It only seems like yesterday that the East Midlands Development Agency closed its doors (only for a load of civil servants to walk in through the back and do something which bears a vague resemblance to some of its work).
Anyway, here we are four months on and Lord Heseltine is announcing proposals which also bear a startling resemblance to things regional development agencies used to do, putting tens of billions of government money in the hands of local organisations and devolving decision-making to local level.
What on earth is going on?
Well, some pigeons are coming home to roost for one thing. The coalition government's decision to scrap all of England's nine regional development agencies was the kind of one-size-fits-all politics which flew in the face of well-established regional variations in the economy.
It assumed, too, that all RDAs were an expensive waste of space. As Ken Clarke privately admitted even before the election, they were not. The RDAs in the north west, south and south west did not cover themselves in glory. Ours, however, grew into something professional and well-run. And the RDAs in Yorkshire and the North East made a vital contribution to their economies.
Whatever the government's numbers may tell us, it is questionable whether any money was really saved by closing them. Besides the costs of getting rid of people and unwinding contracts in some RDAs, these agencies contained valuable expertise about regional economies and an ability to get funding out into the economy (something this government has made a real horlicks of). This valuable asset was allowed to walk out of the door.
Government's theory was that local economies should be weaned off the state spoon and learn to stand on their own two feet. The first sign that this theory was wildly idealistic surfaced when Lord Heseltine (yes, him again) came up with the Regional Growth Fund, an acknowledgment that putting money into pump-priming business growth at regional level might not be such a daft idea after all.
We also had the emergence of Local Enterprise Partnerships, an attempt to encourage business to get involved in initiatives which might help develop their local economies.
And, of course, we've had a team of civil servants responsible for monitoring and advising on the implementation of government policy at regional level taking over the offices formerly occupied by emda.
Now, the eagle-eyed among you might just have spotted a bit of a theme here: organisations and initiatives involved in developing the economy at something other than a national level. We won't say regional because, of course, that has all stopped.
Sort of.
Let's stop being facetious for a minute. Lord Heseltine's announcement today is a big issue for Nottinghamshire and Derbyshire. The brutal truth is that its Local Enterprise Partnership. D2N2, has struggled to make any kind of meaningful impression where it counts. It isn't the go-to organisation for business, councils don't rate it, MPs never mention it and Whitehall wonders what's happened to it.
LEPs were always going to struggle to gain traction because they had a budget around about the size of a packet of KP ready-salted. Yet some have managed to persuade local authorities they were worth backing (Northants got its hands on £2 million). The view is that D2N2 and others have failed to establish any authority.
Lord Heseltine's proposals suggest this needs to happen fast. He has clearly identified these organisations as a route through which government money could be channelled into regional economies. This is a major opportunity, therefore, for a business-led organisation to be in the forefront of investment decisions about their own economies.
D2N2 now has to demonstrate that it can grasp this opportunity and work with city and county councils in Nottinghamshire and Derbyshire to get a fair share of the cash. This hasn't happened so far with the Regional Growth Fund (where the money the East Midlands got was way below other regions).
So D2N2 and our local politicians have some ground to make up.
Lord Heseltine's announcement suggests that government has effectively admitted that the work RDAs did was not a totally unaffordable waste of time, and that city regions can and should be real engines for growth.
Nottingham and Derby have an unfortunate and inglorious history of letting small-town political rivalry get in the way of grown-up cooperation. The view in business is that they need to get over themselves.
While Lord Heseltine's report represents a potentially big opportunity it is also a political headache. Coverage in the national newspapers today has offered an insight into the political nonsenses the report faces: not for the first time, the Guardian went into full-on 'challenge to the prime minister' mode, The Times - bizarrely - suggested the report's most significant finding was about Heathrow airport, the Telegraph reported the politics but not the detail.
Yet in doing so they more or less made Heseltine's point for him: an awful Westminster-centric myopia - there for all to see in the online era - has left political decision-making increasingly distant and increasingly irrelevant to regional priorities.
In other words, we have to grab what we can.
Showing posts with label Regional Growth Fund. Show all posts
Showing posts with label Regional Growth Fund. Show all posts
Wednesday, 31 October 2012
Monday, 31 October 2011
Regional Growth Fund: Has the East Midlands been short-changed again?
The government may face accusations that it has turned its own philosophy on its head with the results of the second round of bidding for the Regional Growth Fund.
This, if you remember, was the £1.4 billion pot of money designed to cushion the blow of the loss of regional development budgets.
The East Midlands didn’t do well in the first round of bidding. In Notts, only one small project was approved, cash which will help a science company expand.
But local politicians – and, significantly, the Derbyshire-Nottinghamshire Local Enterprise Partnership – comforted themselves that the lion’s share of the money, some £900m, was going to be handed out in the second round.
All sorts of local projects submitted bids, a number of them related to small business growth. In Notts, only one bid succeeded again, cash for the Worksop wire rope manufacturer Brunton Shaw..
The decisions released today suggest that the dead hand of national politics has played a part. Derby will, quite rightly, be celebrating the success of the £50m Derby City bid. But it’s difficult not to wonder whether the Bombardier fiasco was in the back of the minds of ministers signing off these decisions.
Giving Derby a second kick in the teeth would have been a political disaster. So good luck to Derby - £50m represents a massive opportunity to make up ground lost through a series of big business setbacks.
Yet it also appears to fly in the face of Conservative philosophy, which suggests the best way to grow a sustainable economy is to avoid an over-dependence on public money.
There was bound to be disappointment in this exercise. While £900m was on offer, the value of the 492 bids nationally totalled more than £3.3 billion.
The point has also been made before that the East Midlands isn’t viewed as a weak economy, so more money is likely to go further north (indeed, nearly 40% of the bids came from the North East and North West).
Yet the East Midlands does appear to have come off badly from this exercise. One of the key measures is the number of direct and indirect jobs which successful bids will support. In the East Midlands it’s 1,400 direct jobs, 7.800 indirect. This is smaller than any other region, including the booming South East.
Three other questions are raised by the RGF result in the East Midlands. One is where this leaves the LEP, which needed a big project to give it some purpose – does the Derby City bid provide that or not?
The second revolves around Boots and its enterprise zone. The company is thought to have put in a bid for £200m. It got nothing, so where does that leave plans for a zone launched personally by David Cameron and Nick Clegg?
It certainly raises the stakes on the fight to win government funding for the dualling of the A453, which Boots views as crucial to the future of its Nottingham site.
The final question is one which seems to have dogged so many civil service business decisions, most notably Bombardier: did it enforce the rules around RGF decision-making literally, or did it interpret them in a way which ensured a desirable result?
This, if you remember, was the £1.4 billion pot of money designed to cushion the blow of the loss of regional development budgets.
The East Midlands didn’t do well in the first round of bidding. In Notts, only one small project was approved, cash which will help a science company expand.
But local politicians – and, significantly, the Derbyshire-Nottinghamshire Local Enterprise Partnership – comforted themselves that the lion’s share of the money, some £900m, was going to be handed out in the second round.
All sorts of local projects submitted bids, a number of them related to small business growth. In Notts, only one bid succeeded again, cash for the Worksop wire rope manufacturer Brunton Shaw..
The decisions released today suggest that the dead hand of national politics has played a part. Derby will, quite rightly, be celebrating the success of the £50m Derby City bid. But it’s difficult not to wonder whether the Bombardier fiasco was in the back of the minds of ministers signing off these decisions.
Giving Derby a second kick in the teeth would have been a political disaster. So good luck to Derby - £50m represents a massive opportunity to make up ground lost through a series of big business setbacks.
Yet it also appears to fly in the face of Conservative philosophy, which suggests the best way to grow a sustainable economy is to avoid an over-dependence on public money.
There was bound to be disappointment in this exercise. While £900m was on offer, the value of the 492 bids nationally totalled more than £3.3 billion.
The point has also been made before that the East Midlands isn’t viewed as a weak economy, so more money is likely to go further north (indeed, nearly 40% of the bids came from the North East and North West).
Yet the East Midlands does appear to have come off badly from this exercise. One of the key measures is the number of direct and indirect jobs which successful bids will support. In the East Midlands it’s 1,400 direct jobs, 7.800 indirect. This is smaller than any other region, including the booming South East.
Three other questions are raised by the RGF result in the East Midlands. One is where this leaves the LEP, which needed a big project to give it some purpose – does the Derby City bid provide that or not?
The second revolves around Boots and its enterprise zone. The company is thought to have put in a bid for £200m. It got nothing, so where does that leave plans for a zone launched personally by David Cameron and Nick Clegg?
It certainly raises the stakes on the fight to win government funding for the dualling of the A453, which Boots views as crucial to the future of its Nottingham site.
The final question is one which seems to have dogged so many civil service business decisions, most notably Bombardier: did it enforce the rules around RGF decision-making literally, or did it interpret them in a way which ensured a desirable result?
Wednesday, 11 May 2011
Welcome to the affluent south!
So, the race is on for Nottinghamshire and Derbyshire to get their snouts into a £950m pot of government money intended to help the economy grow.
We’ll need to do a whole lot better than we did in the first round of bids for this Regional Growth Fund.
The Local Enterprise Partnership put together 38 applications worth a total of £112m. And we ended up with next to nothing.
There was much soul-searching at the LEP afterwards, which has sought to understand why some pretty professional applications fully backed by the relevant local authorities got nowhere.
And their conclusion? We need to be a bit further north.
Okay, so that was only one of the conclusions. On a more pragmatic level, the real clue as to why the LEP’s efforts drew a blank is contained in the area’s one successful bid: Molecular Profiles, a Nottingham science business, was awarded £1.6m to support a wider investment programme which will create new, high-quality jobs fairly quickly.
It applied to the Regional Growth Fund itself – and bids direct from business is what the government was really looking for.
There remains an irony here. The government appears to have put itself in a position where it prefers bids from companies, not from LEPs – organisations which IT set up. LEPs are still struggling to establish their relevance to business and this hasn’t helped.
But back to us being in the wrong place. I went to a meeting of the local LEP the other day and heard Richard Williams, director of regeneration at Derby City Council and a LEP board member, say, with tongue-in-cheek: “We are now part of the affluent south, not part of impoverished middle England or the north.”
What he was getting at was a set of government metrics which classify the English regions according to their economic strength. All other things being equal, it appears these classifications have a significant impact on where government money goes.
There is some logic in this. If a regional economy is heavily dependent on the public sector – and those further north are – it makes sense to concentrate support there.
However, judged by where the RGF funds have gone so far, the impoverished north appears to have flexible boundaries, taking in parts of those well-known geographic outposts the West Midlands and the North West (home, of course, to such poverty-stricken sink estates as Birmingham and Manchester).
These classifications are also based on averages, ignoring economic variations within regions. In our case, while Derby has some very powerful and successful global manufacturers like Rolls-Royce, Bombardier and Toyota, Nottingham depends more on services and the public sector.
Neither Nottingham nor Derby are basket cases. Nottingham is on the verge of some substantial investment in retail and transport infrastructure, and the supply chains around Derby are among the best in the world.
But neither are Birmingham nor Manchester. Sure, parts of the regions around them struggle, but so do North Derbyshire and North Nottinghamshire – former coalfield areas which still contain pockets of poverty. So the government has some explaining to do here.
It was pretty obvious from the LEP meeting that it still has some explaining to do with the new Enterprise Zones, too. David Cameron and Nick Clegg came to Nottingham to personally announce that a part of the sprawling Alliance Boots campus was going to become one of the first of these zones, but detail on how it will work remains unclear more than a month after their announcement.
There were vague suggestions that it might be home to a mix of commercial and residential development, while Boots exec Patrick Dunne mentioned the possibility of bringing partners form the health and beauty industry on to the site.
The government is clearly looking for quick progress with Enterprise Zones, which are a key part of its growth agenda. But it may have shot itself in the foot by ripping up the existing government presence at regional level at the same time, thus removing some of the capacity to grab hold of a flagship project at grassroots level, make sense of it and identify the way forward.
Enterprise Zones would have been put in the hands of the East Midlands Development Agency, the Government Office for the East Midlands and UK Trade & Investment. One is going, the other is gone, while UKTI is transferring to a new consultancy.
Among the speakers at the LEP meeting was Maria Lyle, the new assistant director for the government’s Department for Business Innovation & Skills in the East Midlands & South East Midlands. She will be working with Rowena Limb, who has overall charge of BIS’s presence across this ‘region’, and looks likely to be the lead contact around Nottingham.
Her in-tray looks like it’s full of an Enterprise Zone-shaped folder already.
We’ll need to do a whole lot better than we did in the first round of bids for this Regional Growth Fund.
The Local Enterprise Partnership put together 38 applications worth a total of £112m. And we ended up with next to nothing.
There was much soul-searching at the LEP afterwards, which has sought to understand why some pretty professional applications fully backed by the relevant local authorities got nowhere.
And their conclusion? We need to be a bit further north.
Okay, so that was only one of the conclusions. On a more pragmatic level, the real clue as to why the LEP’s efforts drew a blank is contained in the area’s one successful bid: Molecular Profiles, a Nottingham science business, was awarded £1.6m to support a wider investment programme which will create new, high-quality jobs fairly quickly.
It applied to the Regional Growth Fund itself – and bids direct from business is what the government was really looking for.
There remains an irony here. The government appears to have put itself in a position where it prefers bids from companies, not from LEPs – organisations which IT set up. LEPs are still struggling to establish their relevance to business and this hasn’t helped.
But back to us being in the wrong place. I went to a meeting of the local LEP the other day and heard Richard Williams, director of regeneration at Derby City Council and a LEP board member, say, with tongue-in-cheek: “We are now part of the affluent south, not part of impoverished middle England or the north.”
What he was getting at was a set of government metrics which classify the English regions according to their economic strength. All other things being equal, it appears these classifications have a significant impact on where government money goes.
There is some logic in this. If a regional economy is heavily dependent on the public sector – and those further north are – it makes sense to concentrate support there.
However, judged by where the RGF funds have gone so far, the impoverished north appears to have flexible boundaries, taking in parts of those well-known geographic outposts the West Midlands and the North West (home, of course, to such poverty-stricken sink estates as Birmingham and Manchester).
These classifications are also based on averages, ignoring economic variations within regions. In our case, while Derby has some very powerful and successful global manufacturers like Rolls-Royce, Bombardier and Toyota, Nottingham depends more on services and the public sector.
Neither Nottingham nor Derby are basket cases. Nottingham is on the verge of some substantial investment in retail and transport infrastructure, and the supply chains around Derby are among the best in the world.
But neither are Birmingham nor Manchester. Sure, parts of the regions around them struggle, but so do North Derbyshire and North Nottinghamshire – former coalfield areas which still contain pockets of poverty. So the government has some explaining to do here.
It was pretty obvious from the LEP meeting that it still has some explaining to do with the new Enterprise Zones, too. David Cameron and Nick Clegg came to Nottingham to personally announce that a part of the sprawling Alliance Boots campus was going to become one of the first of these zones, but detail on how it will work remains unclear more than a month after their announcement.
There were vague suggestions that it might be home to a mix of commercial and residential development, while Boots exec Patrick Dunne mentioned the possibility of bringing partners form the health and beauty industry on to the site.
The government is clearly looking for quick progress with Enterprise Zones, which are a key part of its growth agenda. But it may have shot itself in the foot by ripping up the existing government presence at regional level at the same time, thus removing some of the capacity to grab hold of a flagship project at grassroots level, make sense of it and identify the way forward.
Enterprise Zones would have been put in the hands of the East Midlands Development Agency, the Government Office for the East Midlands and UK Trade & Investment. One is going, the other is gone, while UKTI is transferring to a new consultancy.
Among the speakers at the LEP meeting was Maria Lyle, the new assistant director for the government’s Department for Business Innovation & Skills in the East Midlands & South East Midlands. She will be working with Rowena Limb, who has overall charge of BIS’s presence across this ‘region’, and looks likely to be the lead contact around Nottingham.
Her in-tray looks like it’s full of an Enterprise Zone-shaped folder already.
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