House of Commons - East Midlands Regional Committee

East Midlands Development Agency and the Regional Economic Strategy - East Midlands Regional Committee Contents

Memorandum from East Midlands Development Agency (EM 07)

The East Midlands Development Agency (emda) welcomes the opportunity to contribute to this Inquiry into emda and the Regional Economic Strategy (RES). This submission builds on our recent attendance at the first session of the East Midlands Regional Select Committee to be held in the region (on 27 April 2009).

emda is subject to a wide range of accountability structures with which we have effectively engaged to demonstrate and enhance our role and performance.

emda places the voice of business at the heart of public decision making on economic planning in order to maximise private sector engagement, investment and leverage.

emda provides specialist economic development and regeneration know how—delivered through an effective mix of public and private sector expertise.

emda has consistently achieved its goals—against a backdrop of ongoing efficiency savings.

emda has generated £9-15 of economic output (or GVA) for the regional economy for every £1 it invests.

emda has strong stakeholder buy-in for the aims, ambitions, priorities and actions within the RES.

Our latest analysis shows improvement against the majority of RES targets, suggesting significant success in delivering shared objectives.

Our close engagement with the business community ensures that emda can respond rapidly, and offer support specifically tailored to the changing needs of the region's businesses.

emda's regeneration programme focuses on building the infrastructure to aid our long-term recovery and future growth.

Although Defra funding accounts for only 3% of emda's Single Pot, almost 38% of emda's outputs help support rural communities and businesses.

Sustainable Development is fully cascaded from the RES down through emda's Corporate Plan and project development and appraisal systems.

emda is one of eight Regional Development Agencies established under the RDA Act in 1998 and formally launched on 1 April 1999. The London Development Agency was established two years later in July 2001. emda's budget for 2009-10 is £157 million.

emda is able to bring a very real business-focused approach to our operation and investments, which are directed by our private sector Chair and our Board (made up of representatives from the business, local government, higher education and third sectors).

1. The role, responsibilities and accountability of emda

emda is subject to a wide range of accountability structures with which we have effectively engaged to demonstrate and enhance our role and performance.

emda delivers a comprehensive range of programmes for the Government, developed in conjunction with business, and in an efficient and effective manner.

emda has consistently achieved its goals—against a backdrop of ongoing efficiency savings and with a comparatively modest budget.

emda has had a significant impact on the regional economy and has generated £9-15 of economic output (or GVA) for the regional economy for every £1 it spends.

Overview of emda's role and responsibilities

1.1 emda has a key role in providing strategic economic leadership through the development and championing of the Regional Economic Strategy (RES). This long term strategy is based on comprehensive evidence and identifies the challenges and opportunities ahead.

1.2 The RES commands significant levels of support from (public and private sector) partners in the region—this has led to a high degree of coherence between the RES and a range of regional and local implementation/delivery plans. Regional partners (including Local Authorities and groups of Local Authorities) prioritise activity and align resources behind agreed, regional priorities, thereby increasing impact.

1.3 The current Regional Economic Strategy (RES) has the vision that: "by 2020, the East Midlands will be a Flourishing Region—with growing and innovative businesses, skilled people in good quality jobs, participating in healthy, inclusive communities and living in thriving and attractive places."

  1.4  This vision of a Flourishing Region is supported by the three Structural Themes or crosscutting principles of: Raising Productivity, Ensuring Sustainability and Achieving Equality. Within the three Themes, the RES identifies 10 Strategic Priorities, each setting out a number of Priority Actions which are required to improve the region's performance.

Raising Productivity Ensuring Sustainability Achieving Equality

—  Employment, learning and skills
—  Enterprise and business support
—  Innovation —  Transport and logistics
—  Energy and resources
—  Environmental protection
—  Land and development —  Cohesion communities
—  Economic renewal
—  Economic inclusion

1.5 emda's budget of £157 million for 2009-10 is comparatively modest in comparison to other public spending in the region (estimated to be £24 billion), and indeed the size of the regional economy (£77.9 billion). emda's investment priorities are set out in our three-year Corporate Plan—which is drawn up in accordance with guidance issued by the Department for Business, Enterprise and Regulatory Reform (BERR) and are consulted upon with regional stakeholders. The relationship between the RES and emda's Corporate Plan is set out below.

1.6 In line with our statutory responsibilities we have utilised our funding, resources and know how to:

— Deliver business support services, and promote enterprise activity and business growth/competitiveness;

— Foster innovation and scientific advance;

— Attract inward investment and promote the region as a tourist destination;

— Support employment, learning and skills needs;

— Deliver regeneration activities and physical infrastructure (including 27 sites in the National Coalfield Programme);

— Promote environmental sustainability and climate change adaptation measures;

— Develop local strategic capacity to lead economic development;

— Influence wider infrastructure support (including transport); and

— Respond to economic shocks.

1.7 emda's performance has been measured against a framework, primarily based on operational outputs set by Government, which has evolved over time. We have delivered our targets year on year and since 1999-2000 emda has:

— Created or safeguarded 81,231 jobs;

— Remediated 1,579 hectares of brownfield land.

1.8 It is important to note that these achievements were delivered against the backdrop of efficiency measures required by all RDAs in terms of their administration budgets. In 2007-08, the final year of the three year efficiency programme based around the Gershon Review, emda exceeded the target of £9.4 million, and achieved £14.8 million savings across the year.

emda's Impact

1.9 In 2005, emda commissioned an independent evaluation of the agency's spend and activities. This was an extensive evaluation of the agency's impact since its establishment in 1999 and was undertaken by Ecotec Research and Consulting. This is a ground-breaking piece of work and one that few other public sector bodies have been subject to before. The Ecotec study into emda's impact was gold standard in terms of breadth and depth of coverage and was able to look at issues in more detail than the national RDA evaluation commissioned by BERR.

Headline findings show that emda has:

— Had a significant impact on the regional economy;

— Generated economic benefits that substantially outweigh its overall costs;

— Generated £9-15 of economic output (or GVA) for the regional economy for every £1 it spends; and

— Produced more than £1 billion in economic benefits per year.

The evaluation also endorsed our organisational approach:

— 90% of emda's projects were judged to be effective or very effective in meeting their objectives;

— 94% of all projects assessed were judged as delivering good or reasonable value for money;

— Most projects would not have gone ahead without emda support; and

— Significant financial leverage has been generated by emda—Ecotec suggest a potential leverage for all project expenditure to be approximately £1.5 billion.

1.10 From a strategic perspective, our unique role in bringing together partners and stakeholders to tackle complex economic challenges has been highlighted as a real strength. These findings are a positive endorsement of our work, demonstrating that emda has been investing wisely in business support, regeneration and skills activities to bring about substantial benefits for our regional economy.

Accountability

1.11 emda is accountable to Ministers and Parliament through the Secretary of State for Department for Business, Innovation and Skills[4] and, as with all RDAs, our annual performance report and accounts are laid before Parliament, after being audited by the National Audit Office. We also appear before Parliamentary Select Committees and regularly answer Parliamentary Questions.

1.12 At the regional level, we are held to account by our Board and by regional partners and this happens in a variety of ways; through consultation exercises, attendance at partner meetings and our Annual Public Meeting, where the average attendance is between 300 and 400 stakeholders (including a significant proportion of businesses and business representatives).

1.13 We are currently subject to scrutiny by the East Midlands Regional Assembly (until April 2010). This process is conducted by the Regional Scrutiny Board and emda's performance is assessed against a series of thematic reviews on an ongoing basis. This process is governed by a clear protocol and supported by quarterly hearings. We are also now subject to parliamentary scrutiny through the new Regional Select Committee, and the soon to be established Grand Committee.

1.14 We are also subject to assessment by the National Audit Office (NAO) through an Independent Performance Assessment (IPA). In 2007, the NAO awarded emda 22 points from a possible 24 (the highest rated RDA)—and judged us to be performing strongly. This reflected a particularly strong assessment of emda's achievements to date.

2. The process by which the RES was drawn up and level of involvement of regional stakeholders

In consulting on the current RES, A Flourishing Region, emda was the only RDA to have actively involved the people of the region in the RES development process—where we reached 90% of East Midlands residents.

emda undertook the most extensive public consultation process ever undertaken in the region—100 events, reaching around 1,400 regional stakeholders.

Partner ownership was reinforced by the formation of a RES Reference Group, which met regularly to discuss key policy content and agree the development process.

2.1 Although the RES is developed and championed by emda, it is owned by the region. To ensure regional partner ownership, the RES development process has always been underpinned by an extensive programme of consultation and engagement. The development of the current RES, A Flourishing Region, was underpinned by a working group of key delivery partners—the RES Reference Group. This group comprised regional leaders from the public, private and third sectors and met regularly to discuss policy content and agree the RES development process.

2.2 To build wider stakeholder ownership we carried out the most extensive public consultation process ever undertaken in the region. This was conducted in three distinct phases:

20 Questions for 2020

Creating a Flourishing Region Together

A Flourishing Region

2.3 Throughout this period, emda attended over 100 events, reaching around 1,400 regional stakeholders and partners. The success of our proactive consultation campaign resulted in 495 substantive written contributions from a wide range of regional partners, stakeholders and residents from across the East Midlands.

2.4 We believe we were the only RDA to have actively involved the people of the region in the RES development process. The launch of the first formal consultation document in September 2005 was accompanied by an advertising campaign—200 poster sites on billboards and buses. The campaign ran for two weeks at the beginning of September and reached 90% of residents in the region. We also held Have Your Say Roadshows in 11 public venues across the region, including city centres and tourist attractions. These activities were supported by the development of a dedicated website which received over 20,000 visits between May 2005 and July 2006. Website visits to the dedicated RES review website increased by 66% during the advertising campaign.

2.5 All of this means that the RES is a product of debate and consensus around the key challenges and opportunities for the region and engendered significant support for, and ownership of, the RES.

2.6 To ensure that partners would put resources behind their words of support for the RES, we devised a RES Implementation Plan. This maps the activities of the region's key delivery partners, against each of the 59 Priority Actions of the RES. In the first version (published in January 2007) a total of 102 organisations in the region provided detailed written responses to the Implementation Plan. This indicated a total of £1.68 billion investment which is aligned to RES priorities.

3. The effectiveness of the RES for the East Midlands in delivering against its targets

The RES provides an effective framework to influence partners to deliver agreed priorities.

Our latest analysis shows improvement against the majority of targets, suggesting significant success in delivering RES objectives.

3.1 An important function of the RES is to influence and shape the investment behaviours of regional partners to ensure that agreed priorities are delivered in a co-ordinated way. It also has an important role to play in articulating the needs of the East Midlands to Central Governmenty achieving alignment of the priorities and investment plans of partners we are able to deliver strategic added value and economies of scale.

3.2 To monitor the Strategy's success we have devised the RES Performance Management Framework. This includes a range of measures and indicators which together provide an overall framework for monitoring our progress towards sustained and sustainable economic growth in the East Midlands. The following diagram shows the key elements of the Framework.

Figure 1

RES PERFORMANCE FRAMEWORK

3.3 A key element of the framework is a range of "outcome" indicators. These directly measure the performance of the region in delivering RES objectives, and are organised by the RES's 10 Strategic Priorities. Performance against these targets has been very positive, especially in relation to the employment and skills targets. Our latest assessment shows improvement against the majority of the Strategic Priority indicators—suggesting significant success in delivering RES objectives. A summary of the region's performance against these targets is provided at Annex A.[5]

3.4 Whilst we are pleased with progress to date we are aware that the impact of the current economic downturn is yet to fully appear in the statistical evidence. This is largely as a result of time-lags in the production of official statistics. We are also aware that the outcome of this may make it difficult to achieve some of the targets set within the Strategy, especially around business and employment growth.

3.5 emda was the only RDA to set a measurable target in the first RES—to become a top 20 region in Europe by 2010—this concept both galvanised and energised partners. For the current RES, and to gauge progress towards the wider vision of A Flourishing Region we have developed, in conjunction with the New Economics Foundation, the groundbreaking "Regional Index of Sustainable Economic Wellbeing" (R-ISEW). Built around core traditional economic measures of success (such as GVA) the ISEW incorporates other measures which reflect the complex, sometimes positive and sometimes negative relationships between economic, social and environmental development. This includes factors such as the value of voluntary work, the costs of environmental degradation, and the costs of crime. It enables the region to measure its aspirations to ensure that economic growth and increased productivity are shared for the benefit of all, that disparities within the region are being addressed and that our ambitions for increasingly cohesive, inclusive and participative communities are being fulfilled.

3.6 Recent analysis has shown very positive performance against the Regional Index of Sustainable Economic Wellbeing. Since 2004 ISEW per capita in the East Midlands has risen above that of the English average. In 2004 we were 2% below the English average—in 2006 it had risen to 7% above the English average. The East Midlands has also closed the gap with the leading region, the South West. In 2006 the gap with the South West stood at only 10% per capita, down from 32% per capita in 1994 (being the first year that data is available for the ISEW).

4. The effect of the financial and economic situation on businesses in the region including the effect on different sectors and the impact on local employment, and how well emda is meeting needs in the challenging economic climate

Our close engagement with the business community allows emda to respond rapidly, and offer support specifically tailored to the changing needs of the region's businesses.

emda's business sector intelligence also enables us to inform Central Government of the pressing needs of business so that funding can be made available to react quickly to changing economic circumstances.

emda's regeneration programme focuses on building the infrastructure to aid our long-term recovery and future growth.

4.1 The financial and economic downturn has affected all businesses in the East Midlands region, particularly in the manufacturing and construction sectors, but with knock on effects on retail and service sectors, as consumer expenditure in the region remains flat. Major job losses have been experienced in the region leading to increased unemployment. This has led to an increase in interest in business start-up activity.

4.2 emda has a key role in bringing together regional partners to respond to the challenges posed by the current economic climate. In our recent RDA Chair of Chairs role, we were central to Government thinking, acting as an "ideas factory", designing innovative suggestions for improvements in the interventions required to assist businesses. A significant outcome of this enhanced role for RDAs saw, for the first time, the Pre-Budget Report 2008 contain a specific chapter devoted to the work of the RDAs.

4.3 The changes that emda has made over the last three years in terms of business support delivery have proven to be vital. We have made significant and wide-ranging changes—rationalising provision, simplifying the offer to business and driving efficiencies that have reduced back office costs (from 30% to 23%) and increased the number of front line business advisers by 40%.

4.4 emda understands the importance of direct support to viable businesses though the current downturn and many interventions continue to be delivered to meet their challenging needs. The increase in front line advisers has enabled the Business Link service to ensure a swift deployment of Business Link Health Checks announced in October 2008. The diagnostic tools have been updated to support advisers in the identification of specific issues affecting businesses. A new Business Turnaround enhancement was introduced to the Business Transformation Grant scheme in December 2008 enabling a business in difficulties to access specific aid to recruit a private sector Turnaround Specialist.

4.5 Access to finance is a key concern for emerging and growing businesses. From 2002, emda has progressively developed an "escalator of funds" comprising grants, loans and venture capital—to complement the private sector and to help regional businesses to start up and grow. Since 2002, £131 million of new finance has been made available to East Midlands businesses as a result of emda's business investment activities, including £61 million directly from emda. This in turn has levered—or is forecast to lever—£475 million of additional investment and has supported 1,500 companies. The current downturn has exacerbated these needs and has required emda to refocus and enhance elements of the funding escalator.

4.6 In response to the decline in the availability of credit to businesses, emda has integrated new funding mechanisms into the escalator. One such example is the Transition Loan Fund (established in February 2009)—emda has, to date, committed £6m to the Fund, which makes loans of up to £250,000 to businesses that have been affected by the reduction in the availability of bank finance. In addition, emda is seeking to support micro businesses in some of the region's more disadvantaged areas through EnterpriseLoans East Midlands. This £5 million loan fund provides loans of up to £20,000 to viable small businesses that traditionally struggle to raise bank finance.

4.7 We are also delivering a package of events across the region providing free advice to businesses and enabling them to engage and express the issues facing them. We ran a series of "Survive and Thrive" events across the region in December 2008. These events provided master classes for businesses and were extremely well attended by 2,000 business people. We have invested in further support for businesses through the "Route to Market" programme, consisting of five days of workshop-based support in a number of specialist areas. Running alongside this, a series of workshops aimed at raising awareness of the benefits of resource efficiency. The "Survival of the Fittest" events started in January and will reach approximately 300-500 businesses.

4.8 In addition to the support directed at the business community as outlined above, emda has also worked with key partners across the region, including the Homes and Communities Agency and Government Office for the East Midlands (GOEM), to identify a number of planned key regeneration schemes whose delivery can be brought forward to commence within the next twelve months. Focus has been given to schemes that will have major regeneration impact and will create and safeguard jobs, through bringing forward mixed-use developments in support of sustainable communities. Those schemes identified by emda include:

— The redevelopment of Derby's Cathedral Quarter;

— Development of a new Business Quarter for Leicester adjacent to the city's railway station; and

— The re-development of Nottingham Railway station to create a new transport hub supporting regeneration of the surrounding area.

4.9 The short-term aim is to maximise economic impact, during a period where conditions remain depressed in the property and construction sector. The long-term aim of emda's regeneration programme is to build the infrastructure required to aid our long-term recovery and future growth.

4.10 emda also works effectively across local boundaries to react to economic shocks and, as a result, has developed with partners the Career Chain—Pan Regional Redeployment Project. This is a matching service for construction professionals facing redundancy. Using £1.58 million of emda funding, this project originally focused on the aerospace engineering sector and in December 2008 emda expanded the scheme to include the construction sector with an additional £400,000 worth of funding.

4.11 Evidence suggests that businesses are diverting limited budgets away from employee training and therefore from January 2009, SMEs have been able to access focused training programmes through the Train to Gain Programme, in subjects demanded by businesses including business improvement, team working and sales and marketing. Since April 2009, emda has been responsible for delivering the independent brokerage service to Train to Gain, under the Business Link brand.

5. The changes to regional policy proposed in the Local Democracy, Economic Development and Construction Bill and the potential effect on the work of emda

emda fully supports the move towards an integrated Regional Strategy and is working closely with the Local Authorities and the Regional Assembly to facilitate its development.

It is imperative that the LDEDC Bill protects and enhances the benefits of the business-led RDA model in order for emda to deliver effective economic growth.

5.1 emda welcomes the opportunity to play a full and proactive role in the implementation of the SNR as articulated in the Local Democracy, Economic Development and Construction Bill (LDEDC). We are fully supportive of the move towards an integrated Regional Strategy has historically, the separate timescales, overlapping processes and different evidence bases of the RES and Regional Spatial Strategy (RSS) made it challenging to fully integrate economic and spatial policies.

5.2 Recent progress has been made in relation to the structures required to develop an integrated Regional Strategy. emda alongside the Shadow Local Authority Leaders' Board (LALB) have worked closely to develop the regional Change Management Plan (CMP) that sets out the top level governance structures for SNR implementation, along with key principles in terms of groups and structures to support the Joint Strategy Board and wider stakeholder engagement. The CMP was submitted to GOEM in March 2009 and we are currently awaiting Central Government feedback.

5.3 Although we welcome the policy direction articulated in the LDEDC Bill we remain concerned that the ongoing partial review of the RSS will impact on the region's ability to develop a timely integrated Regional Strategy from April 2010.

5.4 Another important aspect of the LDEDC Bill is the future requirement on regional partners to undertake joint investment planning. This is very much welcomed and is vital in order to ensure that funding is aligned in support of regionally agreed priorities. It will therefore be crucial for emda, Local Authorities, Homes and Communities Agency, Highways Agency, Network Rail, Environment Agency and others to work even more closely together moving forward.

5.5 emda has a very strong track record of working successfully at the sub-regional level through Local Area Agreements, Local Authorities, Urban Regeneration Companies and emerging Economic Development Companies. In 2001, emda agreed to fund seven Sub-regional Strategic Partnerships (SSPs) to bring together businesses, the public sector, and the third sector to tackle the distinct needs of their local areas. Between 2003-04 and 2008-09 emda has allocated £255 million of Single Programme funds to the SSPs. In line with the spirit of the Sub-National Review, the emda Board agreed, in September 2007, to contract sub-regional activity directly with the nine Unitary and County authorities (9Cs) from 2009-10. In most parts of the region, this approach became operational on 1 April 2009 and this year sees approximately a third of our budget allocated in this way.

5.6 Going forward, emda believes that it is imperative that the LDEDC Bill protects and enhances the benefits of the business-led RDA model when addressing sustainable economic growth. Business leadership of RDAs, clear decision making based on our capacity and expertise in key areas, and our financial flexibility have been critical factors in the progress we have made to date, in developing regional economies as well as responding effectively to the economic downturn—we must continue to capitalise on this strength.

6. The role of other Government agencies such as the Government Office for the East Midlands, and of partnerships between Government agencies, local government and the private sector, in delivering the aims of the RES

emda has strong stakeholder buy-in for the aims, ambitions, priorities and actions within the RES.

emda has a good reputation for effective partnership working.

emda has been instrumental at engaging with organisations and bringing them together where there has been clear need to remove barriers and encourage joint working.

6.1 As noted previously, emda's 2009-10 budget of £157 million is comparatively modest relative to other public spending in the region and the size of our region's economy. To have a measurable impact on our economy it is vital that we draw together partner support behind agreed strategic and delivery priorities.

6.2 Regional stakeholders, partners, and the general public have been involved in key stages of the RES development, from identification of key themes and strategic priorities to testing of the priority actions. This has allowed for strong stakeholder buy-in for the aims, ambitions, priorities and actions within the RES and for emda to truly develop a strategy for the region.

6.3 emda has a good reputation for effective partnership working. We have a strong relationship with GOEM and emda was instrumental, in partnership with GOEM, in facilitating the establishment of the Regional Co-ordination Forum Steering Group (RCFSG) in the East Midlands. The RCFSG, included key public sector funding organisations (Public Health, Learning and Skills Council, Job Centre Plus, Local Government, Regional Assembly) and aimed to provide an effective performance management framework for the delivery, reporting and monitoring of the RES. The group was in operation from 2006 to 2008 and has been superseded by a couple of new regional-level groupings. Firstly, the Regional Economic Cabinet, which is chaired by the Minister for the East Midlands, Phil Hope MP, and meets on a regular basis in order to ensure that all parties in the region are doing as much as possible to support the region's economy in the economic downturn. Secondly, an SNR Implementation Group (comprising emda, GOEM, Local Authorities and the Regional Assembly), which is driving forward the implementation of the SNR.

6.4 emda has used both public sector and private sector partnerships to initiate development in the region. An example of this approach is Blueprint, which is an innovative public-private partnership formed by emda, English Partnerships and Igloo Regeneration Fund in 2005. This vehicle was the first of its kind in the UK and has delivered a number of schemes in areas of market failure—where the private sector alone is unwilling to invest. Recent schemes include Nottingham Science Park and the Digital Media Centre in Leicester. To date, Blueprint has levered in £31 million private sector investment to support its programme of physical infrastructure development and has won numerous awards.

6.5 emda has also been instrumental in bringing organisations together where there has been clear need to remove barriers and encourage effective partnership working. For example, we facilitate collaboration between the region's universities, to enable the region to offer a desirable knowledge base to attract students and businesses. A good example of this approach is BioCity, where we brought together the University of Nottingham and Nottingham Trent University and removed the barriers to progress this important initiative (with funding, guidance and strategic support). BioCity provides incubation and grow on space for SMEs in the bio-pharmaceutical and life science sector. To date, 57 knowledge intensive businesses have been created and it has levered in £27 million private sector investment. This scheme is extremely successful and has attracted national and international recognition.

7. The way emda's resources are divided between rural and urban parts of the East Midlands, and whether the division is appropriate

emda seeks to continue to embed the consistent adoption of the "think rural" approach across all directorates and teams and at all levels through mainstreaming activities.

Although Defra funding accounts for only 3% of emda's Single Pot, almost 38% of emda's outputs help support rural communities and businesses.

7.1 Firstly, it is important to reinforce the issues set out in section 1—the challenges and opportunities (and therefore the priorities) for the region are set out in the RES and it is this document that guides emda's Corporate Plan and our investment approach. We do not seek to spread our funding equally across all parts of the region, but seek to prioritise activities that will deliver greatest impact (through a focus on the region's key sectors, for example) or tackle specific geographical needs and challenges.

7.2 The East Midlands is, however, England's third most rural region, with over 30% of our population living in rural areas—almost 10 percentage points higher than the English average. We are fully committed to our obligation to consider the needs of rural communities and businesses. In 2003 emda signed up to the East Midlands Rural Charter (at our instigation) as a demonstration of our strong commitment to "thinking rural".

7.3 In 2005-06 emda's Board took the decision to mainstream delivery of rural priorities, in response to national Defra Guidance and support from rural partners. By mainstreaming our rural activities, all Single Pot investments are considered in relation to their impact on rural communities and businesses. Mainstreaming makes it impossible to disaggregate our investment by rural or urban classification however, we do monitor the impact of our outputs to ensure that we deliver interventions to the benefit of the whole region. The disaggregated outputs are calculated by projects being assigned to specific districts as their "area of impact".

7.4 emda's Rural Team works across the organisation in the development of our policies, programmes and projects in order to ensure that rural issues are appropriately considered at the early stages of project and policy development. This is a key part of our "rural proofing" responsibility, which also extends to the policies and plans of other agencies delivering in related areas or on behalf of emda.

7.5 Our approach to mainstreaming has seen a positive growth in our support for rural areas. In 2005-06 over 36% of emda's outputs supported communities and businesses in rural areas. This has increased to almost 38% in 2007-08. This should also be viewed in the context of Defra's contribution to emda's budget, which is approximately £4.7 million, around 3% of the total.

7.6 In addition to our direct investment, we are also responsible for delivering the socio-economic elements of the Rural Development Programme for England (RDPE), amounting to approximately £60 million of EU and Defra funding, between 2007-13. The funding will support activity aimed at improving competitiveness, collaboration and diversification in the agricultural and land-based business sectors and their associated supply chains, as well as enhancing opportunity and quality of life in rural areas. Skills development, resource efficiency, innovation and renewable energy will be features of the programme. We will also share best practice and learning with the emerging Coastal Areas Network led by South East England Development Agency (SEEDA).

7.7 emda also seeks to influence the work of other partners and stakeholders in the region as a core partner of EMRAF (East Midlands Rural Affairs Forum). One of emda's Board Members (who takes a lead on rural issues) currently also serves as EMRAF's Vice Chair. emda is charged with leading and reporting back on the implementation of three of the seven priorities within the East Midlands Rural Action Plan, which was developed under the auspices of EMRAF.

Examples of work in support of Rural Action Plan priorities include:

— Ensuring that the summer 2007 flood relief grant scheme for small businesses was fully extended to rural areas, including to land-based businesses;

— Supplementing the regional business support service to fully encompass land-based business sectors. This will support the delivery of RDPE (Rural Development Programme for England 2007-13) and help develop the capacity of Business Link to engage fully with land-based sectors;

— Ensuring that Business Link delivery is fully engaged with the Post Office Network Change Programme to help mitigate the impacts and assist business adaptation; and

— Developing a rural evidence base document to underpin development of the Rural Action Plan.

7.8 In addition, emda funding is used to support a wide range of projects focused on rural issues, including Live and Work Rural, which is a partnership with the Peak District National Park Authority and helps businesses and communities to maximise the opportunities of the Peak District's natural environment. emda is providing £520,000 over three years to this project. Funding of £1.7 million has also been provided to the Retford Enterprise Campus project, which will create 1,550 sq metres of new office space and workspace for incubation and early growth businesses. A focus will be given to creative industries, rural diversification and target sectors such as food and drink.

8. How well emda is performing on sustainability

Contributing to sustainable development is one of emda's five statutory functions and is fully cascaded from the RES down through our Corporate Plan and project development and appraisal systems.

To maximise our organisational contribution to delivering sustainable development emda has developed an Environmental Management System (EMS).

Any organisation seeking funding from emda must also demonstrate how they will deliver sustainable development.

8.1 Contributing to sustainable development is one of emda's five statutory functions as embodied in the RDA Act and reflected in the collective mission of RDAs: "to transform England's regions through sustainable economic development". We work within the context of the UK Government's definition of sustainable development which is concerned with: "meeting the needs of the present without compromising the ability of future generations to meet their own needs". On a day to day basis we bring this concept to life by seeking to support developments which balance economic, social and environmental considerations leading to a flourishing East Midlands characterised by sustainable economic wellbeing.

8.2 The UK Sustainable Development Strategy (Defra, 2005) establishes the context in which sustainable development is delivered in the East Midlands. Its principles are fully embedded within the current RES and further articulated in our measurement of the RES vision using the Regional Index of Sustainable Economic Wellbeing (R-ISEW). Furthermore, five of the 10 Strategic Priorities demonstrate how our regional economic ambition embeds national sustainability priorities. The RES was also subjected to a detailed Sustainability/Strategic Environmental Assessment and an Equality Impact Assessment to ensure that the RES reflects the needs of all equality groups and contributes to equality of opportunity for all.

8.3 The national Sustainable Development (SD) principles cascade from the RES down through our Corporate Plan and project development and appraisal systems. To maximise our contribution to delivering SD, emda has developed an Environmental Management System (EMS). This seeks to reduce our environmental impact whilst improving our corporate efficiency. It includes a number of environmental improvement targets to be achieved by 2010-11:

— 5% reduction in the carbon emissions arising from our offices;

— 20% reduction in business miles; and

— 10% reduction in waste from our office activities.

8.4 Any organisation seeking funding from emda must also demonstrate how they will deliver SD. A number of requirements have been put in place to ensure projects maximise their contribution to SD. All projects must:

— Demonstrate how they have a positive impact on the opportunities available to different equalities groups;

— Comply with existing environmental legislation and demonstrate how they will have a positive impact on the environment or, where an impact might be negative, how this will be mitigated;

— Meet our expectations in relation to sustainable design and management (as set out in emda's Sustainable Physical Development Guide).

8.5 As well as discharging our SD responsibilities in developing the RES, emda has developed a number of additional subsidiary strategies and action plans which deliver against SD—key examples include emda's Economic Inclusion Development Plan, the Business Support and Regional Innovation Strategies and our Statutory Equality Schemes focused on race, gender and disability equality. We have also worked with regional partners in the development of other regional strategies, policies and action plans to ensure that economic and SD principles are fully embedded. Key examples include:

Regional Energy Strategy Regional Waste Strategy

Regional Spatial Strategy Regional Environment Strategy

Climate Change Programme for Action Rural Action Plan

Regional Skills Frameworks/Action Plans Regional Biodiversity Strategy

Exemplar Sustainable Development Projects

8.6 Since our establishment we have invested in numerous exemplar projects delivering the sustainable development agenda. Examples include:

— Development of a new sustainable eco-visitor centre at the Attenborough Nature Reserve, providing new facilities to support the financial sustainability of the nature reserve;

— Genesis Social Enterprise Centre in Alfreton, a mixed development of managed work space, educational and community facilities designed to enhance local service delivery and create new economic opportunities for local people;

— Supplier Diversity East Midlands, an innovative business support programme working with large multi-national household brands (including PepsiCo, ExxonMobil, Eversheds, KPMG, and IBM) to open up their supply chains to the region's black and minority ethnic business community; and

— National Energy Technologies Institute hosted at Holywell Park, Loughborough University, a partnership between Government and the private sector to invest up to £1 billion in the development and deployment of new energy technologies to support the UK's emergence as a world leading low carbon economy.

CONCLUSION

emda's business leadership and insight is crucial—we are on the economic frontline and our priorities and investments are informed by business views and needs.

Through our economic leadership we provide a rapid response (often within hours or days) and help businesses and their supply chains refocus and survive.

We can be brave and take tough decisions and risks—all with the aim of getting a bigger bang for our buck.

Issues do not stop and start at administrative boundaries—we can remove barriers and instigate effective partnership working. And we can bring our capacity and expertise to the table in terms of large, complex projects.

We undertake unique, ground-breaking activities—whether that's in our research programme, our regeneration activities or our support to business.

Our impact is significant—generating between £9 and £15 of economic output (or GVA) for the region's economy for every £1 we invest.

Annex A

PROGRESS AGAINST RES TARGETS

Key Indicators	Measure	Target (by 2009)	Baseline	Update
Employment, Learning & Skills	Percentage of economically active qualified to Level 4 or higher	To increase the proportion of economically active adults qualified to a Level 4 or above to 30%	EM 25.0% (2003) UK 28.6% (2003)	EM 28.5% (2007) UK 32.4% (2007)
	Employment in K1 high knowledge intensive sectors and K4 low knowledge intensive sectors	To increase the proportion of employment in K1 sectors to within 4 percentage points of the UK average; and to reduce the share of employment in K4 sectors to level with the UK average	K1 EM: 24.5% UK 32.1% (2003 revised) K4 EM: 38.4%; UK: 30.9% (2003 revised)	K1 EM: 38.9%; UK: 41.2% (2006) K4 EM: 22.6% UK 21.7% (2006)
Enterprise & Business Support	Business registration rate (per 10,000 population)	Increase the rate of VAT registrations to 40 per 10,000 population head and be at least level with the UK average	EM: 36 UK: 38 (2004, revised)	EM: 37 UK: 42 (2007)
	Proportion of businesses surviving three years	Maintain a three year survival rate above the UK average and be at least 71%	EM: 70.7% UK: 69.7% (2001, revised)	EM: 72.2% UK: 71.3% (2002)
Innovation	Gross Domestic Expenditure on R&D	To increase gross expenditure on R&D to 2.5% of GVA	EM: 2.1% UK: 1.9% (2002, revised)	EM: 1.9% UK: 1.8% (2005)
	% of business turnover attributable to new & improved products	To increase the proportion of business turnover attributable to new and improved products to 6%	EM: 4% UK: 9% (1998-2000)	EM: 5% UK: 11% (2002-2004)
Transport & Logistics	% of workforce travelling to work by public transport, walking or cycling	To increase the proportion of the East Midlands workforce travelling to work by public transport, walking or cycling to 23%	EM: 20.5% UK: 28% (2004)	EM: 22.3% UK: 28.9% (2006)
Environmental Protection	Proportion of river distance classified as "good" chemical and "good" biological quality	To maintain the current proportion of East Midlands river length (% of total km) of "good" chemical and "good" biological quality	Biological quality: 61% Chemical quality: 55% (2004)	Biological quality: 66% Chemical quality: 63% (2006)
Land & Development	Average annual growth over a five year period in employment floorspace	To maintain an annual average growth rate over a five year period of 1.5% in employment floorspace	East Midlands: 1.7% England: 1.5% (1999-2004, revised)	East Midlands: 1.1% England: 0.4% (2002-07)
Cohesive Communities	Participation in formal voluntary activities in the last 12 months	Increase the proportion of the East Midlands population engaged in formal volunteering to within 3 percentage points of the leading region	East Midlands: 44% South West: 51% (2003)	East Midlands: 47% South East: 48% (2005)
Economic Renewal	Economic activity rate (% working age) in urban and rural areas	Maintain rural rates above 80% and increase urban activity rates to 78%	Urban: 77.6% Rural: 81.1% (2004)	Urban: 80.7% Rural: 81.4% (2007)
Economic Inclusion	Proportion of the population of working age claiming key benefits	To halve the gap between the East Midlands and the South East from 3.6 percentage points to 1.8 percentage points	East Midlands: 13.4% South East: 9.7% (May 2004, revised)	East Midlands: 12.9% South East 9.6% (Nov 2007)
	Economic activity rates in the bottom decile of East Midlands LADs/UAs	Increase economic activity rates in the bottom decile of LADs/UAs to 75%	71.7% (2004, revised)	73.5% (2007)

2 11,639 businesses created and 84,006 businesses supported-to note that the output achievements for business creation are from 2002-03 onwards and from 2005-06 for businesses supported. Back

3 Output achievements for assisting people with their skills development are from 2002-03 onwards. Back

4 Formerly the Department for Business, Enterprise and Regulatory Reform (BERR). Back

5 Ev Back