should naturally spill over into local industry. Sometimes it does: Sheffield University’s Advanced Manufacturing Research Centre has links to the local plants of giants like Boeing and McClaren.
But Boeing’s cutting-edge “actuation systems” and McClaren’s carbon-fibre chassis are sadly unrepresentative of the South Yorkshire economy. Philip McCann, a professor at the Alliance Manchester Business School, says politicians in England’s southern shires, where productivity “can stand comparisons” with Sweden, Austria or Canada, have no idea how different it is elsewhere. Using OECD numbers on GDP per head, he calculates that the Sheffield metropolitan area is 12 per cent poorer than the Czech Republic, a country that only escaped from communism a generation ago. The rest of South Yorkshire is nearly 28 per cent worse off than the Czechs. A better comparison might be Slovakia—a place many Czechs would consider poor.
Sheffield-born economist Paul Collier, one of the guiding lights behind the Castle House summit, judges that his home city “has been falling behind since 1977”. Not coincidentally that was when the first modern age of austerity set in, after the Callaghan government accepted an IMF loan in 1976 conditional on deep cuts. The underlying strength of private industry in South Yorkshire was likely faltering from the 1960s. Ever since, in Collier’s view, the economic rot has only been “concealed by the city being pumped with public money”, which, at intervals, Whitehall abruptly withdraws—a clear and present danger now, as a new bout of austerity looms.
Thatcher’s industrial shakeout and pit closures were famously ruinous across South Yorkshire. The jobs shock of the 1980s became a productivity shock from the 1990s. Even when New Labour money was pouring in, Collier says, public investment never “multiplied” across the wider economy: during the 2000s, Sheffield was the one major city where private-sector employment contracted.
It has not shared in the 21st-century renaissance of other northern metropolitan centres. Despite being one of the UK’s 10 biggest cities, its fortunes have been closer to those of places like Teesside and Hull. Like them, it voted for Brexit and has, in the tired phrase, been “left behind”. Former Bank of England chief economist Andy Haldane—a Sheffield graduate—told the summit that, in 2000, “gross weekly pay was similar in Leeds, Sheffield and Newcastle, and only a touch higher in Manchester.” Since then, Sheffield pay has fallen by about £50 a week behind those in those other cities. Two decades ago, Haldane added, “start-ups per head of population were very similar in Sheffield to Manchester, Leeds and Liverpool. They’re now 25 per cent higher in Leeds and Liverpool, 50 per cent higher in Manchester.”
The infuriating thing is that none of this is inevitable. While most countries have dead-end towns, Britain is distinct for having such stubborn gaps between whole regions. At reunification in 1990, McCann points out, East Germany had only 30 per cent of the GDP per capita of the old West Germany, and less than 35 per cent of the UK’s. Today, the old East “is almost as rich as the UK and richer than everywhere outside London and the southeast.” It hasn’t fully caught up with the West, but it no longer drags down the nationwide position. Indeed, McCann notes, the reunified Federal Republic as a whole now enjoys “a greater edge over the UK than the West alone had in 1990.”
There is a remarkable academic consensus about how to close geographic gaps. Collier, Haldane and international experts such as Julie Wagner of the US thinktank Brookings—beamed into the summit to discuss global “innovation districts” from Latin America to the Middle East—all agree on the centrality of a so-called “clustering” process, where the growth of one firm spills over to others nearby. One expanding company attracts deepening capital pools and concentrations of skilled labour, from which others benefit. Eventually, whole industries hum with the self-perpetuating expansion seen long ago in Lancashire’s cotton-milling, Sheffield’s steelmaking and—more recently—Silicon Valley. It is generally agreed, too, that contemporary Sheffield’s biggest problem is not the relative rarity of its start-ups, but rather their failure to “scale up”. Its position would be transformed if a tiny handful of them could grow in a serious way.
Why, then, has public policy failed to address the “scale-up” challenge? A city council insider concedes that too much local policy has been about “trying to persuade a Heinz or some other giant company to plonk a plant here”, when the real aim should be “identifying the seeds of ingenuity we already have in the area”, nurturing them and then allowing them to “lay down deep local roots.” So I made it my purpose to find three such seeds and ask them what is holding them back.
The “Macmillan gap”—the difference between the loans that smaller British businesses need and the amount British finance will lend—was first flagged as a problem in 1931 by a Depression-era committee that included John Maynard Keynes and Ernest Bevin. Finance and industry were, it reported, parallel worlds, lacking the connections seen in Germany or the United States. A century on, the missing link remains unfixed, and has been aggravated by large banks closing local branches and ridding themselves of the staff who used to look local entrepreneurs in the eye and feed back to HQ on which of them were a good bet.
At the Sheffield summit, a man from HSBC suggested that the bank was eager to make loans, and another from the £2.5bn Business Growth Fund talked a good talk about supporting small firms, before letting slip that just four of the hundreds of companies that it was backing were in South Yorkshire. A youngish man then stuck up his hand and recounted how he had tried—and failed—to finance his start-up locally.
Northern-bred, softly spoken and with several manufacturing-sector jobs under his belt, 34-year-old Chris Iveson and his tech guru partner Robin Hartley-Willows founded FourJaw, a start-up producing “Fitbits for manufacturers”. Their big idea could hardly be more Sheffield, or more precisely trained on its productivity problem. Just as anyone can now log their steps to track and challenge lazy habits, so with FourJaw’s gadgets and analytics software, companies can become “fitter” if they first gauge how hard their machines are working.
In FourJaw’s spruce city-centre office, nestled incongruously amid huge bulldozed spaces and derelict buildings with plants sprouting from their roofs, half a dozen techies are quietly examining each other’s code on outsize screens. Iveson shows me the sort of small package that might contain a new router from BT. Inside—under a lid emblazoned with the slogan “If the spindle’s turning, then you’re earning”—is the “MachineLink” kit. It doesn’t look like much: a large plug, a few wires, two large blue clips, one black box full of USB sockets, and another plain box that Iveson calls “the brain”. It’s yours for £180. A young staff member assembles them in a small workshop just off the main office.
The simplicity is clever. The kits fit onto Computer Numerical Control (CNC) machines, a class of contraptions which Iveson explains “make the world”. “They’ve made the saws that cut the wood on this table; the tooling that has made every piece in this mouse,” he says, gesturing around the room. “Your glasses will have been directly or indirectly made by a CNC machine.”
Such machines can cost millions; most performance tracking tools need a bespoke installation. By contrast, installing MachineLink is almost as easy as strapping on a fitness tracker: just open the main cabinet, find the machine’s two key wires, pop a blue clip on each and you’re immediately monitoring current.
But the real power—and the justification for a £100-per-machine monthly subscription for FourJaw—comes by accessing the “online dashboard, similar to Fitbit, where you can track all these metrics, see what’s going on hour-by-hour—the morning ramp-up, lunchtime, the end-of-the-day drift-off—and also compare machine by machine.” Before every restart, a tablet requires a machine’s operatives to pick a reason why it stopped. Manufacturers soon have hard data on what’s making them less productive. It’s often astonishingly simple stuff. “People are stopping to find a spanner,” says Iveson, and they realise “we haven’t got enough spanners, it’s costing us 30 hours a month… let’s buy some spanners.”
FourJaw’s market could be huge. While acknowledging various practical obstacles and software tweaks needed, Iveson says “in theory, if we managed to connect every machine in the world, we’d be making £18bn a year.” If I were a Dragon in the TV den, I’d be handing over my wodge of cash even if FourJaw could only get a fraction of that target. But when the time came for Iveson to start raising funds, the reaction was different.
Britain is distinct for having yawning gaps between regions
FourJaw needed around £400,000 to get up and running. But the low valuation of the business by the first northern venture capital fund Iveson spoke to meant that the founders would lack the equity needed for later investment rounds. The second gave a £1.5m valuation—which was enough—but attached a terrifying 30-page document detailing myriad circumstances in which Iveson and Hartley-Willows could be sued for hundreds of thousands of pounds.
Bizarrely, the pandemic brought salvation: “Covid was good to us because [southern] investment houses realised they’d have to start investing in people they’d never physically shaken hands with.” Long train rides out of the capital were no longer a bar, so “suddenly, the world was our oyster,” Iveson says. London funds are often invested in hundreds of ventures, making them much more open to risk than northern ones: “The southerners were so relaxed: ‘at this stage, we just want to know that you guys are good guys, and are going to have a good go at it’.” FourJaw got the £1.5m valuation with no frightening strings—but only thanks to a passing emergency.
Half-Greek by heritage, but 100 per-cent “made in Sheffield”, 38-year-old Dino Sofos is a mover and shaker in Britain’s podcast industry. After attending school and university in the city, he made his way into the BBC via Radio Sheffield. Although London posts at Radio 5 Live and Westminster-based programmes followed, he insists he “never stopped banging the drum for Sheffield.”
While informally chatting about the news one day with some of the BBC’s big names, it dawned on Sofos that such discussions should be broadcast. After overcoming some managerial resistance, and pleading a little with the best-known voices like Laura Kuenssberg, Electioncast, Brexitcast and Americast eventually got going. Soon they were loved by the presenters and listeners alike. An attractive “lifer” position as the corporation’s podcasting guy beckoned, but instead Sofos made a wild leap: quitting to form his own production company with the clear ambition that the heart of the operation would, in time, be in Sheffield.
Persephonica is up and flying. The first gig was producing superstar singer Dua Lipa’s podcast before this August’s launch of The News Agents. This daily show is fronted by Sofos’s former BBC buddies Jon Sopel and the (Sheffield-raised) Emily Maitlis, both lured away from the national broadcaster by Sofos’s spark, enthusiasm and the canny partnership that he struck with commercial radio giant Global, which brought many resources and the funding for these stars’ serious salaries. The late addition of Newsnight’s brilliant brain Lewis Goodall into the mix lends the discussion an analytical edge. As of mid-October, it stands at number two in Apple’s “all podcast” UK charts.
Sofos is pulling off great things but isn’t—yet—doing any of them from Sheffield. “When I first started the company, I was going to move up straight away,” he says over a Zoom call from his London home. But he had to get the “big Global job off the ground”, and it’s recorded close to Leicester Square.
The Sheffield dreams remain big. “As we’re talking to the big American streamers, I want them to know we’re based in Yorkshire. To let them know that we’ve found this, you know, twentysomething writer from Rotherham and she’s based here, and that there’s this undiscovered talent we’ve got access to and others don’t—that’ll be our pitch.”
He is inspired by the Sheffield film company Warp (whose titles include This Is England and Chris Morris’s Four Lions) which insists famous actors “come up with their hiking boots and learn their lines walking through the peaks.” He’s informally partnering with its joint CEO Mark Herbert, the pair both being convinced there “is a new sound to be discovered” in audio drama without rigid scripts. His eyes are trained on the “amazing untapped skillset” in that famous Sheffield music scene: “Go down to Kelham Island, and there are so many self-taught producers and musicians in little warehouse spaces recording bands who have put their life savings into creating a studio. Why shouldn’t those people be designing sounds for podcasts?” He hopes to create a professional academy to train entry-level producers from non-university and working-class backgrounds and is already developing a network to bring together Sheffield producers who are currently “lone wolves”.
All this sounds like a textbook “clustering”. So why is Sofos still not in Sheffield? He has two big—and linked—problems. The first is overcoming the great pull of the UK’s giant media cluster: London. Despite Maitlis’s Sheffield roots, The News Agents only underlines the point: “Her life is in London. I’m not deluded, I don’t suddenly get Emily to move or get the train up every week to record a podcast.” Hence Sofos is resigned to continuing to spend much of his time in London for now. Better, he insists, to grow things slowly but sustainably—and avoid the “tokenism” of a rushed, shallow move. The BBC’s partial relocation to Salford was “laughable: presenters would get the train up with the guest, go into the studio and then both get the train back to London.”
Which brings us to Sofos’s second big problem: transport. Though only 160 miles from London, the trains to Sheffield take two to three hours: too slow for a comfortable day trip. HS2 should eventually cut times, but because the Yorkshire leg was axed the last stretch will remain on slower tracks. Still more frustrating are the travel-imposed difficulties of “clustering” with other parts of the industry just 30-odd miles away, in Greater Manchester and Leeds, where Channel 4 is now based. “Ironically,” Sofos explains, one trigger for leaving the BBC was that his own job was moving. “I said, ‘I’m not going to live in Salford, I don’t know anybody, I’m going to live in Sheffield.’ But that meant a horrible commute.” I feel his pain: even on schedule, our local train does the 22 cross-country miles to Sheffield in an hour and five minutes, a speed that a decent cyclist could match.
Son of a steelworker, raised in Shire Green (“not a great place”) and knowing everybody, Jim O’Hara is perfectly at home in a pub garden when I find him. Puffing on cigarettes and bantering affably, he seems like someone from a less distracted age. But he’s only 40, and since the age of 25 has been opening businesses, mostly pubs, like a man running out of time.
He and brother Tom—now an “investment banker, though still a nice person, fundamentally”—both progressed from their Catholic comprehensive to Newcastle University. O’Hara “came back to do all the clichéd Sheffield jobs: “Bassett’s sweet factory, Stocksbridge steel works.” He used his “DJing money” to take a lease on his first bar: “A complete failure—no one paid for a drink, accounting mistakes, everything you could do wrong—but the best thing that ever happened to me. It taught me what not to do.”
Next, with an outlay of only £600, came The Great Gatsby, “named after my favourite book.” (He likes it because “it was a story about someone who tried and failed to ingratiate themselves into a class above the one to which they were born”.) The premises had been “a proper basket case”, so he charmed the landlord into giving them a “tenancy at will” where they could pay £1 rent a week for six months to see if the business worked.
There’s always a bit of a habit in Sheffield of internalising bad things
It did—and the profits were soon enough to open another bar; then the profits from the first two funded a third, and so on: Picture House Social, Public, Piña all followed. There was no debt, just a “decision to keep starting things, one funding the other, to keep going.” O’Hara runs two museum cafés now, too. Every outfit is different, he insists: “We’re not trying to build a brand. We’re trying to do individualistic, exciting things.” The greatest pride comes from watching success spread: former “glass collectors who are now general managers,” or “two guys, Jack and Ronnie… who have seen that I own businesses, seen its achievable” and have now “opened their own restaurant.”
So far, this is a Sheffield story with few frustrations, but for both Jim and his city, “hospitality can only take you so far.” “Once the students disappeared in summer, the city was dead. We needed a reason to get people in, so the bars could pay their VAT bills in September.” His solution was the Tramlines music festival. Today, 45,000 people attend it across three days. “The university has done data, it brings more money into the city than the [world] snooker [championship]: it’s the biggest thing in the city,” O’Hara boasts. He’s done nicely out of it too, selling it in “early 2020, just in time” to avoid lockdown.
But the festival almost didn’t happen. “The council was so risk averse,” O’Hara recalls. Without one official—who “basically put his reputation on the line for us”—Tramlines would have hit the buffers. Whitehall-imposed cuts are a massive problem—the town hall “hasn’t got a pot to piss in,” O’Hara says—but there are issues of culture too. “Confidence is a difficult thing to breed in a town that’s had a lot of knocks… Reputationally, [the council is] sort of hated. It feels very old and white.”
His big exception is Kate Josephs: “This woman could really shake up the city”. The Doncaster-raised chief executive of Sheffield Council returned from prolonged gardening leave in June after a Partygate row over her old Whitehall job. It’s just as well someone at the council is sustaining O’Hara’s optimism. His next big project involves working closely with them on one of the knottiest problems—breathing life back into city centres now that the old retail model is bust.
The closure of Sheffield’s five-floor John Lewis last year caused, in O’Hara’s words, an “outpouring of grief”. Indeed, when I was stood outside its vast shell, an elderly couple stopped and told me how much they’d loved it and feared they’d never again have such a good reason to come into town. O’Hara understands the nostalgia—his own mother worked in the store café for 15 years. Yet, for him, the way ahead must be “respecting the past, not being beholden to it”. “It’s got to be knocked down,” he told me in June. (A few weeks after our meeting, the empty store was instead granted Grade II listed status).
Just across the street from the old John Lewis, the council is restoring a 200-year-old “Mester’s works” called Leah’s Yard. It’s a place that, O’Hara enthuses, has “got the history of the city in its walls.” He and business partner Tom Wolfendon—a 37-year-old who runs an “incubator” for tech firms—won the tender for filling the space. Once the site’s heavy gate is unlocked, we step over dust and dead birds into a gorgeous three-storey brick courtyard which had been abandoned for 40 years. We traipse through a warren of rooms in which individual craftsmen would “sharpen blades and make bone handles”, the odd furnace and cutting wheel still visible. The last of the mesters, O’Hara says, are still “just about” alive. He and Wolfendon bring along two students they’ve tasked—as a holiday job—with tracking down the survivors and recording some oral history.
But knifemaking is not coming back. The plan is to fill the downstairs rooms with 11 bars, cafés and shops, and the 20 units above with offices for local businesses. O’Hara explains that small units and the building’s own Grade II listing would deter any conventional developer. The whole approach must be different: “It’s all independent businesses, no chains anywhere.” They won’t be competing with online retail giants—pretending everyone is going to go back to pre-Amazon shopping habits is “not going to happen,” O’Hara says. Regeneration must instead “activate the space between the buildings” through “live music, festivals, farmers’ markers, things that bring people together.” In the Leah’s Yard context, that won’t mean a museum, but rather might involve the odd history tour, or simply having a juggler in the courtyard.
With two other interesting developments going on next door, “the entire street will become, in our aspiration, the centre of the city centre.” If it works, O’Hara and Wolfendon will certainly profit, but the council, which retains the freehold, will benefit from an uplift in value too. By this autumn, despite the many boarded-up shops nearby, they’d already received around 150 expressions of interest from businesses, five times the number of spaces available to let.
“There’s always a bit of a habit in Sheffield of internalising bad things,” O’Hara says. John Lewis closing gets talked about as “the city being done down again. But the death of traditional retail is not a Sheffield problem, it’s a national problem.” As he speaks about his bespoke Sheffield solution, I find myself thinking that he just might have a rough template for a national answer, too.
The entrepreneurs I spoke to may all be men of a similar age, but they covered three different worlds: smart manufacturing, modern media and “place-shaping” hospitality. I was fretting about how to tie the disparate threads of their stories together—until connections popped up everywhere.
I’d made independent approaches to Iveson and Sofos. Sofos did point me O’Hara’s way, but he wasn’t the only person to do so. The trio appeared to be living parallel lives in what is described as “England’s biggest village”—and as I talked more with them, I discovered why. O’Hara had invested in Iveson’s company, and so had his banker brother Tom. Tom had been in a band with Sofos years ago, and is his business partner today. O’Hara hopes that Sofos will establish his studio in Leah’s Yard and make a history podcast for its website. The web of connections even extends to academia. O’Hara knows Paul Collier, despite the fact Collier left the city decades ago for Oxford and is a generation older than him: “I love Paul,” he says. Collier even chipped in for FourJaw.
Sheffield could do with a smidgen of enterprising favouritism
O’Hara, in particular, knew everyone—in the council, the South Yorkshire authority, social enterprises and university offshoots. Promoting Leah’s Yard was easy, he said, because “we know everyone who writes every article at every publication.” He hopes to convene locals who have ended up wealthy into an “angel investor” network, which can take bets on interesting Sheffield ventures.
It might be tempting to decry what looks like a South Yorkshire mafia—a network of friends with money or influence who help each other out. But as I’ve reflected on countless failed regeneration efforts, I increasingly sympathise with something O’Hara said—that the spirit of Sheffield was “insular, but in a good way”. Dismiss this as self-serving parochialism, and you might dismiss the city’s best hope.
Investment from Whitehall is necessary, but it will never be sufficient. The finance and media clusters of London are themselves knotted together by elite connections and old school ties. Sheffield, a city which lacks these establishment links, could do with a smidgen of enterprising favouritism: if there are people who are fanatical about something purely because it is happening in Sheffield, it is crazy not to tap their ardour.
When you’re made in Sheffield, O’Hara says, “you end up being a bit chippy, which helps.” He and his brother once admitted to each other that some of their success came from anger—the energy that comes from thinking “bastards, I’m going to show you”. It’s not a bad attitude to have, for a city that has realised “levelling up” is something you’ve got to do for yourself.
