Joint memorandum submitted by Exeter City
Council and Exeter Chamber of Commerce
1. EXECUTIVE
SUMMARY
1.1 We recognise that the Committee is investigating
a wide range of key issues relating to the setting up of LEPs.
We are certainly concerned about and engaged in active local discussion
on these major issues, which have fundamental relevance across
the country. In particular, we are concerned both that LEPs should
reflect the economic development vision of their areas and that
they must be relevant to business geography, embrace private sector
input and prove capable of attracting and generating investment.
It is, above all, about creating arrangements with the capacity,
flexibility, skills and proactive approach to support and deliver
the vision—which, in the wider Exeter growth area, is a
dynamic and clearly articulated one.
1.2 However, our specific focus in this
submission is on a fairly narrow but, in our view, significant
point—about the way relevant LEPs will deal with the interests
of key regional cities and growth points like Exeter (including
their wider functional economic areas) which, although of critical
economic significance, still retain district council status within
a two-tier local government system. This anomaly is not a universal
issue but, where it applies, it threatens to undermine the vital
contribution that such cities can and must make to the future
economic and business prosperity of their wider areas, unless
the emerging LEPs explicitly acknowledge their role and influence,
and accommodate them properly in their governance structures.
1.3 This evidence is necessarily specific
to Exeter, but there are a number of similarly placed key regional
centres within two-tier local government areas which are likely
to have very similar interests and characteristics—such
as Oxford, Norwich, Northampton, Ipswich and Cambridge. There
will doubtless be significant variance in the outcomes of local
negotiations on the role of these key regional centres within
their emerging LEPs, but we believe that the issue is of sufficient
national relevance to merit the attention of the Committee.
1.4 Whilst we generally welcome the government's
stance that local preferences should drive this agenda, we nevertheless
feel that a degree of central steer on the role that key cities
like Exeter are entitled and expected to play will be necessary
and helpful—and in support of the national agenda of achieving
maximum business-led economic growth throughout the country.
2. BACKGROUND
TO SUBMISSION
AND EXETER'S
ROLE AS
A REGIONAL
CITY
2.1 The far south west of England, by which
we mean the Peninsula of Devon and Cornwall, together with those
parts of Somerset and Dorset which look more towards Exeter than
towards Bristol and Bournemouth respectively, is an area characterised
predominantly by sparse and remote rural communities, low wages,
low productivity and poor connectivity. Within that area there
are two major economic drivers, Plymouth and Exeter. Within the
administrative county of Devon, Exeter is the sole significant
urban location and by far the most powerful economic influence.
2.2 Exeter City Council's administrative
area is confined to the city itself, as it has been for over 800
years, but it works very actively in partnership with surrounding
authorities (particularly those which constitute the Exeter New
Growth Point) and with business and the University in particular.
The city's area of economic activity encompasses at least 500,000
population and Exeter constitutes the major employment hub for
a very wide area. The City Council regards economic growth and
development as a key priority and is extremely proactive in relation
to business interests and business growth opportunities.
2.3 Exeter's Chamber of Commerce is one
of the south west's most successful and active, and is the city's
leading business organisation, having absorbed three other major
city business groups in recent years. It has over 500 members
from across Exeter's area of economic influence, including the
largest employers both in Exeter itself and in each of the three
surrounding district local authority areas.
2.4 Whilst this is not the place to describe
Exeter's particular economic importance and potential in detail,
some key points to illustrate its significance may help to place
this submission in a relevant national context:
— Exeter had the 3rd highest pre-recession
employment growth in the country—eg an increase of 17,500
employed between 2004-08, many of which were private sector/knowledge-based.
— In recent years Exeter has seen the greatest
improvement in competitiveness of all UK cities (UK Competitiveness
Index 2010).
— Exeter University is one of UK's most
successful and rapidly developing HE institutions—rated12th
in The Times UK league table, it currently has over 17,000 students.
— The combination of the University, the
Innovation Centre, the emerging International Science Park, the
worldwide Met Office HQ, the Hadley Centre for climate change
research and the Peninsula Medical School is making Exeter a key
national centre for science and research based economic activity
and growth.
— Exeter has the largest proportion of
businesses with a £5 million plus turnover in the whole south
west region.
— The Exeter New Growth Point is planned
to deliver around 25,000 new houses (including the radically sustainable
Cranbook new community) and 100 hectares of additional employment
land (delivering approximately 18,000 new jobs).
2.5 The significance of Exeter in the economic
growth of the south west has been fully recognised and supported
by the outgoing South West Regional Development Agency, which
was both required and able to take a strategic overview of the
region's needs and potential. The city has a vibrant and growing
economy, has enthusiastically embraced growth and inward investment
and has taken a long-term strategic view of its direction, in
close partnership with business, other public sector organisations,
the University and the RDA.
3. EMERGING LEP
GOVERNANCE ISSUE
3.1 At the time of writing this evidence
the emerging picture of likely LEP arrangements in this area to
replace the RDA is not yet clear. There is, however, a predominant
view that at a strategic level an LEP structure which embraced
Cornwall, Devon (including the unitary authorities of Plymouth
and Torbay) and parts of rural Somerset and Dorset would have
the necessary scale to be strategic and effective, whilst still
retaining a degree of resonance with economic and business realities
on the ground. If this cannot be achieved then it will be vital
that whatever more localised solution emerges reflects the reality
of the functional economy in this part of the West Country, and
at the heart of any such area will have to be Exeter.
3.2 However, whatever particular geographic
architecture may emerge from this process, Exeter will have a
pivotal role to play in delivering sustainable economic progress
and success for this relatively disadvantaged part of England.
It is in this context that the governance issue comes to the fore.
3.3 The only substantive guidance currently
available from Government remains the joint letter of 29 June
from the two Secretaries of State and this is not, of course,
prescriptive in terms of how localities should go forward or what
governance arrangements should look like. It is solely in relation
to the issue of geographic scale that this letter refers to partnerships
preferably comprising more than one upper tier authority. There
is clearly no governmental expectation or requirement that governance
itself is to be confined to upper tier authorities—yet that
currently seems to be the assumption of, for example, Devon County
Council.
3.4 The City Council, local business organisations
and Exeter University have been in dialogue with Devon County
Council and others about these issues and it is hoped that a solution
will finally emerge that properly recognises the critical role
of Exeter and its wider Growth Point partners in any LEP arrangement.
3.5 However, notwithstanding the likelihood
of any such outcome arising from local negotiation, it seems to
us to be an important principle that the role of "lower tier"
authorities (and their associated business organisations) within
two-tier areas of the country should not be automatically assumed
to be a minor or marginal one.
3.6 The spectrum of district councils ranges
from small and limited capacity rural authorities, with very little
active engagement in economic development, to large, dynamic urban
growth points which are fully active leaders and partners in their
area's economic development. It is at this latter end of the spectrum
that cities like Exeter sit, and a "one size fits all"
approach to the role of District Councils in LEPs and economic
development neither reflects reality nor serves the national and
local interests that LEPs are designed to promote.
3.7 In economic development matters, dynamic
and proactive city-based district councils naturally operate beyond
their often tightly-drawn administrative boundaries, reflecting
the reach of their economic influence. They are important "guardians"
and the fundamental source of the effort and determination required
to maintain focus on the short, medium and longer term priorities
relevant to their functional economic area, whilst recognising
their economic interdependence with the wider hinterland.
4. CONCLUSION
AND SUGGESTED
WAY FORWARD
4.1 There can be little doubt that major
regional towns and cities like Exeter have a very important role
to play in providing and encouraging the business-led growth that
the country requires and which the new LEPs are intended to promote.
A large number of such towns and cities, often of similar scale
and economic significance to Exeter, quite rightly enjoy unitary
(ie "upper tier") local authority status—centres
such as Swindon, Bournemouth, Southampton, Peterborough, Derby,
York and many more. This accords them autonomous rights and responsibilities
in respect of this and many other key agendas and guarantees them
a "seat at the top table" in both planning for and the
governance of LEPs.
4.2 In a two-tier area, of which overwhelmingly-rural
Devon is an example, an equivalent regional city and economic
hub like Exeter enjoys no such automatic rights, responsibilities
and influence. This impacts not only on the local authority but
also on the business community and its representative organisations,
who must seek to influence and work with two democratic organisations—one
(the lower-tier City Council) having a clear and undiluted focus
on the needs of the city area within they do business, and one
(the upper-tier County Council) with a far broader remit for a
massive and predominantly rural area with more diverse business
interests and needs. But whilst the county authority enjoys an
unambiguous, mandated and powerful role to play in a new LEP the
city authority has, at this moment, only a discretionary, ill-defined
and potentially weak role to play.
4.3 In a two-tier area these sorts of anomalies,
dysfunctionalities and tensions can and do arise from time to
time across a broad range of agendas. Although the system is inherently
flawed, goodwill, political pressure, patient negotiation and
a positive partnership outlook can normally allow such issues
to be resolved, even though the outcome is sometimes sub-optimal.
Indeed, a satisfactory local outcome may well emerge in the case
of Exeter. The purpose of this evidence is not to seek any direct
central intervention in the resolution of such local matters,
but to draw the Committee's attention to an inherent characteristic
of the two-tier local government system which, in principle, could
hinder the outcomes which everyone seeks from LEPs.
4.4 It would take only a minimal element
of direction from the government, and potentially save a lot of
time, effort and business frustration locally, to ensure that
significant regional economic centres (which happen still to have
district rather than unitary local authority status) are accorded
an equivalence of status to upper tier authorities in terms of
the planning and ongoing governance of their area's LEP. That
would be entirely pragmatic, incur no cost, be instantly deliverable
and welcomed by business, and it is an action which we would respectfully
urge the Committee to consider recommending in its report.
4.5 We appreciate this opportunity to provide
this evidence and hope that it will be considered relevant to
the Committee's task.
12 August 2010
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