Wednesday 13 December 2017

Alf measures for Cork: more pragmatism and business sense for the second city?

Former brewing chief Alf Smiddy has proposed a controversial merger of Cork city and county councils. He explained himself to Donal Lynch

'At the moment Cork's voice is entirely fragmented'
'At the moment Cork's voice is entirely fragmented'
Former brewing chief Alf Smiddy
Donal Lynch

Donal Lynch

It's sometimes said that one of the things holding Ireland back is that so many of our politicians are auctioneers, publicans and teachers, and with very few of them coming from the business community.

So you might expect that people would sit up and take notice when Alf Smiddy - a former Beamish and Crawford executive - produced a statutory report (under appointment from Minister for the Environment, Alan Kelly) recommending a controversial merger of Cork city and county. The issue has ignited passions in the Rebel County and further afield.

Smiddy, who is careful to emphasise that he has no intention of becoming a politician himself, has defended the proposals against stout criticism and he evangelises with a mixture of county pride and business nous about the proposed merger.

The status quo, everyone seems to agree, cannot last - the official boundary for Cork city does not remotely reflect the reality on the ground for starters - but opinions are divided on the wisdom of the proposals.

Last week Fianna Fail leader Michael Martin, (who of course is also TD for Cork South-Central) called the proposals "unworkable", while the CEO of the Cork Business Association, Laurence Owens, said that the report confirmed the association's "worst fears", adding that it would lead to the dismantling of Cork as the country's second city through the emasculation of its necessary powers.

Over coffee at the Maldron on Cardiff Lane in Dublin (which is part of the Dalata group, of which Smiddy is a non-executive director), the Corkman sets out his stall in no uncertain terms.

"This is a once-in-a-generation opportunity to get to the root of problems that have dogged Cork for a long time.

"At the moment Cork's voice is entirely fragmented. Whether you're trying to land FDI or promoting Cork as a tourist destination it would all be more efficient if we spoke with one voice. Often there are competing voices between the city and the county and the result is that Cork's overall voice gets diluted on the national stage.

"We are creating three councils within one reporting into a unitary authority; a large metropolitan city council, with about 300,000 people living within it, and two smaller divisions with approximately 100,000 people each living in them."

What about the assertion that city and county do two very different jobs, frequently have opposing interests, and that the voice of the city would get lost in an overall authority?

"People need to understand that the county, as its currently structured, takes in a huge part of the suburban base of Cork city. So the county has already managed to integrate the suburban parts and the industrial base with the more rural parts of the county. Now we're bringing it all together to create one vibrant force."

But report after report has shown that cities, be they in Ireland or further afield, are drivers of competitiveness for economies. They pull the rural areas along - not the other way around. Under a single authority wouldn't the clientelism, which is endemic in Irish politics, inevitably allow rural interests to jostle those of the city, which in turn would harm the county overall?

"No. Under this plan the CEO of the city council will be the deputy CEO of the unitary authority and responsible for economic development for the entire region. There are people who think that Cork may be losing out to Belfast as being the second city on the island, and one of the issues there is that Cork does not speak with one voice.

"There are already competing voices within the county but the result is that the county has less of a voice the national stage."

But there is no precedent all across Europe for the merging of the rural and city councils for a nation's second city. If it hasn't been a good idea for any of our nearest neighbours, why would we want to go through with this?

"The local government models all across the world are very different to each other; one size never fits all," Smiddy responds.

"We looked at New Zealand, and one very comparable area the size of Cork would be Auckland. They have created one single unitary council to represent the whole of the Auckland area. Huge savings were made for taxpayers.

"Or look at Manchester, where many services from central government have been devolved. There are a number of councils but there is a unitary umbrella council. We're not proposing exactly that model, but it represents somewhat what is being proposed for Cork.

"By coming together, by uniting, we will be less dependent on Dublin and the city council's independence is protected in what we're putting forward."

What does he say to the assertion that the city status of both Limerick and Waterford, which now have unified authorities, has been dented by the influx of rural-based councillors? Would this problem not recur in Cork?

"On the contrary, Limerick city is now powering ahead under the new amalgamated local government structures, and Waterford city has developed a new confidence and its heart is beating very strongly again.

"We met the chief executives of both councils as part of the review and they spoke about the many opportunities that had opened up following merger in both areas; both were now working with one strong voice for their regions in their dealing with the national enterprise agencies in Dublin and also in central government.

"As well as that citizens were seeing less bureaucracy and more efficient and effective local government - where citizens were now very much centre stage in all decision-making. We desperately need all of that in Cork and to create regional excellence in services - planning, housing, economic development, speaking with one voice."

Smiddy may not be a politician yet ("I'm apolitical … but never say never") but he does express himself like one ("I am reminded of John F Kennedy when he said: "change is the law of life, and those who look only to the past or the present are certain to miss the future") and his track record in business as well as his roots in Cork certainly lent heft to his proselytising.

He grew up one of six kids on a farm just outside Glanmire, where he still lives. He attended the Christian Brothers in Deerpark, where he says the eduction made him "streetwise, smart and intuitive". He was the first member of his family to attend university, studying commerce at UCC, and went on to qualify as a chartered accountant.

In 1988 he joined Beamish and Crawford Plc and had a zeppelin-like rise through the ranks, becoming managing director in 1992 at the age of 30. The dominant theme in the industry in those years was consolidation, and in 2008 Scottish & Newcastle Plc was acquired for €12b by an international conglomerate formed by two European brewing behemoths, Carlsberg & Heineken, and S&N was subsequently carved up between the two.

The takeover came at a good time for him as he was beginning to get "itchy feet" and, always an adept networker, he already had his fingers in a few other pies.

"As an example I was appointed to the board of Cork Airport Authority in 2004 which oversaw the construction of a new airport terminal at Cork for around €200m. During this period we took passenger numbers to a record level of 3.2m passengers at Cork Airport; I was on the national executive of IBEC for about eight years and chaired its economics & taxation committee, I was a member of Cork Chamber of Commerce, and I was chairman of Plato Ireland for around 12 years."

Given his background in brewing and his work with the airport authority and Dalata, I wonder if he feels that the hospitality sector is looking strategically at its long-term future or is it still in recovery mode surviving day-to-day?

"To my mind there exists a three-speed economy led by Dublin, followed by the large cites and towns, such as Cork, Limerick, Galway, Kilkenny and Killarney, and then the rural areas in the last section, which remain very challenged.

"Take the hotel/guesthouse sector in the rural sector. It continues to survive - but only just, and we need a couple of more years of growth for these hotels to thrive. Initiatives like the Wild Atlantic Way have been truly fantastic, and we need even more creative thinking to find angles like these initiatives in the months and years ahead. Capital expenditure is now badly required in the regions and quite simply hoteliers are not yet in a place to afford such spend."

What about the issue of price gouging within the industry, which some saw as a factor in the loss of the Web Summit?

"With regards to the move I feel it is a big blow to the thriving startup ecosystem in Ireland as we were seen globally as the international leader in this space. Some 90pc of attendees each year came from abroad, contributing over €130m to the Dublin economy. It also seriously impacts Dublin's global reputation as a location to host your event. No doubt the €1.5m payment by the local Government in Lisbon assisted in the decision-making."

These days Smiddy is involved on a number of boards but his primary business is Granite Digital, a digital marketing agency which has a turnover of €2m. It's a venture of which he is justifiably proud but he says there have also been tough moments along the way.

"In 2011 we went through a very tough period when a significant client of ours went out of business. We were left with substantial unpaid debts and combined with the recession this had a big impact on the business for a period of 12 months."

Since then the business has rebounded and now has 40 employees (up from four in 2009) and offices in Dublin, Cork, and Romania. Digital marketing might seem like a bit of a swerve from his previous endeavours but he says there is a common thread through all of them: people.

"I have seen how many companies pay lip service to the notion that your people are your most important asset - but they so are. As Jim Collins said in Good to Great: 'Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people.'"

'Good to great' might be his motto for his home county too.

"I would urge people first and foremost to read the report and make their decisions based on that. This is a chance for Cork that we just can't afford to miss."

Wearable tech will be the next big thing

The next big thing in my industry will be…. "Wearable tech products, such as Apple's Watch for example. Whichever company gets the best product will be a huge winner."

My favourite share is… "the Dalata Hotel Group plc, where the share price has rocketed from €2.50 to €4.50 in 18 months."

The best trip I've taken is… "very hard to know, but definitely the epicentre of Heaven for me is Ballinskelligs in South Kerry; it has to be the finest place in the world to get away from it all. I can't think of any other place I'd rather be."

The best advice I've been given is… "I am not sure it was advice but having covered a lot of ground in business and life, I think the most important thing for me is: When you walk, let your heart lead the way!"

And the worst advice that you've ever been given is… "Over the years many senior people in business would often have said to me that I don't use my power enough."

Sunday Indo Business

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