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Northwest Regional Economic Strategy

RES Assessment Report 2008 June 2008


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Northwest Regional Economic Strategy

Contents SUMMARY 3 Executive Summary 5 Introduction 7 Headline Targets

THEMED CHAPTERS

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10

Business

16

Skills and Education

20

People and Jobs

24

Infrastructure

28

Quality of Life

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Executive Summary Since their establishment in 1999, Regional Development Agencies have been required to produce Regional Economic Strategies, working with partners and on behalf of their regions. The Northwest’s strategy has evolved to become well targeted on specific actions. The 2006 Regional Economic Strategy (RES) included only 45 Transformational Actions and was the first that could be “performance managed”, with each action being assigned a “lead” organisation. In addition the 2006 RES set 8 headline targets for the region for the first time. To support this performance management an Annual Assessment Report is produced, together with six monthly monitoring of progress on Transformational Actions. This assessment report is supported by a more detailed report on each RES factor and action. A small number of monitoring indicators have been agreed for each RES factor and progress against these indicators, together with a commentary on each RES action, has been combined to produce the summary commentary below for each RES factor. This report is developed and endorsed by the RES Advisory Group. Many of the transformational actions in the RES are long term in nature (such as the creation of MediaCityUK in Salford) and will therefore take time to affect the economic performance of the region and targets in the RES. Actions in the RES are the responsibility of a wide range of partners in the region, and by acting together behind a common strategy the region can achieve substantial change. Tackling worklessness, for example, and achieving a long term employment rate of 80%, will require concerted effort from all relevant partners and this indicator is included in all Local and Multi Area Agreements. The Northwest economy has, however, made substantial progress over the last five years as the tables below show: • • • • •

GVA has grown by 26% The number of knowledge jobs has grown by 12% Annual Firm Formation rates have increased by 9% The number of working age people without qualifications has fallen by 15% The number of people in the workforce with graduate qualifications has risen by 19%

The table below sets out headline indicators and shows Northwest progress from 2001-2006, the last year for which we have data.

Measure (Northwest data) GVA No. of jobs No. “knowledge” jobs % “knowledge” jobs Firm Formation (no.) Firm Formation per 10,000 people No. fewer businesses than England average Working age popn with no quals % of working age popn with no quals Workforce with graduate qualifications % of workforce with graduate quals Size of workforce Employment rate

2001 data £88bn 2.89m 1.10m 36.5% 16,485 31 38,525 768,000 18.9% 759,000 25.0% 2.89m 71.2%

2006 data £111bn 3.01m 1.23m 39.9% 17,920 32 38,821 649,000 15.8% 901,200 28.6% 2.97m 72.4%

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Progress since the last RES assessment report in 2007 has also been steady. Our overall conclusion is that the RES remains valid and fit for purpose. However, it is clear that economic conditions are currently becoming tougher. The combined impact of a tightening global credit market and high energy and commodity prices has still to be fully understood. However, it is likely that despite years of good progress, achieving some of the headline targets will be extremely challenging. Detail of progress in the last 12 months is set out below. • Significant progress in implementing RES actions, with delivery of activity on the ground underway. • Significant progress on skills indicators, particularly on the proportion of people with basic skills. An important further milestone for the region will be improving the proportion of people with Level 2 skills as the entry level for employment. • Improvements in the number of graduates and the number of knowledge jobs in the Northwest, although not yet at a rate which would close the gap with the England average. • Reductions in the firm formation rate. However, this is 2006 data and a new Business Start-Up service was introduced in 2007, which will not yet be having an impact on this data set. It must also be remembered that firm formation is currently measured by VAT registrations, and much activity is targeted at smaller enterprises and start ups. Later this year a new data set on businesses registering for PAYE will be available and this will be a more accurate measure of firm formation. • Virtually no change in employment rates, despite increased skills levels. The economic impact of poor health still remains high. Major challenges for the coming year will include: • Responding to the tougher economic conditions that the region will face. In particular we will need to focus on creating the right conditions to ensure ongoing private sector investment, and work to understand the recent unfavourable movements in firm formation rates. • Stimulating employer demand to invest in training and development. For the region to achieve Leitch targets we cannot rely on new entrants to the labour market alone. A substantial proportion of the required increase in skill levels will have to come from the existing workforce. • Taking forward the recommendations of the recent preliminary work on releasing the potential of the region's workforce. • Ensuring a balance between growth which drives the economy towards higher value added goods and services (and hence higher productivity) and growth which enables economic participation for all (and hence higher employment rates). This will require us to consider measures other than GVA to judge success, such as household incomes, quality of life and equality measures. • The emerging demographic downturn and changing role of migration, combined with significant health issues that the region faces. These will result in challenges to growing the size of the Northwest workforce. • Ensuring that the economy continue to grow in a sustainable way. The region has recently agreed to produce a Northwest Regional Strategy integrating economic, spatial, environmental, social, housing and transport priorities. Understanding the inter-relationships between all these issues, and in particular the environmental considerations to further economic growth, is essential if the Northwest is to be a sustainable low carbon economy in the long term. Energy, water and waste constraints to growth in parts of the region and sustainable transport to avoid further congestion were issues raised by many people this year in discussions on progress in implementing RES 2006.

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Introduction The Northwest Regional Economic Strategy 2006 (RES) has now been in place for two years, over half its lifetime. This annual RES Assessment Report follows the pattern of last year’s, giving progress on all actions contained in RES 2006 and our assessment of the implications of this for future investment, activity, and focus. This summary report is organised by RES factor and includes information on the data results contained in the full Baseline Update of economic and spatial indicators. The RES Assessment Report 2008 gives a picture of many RES actions well underway and significant successes achieved. However, the RES Baseline Update shows some indicators turning red, and less progress towards our headline targets than we hoped by this stage. This is a cause for concern, although not surprising given tougher economic conditions predicted in last year’s report. Some decreases represent a relatively slight decline from a strong improvement last year, and so are still above the baseline of two years ago. Data takes a while to be released and in most cases is only now beginning to reflect the early months of the RES.1 However, the targets are ambitious and for a reason – to create the conditions whereby the Northwest can enjoy economic health and prosperity. If data indicators are turning red, and the benign economic climate of the last decade is hardening, all organisations charged with playing a part in that objective have a more intensive role to fulfil. We have moved on significantly with much of what was signalled in the Baseline Update 2007. Partners have succeeded in formulating plans to strengthen leadership and management capabilities and release the potential of the region’s workforce; in coordinating and expanding routes for people to access skills and move into work; in managing a major research programme; and in implementing a regional equality and diversity strategy. Data this year reveals an improvement in the skills profile of the region. The national economic slowdown causes us to assess the vulnerability of our economy. Our firms face higher prices for energy and many commodities, affecting key sectors and emphasising the importance of strengthening international competitiveness, and maintaining inward investment as an important productivity driver. Prospects for growth are variable across the region with some areas facing a more positive set of circumstances than others. This context reinforces the need to enable even further private sector confidence and investment levels, support for business start-ups, growth to build up the private sector in the Northwest and greater skills and employability provision to adapt to continuing industrial and sectoral change. The challenge for our region is about creating opportunity, not reproducing what others do but identifying and exploiting opportunities based on our competitive advantages which enable the Northwest to develop a stronger position. There is no sense of regional complacency about our economic progress so far and the RES remains, in the view of partners, a reliable set of actions for delivery and prioritisation of investment. The analysis would suggest that we need to focus even more effort on a number of key areas: • Capitalise on simultaneous strategic development over the next one-to-two years to strengthen our coordination of the planning and land use, housing, transport, energy and environment strategies and investment plans. While a substantial challenge, our prize for integrating these public sector levers would be to achieve higher levels of sustainable economic growth and well-being, while strengthening the Northwest contribution to tackling climate change. • One example of this opportunity will be the need to set a clear regional direction to influence the release of land for new generation waste treatment and recycling plants and renewable energy generation. Alongside this, it will be important for the region to devise new, stronger actions that support the renewable technology sector and maximise the possibility of nuclear new build in the region.

1

Caution is required in interpreting relatively small annual changes, especially with the high confidence intervals imposed by many datasets.

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• Data this year shows good progress in achieving basic skills/qualifications at Level 2. However, we are not yet using the skills of the existing and potential workforce most effectively, and spatial areas and demographic groups with deep levels of deprivation remain. We continue to lose people in the 25-49 age group from the region, Incapacity Benefit (IB) claimant levels remain extremely high, and there is evidence that the economic impact of poor health is increasing. As a region we need to consider how to respond to this further, building on successes already achieved. Moving towards Leitch recommendations for increasing the profile of upper levels of qualifications in the region will require stimulating stronger employer demand for training and higher level skills in the existing workforce, including activity to extend further our nationally-leading Northwest Train to Gain participation rates. • There is growing evidence that an important determinant of productivity is the manner in which the workforce is managed, and that their skills and innovation capacity are utilised by employers, alongside the strength of networks and knowledge sharing. Last year’s Summary signalled the need for the region to consider how best to release the potential of the region’s workforce, generating greater enterprise capabilities within the whole current and potential workforce. The resulting task-and-finish group has now reported and the challenge for the region will be to achieve buy-in and implementation of its findings. • Sustainable transport is going to be key to the development of the Northwest’s city-regions. We need to look around to see who, nationally and internationally, is getting this right. How can our region plan for growth without increasing transport congestion? • Data indicators around RES actions relating to Enterprise and Innovation have become more negative. The recent slowdown in the economy is a factor in this, and Business Link Northwest’s delivery against targets has been positive. Levels of VAT registered business formation in the region are not yet progressing past the baseline of 2006, although levels of self-employment are higher. Stronger achievement of this headline target will be imperative if the private sector in the Northwest is to create wealth and move the region on from current requirements for public sector investment. Partners have this year demonstrated a move forward from a focus on process to a determination to achieve delivery on RES actions. As a region we need to consider setting further challenging goals to focus our activity and investment into delivering transformational change in the transition years to a Regional Strategy without a RES update in 2009. This collective positive attitude to strengthened delivery and joint prioritisation of activity needs to be continued. This is essential if we are to maximise the impact of ongoing public sector investment into the Northwest in creating the conditions where private sector investment can flourish, and build an economy and society that weathers a national economic slowdown and delivers on prosperity and opportunity for all our residents.

The report uses a colour coding system to provide a summary of progress in the year to enable the reader to get a quick overview of progress: green - good progress or action substantially completed amber - some areas of good progress but not yet confident of achieving action red - significant challenges or constraints on achieving this action still remain

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Headline Targets Progress against the 8 targets in the RES has been mixed, as the table below shows. The region is likely to achieve the targets set in the RES 2006 for reforming the skills profile of our population, both at the ‘no qualifications’ level and at graduate level. However, the region is still experiencing lower levels of firm formation than desired, and is unlikely to achieve targets set for job creation and employment rate. The headline GVA growth figure remains below the England average. Target 2006-2009

Measure

2006 Baseline (2004 data)

2007 Update (2005 data)

2008 Update (2006 data)

GVA Growth (latest data 2006): Achieve GVA growth above England average (to close GVA/head gap with England in the longer term)

GVA: GVA growth: GVA gap:

£103bn 5.5% £17.5bn

£107bn 3.4% £18.4bn

£111bn 4.5% £19.5bn

No. jobs No. “knowledge” jobs % “knowledge” jobs

3.04m 1.19m 38.8%

2.99m 1.21m 39.4%

3.01m 1.23m 39.9%

18,080 33

17,940 33

17,920 32

38,000

37,000

38,800

Working age popn with no quals:

724,600

697,000

649,000

% of working age popn. with no quals:

17.7%

17.0%

15.8%

Districts with rate more than 29%

2

0

0

Workforce with graduate quals:

840,800

891,700

901,200

% of graduate quals:

26.9%

28.4%

28.6%

Workforce: Employment rate: Districts with rate less than 68%:

2.98m 72.7% 4

2.98m 72.6% 4

2.98m 72.5% 4

No. of areas in worst 5%: % of people in households with income less than 60% of GB median:

579 12%

No Update No Update

569 12%

Job Creation (latest data 2006/7): Create 150,000 new jobs, 80,000 in “knowledge occupations” to have same % in these occupations as England

Firm Formation (latest data 2006): Raise the firm formation rate to 21,000 per annum (to have same rate and business stock as England in the longer term)

Firm Formation (no.): Firm Formation rate per 10,000 people No. fewer businesses than the England average

No Qualifications (latest data 2006): Reduce the working age population with no qualifications by 80,000 and no district with more than 29%. (In the longer term to have the same % as England)

Graduate Qualifications (latest data 2006): Increase the workforce with graduate qualifications by 120,000 to meet the England Average

Employment Rate (latest data 2006): Increase the workforce by 83,000 (to meet the England employment rate) and no district to have an employment rate less than 68%. (In the longer term to achieve an 80% employment rate)

Deprivation (latest data 2007): Reduce the number of areas in the worst 5% nationally. (In the longer term less than 20% of people with a household income less than 60% of the GB median)

CO2 Emissions Reduce CO2 emissions per unit of GVA. (In the longer term to meet Kyoto targets of emissions 12.5% lower than 1990 levels)

CO2 emissions per unit of GVA

See text below

CO2 emissions

See text below

Note: Those items marked in green are moving in the right direction and are on track to meet the target. Those items in amber are moving in the right direction, but not quickly enough to meet the target. Those items in red are moving in the wrong direction.

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Gross Value Added (GVA) The GVA of the Northwest has increased by £4bn from 2005 to 2006 (4.5%). However GVA growth has been below the England average of 5.1%. This means that the GVA gap has increased, from £18.4bn to £19.5bn. (Latest data revisions have put up last year’s figure of £17.8bn to £18.4bn). This £18.4bn gap is accounted for by: • £3.7bn due to fewer people of working age and fewer people working than the England average, compared to £3bn in the RES 2006 and £3.5bn in last year’s update. • £14.7bn due to lower productivity of those people in work (compared to £10bn in the RES2006 and £14.3bn in last year’s update). This is partly a reflection of differences in regional prices. Sub-regionally the contribution to this gap is shown in the bar chart below, together with changes from RES 2006.

20000 Employment

Productivity

15000

10000

5000

0

-5000 2008 Update

RES 2006 Cumbria

RES 2006 Cheshire

2008 Update

RES 2006 Greater Manchester

2008 Update

RES 2006 Lancashire

2008 Update

RES 2006 Merseyside

2008 Update

RES 2006 Northwest

Job Creation From 2005 to 2006 the number of jobs in the Northwest increased by 23,000 (+0.8%), against a decline in England of over 140,000 (-0.6%). The Northwest has therefore improved its position, and improved vis-à-vis England, but is not yet back to the level of the 2006 baseline figure. The number of knowledge jobs in the Northwest increased strongly, now forming 39.9% of our employment here. The England figure of 43% in “knowledge occupations” is an appropriate stretch target. This data fits with GVA data suggesting that economic conditions improved in the Northwest in this time period, and we are making good progress on continuing the structural transition to knowledge economy jobs.

Firm Formation The region has experienced a decrease in the number of VAT registered firms started, both in absolute numbers and as a rate per 10,000 people. We consequently have fewer businesses than the England average, and this has worsened over the baseline figure. We look unlikely to achieve the targets we had set for 2009.

No Qualifications The Northwest has done well in relation to this target in the last year of data (2006). The number of people in the working age population with no qualifications reduced again, by almost 50,000. We maintained the achievement reported last year of having no district within the Northwest with a “no qualifications” rate of 29%. We are well on track, therefore to achieve this important RES target.

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While this is welcome progress on levels of “no qualifications”, this is joined in importance with achieving an increased proportion of the population with Level 2 qualifications, seen as the entry point for employability in the majority of roles. Data indicators are progressing in the right direction, and it is at sub-regional and local level that much of the solution to this can be generated. In particular, the key will be to drive up demand for first Level 2 qualifications from employers and individuals. There may be a role for Multi Area Agreements (MAA) and Local Area Agreements (LAA) in further stimulating this demand.

Graduate Qualifications The Northwest has moved halfway towards the target set out in the RES 2006 of increasing the number of people with graduate qualifications by 120,000. We now stand at over 900,000 economically active people in the Northwest with graduate qualifications. This is a good achievement, reflecting a necessary improvement in the ability of the region to generate the workforce required by both the private and public sector, and addressing a key supply-side constraint on growth. However, the Northwest has not been improving as fast as England, so the challenge of closing the gap in relative proportions of the workforce at graduate level remains. In the baseline year our relative shortfall equated to 80,000 graduates, now our relative shortfall equates to 94,000.

Employment Rate Little change on data indicators for this target, meaning that the region is unlikely to meet the RES target of an additional 83,000 people in the workforce. The employment rate has declined slightly to 72.5% compared to England’s 74.3%, and there remain four districts where the employment rate is less than 68%, meaning that significant concentrations of worklessness remain.

Deprivation This year, data relating to 2007 has been released enabling an assessment of progress towards this RES headline target. The region has now slightly fewer areas in the most deprived 5% nationally, and remains static at 12% of people with a household income less than 60% of the GB median.

CO2 Emissions In 2005, total carbon (C02) emissions for the Northwest stood at 61 million tonnes. This was a 2.4% reduction from the baseline year (2003). In 2005 C02 emissions per Unit of GVA stood at 0.58 which means that as a region we have become more efficient since the baseline year (0.64). C02 Emissions (Kt C02)

Total GVA (£ million)

Northwest

England excl. London

C02 Emissions per Unit of GVA***

% Change C02

2003

2004

2005

2003

2004

2005**

2003

2004

2005**

20032005

97707

103035

106501

62826

61151

61317

0.64

0.59

0.58

-2.4

670787

708788

735604

401522

399499

394531

0.60

0.56

0.54

-1.7

Source: DEFRA; per unit GVA calculations by NWRIU. ** Note that this data is indicative only; 2005 may not be directly comparable with previous years due to differences in methodology. *** As a measure of efficiency.

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Business ENTERPRISE (RES ACTIONS 1-7) Progress Good progress has been made with Business Link Northwest operational throughout 2007-08. In its first year, targets have been achieved with 87,000 businesses assisted and 5,525 intensive assists resulting in a ÂŁ389 million GVA impact. The focus is now on improvements in service levels and administrative systems and processes. The key business programme on Start-Ups experienced early delays but is now underway, having made considerable efforts to consult with stakeholders. A programme to support High Growth Business Start-Ups is delayed but expected to launch shortly. Developing a stronger enterprise culture in the region is a priority and this year more events have reached an increasing number of people. A full suite of financial products for start-ups, innovation and growth are now available in the region. Data The data shows a negative picture for most of our key indicators of business density (we saw a decrease in the number of businesses compared to the England average), business start-ups per 10,000 people, and business start-ups as a percentage of the national rate. Although much of this decline represents a slight fall-away from the good results last year, we are nevertheless significantly away from our 2009 targets. However, three year business survival rates have increased and now equal UK rates. Self-employment rates continue to increase, and other underpinning indicators are looking stronger, including engagement of graduates and our Higher Education Institutions (HEI) in commercialisation. There is evidence of green shoots of recovery in increasingly positive attitudes to entrepreneurship, especially compared to static national figures. Implications and Further Actions/Barriers There has been significant regional and national change over 2006 and 2007 to work through, in the reorganisation of Business Link, extensive participation in the national Business Support Simplification Programme, the simultaneous development of a new ERDF Northwest Operational Programme and the preparation of both a national and regional Enterprise Strategy. We recognise that changing enterprise culture and business density is a long-term ambition, and it will take time to accelerate results. However, the data implies that the significant amount of public sector expenditure on enterprise is increasing self-employment rates, but not so far having an impact on a stronger net VAT registration profile. The region needs to debate this implication and decide on short to medium term actions which look likely to achieve the long-term business growth target. Going forward we need to concentrate on delivery, particularly meeting challenging business support needs across the region, achieving real transformation through the regional and subregional Enterprise Strategies, and enabling our HEIs to deliver further on their enterprise capacity. There is an appetite for Business Link Northwest to offer a strong aftercare service, increasing business survival rates, which will increase business density and employment opportunities. A successor venture capital loan fund for high growth small and medium-sized enterprises is proposed for 2008/09. A message from the region is that the current high levels of international immigration we see could very well form a source of enterprising people and new business starts-ups, given the right support.

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REGIONAL SECTORS (RES ACTIONS 8-11) Progress Clear progress on delivering sites and transport infrastructure for the MediaCityUK development at Salford Quays, but slower progress in developing Media Enterprise Centres (a specific support project to MediaCityUK) and projects within the Media Sector Development Plan. The strategy work completed in 2006 for Business and Professional Services highlighted the need to do more detailed analysis and action planning in the Financial and Professional Services sub-sector. This work is nearing completion. In Liverpool, Capital of Culture 2008 has stimulated a creative apprenticeship and enhanced routes into employment in retail, tourism and hospitality. The revision of the Regional Tourism Strategy has been well received and the role and focus of Tourist Boards is supported, and increasingly strategic. Data A mixed picture with a good increase in the number and proportion of people working in knowledge sectors, although the gap in proportion of employment accounted for by this sector, compared to the England average, remains the same. Priority sectors as a proportion of GVA has improved strongly, although still not up to the level of the 2006 baseline figure after a disappointing result last year. There is still some way to go, therefore, before closing the gap with England figures. There has been positive growth in tourism figures, particularly in Manchester and Liverpool, offset by marked decline in Blackpool. Implications and Further Actions/Barriers As in Enterprise, a considerable amount of work has gone in at a regional and sub-regional level to improve our understanding of our priority sectors. Delivery of actions and business/cluster support is now the key tactical priority. The region is concerned overall about progress in developing a stronger knowledge economy and actions and investments within this RES factor relate strongly to strategic priorities in Science, R&D, and Innovation. Regionally, emphasis continues to be placed on making MediaCityUK a success, and the imperatives are to maintain good progress on the physical development and deliver the associated labour market, supply chain, innovation and enterprise opportunities. The tourism focus remains on improving quality and understanding of the marketplace.

INNOVATION (RES ACTIONS 12-14) Progress The regional Innovation Strategy is being finalised and re-drafted following the release of the national White Paper. Actions will then move forward as quickly as possible. Innovation advisors are seen as important to achieving this RES factor and will now be delivered through Business Link Northwest, but progress has yet to be made on recruitment for these posts. A pilot project on business-university collaboration is underway with the Northwest Food Alliance. Increasing knowledge transfer in the region is a key activity: there has been recent recruitment into HEBusiness Engagement, and strong project activity via the Higher Level Skills Pathfinder programme. Innovation vouchers as suggested by the Sainsbury Review are being rolled out, and targets firms new to innovation. Data Most data have not been updated. Patent applications have decreased markedly but we should be wary of drawing too many conclusions from this one data set alone. We expect that the forthcoming work by Organisation for Economic Co-operation and Development (OECD) on innovation across the North of England will strengthen our information on this important factor.

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Implications and Further Actions/Barriers Actions around innovation and knowledge transfer are one of the most essential factors in developing a highly skilled and highly productive economy. Achieving the targets within the new Innovation Strategy and delivering more strongly on knowledge transfer will be important priorities, as will delivering on the recommendations of the Northwest Manufacturing Group. Much work has gone on in the past 12 months to focus on leadership and management, and enabling the value of innovative ideas in the whole workforce, and the region now needs to implement some of the recommendations of that work as a fundamental driver of productivity.

SCIENCE/R&D (RES ACTIONS 15 -16) Progress Areas of good progress on actions in this factor should not be overshadowed by April’s negative publicity about continued funding at Daresbury. Two Science Strategy projects (e-Health and Materials Chemistry) have begun; 65 companies are now in the Daresbury Innovation Centre and there is international interest in investing further; and the Government has approved two new research institutes there. Both proposed new NHS research centres, in Manchester and in Liverpool, have very recently been approved by Government. Phase 1b of the Liverpool Science Park is under construction, but other actions on major research concentrations have been slower than planned, and planning restrictions have drastically restricted the development of Lancaster Science Park. Data The latest data for Business R&D spend shows a fall from last year bringing it lower than the baseline figure. Similarly a reduced percentage of UK business R&D is in the Northwest, raising concerns. The main target for 2009, which is to achieve 5% of Government non-HEI R&D in the Northwest, looks unlikely to be met, as data for this indicator shows a fall against last year, although it is still marginally above the 2006 baseline figure. Implications and Further Actions/Barriers The changing economic climate and changing Government investment priorities raise questions over the future level of science and R&D expenditure in our major public sector facilities and private sector firms. We expect to see worsening R&D levels for Government for quite some time, and it may be that a slower-growing economy nationally reduces private sector R&D spend similarly. Overall, the region is experiencing rather poor data results and needs to seriously consider tactics for redressing this. There are significant sites and projects which contribute towards our objectives for the region and which need continued effort and focus, including Manchester’s Science City (MKC/NESTA project), Lancaster Science Park, Liverpool Science Park and Liverpool Innovation Park. The region needs to debate the bigger picture for the knowledge economy and assess whether the total set of investments/activity performed by the public sector here is enough, both to stimulate private sector R&D and position the region well to expand on our competitive advantage sectors and develop a greater knowledge economy. There is a need to look carefully at the numbers of students of STEM subjects in the region.

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INTERNATIONAL COMPETITIVENESS (RES ACTIONS 17-19) Progress Clear progress has been made against the internationalisation strategy with an action plan in place and a detailed business plan and three year funding agreed with UKTI. A series of activities have been undertaken and recruitment into overseas offices restarted, which had been under threat pending the outcome of the national review of UK overseas inward investment presence. Good progress has been made on business support to exporters with over 250 companies helped with significant assistance to improve their international business performance. Data There has been mixed news on indicators around internationalisation. There has been a fall in the number of exporters and the value of exports from the Northwest, although these numbers need further explanation due to change in methodology. There has been an increase in the number of Foreign Direct Investment (FDI) projects, which are important in adding productivity and greater research-intensity to the regional economy. The region is looking on course to achieve the target for FDI projects, although the percentage of these projects that are researchintensive has fallen in the last year of data. Implications and Further Actions/Barriers The global environment is both a significant opportunity and series of threats/risks for the Northwest, particularly at the moment where the international context of increasing oil and food prices will affect Northwest firms. The focus of further work is very much on developing internally competitive clusters, strengthening our global competitive advantage in science and research, and delivering appropriate skills to enable our companies to compete and to attract foreign direct investment. It will be important for the region to increase the number of research-intensive FDI projects. There is a major target for regional Business Link Northwest to achieve in export and international business assistance, and it will be vital for our firms to export substantially more. Options are being explored for an overseas student programme designed to exploit the value of this important resource for the region.

ICT (RES ACTIONS 20-22) Progress Progress has been slower than planned on the development of a new High Impact ICT strategy, but this is now in the final stages of production and has delivered a useful evidence base. ICT business support is now closely integrated into Business Link Northwest. Good progress was made on running a series of Intelligent Business events across the region. Data Excellent progress on indicators was reported in a recent data update. The region now has 82% of businesses using computer systems, compared to 74% in the 2006 baseline. The proportion of businesses using internet and broadband has narrowed to three percentage points behind the UK average figure, whereas two years ago it was ten percentage points adrift. Broadband connectivity is strong with the region already exceeding its 2009 2Mbs target availability. Implications and Further Actions/Barriers The focus of attention is turning to project delivery and business support with the launch of Business Link Northwest and endorsement of the High Impact ICT Strategy. The region needs to debate how to target public sector investment most appropriately, whether it is best to provide universal support to business or invest into specific sites. It will be important for the enterprise and trading opportunities represented by MediaCityUK to begin to be exploited. Thought leadership in this field includes developing our regional approach to next generation access (fibre based high speed communication), which has the potential to generate competitive advantage, and contribute to increasing flexible working and reducing traffic congestion.

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SUSTAINABLE CONSUMPTION AND PRODUCTION (RES ACTIONS 23-25) Progress Excellent progress has been made on the Business Resource, Efficiency and Waste (BREW) project, working with businesses on sustainable consumption and production, particularly in integrating resource efficiency advice into the suite of products offered by Business Link Northwest, and in achieving annual target figures regarding businesses assisted, tonnes of raw material saved, tonnes of CO2 saved and other outputs. A new 3 year ENWORKS programme has begun. There has been good progress on actions within the Climate Change Action Plan. The Corporate Social Responsibility programme has out-performed against its annual targets. Data There has been relatively good progress on indicators. The percentage of our regional energy demand produced from renewables has risen. While total regional waste has risen, the amount of commercial and industrial waste has reduced. Implications and Further Actions/Barriers Key priorities for this RES factor are to maintain competitiveness for the region as global energy prices rise; to continue to reduce levels of industrial and commercial waste; and to bring down CO2 emissions contributing to tackling climate change. Regional partners need to consider whether further coordination of activity could enable the development of key sites for waste facilities and renewable energy generation, allowing the Northwest to strengthen its environmental performance. Also, there is concern by regional partners that we are not yet well-placed to achieve more sustainable transport connections. On particular programmes, lack of additional funding from Defra to continue the BREW programme jeopardises the future of projects and provision of business advice. A continuation strategy has been developed, reliant on accessing funding through the ERDF Northwest Operational Programme, and achieving match funding from other sub-regional resources. We also need better coordination of messages to businesses via the various private-sector facing organisations. The Climate Change Action Plan is progressing well but requires continued focus and greater capacity if it is to achieve its full potential for the region. Future delivery of Corporate Social Responsibility advice and assistance is at risk and similarly requires an increase in regional focus, perhaps via Leadership and Management projects and the Business Link Northwest infrastructure.

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Skills and Education BASIC SKILLS (RES ACTION 26) Progress Good progress has been made with Skills for Life enrolments growing at an above-target level, an employability skills programme launched and additional activity commissioned with funding from the European Social Fund (ESF). Data Data shows good progress overall, and is particularly strong in reducing the number of people above the England average with no qualifications, down from 120,000 to 90,000. Like last year, the Northwest continues to record zero districts in which more than 29% of the population have no qualifications, down from four in the baseline year. The number of people without an NVQ Level 2 continues to decrease, implying that onward progression from basic skills through Level 1 to Level 2 is beginning to occur. There has been a 1 percentage point reduction in the number of 16-19 year olds without an NVQ Level 2 (i.e. 5 good GCSEs). Implications and Further Actions/Barriers The headline indicators and partners’ performance against targets show that we are making good progress on the basic skills provision, although there is still an issue with poor attainment on numeracy skills. New targets (in line with Leitch recommendations for future economic needs) are likely to be much more challenging, and it is right that they are because the new jobs being created are very likely to be at Level 2 or above. The region needs to consider what actions and investments will further improve the skills profile at both ‘no qualifications’ and Level 2 standards. The relevant agencies have been working intensively to integrate employment and skills policy and provision, and to make sure that European funding can be used most appropriately to support these programmes. Providing English for Speakers of Other Language (ESOL) tuition is an important way in which the region can further utilise the skills and productivity assets of those migrating in to the Northwest.

SECTOR SKILLS AND WORKFORCE DEVELOPMENT (RES ACTIONS 27-34) Progress Good progress on intermediate skills and workforce development has been made with a major programme of adult apprenticeships launched in five business sectors; the signing up of over 250 employers to the Skills Pledge, where employers commit to workforce training; and the Northwest being the best performing Train to Gain region in England, with the number of learners continuing to increase. Some sector specific advances have been made including creative and media apprenticeships in Liverpool and Manchester, the National Skills Academy for Business and Financial Services in Manchester and the Nuclear Skills Academy in Cumbria. The important national pilot Higher Level Skills Pathfinder is up and running with Skills for Care. Addressing an area of concern from last year, a redundancy ‘blueprint’ has been agreed which is designed to strengthen training and qualifications for workers moving from declining sectors to growth sectors. Overall, the region is delivering increasing integration of skills with employability and employment actions. Data Good progress has been made for the region with the majority of indicators moving in a positive direction and excellent increases in the percentage of the working age population with at least a Level 2, Level 3, and Level 4 qualification. There has been a notable increase in the number of adult learners studying a full Level 2, and an increase over the baseline in the numbers of those studying a full Level 3. For the second year we have no data update for employers reporting skills gaps. The percentage of the population in rural areas possessing Level 2 and Level 3 skills has declined, which is a concern, although may be a result of data irregularities. Workforce training figures for the Northwest remain very similar to national rates, although the region has slipped marginally in the last year of data.

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Implications and Further Actions/Barriers It remains of paramount importance to increase the number of employers investing in training their workforce if we are going to deliver the skilled and motivated labour force vital for our competitiveness. The main public sector lever here is the Train to Gain programme, and investment in this is due to double over the next three years. Targets for the region include a headline ten-fold increase in the numbers studying Level 3. There will be an increasing role for sector skills councils who need to deliver on knowledge of employer demand to develop qualifications which are fit for purpose and guide appropriate provision, and who have a key role to play in stimulating greater demand from employers for enhanced skills and training. The key question for the region to address is how to achieve stronger progression through skills levels, particularly progression of those already in the workforce at Level 3 to advance to Level 4, which is necessary if we are to approach what might be our regional targets under Leitch recommendations. We will have to develop a new focus and set of actions which successfully stimulate demand from employers for higher level skills, and also actions to strengthen links between HEIs and industry. There is also an important regional imperative to enable in-migrants to contribute as strongly as possible to our economy, both in employment and in business starts-ups.

LEADERSHIP AND MANAGEMENT (RES ACTIONS 35-36) Progress The Northern Leadership Academy project is running to target, and two limited scale projects on high growth coaching and business volunteering mentoring have shown positive initial results. The enterprise skills/culture programme has succeeded in engaging approximately 6,000 students in Further Education (FE) colleges and 100 schools at Key Stage 3. Data It is difficult to assess this as there are a limited number of data indicators and some have not been updated. There has been a slight but worrying decline in the percentage of the workforce employed as managers and senior officials, exacerbating the differential between national rates and the Northwest. There has also been a small decline in the number of businesses with Investors in People accreditation, although numbers have held up well in the context of the removal of grants towards this programme. Implications and Further Actions/Barriers As signalled in last year’s baseline report, leadership and management is a key area for improvement to close the productivity gap. The data shows that there is an issue for the region in fully utilising its workforce and achieving the benefits of our innovation and enterprising capabilities. Last year the region decided to focus effort on developing recommendations for workforce development, and this has generated a number of policy recommendations headlined “Releasing Potential”. Partners are beginning also to work on new interventions, particularly: mentoring offered through Business Link Northwest; supporting Train to Gain’s new Leadership and Management provision; and developing and rolling out a leadership programme across the region, raising awareness and market penetration through the Northern Leadership Academy portal. Additionally, enterprise skills/culture is due to step up its reach and impact with more substantial offerings at HE and FE level, including the rollout of an Engineering Career Academy.

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EDUCATIONAL INFRASTRUCTURE (RES ACTIONS 37-40) Progress Five national skills academies have been launched covering financial services, nuclear, food and drink manufacturing, construction and general manufacturing. There has been slower than planned progress on actions to increase the number of people studying at a higher level in STEM subjects. Good progress has been made in enhancing FE/HE provision in Burnley and in establishing the University of Cumbria which has now been formally launched. Data There has been an increase in the percentage of students achieving 5 good GCSEs at age 16, and a corresponding decline of over 3 percentage points in the percentage of school leavers who lack a Level 2 qualification. Similarly, good rises have been achieved in levels of attainment at age 19, and in the number of full-time higher education students. However the percentage of HE students studying science, engineering and technology has continued to decrease. There has been a slight reduction in the number of young people not in employment, education or training (NEET), but the differential with the England figure has widened. Implications and Further Actions/Barriers Repeated evidence base studies and regional partners discussions have reaffirmed that the Northwest needs to develop a stronger skills profile, particularly at Level 3 and Level 4 to support key sectors and encourage the growth of private sector firms. Regional efforts to strengthen the FE and HE offer, particularly for hard-to-reach communities, have been successful and there is a broad consensus in the region that alongside the Building Schools for the Future programme the educational infrastructure is sufficient. The imperative now is to focus on making sure the courses offered both meet and stimulate employer demand, and the region needs to develop actions around building the numbers progressing through qualifications levels. A key issue for strong strategic leadership will be the transfer of responsibility and resources for 16-19 provision from the Learning and Skills Council (LSC) to local authorities. We need to close the gap in NEET figures with England. It will be important for the region that we make clear and substantial progress this year on developing actions to improve STEM study rates.

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People and Jobs JOB LINKAGES (RES ACTION 41-46) Progress Regional partners have made good progress in developing a Skills for Jobs framework. JobCentre Plus has delivered significant programmes, with good achievement against outcome targets, and the rollout of Pathways to Work is due to be completed shortly across the region. A regional strategy is in place to reduce child poverty and in Merseyside a tactical toolkit for addressing child poverty has been created and implemented. There has been slower than planned progress on the creation of Job Developers linking employers with vacancies to workless individuals. City Strategy Pathfinders (formerly City Employment Strategies) are in place in Merseyside, Greater Manchester and Blackburn with Darwen and have achieved some initial outcomes, and a worklessness programme by JobCentre Plus in Cumbria has started, focusing on those hardest to reach on Incapacity Benefit (IB). Data There has been no significant change in rates of employment or benefit dependency (employment data relates to 2006, and benefit rates relate to 2007). Virtually no change in the overall employment rate in either the Northwest or England means we are still two percentage points adrift at 72.5%, and there are still four districts with an employment rate of less than 68%. Amongst marginalised groups, employment has risen for non-white people and the over-50s, but decreased for disabled people. The benefit claimant data shows marginal change, in a negative direction, with IB claimant rates still 3 percentage points above the England rate, meaning over 408,000 people on IB. Implications and Further Actions/Barriers The key issue for the future must be a continued focus on tackling low employment rates in deprived areas and amongst groups who are not yet accessing economic opportunities. While the main public sector agencies of LSC and JobCentre Plus are working well together to link employability and skills, and delivering significant programmes to tackle worklessness (including joint activity to maximise use of European funding streams), the region needs to ensure that this activity is focused and extensive enough to make the necessary difference. Transforming outcomes for Northwest residents requires increased activity and coordination for the hardest to reach communities via the City Strategy Pathfinders. It is early days for these but the region will become clearer this year on our expectations and targets for these programmes. The Deprived Areas Fund and Working Neighbourhood Fund bring very substantial resources into the Northwest and partners will need to be both strategic and tactical in their use of this funding. Separately, the national child poverty reduction target needs focus and resources going forward and Merseyside’s toolkit could become an important regional approach, linked where appropriate into City Strategy Pathfinders. As part of an increasingly joined up approach the Department for Health’s new Improving Access to Psychological Therapies (IAPT) fund provides the Northwest with £42m over 3 years to address needs of people with mental health barriers.

LOCAL EMPLOYMENT (RES ACTIONS 47-56) Progress In RES areas remote from growth, work has just restarted on an integrated economic plan for East Lancashire. In Blackpool most sites and physical regeneration schemes are on target - a good achievement - although confidence was affected by a delayed government response to the Taskforce report and non-achievement of Peoples Playground funding. In Barrow both the Marina Village and Ramsden Business Park have progressed well and are now seeking private sector development interest. In Cumbria the West Cumbria Master Plan is proceeding more slowly than anticipated, and there has been underspend on the Cumbria Rural Action Zone programme. In growth areas, Preston has achieved some tangible successes in preparatory work for key city centre retail, office and commercial schemes. Greater Manchester has completed its enterprise strategy and made good progress in establishing the key frameworks for information and evaluation of business support, particularly focusing on aftercare and growth assistance to increase business survival rates. In Merseyside the Urban Regeneration Company Liverpool Vision has fulfilled its objectives, an important prospectus for Liverpool Knowledge Quarter has been is developed, and partners have worked closely together on the development of new European programmes. Carlisle has made slower progress than expected, and in Chester the international financial situation has affected developers’ plans. Crewe public realm is progressing well but the location of a new rail station remains undecided.

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Supporting business start-ups and enterprise in and near deprived areas is a priority for the region. Progress has been slow but the Start-Up project is now running. Similarly major effort was required from regional partners to participate in the emerging European (ERDF) programme and agree appropriate investment frameworks. Data There has been a small decrease in the number of Northwest super output areas in the worst 5% deprived, nationally. Both the Northwest as a region and its rural districts seem to have made advances in median taxpayer income. There has been a significant jump in business density in rural areas which is now well above the target for 2009. Implications and Further Actions/Barriers The actions in this RES factor are concerned with improving the way that places within the Northwest are able to generate thriving economies and labour markets. This has been the focus of significant activity and investment by regional partners during – and before – the operation of this RES. So far the region has seen good economic progress in Manchester and strong physical regeneration in Liverpool, although Liverpool still needs activity to tackle sector productivity, business density, and deprivation issues. Preston’s development is so far predominately in low GVA value areas of business, although major private sector plans are coming to fruition for the city. Areas of limited progress include East Lancashire and Blackpool, where complex site assembly and land remediation work is continuing – the challenge will be to garner support for a larger, economically viable plan. It is recognised that connectivity between East Lancashire and Manchester and Preston must be improved if the sub-regional economy is to address its structural weaknesses. It will be important for the region to assist local and sub-regional partners in forming effective partnerships with the capacity to deliver against these complex challenges. Across West Cumbria the key issue is the implementation of the masterplan and a focus on exploiting the potential of the energy coast. In Barrow securing private sector development commitments for housing and business infrastructure works is essential. Greater Manchester’s appetite for strengthened business aftercare and support to drive up survival rates – rather than increased ‘churn’ – is important to achieve a greater business density rate, and stronger local employment, and this focus should be replicated across the region. In Merseyside the Enterprise Strategy is an important step forward, and in Liverpool there are major projects from the new ‘Liverpool Vision’ economic development company, created through a merger of URC Liverpool Vision, Liverpool Land Development Company and Business Liverpool, which will need resource to create the conditions for further major private sector investment. The region must move to decisions with Network Rail in Crewe, in securing private sector investment into development in Chester, and in tackling congestion and uneven growth in Warrington while commencing the Omega development. Lancaster has been an impressive centre of growth recently, and in future needs to both bring larger initiatives forward and find a way to balance new initiatives (particularly around the university and Heysham) with sustainable planning, transport and infrastructure development.

HEALTH (RES ACTIONS 57-59) Progress Partners are now working collaboratively to develop a regional lead on healthy workplaces, but until recently no progress has been made on this action. The Access to Sport strategy has made relatively good progress and is linked in to national frameworks and 2012 legacy/opportunities programmes. We note the rollout of the new Improving Access to Psychological Therapies (IAPT) fund (see Job Linkages). Within the Community RES Factor progress has been made in developing a stronger evidence base for health and coordination of public policy regionally.

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Data Mixed progress on those health indicators have been updated. Life expectancy has increased and the percentages of the Northwest population who are obese or who smoke has declined. The number of days lost per employee per year through sickness absence has increased. The percentage of Incapacity Benefit (IB) claimants is unchanged and the number has grown slightly to reflect over 408,000 people. Implications and Further Actions/Barriers This RES factor brings together actions and investments regarding health, with a focus on issues which affect the size and productivity of the workforce such as IB claimant numbers, the number of working days lost to sickness and health profiles in areas of deprivation. Although some of the medical indicators for the population have been improving, the economic impact of poor health is worsening, both in IB claimant levels and working days lost to sickness. This should be of significant priority to the region. The stronger health evidence base has revealed a worrying divergence of health statistics within the Northwest, whereby the most deprived 20% of areas in a district are generally worsening compared to their district as a whole. The region must develop and prioritise further and stronger actions to focus on addressing these issues. Regional partners have agreed that we need to understand mental as well as physical health barriers to economic participation. It will be important to strengthen delivery of actions to achieve healthy workplaces and to increase sport facilities, utilising the new Community Investment Fund at the local authority level.

POPULATION CHANGE (RES ACTIONS 60-62) Progress There has been good progress in increasing the number of firms engaging with the work of the Migrant Workers Northwest Forum. There has been little progress on developing schemes to retain graduates. In research terms an important report on Demography and Migration has increased our understanding of the ageing population in the Northwest, the experience of marginalised groups, and the impact of inward migration in recent years (available from the Northwest Regional Intelligence Unit). Data The data shows a strong impact of migration into the Northwest, with national insurance no. registrations higher in 2007 and marginally higher again in this 2008 update, and higher enrolment onto English as a Second Language (ESOL) courses, along with an increase in international students studying here. Other indicators are more negative with falling in-migration from other parts of the country and lower graduate retention of both our Northwest students and those who came from elsewhere to study here. Implications and Further Actions/Barriers The Northwest needs more people to drive our economy, and UK and international inwardmigrants, including students, are very likely to be strong contributors to the economy, both in enterprise and employment. Graduate retention is an imperative for us. Similarly, as part of the Basic Skills/Workforce Development factors, economically and socially we need to step up our efforts to ensure that in-migrants can settle in the Northwest and use their skills to contribute to economic growth here. While migration and student flows both bring down the average age of the population, this is not fully counter-acting the ageing effect and the Northwest needs to pay attention to this dramatic demographic trend for future years. We also need to recognise (in conjunction with the Housing Factor) that potential new housing growth points in the Northwest will affect our population profile.

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Infrastructure TRANSPORT (RES ACTIONS 63-79) Progress Good progress has been made on Highways Agency actions, with the M62/M57 access road works ahead of schedule, the full annual programme of minor improvements implemented, and progress on ramp metering and the ‘influencing traffic behaviour’ programme, whereby information is conveyed to drivers via variable message signs. There has been slightly slower progress than expected on plans for the A556 (the M6 to M56 link). Last year the region prioritised transport investments in the Regional Funding Allocations mechanism and approved schemes have made good progress, although progressing schemes to approval has been slow (much of which is dependent on the Department for Transport). Importantly, initial approval has been received for the M6-Heysham link road. Unfortunately, government still has not given a decision on the Manchester Transport Innovation Fund bid which addresses traffic congestion, although funding for Metrolink expansion has been approved. Several schemes or projects have been reported on by partners, including Blackpool Airport, where infrastructure improvements are projected but not yet agreed; the second Mersey Crossing, which has reached planning application phase; and Manchester Airport, which has completed the first stage of a £35m redevelopment. Data There is complex data on this RES factor with positive trends slightly in the majority, including an increase in the number of journeys not taken by car, number of rail journeys, number of passengers using Liverpool John Lennon Airport, and a reduction in ‘most significant vehicle delay’ – i.e. delays experienced at the most severe traffic blackspot in the Northwest. Data around average vehicle delay experienced does show a rise, and there has been a slight fall in the number of passengers using Manchester Airport. An interesting indicator around access of people to jobs shows a falling percentage of people in receipt of Jobseekers Allowance in Greater Manchester that are within 30 minutes access to the city centre by public transport. Implications and Further Actions/Barriers The region will need to work together this year on the Regional Funding Allocations process to determine priorities. Influencing national investments is highly important and there is concern that the strategic importance of the Manchester rail hub is not yet reflected in national thinking (in this regard, the Northern Way connectivity report is useful). Traffic congestion harms our competitiveness and quality of life and there is a concern that levels of traffic growth risk outstripping demand management measures. Transport linking people with jobs is a key priority. Network Rail continue to develop work on the Route Utilisation Strategies (RUS) programme in the region which will set the context for rail investment. The region needs to achieve both greater connectivity and continued modal shift, ensuring people can access employment sites via public transport and developing innovative transport solutions. Local development frameworks being developed need to include analysis of the need for supporting infrastructure and network demand management. The potential impact of new housing ‘growth points’ need to be integrated into transport planning. In this regard, data from Greater Manchester on accessibility is of concern. In other sub-regions, transport scoping work has started in Cumbria, Lancashire has put forward a number of transport projects prioritised to extend access to employment opportunities, and strategic multi-modal/land use models covering Warrington and Greater Manchester are in development. For the future, regional partners may wish to develop actions around influencing and modifying household decisions on transport.

LAND USE (RES ACTIONS 80-84) Progress There has been mixed progress against strategic regional sites, including formulating plans around Liverpool University Edge, but critical highways constraints are preventing further progress at the Lancaster Science Park at Bailrigg. Work has started at the 3MG site in Halton. Key brownfield sites including Kings Waterfront in Liverpool and New Islington in Greater Manchester are completed. An important regional review of employment land is underway, with the potential to identify a new generation of employment sites, alongside and supporting the review of Regional Strategic Sites. New sub-regional employment sites portfolios are under preparation in Lancashire, Cumbria and Merseyside.

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Data While there has been a slight fall in the sq m of floorspace being developed, we have seen a decrease in hectares of brownfield land (and therefore a slight fall in the proportion of England’s brownfield land that is located in the Northwest), a decrease in the amount of vacant and derelict brownfield land and buildings and a good strong increase to over 80% in the percentage of new dwellings built on previously developed land. Implications and Further Actions/Barriers The most pressing issue for land use may well be the potential for a slowdown in the property market, following the credit crunch. There are concerns relating to the provision of utilities to new employment sites, particularly electricity, and a study is underway to improve the knowledge of all stakeholders. So far regional partners feel that we are successfully working together to maximise the best use of ERDF funding. It will be important to continue this work and link to planning issues to maintain the release of land for housing and employment uses, particularly as the detailed outcomes of the Regional Spatial Strategy Partial Review and Regional Housing Strategy emerge, and in the context of potential new housing growth points. Specific areas for increased focus and investment by regional partners include Basford outside Crewe, Kingsway in Rochdale and ongoing support for development of the Daresbury Science and Innovation Park, as well as developments on important sites in Liverpool, Lancaster, Omega near Warrington, and Manchester.

HOUSING (RES ACTIONS 85-87) Progress The framework for housing provision is under review but there has been limited progress in receiving Government modifications to allow the Partial Review of the Regional Spatial Strategy to move forward. The Strategic Housing Market Assessment is underway and progress has been good on the production of a regional homelessness strategy and work understanding supported housing. We note Government funding reductions for housing market renewal areas in the Northwest. Data Stock of housing in the Northwest has risen, without significantly affecting the ratio of house prices to earnings, which is still significantly below the England ratio, indicating relative affordability on a regional level, although with a very variable position across the region. The number of low demand dwellings, both local authority owned and those of registered social landlords, has taken a marked fall which indicates good progress, although the region still has an issue with a percentage of the dwelling stock which is deemed unfit. Implications and Further Actions/Barriers Against a background of changing market conditions, it is imperative that regional partners work together effectively to join up spatial and housing strategies, at regional, sub-regional and local level. The region will be engaged this year in the preparation of a new Regional Housing Strategy, and it will be important to integrate this with both the Partial Review of the RSS, and the evolving Northwest Regional Strategy. We must be ready for prioritisation work through the Regional Funding Allocations exercise. This work is taking place in the context of two important trends affecting housing: higher interest rates and the impact this has on funders of social housing; alongside the Government agenda about growth in housing numbers and expected decisions on housing growth point bids.

PLANNING (RES ACTIONS 88-90) Progress Activities in this factor have progressed slowly. At the regional level, the EIP Panel’s report on the draft RSS was published in May 2007. The Secretary of State’s Proposed Changes, issued in March 2008, are currently the subject of public consultation. The North West Regional Assembly has also drawn up a project plan for a partial review of RSS. The number of Local Development Framework (LDF) documents being produced by the region’s local planning authorities has increased substantially, although relatively few have reached the stage of being tested at examination. Data The number of planning applications granted has risen slightly, with a small rise also in the number of those granted within eight weeks. There has also been an increase in the overall number of business planning applications and housing applications and an increasing percentage of these are on previously developed land.

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Implications and Further Actions/Barriers It is difficult to assess whether the planning system is increasingly enabling sustainable growth in the region. Reports from sub-regional partners in particular reflect concern that in some areas planning and economic development proposals are not mutually supportive. The key message from regional partners is that further work and stronger actions are vital to link planning, housing, land use and transport together. We have an opportunity over the next two years to strengthen our strategic and tactical coordination to achieve sustainable business growth, quality place-making and address the climate change agenda. The challenge is substantial but partners display an appetite to bring these agendas together and set a strong regional lead on achieving this.

ENERGY (RES ACTION 91) Progress There has been progress on carbon-saving and energy-saving programmes, with the Carbon Trust in particular being very active in the Northwest and the opening of the Capenhurst Energy and Innovation Centre. Data Our total energy consumption has decreased despite economic growth. However, what looks on the face of it to be an increase in the percentage of energy demand produced from renewable sources is tempered by the fact that the Northwest is now proportionately a much smaller part of renewables for the UK than it was when the baseline was established, meaning that other regions are delivering significantly more energy production from this sector. Implications and Further Actions/Barriers Our key priorities for this factor going forward are ensuring security of energy supply, supporting the economic development of the energy sector and contributing to efforts to tackle climate change by reducing CO2 emissions. Continuing rises in world energy prices may have a detrimental impact on Northwest firms. On sectoral growth, the renewable energy sector is thought to be one of our competitive advantages yet the data shows a decrease in the relative importance of this in the Northwest compared to the UK. Major investments in waste to energy facilities can be anticipated but there is a serious risk that they may not receive local planning approval. Investments in offshore wind generation are likely, but the challenge is to deliver targeted support for the sector to build our own presence in technology and operations. Nuclear new build in the region may become a possibility but infrastructure (grid connections) is not ideal. We suggest that the region needs to determine over the next few months how to focus appropriate actions on renewables and the nuclear sector.

INVESTMENT (RES ACTIONS 92-94) Progress Excellent progress has been made in developing and gaining approval for the new ERDF, ESF and Rural Development Programme for England (RDPE), all of which are now in delivery phase. The Northwest Regional European Partnership has made substantial progress in responding to European Commission consultations on issues of relevance to the Northwest. Sub-regional partnerships have produced new Sub-Regional Action Plans which align to the RES and prioritise actions and investments. Data While appropriate baselines for this RES factor need to be established, information available for budget figures for calendar year 2008 show the ERDF programme to be potentially €138.5m (approx £102m) and the ESF programme to be potentially €97.5m (approx £73.1m). Implications and Further Actions/Barriers The region will continue to engage with the European Union on several different levels, including influencing policy, delivering programmes and projects co-financed by the EU, responding to legislation and promoting the Northwest in and across the European Union. A further action will be to become more engaged in the inter-regional and collaborative dimension of the EU, alongside a necessary and important focus on ERDF, ESF and RDPE programmes supporting investments in the Northwest.

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Quality of Life CULTURE AND IMAGE (RES ACTIONS 95-105) Progress Substantial achievements have been made in marketing the region and in securing major events (including a Northwest Cultural Campaign and Northwest Natural Environment Campaign). There has been a successful focus on business marketing for the creative and digital sector, science and inward investment. Liverpool European Capital of Culture 2008 has made significant achievements so far, especially including the launch of the Liverpool Echo Arena and BT Convention Centre, which is a major boost to business conference and events facilities in the region. Early indications (evidenced by the Impacts 08 programme) are showing that attendance at events and numbers of visitors from outside the region are exceeding expectations. Progress has been good on visitor economy attack brands including Chester Super Zoo; Hadrian’s Wall Heritage; and Jodrell Bank. Strategies for Visitor Information and for Business Tourism have been produced, and increasing support for business growth and skills are helping to boost the visitor economy sector. There has been slower than expected progress on the development of a Sport Sector Strategy and Action Plan, and a strategy for the outdoor sport sector, although work has taken place on gaining benefit for the Northwest from the 2012 London Olympics. Culture Northwest’s activity has included: facilitating and supporting activity in key areas such as Cumbria, Pennine Lancashire, Blackpool and the Fylde Coast; launching the Northwest Culture Observatory Online and developing the Culture and Image evidence paper, both of which have improved intelligence on the sector; and delivering the regional vision for the Cultural Olympiad through a process of consultation – this includes the development of a programme of activity bringing £3.02m into the Northwest from the Legacy Trust UK. Data Many data indicators for this sector have not been updated. Regional tourism indicators, including the number of overnight stays and day visits, have increased. However there are some sub-regional areas of concern including visitor numbers to the Lake District. Year long studies of same day tourism and of business tourism are generating a better evidence base on which to base policy and investment decisions. Implications and Further Actions/Barriers There is an increasing desire to understand the importance of place quality in destination choice and in the experience of, and economic value generated by, visitors. Pilot work in this area will strengthen our ability to influence investment in the future. Service quality continues to be of concern, with a strong focus on work to improve the skills of the workforce in the visitor economy. Major events remain a priority and Manchester and Liverpool continue to improve their aspirations and deliverability. We will sustain efforts to secure value for the Northwest from London 2012 in sport and marketing, and to increase visitor marketing and business and inward investment marketing.

COMMUNITY (RES ACTIONS 106-112) Progress Projects within the cleaner, greener, safer agenda have made variable progress, while those reporting on actions relating to community cohesion are more positive about success. The role of the voluntary sector is strengthening and a Voluntary and Community Sector strategy and action plan is agreed. Local Area Agreements (LAA) have made good progress on negotiations for improvement targets, and the Northwest has generated four potential Multi-Area Agreements (MAA). Strong intelligence on public health issues has been developed in the region and there is significant commitment to maintaining coordinated regional intelligence and strengthening strategic collaboration between health, local authorities, and the voluntary sector. Data A number of data indicators have been released revealing small or limited improvements in measures, including a reduction in many crime figures and fear of crime. There has been no change in the number of local authorities with good (four star) ratings, and no change in the percentage of households below 60% of the national median income level. The number of Northwest super output areas in the worst 5% deprived, nationally, has decreased by a small number.

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Implications and Further Actions/Barriers This factor is intended to provide a framework for the many activities designed to create cleaner, safer and greener communities, strengthen community cohesion, and develop and run high quality local services. It is proving difficult to assess progress here – data outcomes are ambiguous so far while there is a range of ‘green’ and ‘amber’ signals on progress of individual projects. Regional partners recognise that it is important to look beyond the outputs of individual discrete activities and set out an assessment of what more could be achieved, particularly by the third sector, to gain social benefit and a cohesive society within the Northwest, and what the constraints and enablers for this activity could be. Voluntary sector partners are collaborating on a potential monitoring model using achievement against LAA indicators. As regional partners we have a responsibility to assist the third sector in working with us. A key focus for the future will be delivery of tangible outcomes for the Regional Equality and Diversity Strategy. We would like to have better data on small areas and groups in society and will be looking to improve our understanding and possibly boost the robustness of national datasets. Indicators around the health of the population are improving (see RES factor Health) however there is concern about an increasing divergence of health statistics within the Northwest, whereby the most deprived 20% of areas in a district are generally worsening compared to their district as a whole.

ENVIRONMENT (RES ACTIONS 113-122) Progress Progress against actions in this factor includes the development regionally of a Green Infrastructure (GI) strategy, clearly linking investments in GI with economic and social benefit. Regional work with businesses via Enworks is progressing well. Actions relating to improving the design and build quality in our urban areas are progressing well with a design review panel in place and good involvement from the construction industry. In the visitor economy progress has been made in marketing the region’s environmental assets to visitors. Sub-regionally, in Lancashire the future role of the East Lancashire Regional Park is being evaluated. The Lake District Economic Futures programme has made relatively good progress towards project development, including a framework for transport. In Cumbria, public realm improvements have been completed in Keswick and are under construction in Windermere, Ambleside, Cockermouth and Egremont. In Greater Manchester the Greenheart Plan and Croal Irwell Plan are both in development, but the level of funding is unclear. In Merseyside progress has been strong on the considerable public realm and infrastructure projects underway, particularly in central Liverpool, Southport, and Mersey Waterfront Regional Park. A Knowledge Quarter Prospectus has been developed to invest in public realm improvements around the University of Liverpool. On the rural agenda, considerable progress has been made on establishing sustainable farming and food objectives into the mainstream of projects, particularly RDPE (see RES action 56), but also including health and climate change. Data Very limited data updates here. Of the two separate indicators that have been updated this year, one is positive and one is negative. The estimated number of visitors to the Lake District National Park has fallen below the 2006 baseline. Work seems to have progressed well on the region’s flood management systems and households with access to a flood warning service. Implications and Further Actions/Barriers The Northwest has a strong range of natural assets and visitor/leisure brands and opportunities. Partners have ambitious desires to improve the tourism offer, public realm quality, and the look and liveability of local villages, towns and infrastructure. It will be important for sub-regional partners to take up the Natural Economy Northwest work and for the region to consider how we can develop a legacy and a continuation of the good natural economy and green infrastructure work. One barrier to these programmes is funding, and on the agenda to improve our design and build quality there can also be barriers around aspirations and ability to procure at a high enough standard. However, there are significant prioritisation pressures from the wide ranging economic and spatial development agendas which includes transport, enterprise, innovation, skills, health and employability. As a region we understand that all the RES factors work together simultaneously to affect the Northwest and either enable the private sector to create wealth, or prevent and hamper the conditions in which business can do so. We need to be very clear about how green infrastructure, quality public realm development, and improving the visitor and leisure offer can make a difference to the economy, and work to develop plans which will enable our region to exploit and maximise the comparative advantages in the natural and quality of life assets we possess.

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This document can be made available in the following languages: Bengali, Chinese, Gujarati, Somali, Urdu and Hindi. Please contact the Marketing Department on 01925 400 100

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RES Assessment Report 2008

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The Northwest Regional Development Agency PO Box 37 Renaissance House Centre Park Warrington WA1 1XB Tel: +44 (0)1925 400 100 Fax: +44 (0)1925 400 400

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