Supplementary Memorandum by the Lincolnshire
Coastal Action Zone (CAZ) Partnership (CCT 45(b))
LINCOLNSHIRE ECONOMIC STRATEGY
1. INTRODUCTION
An under-performing county
1.1 Lincolnshire is facing an economic
crisis. Lincolnshire is under-performing in comparison with
the East Midlands, and this looks set to continue and become more
severe. Lincolnshire has been growing slowly in recent years,
at a rate that is well below that for the region and for the UK
as a whole. The result has been an increasing gap, as Lincolnshire
has been "left behind" when compared with many other
parts of the country. On current trends, Lincolnshire will continue
to lag behind the East Midlands and the UK, and the gap will continue
to widen.
A "hidden crisis" in economic growth
and performance
1.2 The rural nature of Lincolnshire, combined
with local growth "hot spots", has hidden deeper structural
issues and problems that contribute to and underpin low levels
of comparable economic wealth and growth. This "hidden crisis"
has created a situation where future economic development and
growth will need to focus on bringing the performance of the Lincolnshire
economy up closer to the regional average. There is a need for
urgent action to address the performance of one of England's lagging
counties.
A need for a concerted and substantial response
1.3 Effective and successful response to
this crisis will require concerted action from local partners
as well as from regional agencies and other stakeholders. It will
also require substantial investment, of effort and commitment
as well as resources, to address the structural issues and barriers
to growth that exist. Given the scale of the development challenge,
investments will need to demonstrate a clear "return on investment"
of public as well as private funds. Future actions will need,
in other words, to have a real and substantive effect on the longer-term
growth and economic competitiveness of Lincolnshire.
The strategy as a response to these issues
1.4 The Lincolnshire Economic Strategy is
a framework for future action and focus. The strategy addresses
the major structural issues and barriers to economic growth and
development that Lincolnshire faces. The starting point for the
strategy, as a result, is to identify and focus on "what
needs to be done" to unlock the Lincolnshire economy and
its future growth. The underpinning principle is to address these
fundamental issues and to assess the success of the strategy by
changes in economic performance that "narrow the gap"
with the region and the country. Actions are needed that make
significant impact.
A collective strategy
1.5 This strategy has been developed by
Lincolnshire Enterprise with inputs from the University of Lincoln.
It is supported by the Lincolnshire Assembly, and developed as
an integral part of the Regional Economic Strategy. It has been
subject to a broad and intensive consultation process that has
sought to engage organisations and individuals across Lincolnshire
and beyond. This document, as a result, enjoys broad support across
Lincolnshire.
2. PURPOSES OF
THE DOCUMENT
A strategy for economic growth and renewal
2.1 The Lincolnshire Economic Strategy is
Lincolnshire's strategy for economic growth and renewal. Its content
is based on extensive analysis of Lincolnshire's current and anticipated
economic circumstances, and on previous research undertaken on
the local economy.
A framework for co-ordinated action
2.2 The Strategy highlights the key characteristics
of the economy and uses this as the basis for identification of
priorities and recommended areas of future action. It provides
a framework for collaborative and co-ordinated actions to support
and enhance the economic development of the county.
Fitting within the regional dimension
2.3 The regional dimension is also important,
as Lincolnshire is part of the East Midlands economy. The Strategy
seeks to influence regional policy, and is also influenced by
regional economic priorities and the developing Regional Economic
Strategy. It is also shaped by the Community Strategies of Local
Strategic Partnerships in Lincolnshire.
2.4 The three purposes of the Lincolnshire
Economic Strategy are to:
I. Provide a shared framework for
future economic development activity.
II. Inform and guide planning on what
to do with resources that are or will become available to support
economic development.
III. Identify where additional activities
and resources are needed.
The aim: addressing economic performance
2.5 The primary aim of the Strategy is to
address the central challenge facing Lincolnshire's economy, namely
tackling poor economic performance and the need for substantial
and effective future action and investment of resources.
3. THE LINCOLNSHIRE
ECONOMY
Falling GDP and slow growth
3.1 Lincolnshire has low and falling GDP
per capita, relative to the UK average. According to the latest
data, in 2002 Lincolnshire's GDP was 74% of the UK average, down
from 76% in 2001. Real growth from 1995 to 2002 was 0.7% per year,
compared with 2.7% for the rest of the East Midlands and 3.1%
for the UK over the same period. Over that period, GVA indices
fell from 87% of the national average to 74%, indicating substantial
slipping back in comparison with the UK as a whole.
A widening gap with the region and country
3.2 Not only is Lincolnshire below the regional
and national average, by some margin, but the gap is widening
because of the very low relative annual growth rate. On current
trends, the rest of the East Midlands and the UK will grow away
from Lincolnshire, leaving it with a falling relative GDP rate.
Real deprivation and rural isolation
3.3 Parts of Lincolnshire are experiencing
real deprivation. Of Lincolnshire's 392 Super Output Areas, 63
are in the bottom 25% according to deprivation indices and 13
are in the lowest decile. The Eastern areas, and in particular
the coastal strip, have lower levels of wealth and higher levels
of disadvantage. Along the coast, for example, are ten settlements
that have been nationally recognised as Enterprise Areas due to
their high levels of deprivation. Many rural areas and settlements
across Lincolnshire have low and dispersed populations and low
average per capita income levels.
…with some local areas of growth
3.4 Even though the overall rate of growth
of Lincolnshire is slow, and well below the regional and national
averages, the picture of growth is not uniform across the county.
There are "pockets" of local growth across the county.
Greater Lincoln and the West of Lincolnshire are projected to
grow at rates around or above the regional average (although not
at projected national average growth rates).
But not enough to reverse the trend…and move
closer to the region
3.5 These variations within Lincolnshire
do not translate into an overall growth rate that looks set to
arrest falling relative GDP. For Lincolnshire as a whole to move
closer to the regional and national average, the overall growth
rate would need to exceed the national average by a significant
margin for a sustained period. Current data indicate that the
opposite is likely: that even if growth improves slightly it will
not be enough to pull the county up to regional and national levels.
Impact needed
3.6 The Lincolnshire Rural Strategy estimates
that the cost of actions to ensure that Lincolnshire can start
to catch up with the UK average GVA are in the region of £300-600
million over 10 years. This will include the creation of 1,000
jobs a year and £160 million of additional external investment
each year, and an extra £50 million worth of business support.
A weak skills position
3.7 The skills position is weak. Almost
one third of adults in Lincolnshire have no qualifications. The
county has a lower proportion of people with qualifications at
level 3 or higher (21%) than the region (24%) and England (28%).
Although Lincolnshire performs well at A-level it has one of the
lowest levels of Higher Education participation in the country.
The county suffers from a serious brain drain of young people
leaving for Higher Education and high skilled jobs, and not returning.
Reliant on "traditional' industries—a
need for more enterprise and innovation
3.8 Lincolnshire is heavily dependent on
well-established and mature industries, in particular those associated
with agriculture and land-based activities. There is some concentration
of engineering and related manufacturing business in larger settlements,
although at a lower contribution than historically has been the
case. And although tourism has been growing, it has not been doing
so at the national growth rate in this sector. There is little
by way of new and technology-based industry emerging in the county.
There is a pressing need for more enterprise, through business
start-up, and growth, through innovation.
Faster growth to meet the region's "top 20"
goal by 2010
3.9 Judged against the twelve strands of
the current Regional Economic Strategy as at 2005, Lincolnshire
does not perform well and is experiencing development challenges
in each strand. The county's problems mean that the East Midlands
is unlikely to become a "top 20" EU region while growth
in Lincolnshire continues to be well below the regional and UK
average. For the region to meet its "top 20" goal, Lincolnshire's
economy needs to grow rapidly above the regional and national
average for a sustained period.
4. THE STRATEGIC
APPROACH
A framework for addressing the causes of slow
economic growth
4.1 "Where we are now?" and the
challenges that Lincolnshire is facing have been widely reported
and are well established. This Economic Strategy is a framework
for addressing the causes of slow economic growth and historical
under-performance by focusing on the structural issues faced by
the county. Using systematic and rigorous analysis, the strategy
identifies what should be done to close the strategic gap between
Lincolnshire's aspirations and what is likely to happen without
action.
Drivers of the Lincolnshire economy
4.2 The challenges to future economic development
and current under-performance are produced by a small number of
major factors that determine the current condition of the economy
and its previous path of development. These "drivers"
of economic activity and change will influence future economic
growth in Lincolnshire. There is a need to address these drivers
in ways that enable faster and more equitable growth and that
remove or resolve barriers and constraints to development.
4.3 Table 1 summarises the factors and conditions
that are shaping the Lincolnshire economy and its development
and current structure. The Table highlights the key drivers of
economic development, and for each summarises the outcomes to
be achieved through the Lincolnshire Economic Strategy. The drivers
represent where the economy is now and where it is going. The
outcomes represent the results of successful implementation of
the strategy.
4.4 The five drivers of Lincolnshire's economy
and its development are set out in Table 1 together with the changes
that this strategy is intended to achieve.
They are:
A more diversified industrial structure
1. Developing a more balanced and diversified
industrial structure that moves the economy more towards innovation
and to greater levels of competitiveness in the business population.
This will require renewal and rejuvenation in established and
existing sectors as well as the development of and diversification
into more innovative and higher value-added sectors, and markets,
such as sustainable energy and similar "upstream" sectors.
To reverse the brain drain requires the development and attraction
of higher value added industries that create higher skilled jobs.
Table 1
DRIVERS OF THE LINCOLNSHIRE ECONOMY
| Driver | Outcomes to be achieved
|
Existing industrial structure
| |
— Reliance on "traditional" industries
such as engineering, agriculture and land-
based
— Although, overall structure relatively broad (ie
relative over-dependence)
— Little indication of emergence of "new"
and technology-driven sectors
— Low levels of business start-up
— Sectoral competitiveness sustained and built on
in established industries
— A need for more innovation
— Diversification into new sectors
— Emergence of new sectors and areas of business
activity through enterprise
— Enhanced business-to-business collaboration and
clustering
Low wage, low skills economy
— Low wage rates, in relative UK terms
— Low levels of skills attainment
— Low levels of productivity, against UK & EU
— Shortages of affordable housing
— Increased skills in the workforce
— Increased FE and HE participation
— Attraction and start-up of businesses employing
at higher skills levels
A dispersed and rural county, on the economic periphery, and
with poor linkages and connectivity
— Poor physical infrastructure and under-developed
ICT connections
— Lack of scale in economic activity
— No major geographical concentrations of business
activity
— Relatively low levels of local demand
— Difficult to access markets & opportunities
— Growing firms seek opportunities outside county
— Greater connectivity through ICT
— Innovative use of ICT resulting in productivity
gains
— Maximise the benefit of the presence of the East
Midlands Media Computing Technology Centre
— Improved infrastructure to improve links in the
county and with key markets
— Greater consumer and business-to-business activity
within Lincolnshire
— Greater support to gain access to markets and
customers and exploit opportunities outside the county
Enhancement of school education & expansion of post-16
education
— Growth of University of Lincoln in Lincoln and
FE provision across much of the county
— Expansion in 16-19 participation and provision
— Low levels of participation in Higher Education
and post-18 Further Education
— Variable education offer up to 16
— Need to develop a more entrepreneurial population
— Reverse the brain drain
— Greater participation in HE and FE leading to
higher skills, knowledge and qualifications in workforce
— Increased local retention of graduates
— Increased interactions between FE/HE and businesses
— Improvements in areas where schools are not performing
as well
Variation in local communities and their prosperity and opportunities
— Concentration of high deprivation at local level,
particularly in certain parts of the county
— Areas of relative wealth concentration, both urban
and rural
— Effects of growth outside county on the South
(Peterborough), the West (Nottinghamshire) and the North (Yorkshire
& Humberside)
— Address communities and local "pockets"
of disadvantage
— Greater integration and connection within Lincolnshire
communities
— Greater opportunities across the whole population,
including those facing disadvantage
More enterprise through start-up
2. Moving from a low wage, low skills economy by increasing
the skills, qualifications and capability of the workforce and
by encouraging more businesses involved in higher value-added
activities. This will require an overall improvement in skills
levels and participation in vocational further education, higher
education, and continuing and lifelong learning. It will also
require higher levels of business start-up, particularly in competitive
industries and markets, and greater success in attracting existing
businesses active in these sectors.
A peripheral, rural and dispersed- a need for "connectivity"
3. Addressing the dispersed, peripheral and largely rural
nature of Lincolnshire by enhancing integration with other markets,
raising local levels of economic integration, and building "critical
mass" in the local economy. Increasing connectivity, through
ICT and via improvement of the physical infrastructure, is critical.
The innovative use of ICT will lead to productivity gains as well
as and through improved connectivity.
Building on our strengths in education and addressing weaknesses
4. Building on education strengths and addressing areas
where education can be enhanced. Lincolnshire performs well in
parts of its schooling, as well as in the education of its 16
to 19 year olds, and has recently seen rapid growth in higher
and further education. However, there is wide variation in schools
education attainment. Higher education participation continues
to be amongst the lowest in the UK, and students have tended to
leave and not return. This "brain drain" needs to be
reversed.
Addressing the social and economic aspects of disadvantage
5. Addressing the social as well as economic effects
of income disparities within and between communities. Lincolnshire
has areas that are highly prosperous, as well as communities that
have some of the highest levels of deprivation in the country.
In areas of deprivation and lower wealth, indices suggest that
the causes and measures of disadvantage relate to lower employment
and education prospects and other indicators of economic opportunity,
such as health. Addressing deprivation as a result of lack of
or reduced access to socioeconomic opportunities will lessen disadvantage
and increase the overall productive capacity of Lincolnshire.
Within a regional as well as sub-regional context
4.5 Lincolnshire's economic development occurs within
a regional as well as sub-regional context. The Regional Economic
Strategy and in particular its key drivers will have a material
impact on the development of Lincolnshire. For this reason, the
Lincolnshire Economic Strategy is based on the underpinning drivers
of the Regional Economic Strategy as well as on the local drivers
of economic change.
With drivers from the Regional Economic Strategy
4.6 Six drivers have been prioritised from amongst the
14 RES themes that have been highlighted in the current strategy
and the consultation documentation for the new RES. These are:
4. Enterprise and opportunity
6. Sustainable communities
A framework for economic development
4.7 Table 2 brings together Lincolnshire's drivers of
economic development and the key drivers of the Regional Economic
Strategy. Combined, the framework for the Lincolnshire Economic
Strategy focuses on local issues within a regional frame. The
strategy relates, as a result, to local drivers of economic development
and to the broader economic strategy for the region.
Addressing issues underpinning the "hidden crisis"
4.8 Each of the identified priorities for future economic
development represents responses to the specific economic issues
faced by Lincolnshire, and so ensures that the focus of the strategy
is on addressing the "hidden crisis" of economic under-performance
that is the rationale for this strategy.
Actively engaging with these issues
4.9 A broad principle of the strategy, therefore, is
that economic development and related activities should contribute
to Lincolnshire's growth by explicitly engaging with and resolving
the priorities and issues highlighted in the framework.
4.10 The strategy is not an action plan. It offers a
framework within which action can be set. What the framework does
highlight is the broad areas of future activity will be that contribute
to the development of the Lincolnshire economy.
A need for real impact and large-scale action
4.11 Large-scale action and innovative responses that
lead to real impact will be needed to address the priorities identified
in the framework. This may entail "transformational"
projects as well as extensions of existing activities, or new
projects of more modest size.
5. PUTTING THE
STRATEGY INTO
ACTION
Strategy into action
5.1 This strategy provides a framework for future action
and prioritisation. The next step is to move from the strategic
framework to action.
Building on what we do
5.2 As a starting point, what we currently do will be
assessed against the strategic framework and the highlighted priorities
for future economic development and change. Opportunities for
change will be identified by more explicitly matching activities
to priorities and their associated targets.
A three-year action plan
5.3 A three-year action plan for the Lincolnshire Economic
Strategy will be produced, based on the priorities identified
in Table 2 of the strategic framework. The action plan will provide
specific resources, timescales and objectives associated with
each priority as well as with the overall strategy.
An annual review of progress
5.4 A review of progress against the Strategy and specific
measures will be undertaken, in the form of an annual "development
report" on the Lincolnshire economy and its development.
This report will assess how activities and interventions are contributing
to the overall development of the economy, as well as analysing
progress against specific priorities and related actions
Priorities as the basis for action
5.5 How will this be done? For each priority (as identified
in Table 2), areas for action and intervention will be identified.
Implementation of the strategy will require delivery of actions
identified for each priority, which will provide a logical framework
for action and monitoring of effectiveness and impact.
Assessing progress
5.6 The three year action plan will be used to assess
progress and impact. Each action will be monitored against its
related priority in order to ensure that progress is being made
against broader objectives, in particular increasing GDP levels
in relation to the region and the national benchmark.
Monitoring
5.7 Monitoring is likely to be undertaken at three levels:
(1) How GDP and GVA is increasing, in absolute and
relative terms, and in particular how Lincolnshire is improving
its position against the regional and national averages.
(2) How specific actions and activities are addressing
particular, targeted priorities.
(3) How actions are fulfilling tier 3 targets, as
well as how the actions are contributing in an attributable way
to Lincolnshire's economic development.
Role of partners
5.8 The role of partners will be to ensure effective
delivery of the strategy, and wherever possible, to ensure that
approaches are coherent and co-ordinated and that resources are
matched and leveraged. Specifically, partners will be asked to:
(1) Agree and confirm the measures and possible actions
for priorities.
(2) Work towards economic development within the
framework of specific priorities that address Lincolnshire's economic
drivers.
(3) Contribute, via activities and resources, to
the achievement of the strategy.
Areas for action
5.9 The strategic framework summarised in Table 2 provides
a logical framework for implementation of the strategy. For implementation,
two additional tables will be produced using the same framework.
These will be:
(1) Specific areas for action within each priority.
(2) Specific output targets for each priority.
Specific targets
5.10 These areas for action and targets will be updated
on a regular basis, as part of the annual review and for each
three-year action plan.
Table 2
A FRAMEWORK FOR THE ECONOMIC DEVELOPMENT OF LINCOLNSHIRE
| Economic Wellbeing |
Growth |
Sustainability
| Enterprise & Innovation |
Diversity
| Sustainable communities |
| Existing industrial structure | 1. Greater future competitiveness in established sectors
| 2. Emergence of new sectors
3. Attraction of businesses into Lincolnshire
4. Clustering
| 5. Addressing environmental issues in sectors
| 6. Improved innovation in established businesses
7. More new business started in existing and new industries
| | |
| |
| | | |
|
Low wage, low skills economy |
8. Improved access to education, training & skills
9. Upskilling of existing workforce and new entrants
| 10. Companies employing higher skilled staff
11. Productivity increased in companies
| | 12. Self-employment/business start-up, by indigenous & in-migrant populations
13. Increase in higher quality starts
| 14. Labour migration & integration |
|
Dispersed county, on the economic margins
| 15. Improved ICT connections and innovative use of ICT
16. More integration with wider economy
17. Improved infrastructure
| 18. More growth of local businesses, within and beyond Lincolnshire
| 19. Effects of economic change on the environment
| 20. More entrepreneurs in "local" economies
| | 21. Community development strategies
|
Expansion of post-16 education |
22. Greater participation in Higher & Further Education
| 23. More involvement of HE & FE in the economy
| 24. Opportunities for "exemplar" projects or activities
| 25. Increase in "intellectual" entrepreneurship
| | |
Variation in local communities & their prosperity
| | | 26. Preserving quality of life and natural assets of county
| 27. Stimulating enterprise in deprived communities
| | 28. Fewer deprived and less prosperous communities
|
| | |
| | | |
Explanatory footnote to Table 2: The RES framework identifies
two broad foci for regional economic development and 12 particular
themes. In order to align the Lincolnshire Economic Strategy with
the regional framework, the table below provides a synthesis of
the RES and current consultation framework, by identifying six
priorities: (1) economic wellbeing (2) growth (3) sustainability
(4) enterprise and opportunity (5) diversity (6) thriving enterprising
communities. The framework takes the outcomes, as identified regionally,
from economic strategy and uses these to create a framework for
Lincolnshire that, via its identification of local drivers of
change, places the overall regional strategy within the context
of the particular conditions within and needs of the county.
| 
