Chair’s Blog : January 2017
Mark Duddridge, Chair of CIOS LEP describes the lay of the land as we enter a new year..
“We are still on a long economic journey from a very low start, so we will continue to make the case for greater investment to match our ambition”
There are a few events that could vie for the title of most seismic in 2016, and although some might say that the US election result ‘Trumped’ Brexit in the UK, it is the vote to leave the EU that will be most keenly felt here.
The EU referendum overshadowed the first half of the year and the result dominated the second. It brought unwelcome uncertainty to our £500m EU funding programme in Cornwall and the Isles of Scilly before and after the vote, and only recently have we had the reassurance we and others sought that funding will be honoured.
And the good news is that the Cornwall and Isles of Scilly EU Growth Programme is delivering. Investment is flowing into business support activities to help established businesses grow and new ones get established, with a target of 1,000 new starts by 2018.
Some £8.5 million of skills-related activities are currently open to tender, including employer-led projects that will make sure businesses get the skills they really need. You can keep an eye on all these EU callshere.
New EU funded workspace projects have been approved at the A30 Business Park at Indian Queens and the Carluddon Technology Park near St Austell. Businesses can also bid directly for funding through the BIG 2 Fund and via the Isles of Scilly voucher scheme.
EU investment is also going into our growth sectors including creative industries (one of our fastest growing), marine energy and digital skills. And £8 million is earmarked for the development of the Chiverton Cross to Carland Cross dual carriageway upgrade, regarded by many businesses as the critical missing link in the A30. If you want to read more about all these projects visit the Growth Programmewebsite.
And with so much support available, it is important businesses know where to go for help to navigate through it. That’s why the Growth Hub was established this year. It provides free and impartial advice to help your business grow and is funded by the EU, LEP, Cornwall Council and Government. Please use it, it’s there to help.
These projects share a common theme. Whether it’s skills, business support, grant funding or infrastructure, they are all key areas that the business community has told us are priorities for investment. And it’s the business community, through the LEP, Chamber of Commerce and others, that will continue to help shape these projects.
Last year also saw significant progress on Growth Deal projects designed to unblock barriers to growth. Our first two growth deal bids secured £60m of Government investment towards a total £198m package that aims to deliver 5,000 jobs and 7,000 new homes.
Schemes are well under way in Bodmin town centre, Truro’s western corridor and the Carkeel roundabout at Saltash. The southern access of the proposed Newquay Strategic Link was completed in the summer, which will eventually cross the Duchy of Cornwall’s 4,000-home Nansledan development and improve access to Cornwall Airport Newquay and the Aerohub Enterprise Zone.
Aerohub continues to be a magnet for quality employers with 12 businesses employing 327 people with an average wage of £33,400, almost twice Cornwall’s average. Earlier in the year Goonhilly Earth Station became part of Aerohub, reinforcing our ambitions to become a national centre for Future Flight Technologies, offering a safe licensed environment to test, operate and validate experimental and innovative aircraft and space systems.
Any future spaceport at Newquay would be part of this national centre, and we expect more detail on the licensing process for a spaceport in the New Year.
In December I met with Communities Secretary Sajid Javid and Cornwall Council to sign a deal that commits all of us to delivering the Enterprise Zone, and he was impressed by our collective ambition.
During 2016, Cornwall and the Isles of Scilly were also part of the first ever Science and Innovation audits in the UK, commissioned by the Government to map local research, innovation and infrastructure strengths across the UK. Published in November, the South West audit highlighted advanced engineering and digital innovation as two sectors where we lead the UK and can compete globally.
We are now seeking to build on these strengths and attract more investment, creating high value jobs that pay much higher wages. There will times we want to focus on our own area – but there will also be good reason to collaborate with others, whether that’s in the South West or beyond.
And the LEP’s employment and skills team continues to forge ever closer links between business and schools to raise awareness and aspirations among our young people. This includes our Enterprise Adviserprogramme, launched this year. So if you’re in business and can spare some time to help inspire the next generation, please get in touch.
We have also been running a pilot project with the University of Exeter and local business organisations, funded by the Department for Work and Pensions, looking at how we close the employment gap for people with disabilities and long term illness. The quality and quantity of response has already been exceptional and makes us well positioned as a testbed for future schemes.
Looking ahead to the New Year, we expect to hear the outcome of our Growth Deal 3 bid for £127m from the remaining £1.8 billion of the Government’s Local Growth Fund. We had hoped to hear around the time of the Autumn Statement, but with the fund three times over-subscribed, it has been delayed.
What we do know is that we can expect to receive substantially less than we bid for because the Government has confirmed that there is only £191m being allocated to the entire South West region, which includes six LEP areas.
This means we will have to prioritise fewer investments that we think can have the biggest impact on our economy.
Those are likely to be around growth sectors including aerospace, space, marine renewable energy and creative industries, and we want to try and tackle the shortage of workspace in some of our town centres. We will expect all projects to have a strong focus on skills development, and the new Skills Hub launching next year will support this.
This means of course that there will be many applicants for Growth Deal funding who will be disappointed because our allocation is so much less than we bid for. We share their disappointment. We were encouraged to put forward an ambitious bid and although we will probably be on a par with many other LEPs in terms of per capita Growth Deal investment, we don’t think that is good enough. Despite our progress to date, our region still lags behind and we are still on a long economic journey from a very low start, so we will continue to make the case for greater investment to match our ambition.
We will of course support unsuccessful Growth Deal applicants to access other funding opportunities, including those announced as part of the Autumn Statement including the £2.3bn Housing Infrastructure Fund and the £2bn annual investment in research and development through the Industrial Strategy Challenge Fund.
On his recent visit to Cornwall the Secretary of State said he was urging LEPs to seize the opportunity presented by these funds, and working with our partners we intend to do so.
We are also optimistic that our long-held ambition to create a bespoke business investment fund for Cornwall and the Isles of Scilly will come to fruition in 2017. We expect this to amount to tens of millions of pounds and provide a range of loan and equity finance, becoming self-sustaining in perpetuity.
The New Year will also see the triggering of Article 50, firing the start gun on the UK’s negotiations to withdraw from Europe. We should not underestimate the massive impact Brexit is and will continue to have on resources at senior Government level, nor the enormous uncertainties that will follow 2020 when current EU and Growth Deal funding come to an end.
We believe that creates opportunities to help shape regional funding and the potential for more joined-up investments, and we support Cornwall Council’s ambitions to be a potential testbed for replacement funding options.
The updated Strategic Economic Plan for Cornwall and the Isles of Scilly, which is being led by the LEP, creates the road map for how our economy can grow to 2050 and will be published in the New Year.
Its role will be vital to help navigate our investment relationship with Government in a post-Brexit world and a united approach to economic development that helps business and the public sector plan for the future together across Cornwall and the Isles of Scilly.
The Government’s economic narrative has changed to wanting an economy that works for everyone. Growth and productivity have become the key focus, and the devolution agenda is all about how it supports growth. That’s why the Government’s new Industrial Strategy will focus on the need to rebalance an economy that has served some people in some places far better than others, over a very long period of time.
The LEP’s challenge is to make sure these soundbite policy statements translate into real growth and opportunity, and as we enter 2017 our determination and commitment to that cause is unwavering.
May I wish you all the very best for the new year.