Written evidence from Cambridgeshire County
Evidence submitted on behalf of:
Cambridgeshire County Council
South Cambridgeshire District Council
East Cambridgeshire District Council
Huntingdonshire District Council
Greater Cambridge Partnership; local economic
Cambridgeshire Horizons; local delivery vehicle
for coordinating sustainable growth; www.cambridgeshirehorizons.co.uk
1.1 This submission seeks to present a case
for continued investment in economic growth in Cambridgeshire,
identify best practice from Cambridgeshire in managing funding
and delivering growth and provide evidence of key issues in determining
effective, efficient and accountable Local Enterprise Partnerships.
Local Enterprise Partnerships should be supported to reflect and
be able to respond to local issues in order to then be able to
support business to establish and grow.
2.1 Cambridgeshire is a major engine for
growth. The area has a diverse knowledge based economy, and is
one of the few truly international brands (not least through Cambridge
University) that the UK has. The characteristics of the Cambridgeshire
economy mean that it is well placed to attract investment that
might otherwise locate elsewhere internationally.
2.2 However, the continuation of Cambridgeshire's
success, which is also critical to the performance of the wider
UK economy, depends in large part on the delivery of new homes
and low carbon infrastructure, so that growth is not hampered
by unaffordable housing and unacceptable congestion and the area
continues to attract the best talent and companies from around
the world. Without such investment the growth potential of Cambridgeshire
is at real risk.
2.3 Local Enterprise Partnerships offer
a unique opportunity to tackle the barriers that are already limiting
the growth of our economy, but only if they are truly empowered
to take on that role. Cambridgeshire has a track-record of innovation
and flexibility in managing funding to support economic growth
and deliver sustainable infrastructure, when we are empowered
to do so.
3. THE FUNCTIONS
3.1 The primary function of Local Enterprise
Partnerships should be to identify and tackle, through investment,
obstacles to economic growth. Supporting Local Enterprise Partnerships
in areas that have the greatest potential to grow and have politically
committed to growth will achieve the greatest value for money.
3.2 Drive the localism agenda
In order for Local Enterprise Partnerships to
meet the needs of local economies they must reflect the nature
of the functional economic area. It must be recognised that mid
size cities and market towns play a vitally important role in
the national economy, balancing quality of life with economic
growth and connecting the rural economy with core economic hubs.
The State of the Countryside Report 2008 found that rural areas
supported more than their national share of workplaces in energy
and utilities, construction, transport and communications and
Functional economic geographies in the north
of the country, away from the influence of London, are very different
from those in the south of the country where economic linkages
and commuting patterns are much more complex. Local Enterprise
partnerships covering a number of towns and smaller cities should
therefore not be disadvantaged on account of their size and nature
and it must not be assumed that a larger Local Enterprise Partnership
covering a single large city will achieve greater value for money.
Unless a Local Enterprise Partnership represents a realistic economic
geography, it will not represent local needs, agreement of joint
priorities will be harder to achieve and this will risk spreading
the resources of the Local Enterprise Partnership too thinly across
too many issues.
3.3 Long term, flexible forms of investment
Enabling Local Enterprise Partnerships to make
long term investments and allowing them to be flexible in how
they spend money will generate the greatest return on investment.
Cambridgeshire has a track-record of innovation and flexibility
in managing funding to support economic growth and deliver sustainable
infrastructure, when we are empowered to do so.
3.4 Critical role in Inward Investment
Local Enterprise Partnerships have an important
part to play in inward investment. Successful inward investment
relies on a detailed knowledge of; the local economy, gaps in
supply chains, key sectors of growth, property and land availability,
labour supply and key contacts within local authorities, the business
community and the academic community. This kind of knowledge and
networking is only realistic if inward investment is owned and
driven locally. The importance of local knowledge is recognised
in the coalition governments localism agendathis agenda
needs to be driven forward through enabling Local Enterprise Partnerships
to have a real impact in their local economies.
3.5 Business Support informed by local intelligence
The delivery of business support services should
be a function of Local Enterprise. Business support is only effective
if it responds to the particular issues of local businesses. These
issues will vary significantly based on the sector, size, growth
potential, location and employees of the business. The Local Enterprise
Partnership should provide a mechanism for local business intelligence
to inform economic development and business support functions,
ensuring that those services delivered are effective and achieve
the greatest value for money.
3.6 Local authority responsibility for statutory
Local Enterprise Partnerships should provide
a mechanism for businesses to help inform local authority decision
making, with local authorities continuing to exercise their statutory
policy-making responsibilities for planning and housing. In addition,
Local Enterprise Partnerships could have an important role in
helping local authorities overcome barriers in the implementation
of policy and coordinating delivery.
4. THE REGIONAL
THE LEP SYSTEM
4.1 Invest in areas with the greatest potential
The emphasis of the Regional Growth Fund should
be on supporting areas with significant potential for economic
growth and creating sustainable private sector employment. Oxford
Economics have demonstrated that the East of England is one of
only three regions making a net contribution to UK plc, yet the
Cambridge area, the key driver of economic growth within the region,
faces increasing constraints in terms of housing affordability,
transport infrastructure and skills. GVA-based capital allocation
of the proposed grant proportion of funding would lead to a much
fairer distribution than a formula based on outdated population
estimates and would ensure that those areas with the most potential
to grow, receive the support they require to fulfil their potential.
4.2 Growth of the economy and growth of sustainable
It should be recognised that sustainable new
homes and communities will be a vital element in support economic
growth, alongside a direct support for innovation, commercialisation
The Cambridgeshire Integrated Development Programme
(2009) identifies and costs the interventions required to deliver
our vision for long term, sustainable, high quality growth and
forges a connection between housing and economic ambitions. Within
the programme is an evidence base on sub-regional infrastructure
needs. £3.9 billion of infrastructure investment in transport,
education, community facilities, health, open space, waste and
utilities is needed to deliver our vision for sustainable economic
and housing growth. Without investment from the Regional Growth
Fund and through the Homes and Communities Agency, Cambridgeshire
and the wider region will no longer continue to perform, particularly
in light of increasing competition from abroad. The high value
nature of Cambridgeshire's economy means that it competes with
locations across the globe to attract and retain the best quality
people and businesses. Growth in Cambridgeshire must therefore
be high quality across homes, places, connectivity, communities
and culture. For this reason, we developed the Quality Charter
for Growth. The Charter aims to ensure the area remains an international
leader in architecture, design, community development and low-carbon
growth for years to come.
4.3 Supporting private sector jobs growth
The county and district councils of Cambridgeshire,
along with district councils outside of the Cambridgeshire administrative
area, already work together with businesses through the structure
of the Greater Cambridge Partnership, a local economic partnership.
Private sector jobs growth has already been recognised as a key
priority across that partnership given that 43% of Cambridge's
workforce is employed by the public sector and a significant number
of residents in the districts surrounding Cambridge, commute into
Cambridge to work. Funding from the Regional Growth Fund will
be vital in ensuring that the future Local Enterprise Partnership
is able to address the barriers currently restricting private
sector jobs growth in the local area, both in terms of "hard"
physical infrastructure and "soft" infrastructure such
as skills development and training.
4.4 Enable flexible investment and local retention
Cambridgeshire has a track-record of innovation
and flexibility in managing funding to support economic growth
and deliver sustainable infrastructure, when we are empowered
to do so. Allowing local areas with a proven track record of delivery
to take more risks will generate greater returns on investment.
The Regional Growth Fund should provide the
opportunity for the area to capitalise on and increase its existing
strengths and assets and gain greater freedoms and flexibilities,
allowing it to potentially re-profile and vire funds won via the
Regional Growth Funds to more achieve the best possible outcomes
for the local area and the wider UK economy.
Cambridgeshire Horizons have used progressively
more ambitious models of investment and have progressively achieved
more with this investment. Two examples of recent investments
Trumpington Meadows and Clay Farm
Working closely with developers, Cambridgeshire
Horizons put in place funding mechanisms that kick started development
in areas critical for the sustainable growth of Cambridgeshire.
A £4.5 million loan (paid into an escrow
account) was agreed with the Trumpington Meadows land company
in exchange for the delivery of 100 houses by Sept 2012, 200 by
2013 and 300 by Sept 2014. If the developer fails to hit the housing
targets, the rate of interest on the loan increases. As a result
of this agreement, development will start on the site this year
that may otherwise not have happened.
A development at Clay Farm has now been agreed
in principle as a result of an equity investment model with associated
delivery targets for housing and infrastructure. Subject to negotiations
Cambridgeshire Horizons plan to make an £8 million investment
in Clay Farm and are seeking to obtain a 20% internal rate of
return on the investment taken from the surplus profits that developers
make on the scheme. Thereafter, Cambridgeshire Horizons will take
a 20% share of ongoing surplus profits until the end of the project.
Again, as a result of this agreement, development will soon begin
on the site that otherwise is unlikely to have happened. Furthermore
Cambridgeshire Horizons could see at least a £15 million
return on the initial £8 million investment.
These examples show that the more the locality
is able to share in the risks of the investment, the more the
locality stands to benefit from the investment.
We therefore request that central government
allow localities to retain more of and take responsibility for
the money that is generated by the local economy and be empowered
to achieve more with the limited funding available, for example
through Tax Increment Financing, the Community Infrastructure
Levy and a sub-regional business rate supplement
Tax increment financing
Tax Increment Finance is a method of borrowing
funds to pay for infrastructure, on the basis that additional
housing requiring that infrastructure will increase tax revenues.
Although this system is widely used in America, it has not been
tried yet in England, in part because the US has a wider range
of local tax instruments, such as property tax, whereas the English
tax system is more centralised. Cambridgeshire Horizons has written
to the Department of Communities and Local Government suggesting
that a pilot project could be taken forward in Cambridgeshire,
using the increments in business rate income, which could be returned
to local control.
The Variable rate Tariff or Community Infrastructure
Cambridgeshire Horizons and LPAs in Cambridgeshire
have been leading work to examine the potential for a countywide
system of standard charging on new development, in order to fund
infrastructure. This charge could take the form of the currently
proposed Community Infrastructure Levy or a Variable Rate Tariff
based in existing Section 106 legislation. Either of these innovative
funding methods could provide contributions towards subregional
projects. Such a charge would need to have varied rates to take
account of differing development economics across Cambridgeshire.
4.5 Revenue Funding for Local Enterprise Partnerships
Cambridgeshire has been working hard to achieve
efficiencies yet still deliver high quality results and services.
Through the umbrella of "Cambridgeshire Together", public
service leaders across the county have come together to explore
new ways of working, improve services and offer better value for
money. Each of the eight projects developed have associated outcomes
that will benefit the people of Cambridgeshire. As a result of
the work taking place within the programme, Cambridgeshire has
been named as a national Total Capital and Assets Pathfinder as
well as being shortlisted for the MJ Total Place Achievement of
the Year 2010. However, this work would not be taking place without
revenue funding received from Improvement East. The same principle
is true of the innovative funding models developed by Cambridgeshire
Horizons. Without having received some revenue funding from the
Housing Growth Fund, Cambridgeshire Horizons would not have been
able to achieve the same return on investment from the capital
element of the funding programme. It is therefore vital that Local
Enterprise Partnerships are provided with some revenue support
if they are to fulfil the ambitious role that Government intends
5.1 LEPs should be supported to coordinate
We fully recognise that to work on issues such
as key transport corridors requires Local Authorities and Local
Enterprise Partnerships to work beyond their borders. Cambridgeshire's
authorities have a track record of creating strategic alliances
with neighbouring areas to address key areas of work as and when
Examples of this are the A428, the A47 and East
Cambridgeshire County Council works with Norfolk
County Council, Peterborough, District Councils and local business
in the A47 Alliance to press for improvements to capacity and
address safety issues. Some improvements have come forward to
the route during the life of the Alliance and is an effective
voice for the joint aspirations. The route is a key link to and
from the fenland area of Cambridgeshire and Norfolk.
Cambridgeshire County Council with the Highways
Agency, Bedfordshire Authorities, District Councils and Local
Development Bodies such as Cambridgeshire Horizons and Renaissance
Bedford to promote/study improvements to the A428 length of the
regional route. The A421/A428 and A14 between Cambridge and Ipswich
will shortly form a new east west dual carriageway route between
Felixstowe and Milton Keynes/M1, but one length Caxton common
to Black Cat Roundabout on the A1 still exists as a single carriageway
road and is much in need of improvement. Co-ordinated action between
local authorities and development interests appears to be the
only way forward.
Working with many other authorities on the promotion
of an eastwest rail route between Ipswich and Oxford. Significant
progress has been made in developing services between Oxford and
Bedford a link which requires extra trackwork. Improved services
have been achieved between Cambridge and Norwich and Cambridge
and Ipswich through this joint working.
Currently, there are few cross boundary schemes
which are being promoted due to the lack of funding, but Local
Authorities are well versed in cross border co-operation. Various
powers exist to facilitate this and this is usually effected through
one authority becoming the lead authority, but both contribute
proportionately. (An example of this is the nearby A1073 new road
scheme from Peterborough to Crowland, jointly promoted and implemented
by Lincolnshire County and Peterborough City, with Lincolnshire
Business led Local Enterprise Partnerships still
need proper governance arrangements so that residents can have
their say on key issues that affect them and can have confidence
that LEP decisions are made in an open and transparent way.
6.2 Importance of Universities on the Local
Enterprise Partnership Board
Currently government suggests that business
and civic leaders will have equal representation on the boards.
We are concerned that this does not take into account the valuable
role that others (eg universities) can play in the local economy.
6.3 Meaningful consultation
Given that proposals for LEPs are being developed
over the summer months government should consider that businesses,
residents and local authorities are given further opportunity
to develop the proposals, once submitted, after 6 September.
7. MEANS OF
EU FUNDING) UNDER
7.1 Delegation to a consortia of local authorities
across a region or to LEPs
Local Enterprise Partnerships needs the ability
to be legally constituted in order to be able to access and manage
European Funds and either it or one of its key partners enabled
to administer programmes previously delivered at a regional level.
Some local authorities have the capacity to administer EU funding,
as is evidenced through Cambridgeshire's successful participation
in the Territorial Cooperation programmes Interreg IIIB and IIIC,
which are funded through ERDF, however many will struggle to provide
the required match funding. Central government should ensure that
Regional Growth Funds are eligible as match for European Funding