Transcript The role of place in the UK growth agenda

The role of place in the UK
growth agenda
Version:0.2
Date: 19th February 2013
Author: Strategy and Communications
Approved by:
Next Review:
Contact:
Richard Puleston
[email protected]
A metropolitan bias in UK growth policy?
In December 2011, HM Government announced its intention to:
“develop tailored deals with our core cities, devolving powers and
supporting projects which will boost growth and jobs for the long
term”.
Since then we have seen:
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•
city deals agreed with England's eight core cities;
•
negotiations on a further 20 city deals for wave 2 cities;
•
sustained government support for the development of HS2; and
•
a range of wider policy measures to promote growth focused
exclusively on England’s cities.
What opportunities have been extended to
cities?
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Greater powers and incentives to
invest in growth
Earn Back: a new payment by result model that incentivises
a city to invest in growth in return for a share of the
national tax take. (Greater Manchester)
New Development Deals: the freedom to deliver critical
infrastructure through tax increment financing, with the
ability to borrow against future business rate income in key
development zones. (Newcastle, Sheffield and Nottingham)
Economic Investment Funds: the power to pool multiple
funding streams and business rate income into a single
investment fund, leverage private sector capital and invest
in local priorities. Cities will be able to create self-sustaining
investment funds that will reduce dependence on central
government grants. (Greater Birmingham and Solihull,
Bristol and West of England, Greater Manchester, Leeds city
Region, Liverpool City Region and Sheffield City Region)
Greater levers to deliver skills and jobs
Local skills funding model: a new model of skills funding that
will match local contributions (public and private) with national
funding to provide a skills budget that cities will control to invest
in the skills that local businesses need. (Sheffield City Region)
Outcome incentives: new models to give cities greater influence
over the skills system by using incentive payments or payment
by results. (Greater Manchester and Liverpool City Region)
City apprenticeship hubs: enabling cities to boost
apprenticeship numbers by supporting SMEs take on
apprentices through Apprenticeship Training Agencies,
brokerage and incentive payments. (Bristol and the West of
England, Greater Manchester, Leeds City Region, Newcastle and
Nottingham)
Localised youth contracts: local alternatives to the national 1617 youth contract programme, with cities having the power to
design and deliver local models to reduce NEETs. (Leeds City
Region, Liverpool, Newcastle)
Skills Bank: an employer owned mutual that will match public sector funding with private sector investment and allow businesses
to buy the skills and apprenticeships that their local economy needs. (Liverpool City Region)
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Greater powers to drive critical
infrastructure
Greater freedoms and powers to
support local businesses
Rail devolution: increase city control over rail services by
devolving greater responsibility for commissioning and
managing franchise arrangements for local and regional rail
services (e.g. Northern Rail). (Bristol and West of England,
Leeds City Region, Greater Manchester and Sheffield City
Region)
Local venture capital fund: a localised model that will match
national funding with local contributions to create a venture
capital fund that will invest in high tech start up and growth
businesses across an economic area. (Nottingham)
Devolution of local transport majors funding: matching local
resources with devolved transport budgets so cities have the
power and resources to make strategic transport investments.
(Greater Birmingham and Solihull, Bristol and West of
England, Leeds City Region, and Sheffield City Region)
Business Growth Hubs: city led business hubs that bring
together all the support, advice and services that investors
and local businesses need to locate, grow and trade. (Greater
Manchester and Bristol and West of England)
Localised asset management: joint investment programmes that bring together local and national assets in an economic area to
unlock resources for housing development and regeneration (Greater Birmingham and Solihull, Bristol and West of England,
Greater Manchester, Liverpool and Newcastle).
Broadband: Resources to deliver super fast broadband across cities. (Bristol and West of England, Greater Manchester, Leeds City
Region, Newcastle, Greater Birmingham and Solihull).
Low carbon pioneering cities: local programmes that will help cities make critical investment in green infrastructure and
technology; generate low carbon jobs; and accelerate reductions in emissions. (Greater Birmingham and Solihull, Leeds City
Region, Greater Manchester, Newcastle, Nottingham)
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Youth Unemployment Fund
University Enterprise Zones
Twenty-eight cities in England are to share a £50m fund to
develop local programmes to tackle youth unemployment,
the government has announced.
University Enterprise Zones aim to encourage universities to
engage further with business and with Local Enterprise
Partnerships in driving growth at local level, and to encourage
businesses with innovation potential to engage with
universities. They are also designed to encourage investment
in buildings on science parks providing office, workshop and
laboratory space for small firms (incubator and grow-on
space).
Among the schemes, the single largest award is £5.9m to the
Liverpool City Region. This will be invested in a new paymentby-results scheme targeted at helping the most disadvantaged
into work. Other large awards include £5.8m to Greater
Manchester to provide personalised training for people aged
18 to 24 and a local transport-to-work guarantee.
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In addition, £5m will be provided to the Sheffield City Region
to offer intensive advisor and mentor-led support for young
people, and £4.6m to Leeds to provide intensive support for
those at risk of long-term unemployment.
The pilot comprises £15 million capital funding over three
years, with additional support from UK Trade & Investment to
attract overseas investment to the EZ. The success of the
new zones will be seen in increased numbers of innovative
small businesses clustered around and engaging with
universities
The resources for the Youth Employment Fund have come
from HM Government’s failed Youth Contract programme – a
national scheme designed to support communities in all areas
of England.
It is anticipated that the £15m fund will support 3-4
enterprise zones with a maximum bid per pilot of £5m. But
only universities in the eight core City LEPs are eligible to
apply.
So what’s special about cities?
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Cities have the capacity to act as engines of
growth…
Yes - but non-metropolitan England
accounts for over half of output outside
London…
Output (GVA) by area type, 2011
Counties
London
Other
Source: Shared Intelligence 2013
…and productivity tends to be higher in
non-metropolitan areas.
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Productivity in core-cities and other spatial
economies, (£s GVA per head) 2009
Source: ONS 2011
Cities support clustering…
…and yet other areas of England exhibit at least as much clustering as many of our
wave 1 city deal areas…
Number of highly and fairly clustered sectors in city and non-city areas, 2010
Source: ECC analysis of
Business Register and
Employment Survey
2010, ONS.
…the benefits of exploiting ‘agglomeration economies’ by bringing together clusters
of firms and employees can be enjoyed across the range of places.
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Cities are at the heart of the UK knowledge economy…
…but the proportion of workers in knowledge intensive sectors is higher in many
non-metropolitan areas.
Proportion of workers in knowledge intensive sectors by type of place, 2010
Source: ECC analysis of
Business Register and
Employment Survey
2010, ONS.
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Cities have unique access to HE, ports and airports…
…but there are more degrees undertaken
in non-metropolitan universities.
…seven of England’s ten business ports (by
freight traffic volumes are in county areas…
…and almost all areas of England are
within 90 minutes of an international
airport.
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Source: City Limits, ECC 2011
Why does this matter?
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An opportunity missed?
An artificial limitation on national recovery?
Inequality in democratic opportunities
A sustainable recovery cannot be restricted to
cities - restricting access to growth promoting
policy levers means restricting growth rather than
unlocking it. Given that non-metropolitan England
accounts for more than half of all Gross Value
Added (GVA) generated outside London, local
growth policy must recognise the role that
partners across different places can play in
securing a sustainable economic recovery.
Cities enjoy greater effective freedoms, growth
incentives and localised Whitehall budgets than their
peers in other areas. By continuing to devolve
opportunities to a narrow set of areas, HM
Government risks defining access to decision-making
power based on an arbitrary taxonomy of areas rather
than by reference to need and the economic return to
UK PLC.
Growing socio-economic inequalities
Any additional growth unlocked through devolution can fund public services designed to help address socioeconomic challenges . Indeed, the local government funding system makes this link explicit. By devolving
powers to cities , rather than to all areas, current policy could undermine the ability of some places to
support deprived communities and cope with the demand-led pressures of a rapidly ageing population.
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Many places have a record of supporting
growth…
In Essex alone we have:
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•
Supported 140 SMEs through our Skills for Growth programme this year. These
businesses project that the programme will open up £8.6million in new business.
•
Over 2,600 apprenticeships supported with Essex business – delivering an
economic impact of £355m over four years.
•
Secured an economic legacy from the 2012 Olympics Games, delivering supply
chain opportunities to Essex firms and establishing physical infrastructure in
South Essex and around Essex’s Olympic venues.
•
Safeguarded hundreds of jobs each year through our work to help local
businesses trade internationally, explore overseas markets and secure inward
investment
•
Focused highways investment on the routes that matter most to local businesses
– ensure more than 90% of our priority route network is defect free.
…but have struggled to unlock opportunities
with HMG
Essex’s ‘Deal for Growth ‘
As part of its Whole Place Community
Budget Pilot, public and private sector
partners across Essex, and with the
support of the South East LEP, attempted
to strike a deal with HM Government that
would enable local partners to:
• create a £1bn revolving infrastructure
fund;
• redesign local skills services through
the devolution of funding and powers
(making provision employer driven and
developing a payment by results model
for providers); and
• reinvest the proceeds of growth,
including localised NNDR growth across
Essex, with 100% retention of NNDR
growth in key locations.
If the Government had engaged with this
proposed Deal, local partners estimate
that the Deal would have unlocked an
additional 60,000 jobs and 25,500 new
homes in Essex, Southend and Thurrock.
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Northamptonshire’s 10 point
plan
Localised Youth Contracts in
Buckinghamshire
NCC worked closely with its LEP to devise
an extensive plan for fiscal devolution with
a ‘growth offer’ and asks from
Government including:
• a ‘Single Capital Pot’ to align with
existing governance and accountable
body activities;
• 75% of the uplift in tax receipts
generated business support fund to be
retained locally for reinvestment; and
• better investment of devolved funding
on skills through the Northamptonshire
Skills Board.
The partnership estimates that devolution
of the necessary powers, freedoms and
centrally retained funding could result in
70,000 new jobs over the next 15 years
and the potential for 80,000 more homes.
With Government support, the plan could
see Northamptonshire contribute more
than £20bn to the UK economy by 2020.
Buckinghamshire County Council has
petitioned HM Government to increase
local involvement in Youth Contract
provision. It argued that this would better
support for young people and those not in
education employment and training.
In Buckinghamshire – and in other areas –
many are excluded from the national
programme, whilst half the fund (£50m) is
allocated to the Core Cities & City Regions.
Buckinghamshire partners argued for
powers that would allow them to:
• establish apprenticeship hubs;
• develop incentive schemes for small
businesses to take on apprentices, and
• increase local influence over how Skills
Funding Agency resources to increase
the supply of much needed
intermediate technical skills training.
How can non-metropolitan England compete?
Making the case
to Government
Developing new
models of
accountability
• a strong voice to speak for
all places – not just the core
cities.
• developing local growth
plans/strategies for the
long-term.
• accepting changes in local
governance to give
Ministers confidence.
• effective engagement with
the Cabinet Sub-Committee
on local growth.
• advancing these plans
through engagement with
sub-national structures
whatever form these take
(e.g. LEPs, RDAs).
• pursuing alternative
governance models, and
developing new models
that can work in different
types of place.
• securing improved
outcomes - demonstrating
the case in practice rather
than through lobbying
alone.
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Focusing on the
long-term
• Arguing the case for placebased growth over (at least)
the next two parliaments.
This report has been prepared by
Essex County Council’s Strategy function
If you have any questions on this report please contact Alastair
Gordon
By email at:
[email protected]
Or by telephone on:
0333 0136 125
Or by post at:
Essex County Council, Strategy function
PO Box 11, County Hall, Chelmsford, Essex CM1 1QH