Written evidence from Gatwick Airport
Ltd
1.0 SUMMARY
1.1 Gatwick Airport Ltd ("GAL")
welcomes the opportunity to submit Written evidence to the Committee
on the New Local Enterprise Partnerships ("New LEPs").
We note the paucity of information about New LEPs, specifically
their proposed function and structure, pending the publication
of a White Paper later this year. However, we believe that the
concept of enabling business and local authorities, in formal
partnership, to identify and lead priorities for renewal and development
across economic sub regions has interesting potential.
1.2 Regional Development Agencies (RDAs)
have been effective vehicles for economic growth in the English
regions. Any replacement of RDAs must be sensitive to local issues
and economic conditions in order to cultivate an environment conducive
to future growth. It would appear at this stage, based upon published
information and ministerial comments in the public domain, that
the New LEPs would be appropriate replacements for RDAs as they
will help to promote locally based, holistic and community-led
sub-regional growth plans. We look forward to Gatwick Airport,
in partnership with other major local businesses, playing an active
role in any New LEP that may be established in our area of operations
that covers much of West and East Sussex, Surrey and Kent.
1.3 To maximise local involvement and control
of New LEPs, staffing should be drawn from local businesses, local
authorities and, where appropriate, the former RDA for a region.
There may be no need for significant staffing of New LEP secretariats;
focused and streamlined staffing, supported when necessary by
member businesses and local authorities, could provide potentially
powerful and unified teams with greater strength and reach than
current RDA arrangements allow. We look forward to Government
bringing forward proposals on New LEPs secretariat and staffing
structures.
1.4 To be effective, LEPs should focus on
specific issues. In the Sussex, Surrey and Kent area, which contains
the UK's second biggest airport and the M23/A23 corridor between
London and the heavily populated south coast, transport infrastructure
and planning are central to delivering and maintaining economic
growth. While there are indications that the New LEPs may have
freedom to set their own priorities, there may be a case for the
Department for Communities & Local Government (DCLG) and the
Department for Business, Innovation & Skills (BIS) to outline
strategic priorities for certain sub regions that could affect
the wider national interest. We look forward to Government providing
clarity on the level of autonomy to be afforded to New LEPs and
how prioritisation may be best approached.
1.5 Consideration of issues priorisation
raises the matter of the legal status and authority of New LEPs.
We believe it essential that Government provides indication at
an early stage as to whether the New LEPs will have advisory or
statutory powers. The matter of powers is central to understanding
what level of funding may be required for any New LEP. The current
DCLG, BIS and HM Treasury (HMT) consultation on the proposed Regional
Growth Fund suggests that some central funding may be made available
to finance specific projects. Businesses and local authorities
considering making expressions of interest by 6th September will
require certainty around future funding and financing mechanisms.
On their own, Government responses to consultation exercises will
not provide the certainty required.
2.0 THE NEED
FOR NEW
LEPS
2.1 Structures to support sub-regional economic
growth should be based on a range of factors, including but not
exclusive to, geographic boundaries. Gatwick Airport is a case
in point. Although located in the Crawley Borough Council, and
at the far North East corner of West Sussex County Council, administrative
areas, the airport has a business spread and thus economic benefit
over a much wider area. 23,000 airport employees live across three
counties (West Sussex, East Sussex and Surrey) and the Greater
London area. Multinational companies locate close by. Although
some airport suppliers are local, many others locate over a wide
area. Our passenger catchment area covers a wide swathe of Southern
England, including London.
2.2 Collectively, these factors require
an economic development strategy that is flexible in terms of
its geographic basis, and recognises other issues that affect
economic success. Gatwick's economic reach is greater than a single
local authority, district or county. There is a need for a single
organisation to drive economic development for the wider locality
around Gatwick. Whilst much more information is needed on their
final form, the replacement of RDAs with LEPs would appear to
support this need.
2.3 An evolving transport infrastructure
is critical to the future economic prosperity of the area around
Gatwick, and indeed the UK. To a significant extent, the region's
success is bound up with an improved North South rail line and
associated Gatwick station. An improved transport infrastructure
would be best progressed by an organisation covering a greater
geography than a district or County, which has sufficient weight
and status to see change happen. A New LEP would appear to provide
the framework for such an organisation.
2.4 The abolition of RDAs will leave a gap
in the strategic development of the locality around Gatwick. Even
a small gap would have a detrimental effect on local inhabitants.
Over the long term, their housing and transport infrastructure
requirements would not be met. Similarly, the ability of Gatwick,
the UK's second largest gateway, through and from the UK, to meet
demand would be irrecoverably harmed. The replacement of RDAs
is, therefore, critical to the UK's future growth and the economic
success of the Gatwick region. New LEPs would appear to be the
most appropriate means for their replacement, although the arrangements
need to be given careful consideration.
3.0 NEW LEP ROLE,
STRUCTURE & ACCOUNTABILITY
3.1 The success of LEPs will depend on the
degree to which they can deliver real change and clearly definable
results. As such, LEPs will need to have a formal legal status,
and be afforded statutory powers. The only realistic alternative
would be a looser association of council of business leaders,
with no formal legal status—whilst there are currently similar
organisations, it is apparent that they do not have legally a
supported remit to actually deliver the key constituents for economic
growth, and have no formal power to do so. To really deliver for
their area, LEPs need to exist on a formal legal basis.
3.2 With legal status comes a requirement
to ensure accountability. In the context of LEPs, this would be
best facilitated by a powerful board, chaired by a prominent business
leader from the area and encompassing strong representation from
senior business people and local councillors within the LEP area.
Ensuring a mixture of interests and perspectives on the best way
to facilitate development will encourage genuine accountability
to business and the local community.
3.3 A number of factors are key to economic
growth, including land availability, road transport capacity,
public transport and an appropriately skilled labour force. If
economic development is to be truly promoted in a given area,
any New LEP should have a degree of strategic responsibility over
the provision of these key requirements. Without this, it is difficult
to see how the holistic promotion of economic growth, ostensibly
the role of an LEP, could be effectively promoted.
3.4 We would see an LEP working most effectively
if it adopted a clear business mentality in undertaking its work.
Accordingly, LEPs should be headed by a Managing Director, with
Directors responsible for specific functions. These should include,
for example, Economic Development, Transport as well as other
key areas. These directors should be supported by a small number
of expert management staff and by consultants as and when necessary.
3.5 LEP's need to be staffed by appropriately
skilled employees. Recruitment should focus on local businesses,
the current RDA and local authorities. These organisations already
have such experts. An LEP could pool and use this expertise across
districts. In such a scenario, the collective power and influence
of experts within an LEP would be far greater than the current
disparate role of each local authority working individually. Together,
this would lead to greater output, staff efficiencies and cost
savings for the public purse.
4.0 TIMETABLE
AND TRANSITIONAL
ARRANGEMENTS
4.1 We will not be alone in telling the
Committee that the timetable for the creation and operation of
the New LEPs is perhaps shorter than may have been expected. The
various RDAs have been effective vehicles for economic growth
in the English regions. Any replacement of RDAs must be sensitive
to local issues and economic conditions in order to cultivate
an environment conducive to future growth. The successful transition
from one RDA for a region towards several LEPs covering sub regions
must be orderly, phased and inclusive to be successful.
4.2 The current economic situation demands
that all possible vehicles to stimulate and encourage growth be
deployed as soon as possible. We acknowledge that the Government's
suggestion that interim New LEPs may be established can take time
to assemble. The Government has indicated that a businessperson
may act as Chair of each New LEP and we see some merit in that
proposal. However, given the seemingly short transition from RDAs
to New LEPs, the Government may want to consider appointing existing
senior figure either, if appropriate, an RDA or else a Government
Office in order to temporarily direct or steer New LEP bids that
may be short listed following the 6th September deadline for expressions
of interest.
4.3 Within the South East region, and the
heavily populated south coast, transport infrastructure and planning
are central to delivering and maintaining economic growth. While
there are indications that the New LEPs may have freedom to set
their own priorities, there may be a case for the DCLG and BIS
to outline strategic priorities for certain sub regions. This
would ensure that in addition to LEPs promoting growth within
their area of competence, any infrastructure development would
be effectively integrated into wider national priorities and needs.
5.0 FUNDING ARRANGEMENTS
5.1 Staffing LEPs, and employing appropriate
outside expertise, will require a degree of central Government
support. Whilst it may be possible for the private sector to make
some form of contribution to the resources required to operate
an LEP, it is unreasonable to expect them to bear the cost in
full. The current economic climate means that capacity to do so
is severely constrained, and any requirement to do so would be
a significant disincentive to private sector involvement. To address
this, LEPs could consider accepting "in kind" contributions,
such as appropriately skilled staff seconded from their employer.
This would have a range of benefits, such as keeping employment
"overheads" low, improving the local knowledge of staff
and providing valuable experience of a holistic approach to regional
development to the private sector.
5.2 Development activity undertaken through
LEPs needs to be performed strategically and coherently. To enable
this approach, new Capital works should be planned, designed and
phased in their entirety through LEPs. This enables a suite of
suitably skilled staff to be involved at every stage of the process,
and lessens the potential for inefficiencies as a result of a
project being handed over from one entity to another as it passes
through various developmental stages. This approach would also
increase the prospect of private financing over a given project,
thereby reducing the need for support from the public purse. Investor
confidence is far more likely to be promoted through a single
"owner" of a given capital development. It also facilitates
the effective phasing of infrastructure capacity development to
meet demand. This approach is used extensively at Gatwick, and
avoids unnecessary up front costs and as well as reducing risk
should demand not materialise.
6.0 POTENTIAL
MODELS FOR
NEW LEPS
6.1 The Government has yet to confirm the
process for establishing an LEP, as well the specific functions
that LEPs may have and the governance structure that could be
employed. The public interest would be best served through a thorough
analysis of similar organisations that already exist.
6.2 One such organisation is the Gatwick
Diamond. Established in 2003, the Diamond is a collaborative business
led public/private partnership which facilitates, coordinates
and leads the actions necessary to create the right environment
for business growth in the area it covers. It was established
in response to a clear business requirement for an organisation
that could support a vibrant economy that transcends county boundaries
and follows the natural economic geography of the area.
6.3 The Diamond's Governance structures
are well defined, and could inform that used for other LEPs. Chaired
by a local businessman, and populated by business and council
representatives, a Management Group meets every two months to
oversee the operational management and coordination Gatwick Diamonds
activities. The Board is supported by subgroups responsible for
supporting activity skills, transport infrastructure, innovation,
competitiveness and sustainable development, each chaired by representatives
from local government supported by the private sector.
6.4 Similarly, the Gatwick Diamond has successfully
established a clear set of development priorities through this
mechanism. As a result of a consultative and collaborative process,
the Gatwick Diamond developed a "Futures Plan". The
local authorities, businesses and FE colleges then committed to
working together across county boundaries to achieve the world
class vision. The Futures Plan sets out a route map to develop
a modern knowledge economy based on smart working and sustainable
growth to improve global competitiveness. This process could serve
as a model for new LEPs seeking to determine what their strategic
priorities might be.
6.5 The effectiveness of LEPs would be significantly
improved through integration of already existing organisations
that facilitate collaboration between business and public sector
stakeholders such as, for example, the Gatwick Diamond. However,
the Government should ensure that provision is made to maintain
the distinct identity and branding of these already existing entities.
These organisations are already delivering the Governments stated
objectives for LEPs, in that they are "provid[ing] the strategic
leadership in their areas to set out local economic priorities".
The potential to continue their good work (and their existing
expertise and knowledge) should be promoted, rather than constrained,
in the course of establishing New LEPs.
13 August 2010
| 
