Written evidence from Gatwick Diamond
1.0 The Gatwick Diamond Initiative (GDI)
welcomes the opportunity to submit written evidence to the Committee
on the new Local Enterprise Partnerships ("LEPs"). The
GDI believes that while there is limited published information
from government on the scope and functions of the new LEPs, the
concept of enabling business, rather than politics and boundaries,
to identify and drive priorities for local economic renewal and
development has potential if approached adeptly.
1.1 The joint letter of 29 June from the
secretaries of state for Business, Innovation and Skills and Communities
and Local Government invites local groups of councils and business
leaders to come together to consider how to form new LEPs; with
clear strategic leadership and vision; effective governance equally
split between the private and public sector; and reflecting functional
1.2 The Gatwick Diamond Initiative is already
a successful collaborative business led public/private partnership
which aims to facilitate, coordinate and lead the actions necessary
to create the right environment for business growth in the area
surrounding Gatwick Airportan area geographically covering
three district and borough councils in East Surrey and three in
North West Sussex. This initiative has grown from a response to
a request from businesses to give the area an identity to support
a vibrant economy which crosses traditional county boundaries
and follows the natural economic geography of the area. Set up
in 2003, the GDI aims to take the economic performance of the
sub-region from good to excellent. The GDI is led by two business
champions, Paul Gresham of KPMG, and David Butcher of FD Outsourcing,
who are leading thousands of businesses which are determined that
the business voice will be heard.
1.3 Our vision is: "To become a
world class internationally recognised business location achieving
sustainable prosperity". That vision is shared, owned
and driven by the two county councils and six district councils,
two further education colleges and neighbouring universities,
Gatwick Airport and many corporate, large and small businesses
who have freely collaborated to identify and build consensus around
the key deliverables that will enable the area to realise its
vision. We have already achieved much and have a clear vision
as to what we intend to achieve in the future.
1.4 Our strategic priorities of "Inspire,
Connect and Grow" tackle planning, housing, transport,
infrastructure, employment, skills, enterprise, tourism and green
economy issues whereby businesses advise local authorities of
barriers to growth and how needs are prioritised and best met
within limited budgets.
1.5 Gatwick Diamond businesses believe that
the collaborative strategic leadership already provided through
the GDI in partnership with local authorities means that it is
well placed to meet the requirements of a Local Enterprise Partnership
as known so far.
1.6 The functional economic area, at the
centre of which is Gatwick Airport, geographically stretches in
the north from Leatherhead and Redhill in Surrey, to Burgess Hill
and Haywards Heath in West Sussex to the south. Close economic
links also exist with Croydon to the north and Brighton to the
south along the A23/M23 corridor.
1.7 Two county councils and six district
and borough councils are active members of the Gatwick Diamond:
Surrey County Council along with Reigate and Banstead, Mole Valley
and Tandridge councils and West Sussex County Council along with
Crawley, Horsham, and Mid Sussex councils. Both Croydon and Brighton
and Hove councils are also supporters.
1.8 Our aspiration is that the area becomes
a primary destination for high value added investment from the
most advanced and successful companies, home grown and from outside
the region. Achieving such status relies on the area safeguarding
its many valuable assets which must be combined with new assets
to offer citizens, businesses and future investors a truly unique
2.0 The Gatwick Diamond area has a GDP of
£13.3 billion with a population of 600,000 and workforce
of 343,000. Eighty per cent of the workforce is in employment.
The transport network is vital to the business community with
regional hubs at Gatwick and Redhill. Access to international
destinations from the Airport and the surface transport network
provides excellent connectivity to central London (using the Gatwick
Express) and beyond by rail and to the motorway networks via the
M23 and M25. At the centre of the Gatwick Diamond is the UK's
second largest airport with the world's busiest single use runway,
transporting 33 million passengers per annum to 200 destinations
in 90 countries on long and short haul flights, employing 23,000
on-site staff and generating a further 13,000 jobs.
2.1 It is already a base for many successful
businesses including HQ offices for ExxonMobil and Unilever in
Leatherhead, and Thales and the European HQ for Group 4 Securicor
in Crawley for example. The area is a key regional centre for
the professional services sector attracting companies such as
KPMG, PricewaterhouseCoopers, Deloittes, BDO Stoy Hayward, Grant
Thornton, Thomas Eggar, ASB Law and a number of banks regional
headquarters. The other key sectors are Advanced Manufacturing,
Environmental Technologies, Health Technologies (provision and
service), Tourism, Travel and Hospitality and Creative Industries.
2.2 Major private sector investments are
being made in the area. Gatwick Airport is spending nearly £1
billion of capital improvements; Thales, the French-owned aviation
and defence conglomerate is midway through the implementation
of its Project Sapphire, which consolidates activities from a
number of locations around the UK into new facilities in Manor
Royal, Crawley. And Ceres Power is developing its new innovative
cell technology for domestic use taking its first step towards
full scale production by securing a 50,000 sq. ft. manufacturing
base in Horsham.
2.3 Globalisation and our world class vision
demand better performance and benchmarking against high performing
international business locations reveals much more work is needed
to safeguard the area's economic vibrancy and way of life. Relative
to other European and North American airport focused international
business locations the area is mid ranking or lower.
2.4 There is a deficit in knowledge economy
related assets and levels of investment and there is a need to
improve the education, learning and skills profile of the area
to meet future business needs. In an area where there is no university
but two excellent further education colleges, a university centre
is required to provide significantly improved levels of higher
education aspiration and participation and responding to employer
engagement needs and opportunities.
2.5 The area's towns do not have the identity
and quality of place that will attract and retain the talented
people needed to secure high added value growth. The area needs
to improve its infrastructure to grow sustainably and connect
the economy to global value chains.
2.6 Gatwick Rail Station is already the
busiest airport rail station in the UK with over 12 million users
in 2009. However, the GDI is currently campaigning to government
ministers that the Gatwick Express remains a dedicated and non-stop
premier service for international and local business travellers,
commuters and tourists. In addition, funding had already been
agreed in a £53 million private/public sector initiative
to upgrade the very tired and inefficient track, platform and
station at Gatwick. This funding is now under threat, which contradicts
government's stated aims of increased public access to the airport,
especially with the impending traffic implications from the Olympic
and Paralympic Games in 2012. Continued investment will be a major
factor for businesses to invest in the Gatwick Diamond. While
private sector investment will continue to be leveraged, it is
essential that the area secures adequate public sector investment
too, particularly in respect of the transport infrastructure.
2.7 All of which we must achieve with minimal
impact on our environment in an area which has a significant part
designated as an Area of Outstanding Natural Beauty.
2.8 The Gatwick Diamond is an excellent
example of a public/private sector partnership providing strategic
leadership to achieve its vision in a time of minimal funding
and we would commend this model to the Select Committee for consideration.
2.9 The letter of 29 June from the secretaries
of state and the parliamentary select committee internet pages
suggest some topics to which we respond now with our knowledge
3.0 Role"LEPs will wish to
provide strategic leadership setting out local economic priorities".
In 2008 the Gatwick Diamond Initiative developed a "Futures
Plan" which provides strategic leadership and direction following
a four step, consultative and collaborative process:
3.1 First, an assessment of the current economic
situation in the areas was undertaken. The key economic, social
and infrastructure attributes were reviewed and benchmarked against
high performing business locations, mainly airport based.
3.2 A mapping exercise was completed with key
stakeholders using "themed meetings" to assess planning,
transport, business support and education and skills issues, opportunities
3.3 Ideas and concepts for how the vision could
be realised were discussed through workshops with the stakeholder
businesses, local authority CEOs and leaders.
3.4 Finally, the partners worked together to
define its overall direction, strategic initiatives and the actions
to be taken to deliver the Gatwick Diamond vision. The local authorities,
businesses and FE colleges then committed to working together
across county boundaries to achieve a 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
3.5 The GDI would strongly recommend that full
consultation with large and small businesses takes place as early
as possible in the process of setting up a new LEP. Over the years
there have been too many public/sector partnerships which have
failed because of lack of evidence from the private sector and
lack of leadership from the public sector. There is an inherent
conflict of interest amongst many council members who want to
restrict business growth to satisfy their constituents not realising
that with business growth comes improved quality of place to live,
work and do business.
3.6 The GDI would also recommend that the businesses
themselves have a principal role to play in strategic leadership.
Local Authorities need to be guided and led by businesses and
the partnership needs to be continually tested for business support.
3.7 Strategic Leadership is not about inviting
businesses to six monthly events to consult. It is all about local
authority executives and members regularly seen to be out in the
business community talking on a one to one basis to small business
owners as well as CEOs of corporations. Businesses far prefer
this type of interaction in place of group discussion events which
are perceived as talk shops. Business needs to identify the barriers
to growth, lead the discussions and drive the agenda.
4.0 Governance"an equal representation
of business and civic leaders
with a prominent business
chair." The governance of the Gatwick Diamond is clearly
defined with agreed terms of reference and is recommended to the
Select Committee as an effective model:
4.1 Chaired by a senior partner at KPMG, the
business-led Overview Forum is made up of large and small businesses,
Gatwick Airport, colleges, Local Authority leaders and their CEOs.
It meets every six months and reviews progress against the actions
from the Futures Plan.
4.2 The Management Group, chaired by a local
businessman, and populated by business and council representatives
meets every two months to oversee the operational management and
coordination of activities.
There are also four thematic workgroups, the
membership of which is 50% businesses:
4.3 Chaired by a neighbouring university senior
executive, the Inspire Group brings together key agencies
and businesses to develop knowledge assets and encourage links
to universities and colleges, to raise educational aspirations
creating a talented workforce driving innovation and enterprise.
Its priority is the visionary development of a university centre
based in Crawley. A bid in 2009 to HEFCE for £2.6 million
funding to provide infrastructure for 250 students was one of
only six successful nationally but public sector funding was pulled
at the last minute. The plan is now to expand current HE provision
in a "virtual" university centre environment at the
two FE colleges in Crawley and Redhill and to continue to seek
foreign and private sector funding for a new university centre
on a medium to long term basis.
4.4 A District Council CEO chairs the Grow
Group, which is primarily concerned with creating the conditions
to support and encourage appropriate physical development that
will meet the needs of existing and future employers and communities.
Its members are both private sector developers and planning authorities
united around a common set of goals, capitalising on the identification
of Redhill as a New Growth Point. The six local planning authorities
have aligned their local development frameworks for the first
time. Following a recent stakeholder and business workshop, the
councils are working towards the launch of an integrated strategy
which will cover all relevant land use, infrastructure and economic
development issues allowing proper consideration of potential
strategic business locations This will form the statutory basis
for land use planning within the Gatwick Diamond and all local
development frameworks will have to reflect its provisions. The
Grow Group is also responsible for developing a more comprehensive
approach to energy conservation and alternative supply opportunities.
4.5 Chaired by a county council executive, the
Connect Group's role of maintaining and improving connectivity,
both transport and broadband, is of critical importance to achieving
the ambition to be a globally competitive economy. Actions include
progressing and ensuring the delivery of planned major transport
projects, upgrading and transforming Gatwick Airport Rail Station;
addressing east/west public transport access to Gatwick and Redhill
following the introduction of the FastWay bus rapid transit network
linking Crawley with Gatwick Airport and Horley; further successful
implementation of the "Easit" voluntary travel planning
pilot with large employers and improved transport hubs at Three
Bridges, Crawley and Redhill; ensuring that Gatwick Airport fulfils
its potential as a single runway two terminal airport linking
the Gatwick to increasingly more key business destinations worldwide;
and working with the private sector supporting the development
of the broadband fibre infrastructure to provide super-fast high
speed connectivity both in the commercial centres and rurally.
4.6 The Marketing and Communications Group's
role is to build confidence in the local business community to
encourage inward investment and to develop a position of influence
with local, regional and national government and public agencies.
Chaired by a marketing specialist from the private sector, this
group has developed a stakeholder newsletter, delivered a monthly
PR programme, sponsored the Gatwick Diamond Business Awards, and
a Meet the Buyer event, and is currently organising an inward
trade visit from 10 business representatives from Atlanta, USA.
This trade visit is unusual in that local companies will be paying
for the whole trip, including flights, rooms, dinner and transport
to businesses; and local authorities have provided human resource
to assist. It is an excellent example of leveraging private sector
funding to benefit the area. It is hoped to continue this formula
with further inward investment trade visits from the current and
future new route destinations offered by Gatwick Airport.
4.7 The GDI is neither a membership nor a political
partnership and therefore at all times acts impartially and only
for a positive economic future of the business and wider community.
Neither is it a membership partnership which would compete with
the important roles played by local membership organisations such
as local business forums, Chambers of Commerce, and the Institute
of Directors. Indeed these membership organisations are key partners
in the Gatwick Diamond. The GDI would recommend that party politics
play no part in the new LEPs.
5.0 Sizereflecting functional
economic areas. The Gatwick Diamond Initiative is an excellent
example of a "perfectly formed" public private sector
partnership of six district and borough councils, which sits within
two county council areas, and recognises the economic relationship
with two neighbouring councils.
5.1 It is a clear economic area with predominant
sectors, with Gatwick Airport at its heart. Considerable evidence
regarding transport movements and modes, education choices, community
and business hubs has been collected which clearly identifies
the geographic parameters of the area, notwithstanding the critical
relationships with both Surrey and West Sussex economies and Croydon
and Brighton. Crawley alone, on 2% of land area, provides 37%
of the business rates for West Sussex for example. The boundaries
of the Gatwick Diamond while clearly defined should also be regarded
as global with the airport at its centre accessing the world for
business and tourism.
5.2 The Gatwick Diamond brand is now well recognised
after only seven years of use by the business community. Punching
Gatwick Diamond into Google currently comes up with 155,000 results.
A decision was made early on that the logo would be offered free
of charge to any business for use in its marketing and recruitment.
This open and low cost marketing policy is a good example of how
to promote an area for inward investment with little money because
businesses own the brand and they promote it to their benefit.
Examples are as diverse as the Gatwick Diamond Rotary Club and
Gatwick Diamond Investigations.
5.3 The GDI does not have a large back office
which uses up funding. Currently a part time Director is the sole
employee making use of the resources of the public and private
sector partners to effect change. The GDI recommends to the Select
Committee that back office costs are kept to a minimum in new
LEPs. When collaboration and partnership is truly effective, as
is the case in the Gatwick Diamond, the councils already have
all the back office resource and specialist expertise required
for housing, transport, infrastructure and planning.
5.4 The preference of businesses in the area
is to maintain the Gatwick Diamond brand which is promoting and
growing the economic area and has created a strong identity. However,
it is recognised that in the minds of the government a Local Enterprise
Partnership may prove to be a larger economic area than the Gatwick
Diamond. Should that be the case we would emphasise that the Gatwick
Diamond Initiative has always worked hand in hand with and been
supported by both Surrey and West Sussex county councils. This
is a relationship we would want to continue whatever optimum size
a LEP should become and whatever part the Gatwick Diamond plays
within it. However, it is critical that the Gatwick Diamond remains
recognised as a functional economic area and is not disadvantaged
by being forced to be part of other economic areas which do not
easily fit with this airport led economy.
6.0 The Regional Growth Fund:
6.1 Are there benefits from allocating the
different elements of the fund in different ways? The GDI
firmly believes that it would be more appropriate to the economic
geographies of areas to allocate the fund in different ways. Decisions
must be made at a local level meeting local needs. In the Gatwick
Diamond funding from a Regional Growth Fund would be used to match
fund with the private sector to achieve the stated goals which
may very well not be the same goals as another region. Flexibility
will be key and should be granted.
6.2 What type of activities should the fund
support? The GDI believes that funding should be used to encourage
private sector enterprise to support joint projects which deliver
the growth for which they are looking. For the Gatwick Diamond,
the upgrade of the Gatwick Airport Rail station is an excellent
case in point, as are the many stalled and much needed town centre
developments as well as the formation of a new university centre
of excellence which would provide some of the higher education
aspirations needed by the young in the area.
6.3 Are the criteria right for assessing bids?
The GDI agrees with the bid criteria being appropriate. However,
what should be at the top of any criteria is the actual impact
of funding provided. The impact has to be significant which will
often mean that it should not be time limited. Impact could include:
how many more private sector jobs provided? How many more people
educated to Level 4? How many more journeys made by public transport?
How many more businesses started up in innovative green technologies?
How many more employees living locally and not commuting?
6.4 Do you think we should operate a two stage
bidding process? The GDI concur that a two stage bidding process
could be appropriate. Government should recognise, however, that
where projects are not started until 2013 in the second stage
that it could be a five or even 10 year window before any impact
is realised. Previous government regimes have favoured short term
"stop start" funding. This has been proven to be ineffective
and intensely frustrating for the private sector who are used
to investing for the long term.
6.5 Should a Regional Growth Fund become a
long term means of funding activity that promotes growth? There
are many partnerships which have failed because they relied too
heavily on public sector funding and could never be sustainable.
The private sector will invest when they see the public sector
investing but they will quickly back off when they see funding
which is clearly not going to benefit their businesses. This is
not an unreasonable stance when businesses have private shareholders
7.0 What should be the functions of the
LEPs and how will value for money be ensured? Based on the
Gatwick Diamond Initiative model, the functions of the new LEPs
should be identifying, influencing and lobbying by the business
community and sharing in the decision making with the councils
to allocate funding to the projects most appropriate for business
needs ensuring economic growth. The new LEP should co-ordinate
the efforts of all the private sector and public sector stakeholders
to maximise the effect of their existing budgets benefitting the
local economy. Businesses should identify those barriers to growth
where limited public sector investment will unlock significant
additional investment from the private sector. An example of this
for the Gatwick Diamond is the matched funding from Gatwick Airport
to develop the rail station.
However, it is proposed that once the business
led decisions have been made, the actual implementation of funding
in those infrastructure, planning, housing and transport projects
should remain with the local authorities. Back office costs in
the LEP itself should be kept at a minimum further ensuring value
for money. Big offices and high head counts are absolutely unnecessary
when the shared public/private sector LEP role should be largely
voluntarily led. Businesses are prepared to invest time and energy
in decision making which will help grow their economy, as long
as they feel that real benefit is being achieved as a result of
their efforts, that bureaucracy and process does not get in the
way of common sense and that the public sector is making a corresponding
8.0 What will be the funding arrangements
for the Regional growth fund under the LEP system? Funding
arrangements need to be kept as simple and transparent as possible.
The local authorities should be awarded the funding and allocate
sufficient, and as agreed with the business community, to the
LEPs to enable a simple structure of governance. This will provide
the accountability necessary to influence decision making according
to business needs. New LEPs should not be set up with huge financial
back offices when the rigour of process can be provided by the
local authorities. Otherwise there is a risk of duplicating back
office functions and creating a chain of funding where more and
more "sticks to the sides" as it flows through.
9.0 How will coordination of roles between
LEPs be ensured? This could be in a similar way to the current
Local Government Association coordination of roles. In addition,
a neighbouring LEP should ensure that a representative sits on
adjacent LEPs to share knowledge, best practice and minimise duplication.
What the GDI does not consider useful is another layer of bureaucracy
between economic needs and funding.
10.0 What arrangements will there be
for coordinating regional economic strategy? Again this could
be along the lines of the Local Government Association on a regional
basis as currently. There is no need for another additional structure
as seen by regional partnership boards. Whatever the structure,
businesses from each of the LEPs need to sit on such regional
coordinating structures to ensure the business voice.
11.0 What will be the structure and accountability
of LEPs? The Gatwick Diamond Initiative would recommend that
the LEP is a limited by guarantee company. Its articles must ensure
that any public funding obtained will return to the Local Authorities
and/or government in the case of closure. As earlier explained
in section 4.0, the successful governance structure adopted by
the Gatwick Diamond is a model that could be followed elsewhere.
Each LEP should be accountable straight to the Department of Business
Innovation and Skills providing a good balance with the Local
Authorities reporting to the Department of Communities and Local
12.0 What should be the legislative framework
and timetable for converting RDA's into LEPs, the transitional
arrangements and liability of RDA's? The timetable needs to
be quick for both legislation and for the transition, although
appropriate time needs to be spent designing the new LEPs. The
current uncertainty is having a detrimental effect which will
only get worse until the position is clarified and a long delay
will discourage business interest. Implementation should be achieved
as rapidly as possible. A possible idea would be to set up a group
at BIS with experienced representatives from successful public/private
sector partnerships seconded in to design a model.
13.0 How will funds be procured from
outside bodies under the new arrangements? LEPs should be
able to bid for funding from the EU, and other sources independently
and in collaboration with other LEPs depending on the project.
Those funding bids needs to be clearly appropriate to the area's
objectives and business needs because LEPS should not become 100%
fund seekers in their own rights. This drives inappropriate behaviour
by not for profit organisations trying to ensure sustainability.
LEPs must be strong enough to survive without the expectation
of public sector funding "bailing them out". Hence the
importance of keeping back office costs minimal.
14.0 The Gatwick Diamond Initiative is excited
about the prospect of the new LEPs but given the scale of ambition
in the proposals and the vacuum that currently exists in public
sector activity, it is critical that the government comes to decisions
and provides more information publicly and urgently. Businesses
need and want to understand the government's direction regarding
economic growth as quickly as possible because investment decisions
for them may take them out of the UK altogether.
13 August 2010