Memorandum submitted by the Confederation
of West Midlands Chambers of Commerce
The Confederation of West Midlands Chambers
of Commerce (which will be referred to as "the Confederation"
throughout the course of this document) consists of all of the
Chambers of Commerce within the West Midlands Region, which include:
— Birmingham Chamber of Commerce and
Industry (which incorporates Solihull Chamber of Commerce and
Industry)
— Black Country Chamber of Commerce
— Coventry and Warwickshire Chamber
of Commerce
— Herefordshire and Worcestershire
Chamber of Commerce
— North Staffordshire Chamber of Commerce
and Industry
— Shropshire Chamber of Commerce and
Enterprise
— South Staffordshire Chamber of Commerce
and Industry
The Chambers of Commerce that comprise the Confederation
represent over 10,000 businesses in the region as a whole, offering
extensive services to industry and commerce, promoting trade and
advocating the interests of business locally, nationally and internationally.
THE CONFEDERATION
IS SUPPORTIVE
OF ADVANTAGE
WEST MIDLANDS
(AWM)
The West Midlands is at the economic heart of
the UK, contributing 8% of the UK's GDP. However, the region's
GVA per head is just 89% of the UK average equating to a £10
billion output gap. It is crucial to both the region and the UK's
long-term success that the gap is closed and AWM plays an important
role working with business and the public sector to achieve this.
This will support the wider UK economy, which currently relies
to an unsustainable degree on London and the South East. Moreover,
it will tackle social exclusion and broaden opportunities for
the people and businesses of the region.
The West Midlands possesses a defined regional
identity with commonalities in terms of economic interests, geography,
issues, problems and solutions. Research has identified that the
£10 billion output gap is attributable to a predominance
of low productive sectors with poor records on skills, enterprise
and innovation region-wide. It is therefore crucial that there
is strategic management at a regional level to co-ordinate resource,
prioritisation, collaboration, effort and investment to implement
economic development and regeneration throughout the West Midlands.
The Confederation believes that AWM is undertaking this role successfully,
working with the business community through its business-led Board
and Advisory Groups such as the Regional Enterprise Board. We
also recognise that AWM is working hard to make its engagement
with business more effective.
A particular challenge both business and AWM
faces, is the transformation of the Business Link service in the
region. Chambers of Commerce (in the main) delivered the Business
Link franchise for a number of years with notable success. Whilst
the Confederation agreed (and still agrees) with the need to increase
efficiencies by creating a single back-office function, we remain
convinced that delivery locally through intermediaries such as
Chambers is a critical component of providing business support.
We are working closely with the new holders of the franchise to
ensure local delivery but remain disappointed that the move to
a centralised model resulted in Chambers losing the franchise.
This was a particularly difficult period and the working relationship
between AWM and Chambers was strained. Lessons on effective partnership
working have been learned on both sides.
AWM's region-wide successes include:
— The West Midlands Regional Economic
Strategy (RES):
The RES has established clear economic goals
for the region in terms of job creation, skills development, land
reclamation and public investment.
— The Premium Automotive Research and
Development Programme (PARD):
AWM has invested £35 million in the PARD
programme at Warwick University in order to develop world-class
technology across the region's car industry. This investment has
attracted an additional £80 million of additional R&D
expenditure and generated £118 million annual Gross Regional
Product.
AWM successfully led the response to the closure
of MG Rover and last summer's floods.
— Securing the Energy Technology Institute
and Channel 4's Digital Media Commissioning hub:
AWM successfully brought the £1 billion
Energy Technology Institute to the Midlands and secured Birmingham
as the home of Channel 4's Digital Media Commissioning Hub.
AWM's sub-regional successes include:
— Birmingham New Street Gateway Plus
project:
AWM is investing £100 million (the largest
ever investment by an RDA in a single project) in the Birmingham
New Street Gateway Plus project. This will deliver transformational
change and new opportunities for enterprise, regeneration and
employment in Birmingham and the wider region.
— Shrewsbury Food Enterprise Centre:
AWM is facilitating the provision of 12 specialist
food and drink production units in order to encourage start-ups
and growth in this key sector. The development is expected to
create over 100 new jobs.
AWM has secured Coventry as the home for three
nationally significant investments: Ericsson, Tata's European
R&D Centre and the Manufacturing Technology Centre recently
announced in the National Manufacturing Strategy.
— The regeneration of Hereford City
Centre:
AWM has supported the Edgar Street Grid regeneration
in Hereford City Centre, to expand the retail and employment offer
and consolidate Hereford's status as the principal centre for
the southern part of the sub-region. The development is expected
to create 1,250 net new jobs.
AWM has supported the £64 million mixed
use project at Walsall Waterfront, which will deliver houses,
office accommodation and associated retail and leisure facilities.
The development is expected to create 960 new jobs.
This contrasts with the mixed ability of local
authorities and other sub-regional bodies to deliver the West
Midlands' priorities (as opposed to an individual local authority's
goals). Nonetheless, the Confederation believes that RDAs should
play a role in developing local authorities' delivery and strategic
capacity to prepare them for the changes proposed by the Sub-National
Review (SNR) and to reflect the wider importance of empowering
local and sub regional decision-making. However, any immediate
transfer of power and/or funding to local authorities as part
of the SNR will almost certainly lead to a period of slow down
in delivery and there is considerable risk that regional priorities
will be dropped in favour of lower-impact local initiatives which
will not collectively make a significant contribution to improving
the region's output. At some stage in the future, it is feasible
that local authorities will have the strategic capability to assume
these responsibilities. There are, for example, early signs of
improved joint working emerging from the Birmingham, Black Country
and Coventry City Region initiative though this capability needs
to be developed further.
THE SUB-NATIONAL
REVIEW
While the Confederation is broadly supportive
of the aspirations of the SNR, the Government needs to go further
in devolving power from the centre to our regions and localities,
providing a meaningful framework for business engagement in decision-making
at the regional, local and sub-regional level and in joining up
this agenda with broader issues of business support simplification,
Business Rate Supplements (BRS), transport, skills and planning.
At a regional level, there is a strategic regional
economic co-ordination role that RDAs can usefully play. A focused,
streamlined, evidence-based Integrated Regional Strategy (IRS)
covering economic, housing, planning and transport issues could
help to deliver this. AWM is now doing much more to ensure that
it is more business focussed. It is important that AWM is allowed
to continue to utilise the expertise of non-RDA and Local Authority
partners, such as business, to improve regional strategies and
decision-making.
The IRS needs to demonstrate that the region
has really understood what interventions work when driving systemic
economic change. That said, the RES has been the culmination of
several years work and represents a high quality vision and strategy.
Whilst the creation of an IRS presents an opportunity to raise
the bar even further, we should resist the temptation to re-visit
the key components of the RES. Put simply, the regions cannot
afford the luxury of yet more self-examination and another lengthy
and bureaucratic consultation process. The priority now is delivery
of successful interventions and legislation must be introduced
as a matter of urgency to enable RDAs to take on statutory responsibility
and to ensure that the current regional strategies are not left
in limbo.
At a local level, more decisions on planning,
regeneration and transport could and should be taken by local
authorities in partnership with their business community. This
does however need to be accompanied by stronger local leadership,
a sharper focus on economic development issues (as a result of
the new statutory duty), and opportunities for business to be
at the heart of the decision-making process. Businesses are concerned
about current levels of capability and expertise within local
authorities and where this is the case RDAs will need to assist
local authorities to develop the necessary capacity before local
authorities receive delegated funding or have the powers to make
other arrangements.
THE IMPORTANCE
OF BUSINESS
ENGAGEMENT AND
EXPERTISE IN
RDAS
Business leadership of RDAs is an important
principle, which should be retained and developed. AWM has taken
steps (and this continues) to ensure genuine and appropriate business
engagement, particularly given that business is the only stakeholder
with the power to deliver the necessary step change in economic
development that the SNR requires. Within the West Midlands, AWM
has business representation on its Board and strategic regional
partnerships (including the Regional Skills Partnership on which
the Confederation has seven places) as well as in the development
of the RES and Skills Action Plan. The Confederation is in advanced
discussions with AWM to deliver a business engagement programme
with regionally significant firms across the West Midlands. We
welcome this and believe that such an approach will improve further
AWM's ability to engage with the region's most important businesses.
It is important that business participation
is senior and serious with quality candidates experienced in starting
up and running businesses assuming positions on RDA Boards and
partnerships. It is critical that these leaders work with the
business constituency they represent to ensure buy in from the
wider business community. AWM and business colleagues have made
impressive strides in improving the visibility of the business
led aspects of the RDA not least through close engagement with
Chambers' elected Council bodies. The Confederation believes that
requiring RDA board members to exchange ideas regularly with business
and business organisations, to communicate and champion the work
of the agency, could enhance this.
It is essential that business engagement in
RDA programmes "picks up" the broader business community
and does not depend upon relationships with individual businesses.
At any one time there are over 3000 businesses actively collaborating
in AWM's cluster groups across the West Midlands leading to tangible
increases in innovation and growth. Successful regional programmes
include the National Industrial Symbiosis Programme. It is vital
that AWM maintains this region-wide reach whilst continuing to
enhance it.
THE ACCOUNTABILITY
OF RDAS
In the light of the SNR's proposals concerning
future scrutiny arrangements (following the abolition of the Regional
Assemblies), the Confederation is concerned that the panoply of
accountability structures proposed will be counterproductive to
the achievement of economic objectives. The Confederation urges
government to enhance business involvement in scrutiny and accountability
processes.
We support the British Chambers of Commerce's
view that "the prime objective of the SNR should be to ensure
that RDAs are held accountable for their performance against clear,
measurable objectives in terms of economic development".
The Confederation is clear that information relating to RDA performance
should be readily available and that there should be mechanisms
to replace, restructure or abolish failing agencies.
THE IMPORTANCE
OF EFFICIENCY
SAVINGS
The SNR makes reference to the IRS processes
ensuring efficiency savings. It would be very appropriate to invite
business to champion the efficiency savings aspect of the region's
strategies, especially if the UK does enter a period of prolonged
economic slowdown. Business has learned much in recent years about
squeezing costs down and increasing productivity and there will
undoubtedly be learning that is transferable to the public sector.
THE AUTONOMY
AND FUNDING
OF RDAS
It is important to note that regions do not
merely require autonomy to make their own decisions though, of
course, this is crucial. Central government must be prepared to
invest in the regions: the West Midlands needs funding from central
government to enable transformational change. As such, the Confederation
is dismayed by the government's recent decision to remove £300
million from the RDAs' single pot budget to fund the HomeBuy Direct
housing initiative. This will compromise the ability of RDAs to
deliver long-term regional priorities, which will stymie recovery
from the economic slowdown rather than enable it.
SUMMARY OF
RECOMMENDATIONS
— AWM should continue to be the strategic
regional development agency for the West Midlands.
— AWM is uniquely placed to deliver
regional priorities within the West Midlands when compared with
other local and sub-regional bodies.
— AWM should become more economically
centred in its activities and have a sharper strategic economic
focus
— There is a role for AWM in developing
the long-term strategic capacity of the region's local authorities.
— The Regional Economic Strategy and
Regional Spatial Strategy should be combined into an Integrated
Regional Strategy.
— Arising out of the SNR, RDAs will
need to assist local authorities to develop the necessary capacity
before delegating funding or have the powers to make other arrangements.
— It is also essential that business
engagement continues to "pick up" the broader community
and does not depend solely upon relationships with individual
businesses. AWM does this well through its advisory boards and
its positive relationships with business organisations in the
region. This needs to continue and strengthen.
— Business representatives should play
an enhanced role in RDA scrutiny and accountability arrangements.
— Business should assist RDAs to make
efficiency savings as appropriate.
— Central government should avoid interfering
with AWM's budget during the economic downturn as this dilutes
the RDA's effectiveness and undermines their efforts to support
the region's recovery.
19 September 2008
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