How Berwick fits into Arch's economic model

Now is a good time to explain a little bit about how Arch, Northumberland's economic development company, operates and how its '˜profit for purpose' ethos works.

Thursday, 10th November 2016, 12:00 pm
Updated Wednesday, 16th November 2016, 15:50 pm
Cllr Dave Ledger, Arch Chair & Deputy Leader of Northumberland County Council on site in Walkergate, Berwick as demolition starts.

A good example to focus on is the recent purchase of Westmorland Retail Park in Cramlington. Many people in north Northumberland will ask ‘how does an investment in south-east Northumberland benefit me and my family?’

The ‘profit for purpose’ ethos of Arch is at the centre of the answer to that question. Arch’s profit is invested in the business of economic development and generating and safeguarding economic growth across the county. That means jobs and money in the family budget.

Arch has a portfolio of investments across Northumberland and beyond, such as industrial estates, factory units, houses and shops, and it invests in construction projects, making a profit.

This year, Arch will contribute £4.5million to support services in Northumberland, the so-called Arch Dividend. This cash pays for services residents rely on and the staff who deliver those services to customers. That’s a significant amount that offsets cuts from central government which have meant that more than 80% of the council budget has been removed. To put it simply, Arch and its £4.5million yearly dividend maintains council services and the staff who provide them.

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So how does an investment in south-east Northumberland benefit north Northumberland? To explain it simply, Arch has negotiated an investment from Northumberland County Council to underpin the purchase of a highly profitable retail park in Cramlington which attracts more than 10million visits yearly. The county council borrows the investment capital, taking advantage of its excellent financial standing to get a low interest rate. It invests the money in the purchase and Arch repays a profitable rate of interest back to the county council to cover the investment. Arch pays an amount through the income generated from investments such as Cramlington, which alongside its profits, totals £4.5million this year. That means residents make a profit through the council investment and that supports services and jobs.

In north Northumberland, Arch has investments in hotels, industrial parks, homes, offices, retail units and it uses those investments to generate its profit like a traditional business. But unlike a traditional business, it is ‘profit for purpose’ and the purpose is to invest in Northumberland, its people, its jobs and its services.

Dave Ledger, chairman of Arch, said: “Our business is Northumberland and we’re constantly looking to see how we can generate profit to re-invest in this county.

“Nowhere gets left behind and north Northumberland is a key part of our investment plans. Jobs and economic growth safeguard services and jobs. Our business is simple – it’s to generate a profit so that the whole of Northumberland benefits.

“In Berwick, we’ve turned around the old Kwik Save site and created the Walkergate buildings which will see local companies like GWA maintain more than 100 jobs in the town, the Berwick Workspace has allowed local companies to access good-quality office accommodation at reasonable prices, and renovation of the Cowes building is breathing new life into a dilapidated building and it is key to note that these buildings have laid empty and fallow for many years.

“Arch has invested to create new opportunities in the town and those investments benefit the whole of Northumberland in the same way that the Manor Walks purchase benefits north Northumberland.”