3 Regional Economic Strategy
Purpose of the Regional Economic
Strategy
20. The Regional Development Act 1998 required each
RDA to formulate and keep under review a Regional Economic Strategy
(RES) to provide a shared vision for the development of the region's
economy, to improve economic performance and enhance the region's
competitiveness. Since its inception SEEDA has produced three
Regional Economic Strategies. Pam Alexander, SEEDA Chief Executive,
told us that SEEDA had evolved from the English Partnerships which
had a legacy of regeneration, and that the first RES had therefore
focussed on regeneration projects. The second RES became more
focused on lifting up areas of lower productivity and investing
in areas of high performance and growth. The third, and current,
RES emphasizes innovation, science and technology, quality of
life and producing sustainable economic development.[19]
It was published in July 2006 and covers the years 2006-2016.
21. The vision for the current RES is that the South
East would be a world class region achieving sustainable prosperity,
and contained three headline indicators to measure progress against
the 'vision'. These are:
- achieving an average annual
increase in Gross Value Added (GVA) per capita of at least 3%;
- increasing productivity per worker by an average
2.4% annually, from £39,000 in 2005 to at least £50,000
by 2016 (in constant prices), and
- reducing the rate of increase in the region's
ecological footprint (from 6.3 global hectares per capita in 2003
and currently increasing at 1.1% per annum), stabilising the footprint
and, ultimately, seeking to reduce it overall by 2016.
22. The RES has three interlinked objectives: global
competitiveness, smart growth, and sustainable prosperity, and
has fourteen targets to measure progress on these objectives.
RES objectives and targets
|
Objective | Target
|
Global competitiveness |
Global Businesses and Foreign Direct Investment
|
| Knowledge Transfer and Business Expenditure on Research and Development
|
| Innovation and Creativity
|
| Infrastructure
|
Smart growth | Enterprise
|
| Skills
|
| Competition and business regulation
|
| Transport
|
| Physical development
|
| Employment
|
Sustainable prosperity |
Climate change and energy |
| Sustainable Consumption and Production
|
| Natural Resources and the Environment
|
| Sustainable communities
|
Source: RES, The Vision, Values, Targets and Actions
Framework of the Regional Economic Strategy 2006-2016, p 46
23. The actions to achieve the objectives are listed
in the RES Implementation Plan, along with the organisation with
responsibility for each action. These organisations are grouped
into four categories: Central/Local Government, Business, Social
& Cultural, and Environmental. There are also eight transformational
actions that are intended to have relevance across the whole strategy.[20]
24. The RES Steering Group, made up of several of
these partner organisations, monitors and supports the delivery
of RES targets among the relevant organisation.[21]
Progress towards the objectives and targets are assessed annually
and published by SEEDA in Monitoring Reports.[22]
The last Monitoring Report is from October 2007.[23]
25. The RES was drawn up by SEEDA but was amendable
by SEERA. The process enabled the endorsement of those partners
represented through SEERA. SEEDA told us that this helped ensure
that each of the actions set out in the RES was owned by those
best placed to deliver them.[24]
26. An example from the Environment Agency submission
explains this clearly. The Agency is involved, as a partner, in
projects involving resource management, green infrastructure,
low carbon business development and climate change aimed at meeting
RES targets. For example, the programme SE Green Infrastructure
Framework and Building for Nature Partnership involves SEEDA,
the Environment Agency, Natural England and GOSE working on a
series of projects that promote the use of green infrastructure
and sustainable construction techniques within new developments.
This contributes to the natural resources and the environment
target which is part of the sustainable prosperity objective.[25]
The Agency also sit on the RES Steering Group.
27. The Agency Regional Director, Harvey Bradshaw,
told us they believed the current RES recognises sustainability
and acknowledges the principle that a good environment supports
a prosperous economy, that there is a shared understanding that
environmental protection, environmental infrastructure, quality
of life, and adapting to climate change sit hand in hand with
economic regeneration.[26]
He did say that the pace of delivery on some targets could be
faster, and that the emphasis was on large scale projects.[27]
28. We support
the broad emphasis of the Regional Economic Strategy on global
competitiveness, smart growth and sustainable prosperity; and
we recommend that the RES should remain as the single framework
setting a long term vision for the region.
29. The arrangements
that allowed unions, representatives of employers and third sector
organisations to contribute to policy discussions and which existed
prior to the abolition of the Regional Assembly were widely appreciated
by those involved and greatly assisted engagement with key stakeholders.
We recommend that following the SNR similar arrangements are put
in place, including arrangements to provide these organisations
with the support needed to engage fully with future consultations,
so that their views and expertise are not lost either to the Agency
or the Leaders Board.
Sub-regions, hubs and diamonds
30. The RES divided the region into three broad areas
that share similar economic characteristics: the inner crescent
around London, the coast, and the rural area. It also identified
three growth areas (Thames Gateway, Ashford, and the Milton Keynes/South
Midlands area) and, in line with the draft South East Plan, 21
regional hubs as urban centres of economic activity and transport
services that can accept further growth. Of the 21 hubs, eight
are also called "diamonds for growth", having been identified
as potential economic catalysts for the whole region. The plans
for each of the hubs and diamonds are coordinated with the RES
and the frameworks and strategies for the Inner, Rural and Coastal
South East.[28] Pam
Alexander said the implementation plan was being focused on the
city-based diamonds because regional policy focussed on eight
places that had real identity in their own terms.[29]
31. We received a submission from the South East
Diamonds for Investment and Growth Partnership (SEDfIG), representing
the local authorities that cover the eight diamonds.[30]
They pointed out that the region did not have a single centre
but rather several places all with significant growth potential,
and as such they felt it appropriate to develop a sub-regional
focus that reflected this. Consequently, the diamond areas had
benefited from SEEDA acting strategically to build sub-regional
partnerships to address local needs, relating to both deprivation
and opportunities.[31]
We did receive a submission from the South East regional TUC
that expressed reservations about the sub-regional agenda because
they were concerned some stakeholders might be pushed to the sidelines
and that "powers devolved to a sub-regional or sub-sub-regional
level could be abused for party political purposes".[32]
32. We recognise
that the South East region is not an easily identifiable region
like some other English regions. As such the Regional Economic
Strategy has developed with an emphasis on places with broadly
similar attributes and potential. We support the partnership working
that has evolved between SEEDA, local authorities and other partners
in the diamond for growth areas.
The South East as a world class
region
33. SEEDA told us that the vision in the RES was
to make the South East "a world class region achieving sustainable
prosperity".[33]
Most regional development agencies compare their targets against
the UK average but as the richest region in the UK, the South
East compares itself with other leading world regions. Jim Brathwaite
told us that they have a programme where they look at other regions
around the world considered to be equivalent to the South East;
the examples he used were Kanagawa in Japan[34],
greater Washington in the US, and Shanghai in China.[35]
Pam Alexander told us the regions they chose also included Silicon
valley in California and the "heartlands of Europe".
She told us that the South East was slipping down the international
league table because there were extremely fast rates of growth
in some emerging economies, and the emerging economies of Europe
have themselves been offering more challenge than in the past.
She said SEEDA needed to be sure that the actions they took kept
would keep the South East "at the forefront of global economies".[36]
34. We welcome the ambition of SEEDA
for the South East to compete as a region to the highest standards.
However, we are not convinced that the regions named by SEEDA
are realistic regions to draw comparisons with. We would like
to see the evidence base used to justify the comparative regions,
and on what criteria SEEDAs performance is measured against them.
Consultation or engagement and
the RES
35. We heard a variety of views as to the level of
involvement from stakeholders in the process for drawing up the
RES. The EEF told us that the RES was broadly fit for purpose
at the time but the process for drawing it up was over consultative
and took too long to be agreed resulting in an outdated strategy.[37]
The CPRE said they felt the consultation process could have been
clearer and more democratic.[38]
In comparison, the Homes and Communities Agency said they did
feel engaged in the RES and, in terms of priority areas and places,
there was a shared understanding of where the focus should be.[39]
Natural England said the consultation had been extensive and
substantial.[40]
36. Harvey Bradshaw, Regional Director at the Environment
Agency, said he thought they had been "fully and appropriately
engaged". However, he drew comparisons with the way in which
the South East plan (the Regional Spatial Strategy) was drawn
up which he felt had more of a mechanism to change the dynamic
from one of consultation "this is what we think; what do
you think about it?" to one of involvement and engagement.
He used the example of water efficiency standards that he said
would have benefited from relevant organisations being engaged
earlier.[41]
37. Ross McNally from the South East Chambers of
Commerce said:
There was consultation, but not engagement, and that
is a matter of how I define the difference between the two. Consultation
is when people say, 'This is what we're likely to do,' and then
you can throw darts at it or not. Engagement is when people say,
'What do you need? What would you do in your circumstances?' Then
you find that there is a pattern of similarity in certain other
sub-regions and you bring things together to maximise the effect.
[42]
38. Pam Alexander was surprised at the comments of
Ross McNally about a lack of engagement. She described the process
of drawing up the RES :
We started the 2006 RES process, back in July 2005,
with some extremely open debates. More than 2,000 people were
involved across the 15 months that it took to create the RES,
which of course is substantially less than it takes to create
a regional spatial strategy. Those were very open debates. [
]
Peter Hall came to talk about the development of cities and the
impact that they might have. Sustainability was discussed very
openly. We had workshops and working discussions, at which there
was no SEEDA prospectus at all. We were simply having very open
debates. Then as we went forward with the steering groupthat
was one of the reasons for creating the group in the first placesome
key players in the region took those debates and shaped them into
some propositions that we could then consult upon. In my view,
we went from very broad engagement to, of course, consultation
on some propositions that then became a framework that I think
was both clear and targeted, which is what we were aiming to do.
Given that we needed to do all that in not much more than a year,
I think it was a sensible process.[43]
39. She did say that the integrated Single Regional
Strategy will have the same statutory function as the regional
spatial strategy so it will require a different process, and that
would take longer and be much more formalised. Her concern was
to find some mix of the two approaches as repeating the time it
took to produce the South East plan would reduce the effectiveness
for any sort of dynamic process of engagement.[44]
40. We recognise
that there is a balance to be struck between encompassing the
views of other organisations and producing a strategy that is
timely. However, there are concerns in the region that the consultation
process could be improved and that organisations should be able
to feed into the strategy at the earliest opportunity. The Single
Regional Strategy will have a status that requires a certain level
of public involvement. We recommend that SEEDA and the Leaders'
Board publish their intended consultation plan as soon as they
have decided upon it. We recommend that SEEDA and the Leaders
Board provide us with further information as to how they will
ensure broad engagement when drawing up the Single Regional Strategy.
We further recommend the Government provide a comparison as to
the consultation process used in drawing up the South East plan
and the Regional Economic Strategy.
Measuring the performance of
SEEDA
41. In December 2007, PricewaterhouseCoopers LLP
(PwC) was appointed by BERR and the Regional Development Agencies
to:
- provide an independent assessment
of the impact of the spending by each of the nine RDAs and the
RDA network as a whole, and
- assess RDA's achievements against
objectives of both their regional economic Strategies and their
Corporate Plans, and each specific programme and project.
The study focused on the impact of the £580
million spent by SEEDA between 2002-03 and 2006-07[45]
and reviewed 25 evaluations covering spend of nearly £470
million by SEEDA in the relevant period.
42. The report stated that SEEDA has generated significant
outputs such as creating or safeguarding over 39,000 jobs, assisting
33,000 businesses, the creation of more than 2,500 businesses,
making fit 216 hectares of brownfield land for development, assisting
6,500 people into employment, helping 66,000 people develop new
skills and building 191,000 square metres of commercial floorspace.
It concluded overall that there was credible evidence that all
the regional development agencies had generated regional economic
benefits which exceed their costs, and that for every £1
of RDA spend added £4.50 to regional GVA. SEEDA compares
favourably with the RDA national average with every £1 spent
by SEEDA during 2002-07 generated on average £5.60 in GVA
for the region.[46]
43. SEEDA welcomed the review and quoted the findings
to us:
The impact evaluation framework [
] gave us
some quite detailed evidence on the impact of our different interventions.
[
] we're going to be focusing on those which have had the
greatest return. Overall SEEDA was seen to have produced a return
of well over £5 for every £1 we've invested, with a
substantial range, up to over £11. That was in the business-focused
interventions.[47]
44. Pam Alexander said that all of SEEDA's work
documented in the report translated into about £2.6 billion
to the region's economy. However she added, "I think that
that sum is quite remote from individual people. It is actually
the story in terms of new businesses, new jobs and new skills
that is really relevant to individuals in the south-east".[48]
45. In 2006 the National Audit Office conducted an
Independent Performance Assessment (IPA) at the request of the
then Department for Trade and Industry. Overall SEEDA was seen
as "performing strongly", particularly in the areas
of ambition and achievement. Against the category of achievement
it reported that SEEDA had delivered regeneration initiatives
across the region as well as a systematic approach to business
support and that these had been delivered "through effective
partnership working, rural delivery programmes and significant
leverage of investment into the region".[49]
46. We are reassured by the conclusions
of the National Audit Office and PricewaterhouseCoopers reports,
both of which provide a positive endorsement of SEEDA's work and
its benefits to the regional economy. We support SEEDA using the
reports to inform its prioritisation and restructuring.
47. As described above, the RES has a set of measurable
targets and the actions to achieve its objectives. Paul Lovejoy,
Executive Director of Strategy and Communications at SEEDA, said
that the current economic context differed from when the strategy
was drawn up, and the challenge remained to be competitive in
a global context. Pam Alexander stressed the importance of maintaining
the targets that drove the economy in a particular direction,
i.e. global competitiveness, productively growth and quality of
life in terms of community and environmental outcomes. Some witnesses
were more critical. When asked how effective he thought SEEDA
was Ross McNally gave it a five out of ten.[50]
Harvey Bradshaw from the Environment Agency made the point that
the RES spanned a ten year period and as such it was beneficial
that decisions to deal with the economic downturn were being made
with a longer-term strategic mindset.[51]
48. One of the RES's main objectives is to achieve
an average annual increase in Gross Value Added (GVA) per capita.
Pam Alexander admitted to us that "it is pretty unlikely
that we will meet the targets for GVA per capita growth, even
on the most optimistic forecasts for the next few years"
but that they had discussed the situation with their partners
and there had been agreement reviewing targets would not be a
productive use of time. [52]
She continued:
we are very clear that the RES sets us all in the
right direction. It has been very important to us that the RES
targets are owned not just by SEEDA, but by all the partners who
will bring their mainstream activities to making it work.[53]
Reviewing targets
49. There was support for reviewing the targets.
David Edwards, from the HCA, thought it would do no harm to review
the RES as the economic environment has changed since it was drawn
up, "to make sure that we have the indicators and measurements
absolutely correct".[54]
When asked about whether we needed to change the way we measure
SEEDA's performance, Harvey Bradshaw from the Environment Agency
agreed that the "degree to which SEEDA will be impeded by
the economic situation is an issue" but he thought the RES
had an effective routine for monitoring performance of the economic
strategy built in and that would pick up non-delivery of some
actions.[55]
50. We asked the Minister if he thought the way that
SEEDA's performance was measured needed to be changed to reflect
wider social and environmental responsibilities as a result of
the SNR and he agreed. He said that if the RDA was changing then
it would be important to measure what value it added and that
the RDA should be "outcome focussed" and have "a
good rapport with stakeholders". Performance should also
be based on the RDAs reputation and that "stems from its
ability to be able to use its resource and expertise to drive
forward on the priorities and help different areas to come together,
to realise their ambitions".[56]
51. He said that if SEEDA's performance indicators
were to be re-evaluated then it should be formed through an inclusive
debate with local and national politicians, the business community
and other interested parties in the region. Pam Alexander said
it was crucial that the Single Regional Strategy is an effective
plan that was owned by the region.[57]
52. We agree
that the Regional Economic Strategy should be concerned with setting
a vision for the long term and as such it should drive direction
rather than be reactive. We welcome the move to a combined Single
Regional Strategy.
53. We welcome the role of partners
in defining targets and note that any decision to review targets
must be done with full engagement with partner organisations.
19 Q 157 Back
20
These are: 1) 100% Next Generation Broadband Coverage, 2) Science
and Innovation Campuses, 3) Skills Escalator, 4) Regional Infrastructure
Fund, 5) Raising Economic Activity Rates, 6) Global Leadership
in Environmental Technologies, 7) Education-Led Regeneration and
8) Masking the Most of the 2012 Olympic and Paralympic Games Back
21
RES Steering Group membership includes representatives from SEEDA,
local authorities, GOSE, Environment Agency, Natural England,
Regional Skills & Productivity Alliance, business groups,
third sector, trades unions, Sustainable Futures Group, Forum
for Sustainability and the Regional Housing and Transport Boards. Back
22
Ev 80 Back
23
www.seeda.co.uk/RES_for_the_South_East_2006-2016/Annual_Monitoring_Report/ Back
24
Ev 80 Back
25
Ev 50 Back
26
Q 132 Back
27
Ev 50 Back
28
SEEDA, RES 2006-2016, Mapping the South East Economy, p
43 Back
29
Q 160 Back
30
Basingstoke & Deane BC, Brighton & Hove CC, Crawley BC,
Medway Council, Milton Keynes Council, Oxford CC, Reading BC,
Portsmouth CC & Southampton CC. Back
31
Ev 115 Back
32
Ev 103 Back
33
SEEDA, RES 2006-2016, Summary, p 3 Back
34
Kanagawa is the region to the south west of Tokyo Back
35
Q 23 Back
36
Q 158 Back
37
Ev 110 Back
38
Ev 46 Back
39
Q 126 Back
40
Ev 76 Back
41
Q 126 Back
42
Q 75 Back
43
Q 161 Back
44
Q 161 Back
45
This includes expenditure on the Single Regeneration Budget (SRB)
of £129m but excludes National programmes which account for
an additional £203m.The SRB was a government regeneration
fund started in 1994.It was managed through partnerships who won
funding through competitive bidding rounds.The last year of bidding
was 2001/02. Back
46
PwC, March 2009, Department of Business, Enterprise and Regulatory
Reform, Impact of RDA Spending, Vol 2, p 235 Back
47
Q 165 Back
48
Q 12 Back
49
www.nao.org.uk/publications/0607/south_east_england_development.aspx Back
50
Q 72 Back
51
Q 125 Back
52
Q 23 Back
53
Q 23 Back
54
Q 138 Back
55
Q 137 Back
56
Q 173 Back
57
Q 173 Back
|