Memorandum submitted by the Government Office for the
East of England (GO East) (EE 20)

 

 

Background

 

1. The East of England has been one of the fastest growing regional economies in the UK over the last 20 years. It is the leading region for private sector research and development, and an important gateway to global markets through its ports and airports. Its employment rate is one of the UK's highest[1].

 

2. There are, however, pockets of significant deprivation, mainly, but not exclusively, in coastal areas. For example, Great Yarmouth and Norwich receive Working Neighbourhood Funding, helping people in deprived areas get back to work, and funding under the Local Enterprise Growth Initiative, aiming to release the economic potential of the most deprived areas[2].

 

3. While the region has some cutting-edge industries, its general level of workforce skills needs improvement. Qualification rates amongst the working age population compare unfavourably at every level with the national average.

 

4. The region's diverse economy has helped it cope with the recession. While some sectors have been less affected, with certain businesses in technology, pharmaceutical and agriculture sectors continuing to show growth, several sectors have contracted significantly. Construction and housing-related activities and manufacturing (including food production and automotive sectors) have seen high levels of redundancies. Other sectors such as retail and business services have experienced mixed impacts. One upside is that the lower value of the pound has boosted domestic tourism bookings[3].

 

5. In 2009 Q1, the region's unemployment rate rose to 5.9 per cent, up from 4.5 per cent a year earlier. Increases in numbers of claimant unemployed have not been spread uniformly over the region, with largest increases being in the local authority districts of Basildon, Peterborough and Luton[4]. Employment has remained fairly stable: the region's working-age employment rate was 77.7 per cent in 2009 Q1, the same as a year ago. The number of people in employment has risen in the past year, unlike any other UK region, by 18,000. An important factor in unemployment appears to be labour market entrants being unable to find work: vacancies placed with Jobcentre Plus remain significantly lower than a year ago[5].

 

6. The East of England remains well-placed to benefit from the growth of innovative sectors such as bioscience, creative and other knowledge-based industries. Its strengths in private sector research and development are complemented by world-class research institutes and university departments. A key challenge will be to improve the skills of the workforce to enable this opportunity to be realised.

 

7. This submission focuses on the key government programmes being delivered by regional partners in response to the recession, including implementation of national initiatives, such as Real Help Now, and regionally-led activity to coordinate the response of delivery partners. These form part of, but not the entirety of, the Government's response to the recession, which also includes wider tax measures and its complete fiscal stimulus package.

 

 

Responding to the downturn in the east of England: national measures

 

8. The Government's national package of measures forms the core of its response to the downturn. This includes Real Help Now for businesses and individuals, such as:

 

· Help for Business to secure access to finance and maintain cash flow, such as the Enterprise Finance Guarantee Scheme, Working Capital Scheme and Capital for Enterprise Scheme. In the East of England, nearly £20m of eligible applications for EFG have been granted, are being processed or assessed.

 

· Creation of HMRC Business Payment Support Service, allowing businesses to spread their tax payments. Over 10,200 businesses in the East of England have benefited this arrangement.

 

· Launch of a national campaign to promote resource efficiency to small and medium sized businesses to help them make savings.

 

· Train to Gain has a £925m national budget for 2009-10: in this region, over 40,000 people commenced training via this programme during 2008-09, up 174 per cent on the previous year.

 

· Debt and Legal Advice-£15m more funding for National Debtline and the Citizens Advice Bureau to help consumers in financial difficulty. In the East of England, 19 court desks provide free legal and financial advice to anyone facing a repossession hearing. These prevent immediate repossession in 85 per cent of cases.

 

· Mortgage Rescue Scheme-to help those in priority need at risk of repossession, who would otherwise be helped by their local authority under homelessness legislation. South Norfolk and Kings Lynn West Norfolk have completed mortgage rescues; the South Norfolk rescue was the first in the country.

 

· HomeBuy-part of a suite of shared equity and shared ownership schemes including Rent to HomeBuy, a rent first/buy later scheme. In the region up to 1,650 properties will be covered by HomeBuy Direct, representing a Government investment of up to £47m.

 

· Affordable and social Housing-under funding to purchase unsold stock, 166 new units were acquired from private developers. Tenants in Thurrock and Basildon will benefit from nearly £5m for repairs and refurbishment being brought forward in response to the recession.

 

9. The Real Help Now in the East of England booklet explains these measures. It was launched in February by the Prime Minister and the Minister for the East of England at an event attended by local business, the voluntary and community sector, training providers and local authorities. Barbara Follett has continued to promote Real Help Now through media opportunities and stakeholder engagement.

 

10. Businesses find themselves in difficulty. At Budget 2009, the Government responded by extending the period for which businesses will be able to carry back their losses from one to three years (for up to £50,000 of losses). This temporary enhancement is estimated to help 12,600 businesses in the East of England and 140,000 businesses in the UK over 2 years.

 

11. The Budget also announced the Future Jobs Fund, a £1bn fund to allow local authorities and other organisations to bid to create around 150,000 new jobs. Regional partners have now been invited to submit bids.

 

12. In February, the region submitted its Regional Funding Advice setting out priorities for economic development, transport, housing & regeneration and skills, to support the Government's investment decisions in the short and long term. The advice was developed through collaboration between leading partners in the region, and underpinned by existing regional strategies.

 

13. The Government has taken a range of actions to secure the future of the automotive sector, identified by the Committee as an area of interest. These include a national scrappage scheme and setting up the industry-led New Automotive Innovation and Growth Team, which reported to BERR Ministers in May.

 

Regional Response: the role of key players

 

14. There is already a strong tradition of partnership working in the East of England, which has helped key agencies work together to tackle the impact of the recession. They include:

 

· Government Office for the East of England-representing central Government in the region, GO East brings together regional activities of 12 Government departments to support regional delivery and feed the region's views and needs to Whitehall. GO East works with a range of bodies, including local authorities, businesses, regional delivery agencies and voluntary organisations.

 

· East of England Development Agency (EEDA)-responsible for improving economic performance in the East of England. EEDA takes the lead, working with business and other partners, in addressing key economic issues in the region. In addition to specific activities outlined elsewhere in this submission, EEDA plays a crucial role in providing key decision makers with economic intelligence on the downturn, including anecdotal company and area-specific evidence as well as hard data.

 

· Jobcentre Plus (JCP)-provides advice on jobs and training for people who can work and financial help for those who cannot. Its Rapid Response Service provides support in response to major redundancies.

 

· Learning & Skills Council (LSC)-works to improve the skills of young people and adults. It has used funding to reskill people who are out of work or threatened with redundancy, whilst increasing support for those in work to upskill and be better placed for the economic upturn.

 

· Homes & Communities Agency (HCA)-formed on 1 December 2008, bringing together the functions previously undertaken by the Housing Corporation (investing in new affordable housing), English Partnerships (regeneration of land and property) and certain CLG responsibilities.

 

· Highways Agency (HA)-an executive agency of the Department for Transport, responsible for operating, maintaining and improving England's strategic road network.

 

· NHS East of England-provides strategic leadership for the regional NHS. The NHS is the region's largest employer and purchaser, spending over £8.5bn annually and representing 7.5 per cent of the regional economy.

 

· UK Trade and Investment (UKTI)-works with EEDA to support the region's businesses to succeed in international markets, and to encourage the best overseas companies to invest in the East of England.

 

· Local Authorities-have a key role in delivery of services, advice and support, and through planning and infrastructure development. The sub-national review of economic development and regeneration outlines a stronger role in future for authorities in economic development[6].

 

· East of England Regional Assembly (EERA)-a partnership body bringing together elected councillors from the region's 52 councils and representatives from the private, voluntary and community sectors.

 

Regional Economic Forum

 

15. In response to the recession, the region has reinforced arrangements for joint working through the East of England Regional Economic Forum (REF). It was set up in November 2008 and has 25 members[7], drawn from delivery organisations as well as representatives from business, the third sector and other interested parties are invited to take part by the co-Chairs: the Regional Minister and the Chair of EEDA. This membership is wider than similar bodies in other regions.

 

16. REF provides regional leadership, encouraging members to co-ordinate their actions in response to the recession and in preparation for a future upturn. It takes a broad approach, reviewing information on economic and social impacts; considering response measures; and acting as a conduit for information and ideas.

 

17. The REF has met six times to date. So far meetings have:

· endorsed the Regional Redundancy Plan, developed and delivered jointly by JCP, LSC and EEDA;

· considered the delivery of business support measures, on the basis of regular reports from EEDA;

· highlighted infrastructure projects that could be accelerated to aid the regional economy, and established a subgroup to take this work further;

· identified actions to help improve skills in the region's workforce;

· ensured that there is a collective understanding of the state of the region's economy, based on EEDA's monthly economic outlook;

· heard from local authority leaders about the impacts of the recession in the places hosting the REF; and

· identified action to help the region prepare for the opportunities of a low carbon economy.

 

18. In addition, the Regional Minister has used feedback from REF to raise specific concerns with fellow Ministers, and to raise issues through the Council of Regional Ministers, which in turn feed into the National Economic Council. The Regional Minister, together with the Chairs of EEDA and EERA, attends the meetings of the quarterly Regional Economic Council[8].

 

Regional Redundancy Plan

 

19. The Regional Redundancy Plan builds on existing redundancy provision, to coordinate activities of LSC, JCP and EEDA in supporting four target groups: large-scale redundancies; those threatened with redundancy; the newly unemployed; and the long term unemployed. These delivery bodies, with GO-East, monitor and develop its implementation. A joint publication for business and individuals identifies the support available for individuals and businesses. Revaluation of the European Social Fund, following strengthening of the euro, has allowed an extra £12m to be allocated to deliver the Plan. Aspects include:

 

· Where mass redundancies (20 people or more) occur, JCP's Rapid Response Service works with partners to offer a seamless service to employers, unions and individuals. It provides information, advice and guidance to help individuals secure new employment; and to upskill or retrain. Since November 2008 it has offered help to over 495 employers, a yearly increase of 82 per cent.

 

· LSC is working with 18 Further Education colleges to deliver 7000 training places by July 2010 for those claiming JSA for over 6 months, matching them to vacancies and providing training and qualifications to match the employer's needs. It has also launched bespoke training for people threatened with redundancy or newly unemployed, helping them overcome barriers to re-enter the labour market.

 

· EEDA's Beyond 2010 £7.2m skills programme includes advice, guidance and re-training opportunities for individuals facing redundancy. Over 2,600 individuals in over 260 companies have received skills training to help them into work or self-employment since autumn 2008.

 

20. The region is piloting an Integrated Employment and Skills programme in Norfolk, Suffolk and Cambridgeshire. This offers individuals help with skills assessment, careers advice, applications for employment, and finding courses. There have been 1,234 referrals in Cambridgeshire and Suffolk since December and 366 referrals in Norfolk since February 2009.

 

21. Businesses requiring new employees can use Local Employer Partnerships to work with additional JCP services, such as funded work trials for potential employees. During 2008-09, 8,096 businesses across the region signed up to LEP and 7,783 disadvantaged customers started new jobs with them.

 

Supporting business and improving skills

 

22. EEDA, including through funding of Business Link, leads the region's effort to provide advice and support for business, especially to small and medium-sized enterprises. This includes help in coping with the downturn and to prepare the region for an upturn and sustainable economic growth.

 

23. Core EEDA-funded business services include:

· Business Link Gateway, signposting businesses to support;

· the Manufacturing Advisory Service and Resource Efficiency East, helping business improve their performance;

· TakeITon-assisting businesses in their use of IT;

· access to finance-supporting business with finance to help them start up and grow;

· Women's -porting women looking to start or grow a business;

· support for the London 2012 and Paralympic Games electronic brokerage service, Competefor-giving businesses unique access to opportunities arising from the London 2012 Games; and

· Business Map-helping businesses to access publicly funded business support.

 

24. In response to the downturn, EEDA has boosted this integrated £30 million core package. Specific measures include:

· around 5,000 free Business Link 'health checks' delivered and the Business Link gateway responding to high call volumes;

· additional initiatives to help businesses to start up and grow-the first additional round saw 19 companies receive a share of £390,000;

· working with the banking sector on issues being faced by businesses, in particular to develop a better understanding of the financial support available to viable businesses;

· £1.32m additional investment in the Manufacturing Advisory Service;

· ensuring that information and advice is easily and universally accessible, including mailings to over 200,000 businesses; and

· introduction of a £5m regional loan fund designed to support innovative businesses finance their development.

 

25. UKTI and EEDA fund East of England International to help companies win business globally and to support companies wishing to invest and grow within the region. During 2008-09, UKTI/EEI advisors provided significant assistance to 623 companies, a 64 per cent increase on last year.

 

26. UKTI's Passport to Export programme supports novice exporters develop their business internationally, helping 191 companies in 2008-09; and its global network offers businesses access to market intelligence and senior individuals, generating real business for 399 companies in 2008-09, up 63 per cent on 2007-08.

 

Improving skills

 

27. For those in employment, LSC continue to focus on upskilling and qualification attainment. Train to Gain (TtG) helps businesses of all sizes, in all sectors, to upskill their workforce to improve business performance. Within the region, 50,766 adults have started on training courses since August 2008.

 

28. LSC continues to deliver leadership and management training for SMEs through TtG and the East of England is in the top two regions for performance of the TtG Leadership & Management programme and brokerage service.

 

29. To date, 723 organisations have signed the Skills Pledge, a public commitment to support employees develop their basic skills. This covers 340,218 employees across the region, the third highest employee coverage nationally. The Skills Pledge continues to be promoted amongst business and public sector organisations, especially through Ministerial events.

 

30. EEDA provides additional support for rural businesses to access skills and training opportunities through the new Landskills East partnership. This includes £4.5m of investment through the Rural Development Programme for England, and will link with TtG where appropriate.

 

31. The regional European Social Fund, worth £170m, is applied to activities which help to extend employment opportunities and develop a skilled and adaptable workforce. This provision is delivered by the regional co-financing organisations, including JCP, EEDA, LSC and some local authorities. Since 2008, £95m has been released to deliver activities to support skills development, including the response to redundancy.

 

Housing, Infrastructure and Capital Investment

 

32. The region's growth has been supported by significant public sector investment through three Growth Areas, four Growth Points and 21 Key Centres of Development and Change. This will help accommodate the step change in housing supply and infrastructure development needed to give more people the chance to enjoy a decent affordable home in a place they want to live and work.

 

33. While housing growth is primarily funded by the private sector, public sector support for delivering growth (largely to provide supporting infrastructure) comes from central Government, national/regional agencies and local authorities. Critical successes in the East of England for securing funding include:

· Growth Area Funding for growth areas and existing growth points-£144m from a national total of £489m (period 2009-11). Also received £115m (2006-08) to support projects including a new pedestrian and cycle bridge in Cambridge, an innovation centre in Harlow and the regeneration of Luton's railway station.

· Community Infrastructure Fund-transport projects-£58m (2009-11) has been allocated to 8 projects regionally. An additional £100m have been allocated to 13 potential schemes in the Thames Gateway Growth Area.

· Regional Funding Allocation (RFA2)-Regional Infrastructure of £58m for the period 2008-11 plus a further £1.2bn over the period 2008-19 for regional major transport schemes, such as the Cambridge Guided Busway.

 

34. Through its RFA2 advice and the work of the Regional Economic Forum, the Region has established that there are immediate challenges in tackling the recession whilst, at the same time, there is a need to address the long term priorities articulated in the Regional Economic Strategy and the Regional Spatial Strategy.

 

Maintaining Delivery: helping keep jobs in the region

 

35. Government agencies in the region have therefore sought to deliver infrastructure and help employment by using their capital funding to unblock stalled construction sites, bring forward spending and deliver affordable housing. Key actions include:

 

· Funding Flexibilities-the HCA increased the amount of Social Housing Grant per home to housing associations to provide more affordable homes. By 31 March, an additional 5,793 homes had been funded.

· Property & Regeneration-HCA invested £35m delivering 4,102sq m employment space; 308 new homes; 120 1st Time Buyers homes and reclaiming 5.5 hectares of brownfield land. In Southend, HCA and EEDA have brought forward investment of £6m in an education facility for the University of Essex. In Norwich, GO East worked with CLG colleagues to enable North Earlham, Larkman and Marlpit areas of Norwich to swap £1.1m between revenue and capital allocations to enable Henderson Business Centre to proceed to completion. The project is part of a development to assist local people into self-employment and to create employment opportunities by offering incubator workshop units. EEDA has brought forward £5.7m of investment from 2010-11 to 2009-10 for key regeneration projects to provide a fiscal stimulus to the economy and support the construction industry.

· Highways Investment-The Highways Agency are planning to bring forward parts of the M1 Junctions 10-13 managed motorway scheme to add capacity through hardshoulder running when traffic flows are high. The region has also asked the Department/Highways Agency to bring forward dualling of the A11 between 5 Ways roundabout and the Thetford Bypass which will complete a dual carriageway link between London and Norwich potentially 3 years early.

 

Measures to support long term sustainable economic growth

 

36. The regional spatial strategy (East of England Plan) was adopted in May 2008; the new regional economic strategy (Inventing our Future: Collective Action for a Sustainable Economy) was launched in September 2008. The two strategies are underpinned by a common evidence base, set out a long-term vision for sustainable development, and include ambitious targets for housing, the economy and the environment.

 

37. In a first for regional strategies, the implementation planning for the two strategies has been integrated into one process. The East of England Implementation Plan[9] (open to public consultation until June 2009) identifies interventions to bridge the gap between current/planned activity and the objectives of both strategies.

 

38. The new regional strategy, proposed under SNR, will bring together existing regional economic, spatial and other strategies, enabling the East of England to align better its activity across thematic areas and to prioritise more effectively the use of public and private sector investment. In the spirit of collaborative regional working, the EEIP is a forerunner to the regional strategy. EEIP combines a long term perspective with responding to the immediate priority of the recession. Key issues include:

· housing-improving energy efficiency in the existing stock and short-term response to the credit crunch and recession;

· transport-passenger links of high economic value;

· utilities-regional broadband improvement;

· enterprise, innovation and business support-financial support for business;

· skills and employability-leadership and high-level skills;

· culture, creativity and the visitor economy; and

· sustaining investment in green infrastructure.

 

39. The Regional Economic Forum has looked at how to improve future skills levels, and backed an LSC proposal to jointly identify the specific skills requirements for the future growth sectors. These are based on the Government's skills activism approach and include low carbon industries, biosciences, high end manufacturing, and creative and cultural sectors. Through employer engagement, this task will identify the skills needs now and for the future which can then influence public sector delivery.

 

40. Transition to a low-carbon resource efficient economy offers opportunities for creating economic growth and jobs as well as contributing to a cleaner environment, which is recognised through the ambitions of the EEIP. REF has also identified action to help the region prepare for the opportunities of a low carbon economy and has commissioned work on how demand for low carbon products and services can be encouraged, including through public procurement.

 

Conclusion

 

41. The East of England entered into the recession in a relatively strong position but has nevertheless been affected by the downturn. Regional agencies have a strong history of collaborative working, and continue to work well together to coordinate a regional response to the recession, delivering a number of initiatives to support business and communities. The Regional Economic Forum provides regional leadership and a conduit for feedback to national fora on developments, at regional and local level.

 

42. The region recognises the importance of maintaining its long-term focus, through coordinated implementation of evidence-based strategies. Partners are also identifying, via the REF and regional strategies, how the region might best prepare for opportunities of the future economy, and in particular to respond to the skills challenge.

 

 

21 May 2009



[1] ONS Regional Labour Market Statistics May 2009

[2] WNF: Great Yarmouth receive £7.2m 2008-09-2010-11, Norwich £1.5m 2008-09-2009-10 (NRF transitional funding only). LEGI: Great Yarmouth £8.6m, Norwich £8.9m 2008-09-2010-11

[3] Insight East Monthly Economic Outlook April 2009

[4] Insight East Monthly Economic Outlook April 2009

[5] 20,500 vacancies in April 2009, compared to 25,900 in April 2008, NOMIS

[6] http://www.communities.gov.uk/publications/citiesandregions/govresponseprosperousplaces

[7] A list of the members of REF and minutes of meetings are available at http://www.gos.gov.uk/goeast/our_region/RegionalMinister/762344/

[8] Details of the Regional Economic Council including notes of meetings are available at  http://www.berr.gov.uk/whatwedo/regional/regionaleconomiccouncil/page49379.html

 

[9] Consultation document available at http://www.eeda.org.uk/implementationplan.asp