I enclose a short note which I hope will address
the issues the Committee is examining.
I would just like to say in response to your point
that the Committee wished to hear from business led proposals
that the Coast to Capital proposal is also business led, in partnership
with our local authority colleagues. A list of supporting businesses
is shown in the attached submission. Should you wish to see the
full Coast to Capital proposal, it can be found at: http://www.westsussex.gov.uk/LEP
1. This supplementary note is submitted
specifically for the Committee's meeting on 12 October 2010 when
it will examine some of the proposals for Local Enterprise Partnerships.
The Coast to Capital proposal was highlighted to the Committee
at the meeting with business representative organisations on 14 September
2010.
2. The Coast to Capital proposal may be
of interest in relation to some of the key issues the Committee
has set out in the terms of its Inquiry:
3. The initial proposal has been led by
John Peel, Chairman of the West Sussex Economic, Skills and Enterprise
Board with input from business leaders from business organisations
representing more than 7,000 businesses including:
Sussex Enterprise
South London Business
CADIA/Gatwick Diamond Business Association
West Sussex Growers
Marine South East
Federation of Small Businesses—West Sussex
Branch
Engineering Employers Federation
Civil Engineering Contractors Association
4. There is firm support from many individual
strategic businesses in the area including:
| Arora Hotels | Lloyds TSB
|
| Baker Tilley | Parafix |
| DHM Stallard | Ricardo |
| Gatwick Airport | Southern Railways
|
| ITT | Southern Water |
| Legal and General | Time 24 Manufacturing
|
| |
Local authority input has come from West Sussex County Council,
the London Borough of Croydon, Brighton & Hove City Council
and some district councils. The proposal is supported by the University
of Brighton, University of Chichester and Sussex University.
OUR AREA
5. The Committee is interested in how LEP areas should
be decided. In determining the area to be covered by our LEP,
we were influenced by the views of the private sector on what
they recognise as the natural functional economy. While there
are many factors which overlap, it became clear that businesses
believe the core economic driver that determines the functional
economic area is international trade activity, which is reliant
on the economic dynamo of Gatwick Airport. Recognised as one of
the South East's key growth areas, the Gatwick Diamond is linked
to the south to Brighton & Hove, itself a significant local
economy, and to the West Sussex coast. To the north, the Gatwick
Diamond is tied to the Croydon economy and through it to the London
economy. To the east and west the Diamond is interlinked to the
rural economy, which has distinctive strengths.
6. Within this area, businesses recognise the travel
to work patterns; they share a labour force, which is mainly resident
in the area; they work with a common skills infrastructure in
terms of schools, colleges and higher education; and they are
reliant on the same transport infrastructure. They face many of
the same business issues and have strong common ground about the
investment and development that is required to further improve
the environment for strong business growth.
7. We believe a LEP area needs to be large enough to
give scale to allow sufficient grip on our key issues—the
application of a common strategic direction on skills, business
growth, investment enterprise etc., across a sufficiently large
mass of businesses and individuals to make a measurable difference.
The Coast to Capital area is such an economy of scale and critical
mass that generates £32.5 billion per year, exports £9.1
billion, with £3.7 billion of tourism income. The area has
79,000 businesses, 113,000 self-employed and 721,000 jobs (of
which 27% are in the public sector). 8,000 new businesses are
started each year.
8. However, LEP areas also need to be compact enough
to allow local engagement of businesses and enable the tackling
of local economic development issues. In the Coast to Capital
area we have addressed this by explicitly recognising five inter-locking
business environments which naturally fit together and which are
tight enough to allow us to get things done at local level and
to effectively engage a wide range of businesses, without fragmenting
to such an extent that we lose sight of the bigger opportunities
and the greater prize.
9. Each of the five interlocking local economies has
its own attributes and particular problems and opportunities,
but they are bound together by the potential to be transformed
from a series of coasting and/or underperforming economies to
an integrated high performance economy. Within Coast to Capital
we will ensure that the characteristics and needs of the five
interlocking business environments are fully recognised and included
in the priorities and activities of the LEP.
10. Two of the areas have submitted their own LEP proposals—Gatwick
Diamond and Coastal West Sussex. The Coast to Capital proposal
includes these two areas in their entirety and with full recognition
of their issues. Both have committed to work with Coast to Capital.
However, we believe that as LEPs in their own right, the areas
might not adequately recognise the real opportunities for businesses
in working across a wider area that links the Coast, to Brighton
& Hove, the Gatwick Diamond and via Croydon, to the London
economy. The danger of LEP areas which are too small are that
they may get trapped in their current patterns of business and
local economy, and will find it difficult to effect real change
and growth.
11. We believe that an argument could be made for a slightly
enlarged area, which would include a further part of Surrey and
the coastal part of East Sussex which would fit in well with our
proposed LEP. We know that both Surrey and East Sussex County
Councils have put in separate LEP bids. However, there are good
reasons for both these separate proposals—there are distinct
and specific issues in each area which are sufficiently well differentiated
from Coast to Capital to warrant separate proposals. We will work
closely with these adjoining areas on issues of common interest—for
example, transport infrastructure, innovation and links to higher
education, coastal issues and the rural economy and the economies
of rural market towns.
VISION AND
FUNCTIONS OF
LEPS
12. The functions we envisage for Coast to Capital LEP
are determined in part by the Government's agenda for LEPs, but
also by our vision. The vision is straightforward and exciting.
It places international growth and entrepreneurship at its very
heart. The aim is to transform business and economic performance
so that the area can compete in any international marketplace.
The LEP aims to develop an economy that is trade-led with a business
community that is outward-looking, investment-focused and driven
by the need to be innovative. It will have a skilled workforce
delivering high value added and knowledge-driven products and
services.
13. To deliver the vision, the Coast to Capital proposal
has focused on a small number of issues which are specific to
this area rather than trying to cover every possible aspect. There
are in any case existing strategies, partnerships and delivery
mechanisms for spatial and economic development priorities.
14. The Coast to Capital LEP has just two key priorities:
— Enterprise and entrepreneurship—tackling low
levels of enterprise and business formation so that the longer
term competitive health of the area is secured.
— International trade—60% of UK productivity gain
is driven by businesses that are internationalised. The area has
some slight competitive advantage in this, but the proposal is
to significantly increase the numbers of firms who trade internationally.
These priorities will act as the economic engine to drive
the required increases in employment, productivity, innovation
and business growth. Other issues will not be ignored, but businesses
have said that by focusing in this way the LEP will have maximum
impact on the economy as a whole.
HOW THE
LEP WILL WORK
15. The LEP will be a strategic body and will take a
long term view of the issues affecting businesses. It will set
priorities for creating the right conditions for businesses to
flourish. Led by businesses, the LEP's role will be:
— Understanding the local economy and its drivers.
— Developing a strategy to create the right environment
(including planning and infrastructure protocols with the planning
authorities).
— Setting investment priorities and identifying a small
number of catalytic projects.
— Raising funding from the private sector and bidding
for funding.
— Commissioning delivery (possibly from a single purpose
delivery vehicle).
— Establishing an Enterprise and Export academy to be
run jointly by further and higher education.
16. In doing this the LEP will work with and seek to
influence statutory and other bodies that are responsible for
planning, transport, education and skills etc. that impact on
business.
STRUCTURE AND
ACCOUNTABILITY
Being accountable
17. We will be openly accountable to the business community,
local people and interested organisations, publishing regular
reports of our activities. We will hold a bi-annual open meeting.
We will challenge and hold others accountable to our strategic
priorities and principles in so far as their activities impact
on business success.
18. Subject to the responsibilities and powers that the
Government gives to LEPs in the forthcoming White Paper, we will
establish appropriate robust governance structures, and will establish
working relationships with the bodies that have statutory responsibility
for functions which are critical to creating a positive business
environment, such as planning.
19. We do not expect the LEP to do everything itself.
In line with the Government's principles of Big Society, we anticipate
and want to encourage local business and social enterprise partnerships
to also become involved and help determine the conditions for
growth.
Our LEP structure
20. The outline structure we envisage for our LEP is:
The Partnership Board—will be formed as set out
above, and be responsible for overall strategic direction and
priorities.
LEP Forum—to engage wider stakeholders, we will
convene a regular forum to consult on businesses issues, not less
than once per year.
LEP Team—a small team, comprised in part secondees
from business and other stakeholders, will support the Board,
maintain partner relationships and manage the commissioning and
delivery of projects.
Special Purpose Vehicles (SPVs) and other vehicles—these
will be formed to take forward particular investment and financing
projects, for example the catalytic investments in key locations.
FUNDING FOR
LEPS
21. For Coast to Capital we have started from the assumption
that private sector investment will drive the achievement of our
goals in the long term. We have made the assumption that the private
sector will deliver, as the first resort, the support services
that need to be put in place. We have made no assumptions about
the transfer of residual RDA funding to LEPs.
22. It is our role as the LEP to create the favourable conditions
for private sector investment and to convince all businesses that
they should invest in their own business growth, including buying
external support when necessary. We will establish long term relationships
with private sector suppliers of finance including banks, venture
capitalists and developers. To deliver our goals we will need
to facilitate and lever-in at least £5 billion of private
sector investment.
23. As well as creating the right conditions for investment
we will also lead investment in certain critical locations by
bringing together landowners, developers, investors and potential
occupiers. We will establish investment mechanisms and special
purpose vehicles (SPVs) where necessary, learning from existing
examples such as the regeneration vehicle established in Croydon.
24. The role of the public sector will be critical. Local
authorities have a wide range of powers covering planning, economic
development, education, housing and transport which will help
to create the favourable conditions for investment. Local authorities'
role is to make things happen, while ensuring minimum bureaucracy.
Further and higher education are significant investors in their
own right as well as providing essential skills and innovation
infrastructure.
25. Public sector sources of funding and investment will
be used strategically, acting to unlock specific developments
or to lever-in private sector funding. Possible sources of public
sector funding will include:
— Establishing new business Improvement Districts and
Supplementary Business Rates.
— Regional Growth Fund—may be helpful in getting
a rolling programme of investment going.
We will also seek to make greater use of European Union funding,
using the private sector investment we will unlock to act as leverage.
Coast to Capital Local Enterprise Partnership is supported
by the following businesses and organisations
28 September 2010
