Further supplementary evidence from East
Midlands Development Agency (EM 35)
1. INTRODUCTION
1.1 This document seeks to provide further
evidence to address some of the points made by third parties in
their written and verbal evidence to the Committee. This paper
covers a number of issues, including: regional strategy and evidence
base development; engagement with trade unions; spatial resource
allocation; provision of support to small and micro-businesses
and emda's policy on airport expansion. It therefore forms an
addendum to emda's original written submission to the Committee
on 1 May 2009.
2. REGIONAL STRATEGY
DEVELOPMENT
2.1 A number of respondents raised concerns
in relation to emda's strategy development processes (in terms
of appropriate engagement), and a need to revise the RES in the
face of the economic downturn. This section seeks to address some
of the points made by third parties.
2.2 Evidence given by a number of respondents
appears to suggest that emda and the Local Authority Leaders'
Board have forged ahead with plans for the development of a new
Regional Strategy (RS) for the East Midlands, without involving
stakeholders and partners. There are also wider concerns about
government policy in relation to future strategy development,
specifically relating to perceived limitations on engagement.
These issues appear to have influenced some respondents' views
on emda's ability to engage stakeholders appropriately in strategy
development processes.
2.3 As stated in both our written and verbal
evidence, emda has a strong track record of undertaking inclusive
strategy development. For example, we worked very closely with
a wide variety of regional stakeholders in the development of
each of the three Regional Economic Strategies. This was identified
as a real strength by the National Audit Office in their 2007
Independent Performance Assessment of emda which stated that,
"emda undertook a wide and inclusive consultation for its
RES. The majority of stakeholders and stakeholders we spoke to
felt they had played a role in the development of the RES and
their suggestions had been acted upon".[46]
2.4 For clarity, emda has not commenced
with drawing together a new Regional Strategy. We await the outcome
of the Local Democracy, Economic Development and Construction
(LDEDC) Bill's accession through Parliament and for further guidance
from Government, which will follow the Bill, before we commence
any preparatory work with the Local Authority Leaders' Board.
2.5 The approach we intend to adopt for
the new Regional Strategy will place stakeholders at the heart
of our strategic development processes. In line with the Government's
requirements, the region (emda, EMRA and Local Authorities) submitted
a Change Management Plan (CMP) at the end of March 2009, which
sets out the principles and ways of working that will deliver
SNR implementation in the East Midlands. The CMP indicates that
the next six to 12 months will see emda, the Regional Assembly
and the Local Authority Leaders' Board engaging in a number of
crucial activities to prepare the way for the first Regional Strategy
(RS). The first core activity is an open consultation with stakeholders/partners
which aims to identify arrangements for stakeholder engagement
in the development of the RS. An event is taking place on 2 July
2009 to begin to shape arrangements for the development of the
RS. This re-emphasises that stakeholder engagement is at the centre
of our plans to develop and implement a new Regional Strategy
for the East Midlands.
2.6 A further related concern (raised by
the Regional Assembly) was that the RES should be subject to review
to ensure it takes account of the current challenges faced by
businesses as a result of the economic downturn. There are two
key reasons why we have not felt this is in the best interests
of the region. Firstly, the RES is a long-term strategy, which
seeks to address and negate long-term barriers to our economic
competitiveness. As a result, the broad themes and priorities
of the RES remain valid. Secondly, instead of undertaking a time
consuming review of a long-term strategy, emda has proactively
put in place a range of measures to help support businesses through
the economic downturn, whilst undertaking initiatives and investments
that will prepare the region for recovery and future growth. This
approach was endorsed by Government and the Regional Minister
and we remain convinced that this was the most appropriate course
of action.
3. ENGAGEMENT
ON EVIDENCE
BASE DEVELOPMENT
3.1 A small number of respondents questioned
emda's capacity and approach to Evidence Base development, including
emda's technical capability, our ability to engage partners in
the development process, and the accuracy/timeliness of our data
and intelligence in relation to the economic downturn.
3.2 emda has built considerable internal capacity
to ensure that we are able to undertake appropriate evidence-based
policy development, and thus fully satisfy the requirements outlined
in Government RES guidance. emda employs a core team of highly
specialist and technically competent analysts, rather than outsourcing
this core responsibility to private sector consultants. This team
was tasked with both developing the extensive RES Evidence Base
and identifying appropriate policies to address the challenges
and opportunities identified through this analysis. This approach
has ensured close linkages between the Evidence Base and RES policy.
To ensure that the Evidence Base was technically robust, emda
also employed the services of a peer-review panel that consisted
of a range of independent academic experts who provided ongoing
feedback on the appropriateness of emda's approach.
3.3 emda actively engaged with partners
in drawing together the Evidence Base as we were keen to ensure
that it was a source that was owned and trusted by the region,
thus ensuring we could develop a credible strategy which garnered
strong partnership support. As noted above, whilst much of the
analysis was undertaken in-house, emda did outsource input from
a number of appropriate regional stakeholder organisations. For
example, the East Midlands Public Health Observatory contributed
demographic analysis, whilst the British Geographical Survey (based
in Keyworth), Environment Agency, English Nature, English Heritage
and the Countryside Agency assisted with the development of the
environmental chapter of the RES Evidence Base (The East Midlands
in 2006). It should also be noted that to support the RES,
the Evidence Base focused on factors influenced by the economic
sphere; as a result we had to make a number of difficult decisions
in relation to the inclusion of data which had a marginal influence
on the economic agenda.
3.4 emda also utilised a number of partnership
groups to obtain early and ongoing engagement in the Evidence
Base development, thus ensuring a highly inclusive process. A
separate Task and Finish Group was formed to provide contributions
and to act as a sounding board. This group included representation
from a wide range of partners and stakeholders including; BERR,
CLG, East Midlands Regional Assembly, GOEM, Intelligence East
Midlands, Learning & Skills Council, Nottingham City Council,
and Lincolnshire County Council. We also worked closely with environmental
partners (such as East Midlands Environmental Link, CPRE etc)
and Statutory Consultees (English Heritage, English Nature, Environment
Agency) through a further Task and Finish group to assess the
environmental impact of, and contribute to, the SEA and Sustainability
Appraisal of the RES 2006. Beyond the group's core responsibilities
they were also given regular opportunities to provide ongoing
comments on the validity of the Evidence Base.
3.5 In its evidence session, the FSB stated
that emda has a tendency to use statistical evidence which is
outdated, and that this has therefore been a barrier in terms
of our ability to fully understand the extent and impact of the
economic downturn. Whilst it is true that emda uses data from
a range of official sources (for example the Office for National
Statistics), and we fully accept that this is often subject to
time lags, these sources represent only one aspect of the intelligence
which informs emda's strategic approach.
3.6 Our statistical evidence is always supplemented
with survey data and intelligence gathered through business networks—such
as the East Midlands Business Forum (Chambers, IoD, CBI, EFF,
FSB etc), from key partners (eg JobCentre Plus, Government Office),
through close engagement with members of the Regional Economic
Cabinet, the Bank of England's Regional Agents, and directly from
the many businesses and private sector contacts we deal with on
a day-to-day basis. We also engage directly with a wide range
of businesses in our delivery of the Business Link service. The
outcome of Business Link interactions are recorded on a database
(RBSIS), which is then used to inform resource allocation and
programme design to ensure that we are meeting the changing needs
of business.
3.7 The FSB's written submission suggested
that emda does not make annual assessments of the data and intelligence
which underpins the RES, and as a consequence are unable to ascertain
regional progress towards delivering RES priorities. Whilst the
Evidence Base is published relatively infrequently and represents
a snapshot for a given time period, we do regularly monitor regional
performance.
3.8 As highlighted in our written submission,
emda measures and monitors regional performance through the RES
Performance Management Framework at least annually. This analysis
is presented to the emda Board. In addition to this, emda undertakes
regular analysis of data and intelligence to inform our strategic
decision making, for example, we regularly submit analysis to
the East Midlands Regional Economic Cabinet to inform the region's
response to the economic downturn. Nationally, we provide analysis
to the Department for Business, Innovation and Skills (BIS) to
feed into discussions of the Regional Economic Council.
4. SUB-REGIONAL
DISTRIBUTION OF
FUNDING
4.1 This section intends to address some
of the concerns that third parties have raised to the Committee
in respect of a perceived focus of emda investments in specific
localities, namely the `Three Cities' (3Cs), along with an assumed
lack of investments aimed at supporting the development of appropriate
work space units in declining Market Towns.
4.2 As outlined in both our written and verbal
evidence, emda does not seek to spread our funding equally across
all parts of the region and this was reiterated by Jeff Moore
in our evidence session on 27 April 2009, "we are not
about making sure that each of the 42 or 44 districts in the region
gets one forty-second, as it were, of our total budget".[47]
Instead, emda endeavours to prioritise activities that will deliver
the greatest impact or tackle specific geographic needs and challenges
within the region. emda has always recognised the dynamic nature
of the region and specifically, that over 30% of the region's
population reside in rural localities. As such, emda is committed
to its obligation to fully meet the needs of rural communities
and businesses.
4.3 To achieve our vision of the East Midlands
becoming a "Flourishing Region" by 2020, it is
essential that all investments fit within agreed strategic priorities
and are targeted appropriately across a range of spatial areas.
This commitment is recognised by our partners, as quoted by the
Leader of Lincolnshire County Council, Martin Hill;[48]
"I am reassured that it is scrupulously fair with how
the money is allocated while at the same time making sure that
it is not just giving money away for the sake of it".
4.4 As outlined in our original written
evidence, by mainstreaming delivery of rural activities, we now
consider the needs of rural communities and businesses in the
context of all our Single Programme investments, which makes it
impossible to disaggregate our investments by rural and urban
classification. In addition, emda's Rural Team works across the
organisation in the development of our policies, programmes and
projects, to ensure rural issues are appropriately considered
at the early stages of programme and project development. emda
is also responsible for delivering the socio-economic elements
of the Rural Development Programme for England (RDPE) which amounts
to approximately £60 million of EU and DEFRA funding, between
2007-13. The funding is 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.
4.5 In addition to ensuring that the correct
mechanisms are in place to ensure that our policies, programmes
and projects are inclusive of rural communities and businesses,
emda has a track record of working successfully at the sub-regional
level. Between 2003-04 and 2008-09, emda has allocated £225
million Single Programme funding to the Sub-Regional Strategic
Partnerships to ensure that decisions on local investments are
made at the correct spatial level. Going forward, and in line
with the spirit of the Sub-National Review, emda has recently
contracted sub-regional activity to the nine Unitary and County
Authorities, which will see approximately a third of our budget
being allocated in this way. This ensures that specific needs
of local areas continue to be considered and addressed on an ongoing
basis.
4.6 In response to the specific issue about
the lack of appropriate work space units in declining Market Towns;
an example where emda has proactively supported the demand for
higher quality employment land within rural localities is the
development of Cransley Park, the former Cohen's Yard Brownfield
site in Kettering. This development will generate 32,000 sqm of
new commercial floor space and has the potential to create a further
900 jobs for the county which will support the Northamptonshire
Growth Agenda. This project is the result of a collaboration between
Northamptonshire Enterprise Limited, Northamptonshire County Council
and Cransley Developments, and is using £2.4 million secured
through the Government's Growth Area Fund and emda's Single Programme.
This project supports the sub-regional demand for higher quality
employment land and will contribute significantly towards the
objective of employment-led growth to stimulate the Northamptonshire
economy.
5. ENGAGEMENT
WITH TRADE
UNIONS
5.1 With regards to our engagement with
Trade Unions, and specifically, Unite the Union, emda has not
received a formal request for funding directly from Unite to deliver
a regional response to large scale redundancies (as stated in
their verbal evidence). However, we have been involved in discussions
with both Unite and TUC regional representatives, on an ongoing
basis, to discuss joint working in response to the issue of redundancy
support.
5.2 A number of mechanisms are already in place
to respond to large scale redundancies and we have been keen to
ensure that Unite and the TUC are closely engaged in these. For
example, the Large Business Support Group, chaired by Jobcentre
Plus, and hosted by emda, seeks to achieve a coordinated approach
to delivering this agenda. The TUC are members of this group.
In addition, emda funds the Career Chain Project, which focuses
on providing redundancy and redeployment support to engineers.
Unite are active members of the Project Steering Group.
5.3 emda has also worked with Unite and
the TUC to advise on what funding is available to them from a
range of regional funding mechanisms and how that funding can
be best accessed. To date, the TUC has successfully bid for £20,000
from the LSC in order to host training workshops for the UnionLearn
representatives, to support their work during the recession. emda
has also been working closely with the TUC to assist them in building
a proposal for £50,000 of funding from emda and will incorporate
additional funding from other partners, including the Unions themselves
so that they can take forward their proposal for a cross-union
redundancy response.
6. BUSINESS SUPPORT
TO SMES
6.1 In their verbal evidence, the FSB stated
that most of our business support activities are targeted at larger
businesses as opposed to sole traders, partnerships and micro-businesses.
6.2 emda recognises that the economic downturn
has affected all businesses in the East Midlands and is committed
to bringing together regional partners to respond to the challenges
posed by the current economic climate. emda understands the importance
of direct support to viable businesses—particular to sole
traders, partnerships, start-up and micro-businesses—and
is committed to tailoring and targeting interventions in order
to meet the specific needs of all types of businesses.
6.3 The primary channel for awareness raising
and marketing of emda's business support products is through Business
Link, which undertakes targeted marketing campaigns to ensure
that businesses of all sizes are aware of the publicly funded
support available to them. During 2008-09 over 67,000 businesses
used the Business Link service in the East Midlands; 70% of which
had 10 or fewer employees. In addition, Business Link helped over
14,000 individuals who were thinking about or wanting to start
a business and over 3,000 business start-ups, the majority of
which are sole traders or employ fewer than four people.
6.4 In addition to using the Business Link
service, many of these businesses went on to access one or more
of the support products available to small and micro- businesses.
For example, since its launch in August 2007, 58% of the businesses
accessing the Business Transformation Grant employed fewer than
10 people. These businesses have been awarded grants totalling
just over £2 million. In addition, emda is seeking to support
micro-businesses in some of the region's more disadvantaged areas
through EnterpriseLoans East Midlands (ELEM). This fund is only
available to SMEs and focuses on sole traders and partnerships,
start-up businesses and micro-businesses by providing loans of
up to £20,000 to viable businesses that struggle to raise
bank finance. In the first nine months, ELEM awarded loans totalling
just over £500,000 to 39 start-up and micro-businesses. Through
Connect InvoRed, 603 SMEs, mostly start-up and micro-businesses,
have received support from the regional investment readiness programme
which has resulted in 61 SMEs over the last two and a half years
raising £51 million worth of investments.
6.5 Along with direct financial support,
emda has delivered a package of events across the region providing
free advice to businesses and enabling them to express the issues
facing them. In addition, the "Route to Market" programme
consists of five days of workshop-based support in a number if
specialist areas and 53 (60%) of the 89 businesses engaged are
micro-businesses. The "Mentoring for All" programme
provides up to 10 mentoring sessions to regional businesses and
of the 699 clients engaged on the programme between April 2007
and March 2009, 507 (72%) were micro-businesses.
6.6 emda has actively engaged with the business
community on an ongoing basis and since 2004, through the East
Midlands Business Forum. This is a collective group, which includes
representatives from a range of business forums (IOD, CBI, FSB,
and Chambers) and provides an opportunity for emda to gain direct
input from all types of businesses on our strategic development.
This has also helped inform emda's business support offer, thus
ensuring that we meet the concerns and needs of all businesses
in the region.
7. AVIATION POLICY
AND SUPPORT
FOR EAST
MIDLANDS AIRPORT
7.1 In verbal evidence given on behalf of
East Midlands Environment Link, Bettina Lange (Campaign to protect
Rural England) expressed concern over emda's "unqualified
support for the expansion of activity ... at East Midlands Airport".
7.2 emda does not accept that we have provided
"unqualified" support for the expansion of East Midlands
Airport (EMA). Policy on aviation growth is set nationally by
the Air Transport White Paper, and that shapes and determines
the trajectory of aviation in the UK. The region has sought to
apply the principle laid out in the last White Paper on aviation
which supports aviation growth, but argues that we need a balanced
approach, which recognises the importance of air travel while
also mitigating and addressing the environmental issues. The White
Paper supports the projected expansion of passenger and freight
traffic at East Midlands Airport but is subject to strict controls
on night noise. Therefore, this sets the context for regional
land-use (in the RSS) and other policies or strategies, such as
the RES.
7.3 emda has consistently argued that environmental
issues (including issues such as the management of night flight
impacts) are most effectively dealt with through the Airport Master-planning
process which brings together an open and transparent forum for
all the key stakeholders that have an interest in the future of
aviation in the region.
7.4 emda has been consistent in its strategic
approach to EMA. In the first Master-planning exercise (2006)
we argued that EMA makes an important contribution to the delivery
and realisation of the RES objectives and aspirations both by
direct employment and economic activity, and through its catalytic
role on the wider regional economy. It serves as a key international
port for the region and the UK as a whole. The express freight
role has been shown to provide services to regional and national
businesses which help them compete in international markets, to
use modern "just in time" management, and to manage
their supply chains in a sophisticated and efficient way. EMA's
express freight specialism relates well to regional ambitions
to encourage high-growth, high-value sectors, and the express
freight sector is shown to be a significant employer in the region.
7.5 However, we recognise there are tensions
and trade-offs between a growing aviation sector, and other objectives.
In our Masterplan response in 2006 we supported the inclusion
of aviation in the Emissions Trading Scheme, and suggested that
the Masterplan reflect the impact and implications of that in
planning for the longer term.
7.6 We have also made the case through the
Master-planning process that the airport should seek to follow,
or indeed set, best practice in its operational standards encouraging
the use of alternative technologies such as electric or low emission
ground vehicles and exploring ways to reduce emissions from taxiing
and manoeuvring aircraft. There is good evidence to suggest that
EMA is setting an example in this regard through its application
of renewable energy initiatives and enhancing operational techniques
to improve efficiency. A good example of this in practice is that
compared to 2000, EMA volumes of freight have grown by over 44%
(to 2005-06) but we understand that this has been carried on 6%
less aircraft movements due to a policy of seeking higher efficiency
by increasing tonnes per movement, rather than increasing the
number of flights.
7.7 emda has also worked with EMA and partners
to help improve public transport access to the airport for employees
and passengers. The Skylink bus service was something emda helped
pilot, and this is now commercially successful. In addition, East
Midlands Parkway station has created a new gateway to the region
in the heart of the Three Cities area, improving access between
EMA, the region, and the wider rail network. emda invested £895,000
to improve the environmental credentials and design of the station
itself, which opened in January 2009. Anecdotally (via East Midlands
Trains), we understand the station is already providing increased
public transport flows by passengers to EMA.
J P Moore
emda
June 2009
46 Independent Performance Assessment: East Midlands
Development Agency (emda), Page 6, National Audit Office, 2007. Back
47
As quoted by Jeff Moore, Chief Executive, emda, 27 April 2009
at Nottinghamshire County Council. Back
48
Martin Hill, quote taken from transcript of evidence session held
22 May 2009, Leicestershire County Council. Back
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