The reporting of the Chancellor’s Autumn Statement (that’s the mini Budget he said he was getting rid of) has been almost ritually gloomy
Growth worse than forecast, borrowing worse than forecast, cuts worse than forecast, unemployment worse than forecast (that’s enough worse than forecast – ed.)
There are a couple of reasons for the headline gloom-fest. For starters, this is not what George Osborne said would happen, and it lands him in a suspiciously similar position to his political opponent, Nottingham High School old boy Ed Balls. So some would say he is properly being held to account, others that it’s political schadenfreude.
The second reason is that we appear to have a fixation with news agendas:
“I think it’s grim, what do you think?”
“Well, yeah – it does sound grim, doesn’t it?”
“Terrible, pretty grim really.”
Now, it would be a brave person to stand up and suggest anaemic UK growth and the euro zone horror story signal that happy days are here again.
But I’ll try to dial in a little bit of perspective.
Besides a potential hiccup in this quarter and the next (that’s the R-word or the Double-D phrase), the economy is likely to grow a little bit over the next year.
As that’s a national average, some regions of the UK are likely to grow more than others.
The East Midlands looks like it’ll be one of them.
I says that because I saw a piece of research towards the end of last week from the Institute for Public Policy Research which analysed when employment in the regions was likely to get back up to its pre-recession peak.
Some of its research does sound, ahem, grim. Northern regions may not see employment peak again until 2018 or beyond. That’s a lost decade.
But other regions will see it return to the high by 2014. And we’re bracketed together with the south, south east and east of England in this group.
One more point of perspective. Whether it was courage, confrontation or carelessness, the Chancellor chose the day before the public sector pensions strike to announce that these workers could also look forward to pegged pay increases and more job losses.
In total, the Office for Budgetary Responsibility is now estimating that more than 710,000 public sector workers will have lost their jobs by 2017.
In isolation, that’s a huge number. But, as I’ve blogged before, it is a proportionally small part of the economy – of the UK workforce of 30 odd million, 6 million are employed in the public sector. So the job losses would amount to less than 2.5% of our total workforce, and over that length of time at least some of those jobs will be replaced by private sector growth (not as many as George Osborne would hope, though).
Besides the raft of measures aimed at encouraging lending to small and medium-sized businesses, the major headline for us was that we finally appear to have dragged the A453 widening project over the line.
After only 30 years of trying...
This single carriageway link between Nottingham, the M1, East Midlands Airport and the East Midlands Parkway railway station has accurately been described as the biggest car park in Nottingham.
Beyond the jokes, it has cost the local economy millions in delays, and Boots dropped some heavy hints in private that it regarded progress on this project as a factor in future investment – especially after the decision to turn part of its sprawling and under-utilised campus into an enterprise zone.
While we don’t have a definite start date, that project will now begin before 2015, which is earlier than expected. Turning it into a four-lane road should reduce congestion and cut journey times.
More significantly, it is also likely to open up swathes of land for residential and commercial development, and I wouldn’t be in the least bit surprised to see land transactions and planning applications start to shift in this area.
We can’t kid ourselves – it’s going to be slow progress for a while now. We could well have a situation where, when the A453 finally speeds up, so does the economy.
Showing posts with label Enterprize Zone. Show all posts
Showing posts with label Enterprize Zone. Show all posts
Wednesday, 30 November 2011
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.
Thursday, 24 March 2011
What a week for Nottingham
What a week for Nottingham. £500m and 5,000 jobs from the massive expansion of Broadmarsh, £240m and 2,000 jobs from the extension of the Victoria Centre, final sign-off from government for the construction of lines two and three of the tram…and now an Enterprise Zone at Lenton which could create anywhere between 5,000 and 10,000 jobs.
Normally, you’d be lucky if you got one scheme a year of this magnitude. To have four in the space of one week is well into all our Christmases coming at the same time.
These are only plans, of course. In this kind of economic climate – one clearly exposed to the impact of global economic events we cannot control – they could change, stall, perhaps be pushed on to the back-burner.
The likelihood is that at least three of them will go-ahead. Together, they could have a significant impact on the Nottingham economy for years to come, adding economic multipliers to local business and the local economy during and after construction.
It’s been obvious for a while that the unused parts of the sprawling Boots site were in pole position to become an Enterprise Zone – especially after the Treasury contacted Nottingham City Council and asked them to put more work into a draft proposal for it.
It was finally confirmed this morning by that well-known political double-act, David Cameron and Nick Clegg (who, incidentally, took over an announcement which was originally scheduled to be delivered by Vince Cable).
Alongside Boots and just across the road from QMC and the university hospital, and the international research giant that is University of Nottingham, it ticks all the boxes the government is looking for with the new generation Enterprise Zones.
The hope is that it could attract national and international businesses of size or standing, probably in technology or knowledge-related industries – while also being a great opportunity to nurture promising spin-outs from university research.
We’re told there is the potential for around 200,000 square metres of commercial business space for all sorts of industry sectors. So together with the 7,000-odd people who work at Boots, that could put up to 17,000 people working at the campus in the coming years.
Which begs one final question. While the expansion of the tram will assist with transport, this surely puts further pressure on government to make the dualling of the A453 a priority.
May be I’m expecting too much…
Normally, you’d be lucky if you got one scheme a year of this magnitude. To have four in the space of one week is well into all our Christmases coming at the same time.
These are only plans, of course. In this kind of economic climate – one clearly exposed to the impact of global economic events we cannot control – they could change, stall, perhaps be pushed on to the back-burner.
The likelihood is that at least three of them will go-ahead. Together, they could have a significant impact on the Nottingham economy for years to come, adding economic multipliers to local business and the local economy during and after construction.
It’s been obvious for a while that the unused parts of the sprawling Boots site were in pole position to become an Enterprise Zone – especially after the Treasury contacted Nottingham City Council and asked them to put more work into a draft proposal for it.
It was finally confirmed this morning by that well-known political double-act, David Cameron and Nick Clegg (who, incidentally, took over an announcement which was originally scheduled to be delivered by Vince Cable).
Alongside Boots and just across the road from QMC and the university hospital, and the international research giant that is University of Nottingham, it ticks all the boxes the government is looking for with the new generation Enterprise Zones.
The hope is that it could attract national and international businesses of size or standing, probably in technology or knowledge-related industries – while also being a great opportunity to nurture promising spin-outs from university research.
We’re told there is the potential for around 200,000 square metres of commercial business space for all sorts of industry sectors. So together with the 7,000-odd people who work at Boots, that could put up to 17,000 people working at the campus in the coming years.
Which begs one final question. While the expansion of the tram will assist with transport, this surely puts further pressure on government to make the dualling of the A453 a priority.
May be I’m expecting too much…
EZ does it: What our Enterprise Zone will offer
I blogged earlier this week about the Government’s plans to re-introduce Enterprise Zones to encourage business growth.
Sure enough, George Osborne announced in his Budget yesterday that there would be 21 of them across the country, with the first 10 including a site in the area covered by the Derbyshire and Nottinghamshire Local Enterprise Partnership.
I’d just love to tell you where it is right now, but some Very Important People are going to announce it later today and I’ve been told to keep my trap shut so they can claim all the glory.
All I’ll say is that the announcement will be of keen interest to businesses around Nottingham, and the location reflects one of the city’s industrial strengths.
What I can tell you, because the details are already out there on p33 of the Treasury’s Plan For Growth, is what the Enterprise Zone will offer:
RATES: A 100% Business Rate discount worth up to £275,000 over a five-year period for businesses moving into an EZ during this Parliament.
REINVESTMENT: All Business Rate growth in the zone for up to 25 years will be retained and shared between the local authorities in the Local Enterprise Partnership area ‘to support LEP economic priorities and ensure the returns from the EZ growth are reinvested locally’.
PLANNING: Government and local authorities to develop ‘radically simplified’ planning approaches for the EZ.
CONNECTIVITY: Government support to roll out superfast broadband throughout the EZ.
There is more. Alongside these basic rules, the government says it wants to see reduced regulations all round in the EZ, enhanced capital allowances for plant and machinery in areas where there is a manufacturing bias, the use of Tax Increment Finance, and UKTI support for inward investment into these zones or trade opportunities.
More detail will emerge later today, but these zones look likely to provide a stream of cash which Local Enterprise Partnerships had been missing. Government says it wants this money will be used to promote long-term sustainability.
So it clearly has the criticisms of the old Enterprise Zones flagged up earlier this week high in its mind.
Look out for the announcement later.
Sure enough, George Osborne announced in his Budget yesterday that there would be 21 of them across the country, with the first 10 including a site in the area covered by the Derbyshire and Nottinghamshire Local Enterprise Partnership.
I’d just love to tell you where it is right now, but some Very Important People are going to announce it later today and I’ve been told to keep my trap shut so they can claim all the glory.
All I’ll say is that the announcement will be of keen interest to businesses around Nottingham, and the location reflects one of the city’s industrial strengths.
What I can tell you, because the details are already out there on p33 of the Treasury’s Plan For Growth, is what the Enterprise Zone will offer:
RATES: A 100% Business Rate discount worth up to £275,000 over a five-year period for businesses moving into an EZ during this Parliament.
REINVESTMENT: All Business Rate growth in the zone for up to 25 years will be retained and shared between the local authorities in the Local Enterprise Partnership area ‘to support LEP economic priorities and ensure the returns from the EZ growth are reinvested locally’.
PLANNING: Government and local authorities to develop ‘radically simplified’ planning approaches for the EZ.
CONNECTIVITY: Government support to roll out superfast broadband throughout the EZ.
There is more. Alongside these basic rules, the government says it wants to see reduced regulations all round in the EZ, enhanced capital allowances for plant and machinery in areas where there is a manufacturing bias, the use of Tax Increment Finance, and UKTI support for inward investment into these zones or trade opportunities.
More detail will emerge later today, but these zones look likely to provide a stream of cash which Local Enterprise Partnerships had been missing. Government says it wants this money will be used to promote long-term sustainability.
So it clearly has the criticisms of the old Enterprise Zones flagged up earlier this week high in its mind.
Look out for the announcement later.
Monday, 21 March 2011
An Enterprising dilemma for Nottingham
It wasn’t just the deal-making accountants and lawyers who saw West Yorkshire as a lucrative hunting ground, though. One morning I picked up the Yorkshire Post to find a great exclusive: its reporters had ambushed officials from the Welsh Development Agency, who were camped out at a hotel just outside the city inviting local businesses to consider leaving Yorkshire and moving to Wales.
The WDA was, quite rightly, sent packing with a flea in its ear and politicians demanding to know why public money was being used to poach businesses from one part of the UK to another when the jobs ‘created’ in Wales would simply be those lost in Yorkshire.
The answer goes to the heart of the recent debate about whether we should bring back Enterprise Zones, and we’ll find out later this week if Nottingham has been successful in getting one on our patch.
I was chatting to Graham Chapman, the deputy leader of Nottingham City Council, about this very issue on Friday. He gave a broad hint that there are a couple of sites where they’d like to give it a go, but made it clear that the terms of the Enterprise Zone were the key: it would work only if the incentives were framed in such a way that they didn’t attract businesses who were moving only to follow the money.
As the WDA fiasco illustrated, he has point. There was another example closer to home which also threw a harsh light on the inherent weakness in inward investment underpinned by financial incentives.
Back in the early 90s, Mansfield was coming to terms with the social and economic impact of the end of the mining industry. It got a sniff that an American car components company, Johnson Controls, was interested in opening a factory making car seat covers. There were 600 jobs on offer and, quite understandably, the district council pushed the boat out for them, with an incentive package which included a contribution of nearly £2m from the European Union.
Six years later the council’s economic development chief turned up to a meeting with Johnson Control executives at which they handed over a sheet comparing the costs of operating in Mansfield and the costs of operating in the Czech Republic.
Mansfield had no answer. This was a global business, with no particular links to Nottinghamshire, which had decided elsewhere that it was going to follow the lowest cost option. So off it went, taking 600 jobs with it.
Graham Chapman, who knows a lot about economic development, says that Enterprise Zones will work only if they encourage a sustainable commitment to a location – in other words, one driven by business and economic logic rather than a short-term sweetener.
Enterprise Zones can work – the Sherwood Business Park [pictured above] just off Junction 27 of the M1 is a living, breathing example of one based on an attractive site right next to a motorway junction. So its advantages went beyond financial incentives.
But they also raise questions about fair competition in business and commercial property: why would it be right for one site to have Government support and not another?
We’ll find out how – or if – George Osborne has worked out some convincing answers to these big questions later this week.
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