Memorandum submitted the South East Diamonds
for Investment & Growth (SEDfIG) Partnership
1. INTRODUCTION
1.1 The South East Diamonds for Investment &
Growth (SEDfIG) Partnership[98]
seeks to support the economic performance of the key economic
areas of south-east England—the eight "Diamonds for
Investment & Growth". These "functional economic
areas" account for a disproportionate amount of GVA within
the region and will provide the majority of economic and housing
growth within the south-east in forthcoming years.
1.2 The eight Diamond areas are:
— Milton Keynes & Aylesbury Vale;
— Oxford/Central Oxfordshire;
— Thames Gateway Kent; and
Each of these functional economic areas is supported
by sub-regional partnerships, with strong levels of business engagement
and involvement. Since 2006, the authorities at the urban core
of these areas have been working together as the SEDfIG Partnership.
The SEDfIG has led and commissioned economic
research, supported shared EU-funded programmes, arranged pan-Diamond
conferences, responded to Government and associated consultations,
contributed to national policy development, shared good practice
case studies and learning and sought to articulate and support
the growth needs of the Diamonds.
2. THE ECONOMY
OF SOUTH-EAST
ENGLAND
2.1 The south-east currently accounts for over
14% of UK Gross Value Added (GVA), as well as over 25% (£3.2
billion) of UK business expenditure on research and development.
The region has an existing strong presence amongst nationally
identified priority growth sectors, largely based in the Diamond
areas. The region has the highest concentration of health technology
companies in the UK and is an international centre for the aerospace
industry, accounting for 22% of UK firms in the sector. The south
east is Britain's most economically active region and has higher
levels of productivity than the rest of the UK.[99]
2.2 Earlier work by Oxford Economics has revealed
that £1 billion invested in infrastructure in the south-east
can deliver a £160m per annum increase to UK GDP, compared
to a return of £119 million for the Midlands and £76
million for the North of England.[100]
This demonstrates the value added rate of return gained from investing
in south-east infrastructure.
2.3 Whilst there are no "core"
cities in the south-east, there are a number of strong urban economies—the
Diamonds—which drive growth and productivity in the region.
The south-east of England relies heavily upon the economic vitality
and success of the Diamond areas to generate employment, GVA and
prosperity. The "polycentricity" of the south-east,
and the way that smaller urban areas tie together, with London,
to form a strong regional economy, is now widely recognised.[101]
Strong functional relationships tie the Diamonds both to London
and to each other, playing a vital role in the economic success
of the capital and the UK as a whole.
2.4 The South East is critical to UK economic
success, so it is important to ensure there is an overall strategy
for meeting the needs and aspirations of the area as a whole.
Growth will bring pressures on the infrastructure, housing, environment,
and economic development that must be met. In addition, the south-east
of England, is slipping behind competitor regions internationally,
dropping ten places on the World Knowledge Competitiveness Index
between 2005 and 2008.[102]
There also exist significant pockets of deprivation, largely found
in urban parts of the region. Across the south-east as a whole,
there are 958,000 economically inactive people of working age—compared
with only 354,000 in the north-east.[103]
3. IMPLICATIONS FOR
LOCAL ENTERPRISE
PARTNERSHIPS (LEPS)
3.1 The economic context set out above has
a number of implications for the structure and workings of LEPs
in the south-east. These include:
— The south-east makes a vital, disproportionate
contribution to the success of "UK Plc".
— LEPs need to provide a means to overcome
the challenges of creaking infrastructure, inadequate housing
supply and skills gaps to ensure south-east can continue to make
this contribution. Without it, the national economy suffers.
— The south-east is slipping behind comparative
regions internationally. LEPs, supported by appropriate investment,
need to address this and have a role to play in inward investment,
sector policy and other associated functions. Complacency in the
face of this challenge poses a risk to recovery and growth.
— As a region without a core city, the
south-east is "different" to the rest of the UK. Businesses
identify with natural economic geographies—the Diamonds—that
are smaller than the cities of the north.
— There are 74 Councils, including District,
Unitary and Counties, across the South East, far more than in
any other region. It is a busy governance environment, which brings
complexity and a multiplicity of relationships, presenting particular
challenges for effective and efficient partnership working across
wider than "local" areas.
— As a result, it is likely and proper
that a greater number of LEP proposals will come forward from
the south-east, reflecting "natural economic geographies"
and viable, practical governance and partnership arrangements.
— There is a need to ensure some level
of collaboration and co-operation between these areas, to meet
some of the strategic challenges set out above. Smaller LEPs will
be able to work together, providing "building blocks"
to increase capacity and address issues at an appropriate scale.
The SEDfIG can fulfil this role.
— The track record of the SEDfIG in coming
together, voluntarily, at both local and South East levels is
proven. The SEDfIG Partnership will continue to support collaboration
across the south-east, building on the successful joint working
to date and supporting the emerging LEPs. The necessary partnership
structures, processes and governance arrangements are already
largely in place and in the interests of efficiency, speed and
effectiveness, should be used to facilitate the establishment
of LEPs where appropriate.
4. THE REGIONAL
GROWTH FUND
4.1 The SEDfIG Partnership intends to submit
a separate response to the ongoing consultation on the Regional
Growth Fund. At present, we would wish to draw the attention of
the Committee to the economic decline of the south-east on the
international scale, and the importance of the economic growth
of the south-east to the success of the UK.
4.2 We would hope that, in light of the
above, the Regional Growth Fund is not unduly targeted outside
the "Greater South-East". It seems that one of the primary
aims of the fund is to stimulate private sector growth and jobs
in order to mitigate the impact of likely public sector job losses.
Whilst private sector job growth in the south-east has been high
over the past decade, the impacts of public sector job cuts should
not be underestimated. Large concentrations of public sector employment
exist across the Diamonds, in areas as diverse and economically
different as the Thames Gateway and central Oxfordshire.
4.3 The funding and bidding arrangements
of the Regional Growth Fund should not unduly hinder the ability
of the south-east to respond to likely job losses in these areas.
5. MEANS OF
PROCURING FUNDING
FROM OUTSIDE
BODIES
5.1 The SEDfIG Partnership has proven successful
in bringing EU funds into the Diamonds for a range of programmes,
including skills development and retrofitting technologies. It
will be important going forward for the appropriate groupings
of LEPs, suitably funded, to come together to operate at a sufficient
scale to provide both supportive expertise and efficient administration
of bidding processes for these funds.
5.2 The SEDfIG believe that, in a "Europe
of the Regions", it is critical to ensure that we are not
disadvantaged by the fragmentation of functions required to be
successful in competition with other parts of the EU, particularly
when seeking to obtain such funding in future. Prompt consideration
needs to be given as to the means of procuring EU and other funding,
and how this can be managed at an efficient scale.
6. CONCLUSION
6.1 To conclude, the SEDfIG authorities
have already developed strong and sustainable arrangements to
work with business and welcome the proposal jointly to develop
and shape the new LEPs arrangements.
6.2 We hope that, in the spirit of "localism",
the polycentric, dispersed nature of the south-east economy is
recognised by policymakers when considering the LEPs proposals
that come forward. Economic geographies are smaller in the south-east,
but make a disproportionately large contribution to the exchequer.
6.3 In addition, we would conclude by reiterating
that, whilst the economy of the south-east has performed strongly
over recent years (but less strongly than some competitor areas
globally) it has a wide range of diverse needs. It will be important
for partners to continue to work together to articulate the growth
needs of our cities and towns but, equally, it is important that
new initiatives such as the Regional Growth Fund allow the south-east
to play as full a role as possible in supporting the return of
the UK to sustained economic growth.
12 August 2010
98 Comprising Basingstoke & Deane BC, Brighton
& Hove CC, Crawley BC, Medway Council, Milton Keynes Council,
Oxford CC, Portsmouth CC, Reading BC, Southampton CC and partners. Back
99
Centre for Local Economic Strategies (2010), Building the Knowledge
Economy-Research and Action Planning for the SEDfIG. Back
100
Oxford Economics (2009), The Impact of the Tax/Spending
Imbalance in the South-East. Back
101
Eg Pain, K (2006) Policy Challenges of Functional Polycentricity
in a Global Mega-City Region: South East England, Built Environment,
32(2). Back
102
Huggins et al (2008), The World Knowledge Competitiveness
Index, Centre for International Competitiveness, Cardiff University. Back
103
Labour Force Survey, March to May 2010. Back
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