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Northwest Regional Economic Strategy 2006

BASELINE UPDATE REPORT 2007 : Progress One Year On June 2007


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Northwest Regional Economic Strategy 2006

Introduction After the first year of the implementation of RES 2006, this report looks at the progress which has been made. It follows the same format as the Baseline Report giving updates on the agreed range of indicators/impact measures for each RES factor and progress with milestones for each RES action. It has been compiled by accessing relevant data sources and by each lead organisation providing information on action implementation. It must be remembered that many of the impact data / indicators relate to the period before 2006, when RES implementation started. If an indicator is moving in the wrong direction, or not improving as much as desired, it does not therefore imply that RES action is being ineffective. It could be that the action is entirely appropriate and effective, but that this is not yet showing through in the impact data due to time lags. We must also be careful in drawing too many conclusions from one year’s data changes, particularly given the confidence intervals around many of the datasets. One notable feature during the year has been the revision of many economic datasets for previous years, particularly GVA. The Office of National Statistics (ONS) now believes that the Northwest economy did not perform as well as was originally thought in the early part of the century. Rather than outperforming England, the region’s performance was equal to, or slightly worse than, England. This has implications for our expectation of performance in the period 2006-9. Despite good economic performance, the delivery of major infrastructure improvements and an increasing feeling of prosperity in much of the Northwest (particularly our major cities) it must be remembered that economic performance of this kind has been experienced elsewhere in the country for some time. Closing gaps with the rest of the country will therefore be a tough job and the region must not become complacent about the implementation of RES action or effects they will have in that regard. As the rest of the country progresses economically, the region needs to as well, just to stand still. The overall conclusion from the analysis is that although many of the RES actions are being implemented effectively and the region is making progress in a number of important areas, the rate of progress is not as fast as planned or enough in order to close vital gaps with England, or meet RES targets. RES lead partners did not mention many barriers to implementing RES actions in their returns this year and although this should give us confidence that RES actions will be delivered, we need to ensure that this does not turn into regional complacency about economic performance and that the actions will indeed deliver the level of change we need to see in the region to compete economically. Given the data revisions (and the fact that all of this data is for the period prior to the RES) the region needs to debate what more needs to be done to prioritise investment to ensure these key economic indicators move in the right direction. The analysis would suggest that we need to focus even more effort on a number of key areas:

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Using the skills of the whole workforce more effectively – via an increased focus on Innovation, Leadership and Management, the “Skills Escalator”, tackling worklessness/ lack of basic skills, improving health, and delivering the Regional Equality and Diversity strategy

Building on the major opportunities which exist in important parts of the region – such as the Arc of Opportunity in Manchester, Omega in Warrington, Energy and Environmental Technologies in Cumbria – creating the conditions and high quality environment where the private sector wants to invest

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Carefully considering the longer term implications of population change, an ageing workforce and migration, and better understanding of the impact of housing on economic development

Tackling potential infrastructure blockages to growth – such as a comprehensive plan to tackle congestion in parts of the region and alter commuting behaviour, and tackling concerns about the lack of power to key employment locations

Creating opportunities from key global and national trends – including climate change, concerns about the security of energy supply, the experience economy, changing employment patterns, and concerns about health, crime and cultural issues

Much progress has been made, but more remains to be done in ensuring that we can show real impact from RES actions, rather than a focus on process, and spotting opportunities to link RES actions up with each other to be mutually re-inforcing and achieve maximum impact. We trust this report will stimulate these further actions in the region. RES Advisory Group May 2007

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Northwest Regional Economic Strategy 2006

8 Headline Targets Progress against the 8 targets in the RES has been mixed, as the table below shows: Target 2006-2009

Measure

2006 Baseline

2007 Update

GVA: GVA growth: GVA gap:

£102bn 5.7% £17.3bn

£106bn 3.7% £17.8bn

3.04m 1.14m 36.9%

2.98m 1.19m 38.5%

Firm Formation rate (no.): Firm Formation rate per 10,000 people

17640 35

17500 32

No. fewer businesses than the England average

38000

37000

Working age popn with no quals: % of working age popn. with no quals: Districts with rate more than 29%

724600 17.7%

697000 17.0%

2

0

Workforce with graduate quals:

840800

891700

% of graduate quals:

26.9%

28.4%

Workforce:

2.98m

2.98m

Employment rate:

72.7%

72.6%

Districts with rate less than 68%:

4

4

No. of areas in worst 5%:

579

No Update

% of people in households with income less than 60% of GB median

12%

No Update

CO2 emissions per unit of GVA

Robust data not yet available

CO2 emissions

Robust data not yet available

GVA Growth (latest data 2005): Achieve GVA growth above England average (to close GVA/head gap with England in the longer term) Job Creation (latest data 2005): No. jobs Create 150,000 new jobs, 80,000 in “knowledge occupations” to have same No. “knowledge” jobs % in these occupations as England % “knowledge” jobs Firm Formation (latest data 2005): Raise the firm formation rate to 21,000 per annum (to have same rate and business stock as England in the longer term) No Qualifications (latest data 2005): 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 2005): 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 2004): 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)

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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GVA: The GVA of the Northwest has increased by £3.7bn from 2004 to 2005 (3.7%). However GVA growth has been below the England average of 3.9%. This means that the GVA gap has increased from £17.3bn to £17.8bn. (The RES identified the GVA gap as £13bn, however subsequent data revisions changed this figure to £16.2bn). This £17.8bn gap is accounted for by: •

£3.5bn due to fewer people of working age and fewer people working than the England average (compared to £3bn in RES 2006)

£14.3bn due to lower productivity of those people in work (compared to £10bn in RES 2006). This is partly a reflection of differences in regional prices and the nature of the jobs in the region

The Northwest economy has also grown slower than the England economy excluding London and the South East. The latter grew at 3.9% with the result that the GVA gap has grown from £4.8bn at the time the RES was written to £5.2bn. Sub regionally the contribution to this gap is shown in the bar chart below (together with changes from RES 2006). 20,000 18,000

Productivity Employment

16,000 14,000

GVA £ms

12,000 10,000 8,000 6,000 4,000 2,000 0 -2,000 -4,000 RES 2006

Update

Cumbria

RES 2006

Update

Cheshire

RES 2006

Update

Greater Manchester

RES 2006

Update

Lancashire

RES 2006

Update

Merseyside

RES 2006

Update

Northwest

Job Creation: From 2004 to 2005 the number of jobs in the Northwest declined by 55,600. However the number of knowledge jobs increased by 42,200 so that knowledge occupations now represent 38.5% of all jobs. This is an increase of 1.6% points compared to 1% in England. Although this data is before the start of the RES, this increase relative to England is not fast enough for the Northwest to meet the England average % by 2009. The total number of jobs is also not growing as fast as needed to achieve the target. This data fits with the GVA data which suggests that relative economic conditions for the Northwest became harder between 2004 and 2005, making achievement of the RES targets in 2006-9 even more challenging.

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Northwest Regional Economic Strategy 2006

Firm Formation: The region has reduced the gap in the number of businesses with the England average from 38,000 to 37,000 although the firm formations (both number and rate) have reduced. The reduction in firm formation is against the national trend so the Northwest firm formation rate is now 83.5% of the England rate (compared to 85.5% last year). No Qualifications: The region has done well in relation to this target in the last year for which we have data (2005). The number of people in the workforce without qualifications reduced by 27,600. If that rate of reduction is maintained this RES target will be met. There is now no district with more than 29% of the workforce without qualifications. However there has also been a substantial reduction in the % of the workforce without qualifications in England (from 14.8% to 14.1%), and therefore the Northwest has not closed the gap with England at all during the year. Graduate Qualifications: This shows a similar pattern to the “no qualifications” target – the number of graduates in the workforce increased by 50,900 which is at a rate fast enough to meet the RES target if maintained. However the % of graduates in the workforce increased rapidly in England (from 28.3% to 29.9%), meaning that the Northwest gap with England actually widened slightly during the year, although the data is slightly volatile from year to year. Employment Rate: The Northwest workforce has increased by 2,900 from 2005 – 2006. This is the only headline target for which we now have 2006 data. This rate of increase is not enough to meet the RES target of an additional 83,000 people in the workforce. The employment rate has also declined, although only by 0.1% points compared to 0.3% points in England as a whole. This still leaves the Northwest employment rate 1.8% points behind the England rate and unlikely to converge by 2009 as originally targeted. In addition, there has been no reduction in the number of districts with an employment rate of less than 68% and the target is to eliminate these by 2009. However the actual districts with a rate less than 68% have changed (Manchester, Liverpool and Knowsley remain, Preston has dropped out and Blackburn has come in). It is worth noting that although there is mixed news on employment rates, its contribution to the GVA gap of the region has now reduced from accounting for 23% of the gap at the time of the RES to 20% (in 2005). Deprivation: Data on the number of areas in the worst 5% and households with less income than 60% of the GB median has not been updated during the year. CO2 Emissions: Data on CO2 emissions is still being compiled and will be a key element of the implementation of the regional Climate Change Action Plan.

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The section below looks at each of the 25 RES factors and provides a commentary on progress in the year, the latest data and any barriers/further action suggested either by lead organisations or by the analysis and consultation carried out by the RES Advisory Group. Each section is colour coded to enable the reader to get a quick overview of progress – green being good, yellow being mixed and red being poor progress.

Business ENTERPRISE Progress: Good progress has been made with Business Link NW being fully operational from 1 April 07, focusing on priority sectors (although there are a number of important vacancies in the new company still to be filled). A new Business Start contract will be operational in May and the NW Enterprise Forum will hold its first meeting in the summer. A regional enterprise policy is currently being developed and research is underway into the support needs of M businesses (medium sized businesses) and social enterprises. Data: The region has underperformed for many years on enterprise and turning around performance in this area will take a long time. The latest data provides mixed evidence about whether we are beginning to close this gap. There has been an increase in self employment rates in 2006, but business start up rates and 12 month survival rates have declined (2005 data). Implications & further action/ barriers: There is a need for more people to champion this agenda, and to recognise the potential of HE enterprise activities in particular. There is also a need to support the Business Support Simplification agenda to achieve a more co-ordinated and easily accessible service to individuals considering starting a business. The new ERDF NW Operational Programme 2007-13 (in which enterprise is a priority) provides an opportunity to align support services.

REGIONAL SECTORS Progress: Good progress has been made with the confirmation of the BBC move to Salford and associated developments in the Digital and Creative Industries. A forward strategy for the development of the Financial and Professional services has been agreed. Food Northwest (the new body to implement the Food and Drink Strategy) became operational on 1 April. Vauxhall’s recent decision on the new Astra in Ellesmere Port is also a positive sign. However there is less clear progress in implementing strategies around the large and widespread employment sectors. Data: Although the proportion of employment in knowledge occupations has increased, the gap with England in the number of people working in knowledge sectors has increased and the percentage of GVA accounted for by the priority sectors has fallen substantially. On the positive side, the GVA gap accounted for by Business services has also fallen. Implications & further action/ barriers: It will be important to focus effort on the 6 priority sectors and ensure growth in these knowledge sectors if the region is going to compete. The new Business Link service is important in this regard and needs to build on the specialist knowledge within cluster organisations and also to connect with work in the sub regions

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Northwest Regional Economic Strategy 2006

INNOVATION Progress: Progress has been made in terms of implementing the Knowledge to Innovate contract, HE – Business Engagement Programme and piloting innovation work in two non science disciplines. However progress on a regional policy paper on Innovation, expanding the HE Business Engagement programme and HEI capacity for business interaction has been limited. Data: Only one data set has been updated during the period, showing an increase in the number of patent applications granted. Implications & further action/ barriers: The RES was specific about Innovation being a key way to raise productivity by companies working smarter, particularly in widely traded business services and the need to implement progressive HR practices to promote an innovative culture and capture the skills/ideas of the whole workforce. A number of new services are planned to address this issue further and innovation is now a key focus of Northern Way. Although there were no specific issues raised by leads the region must question whether there is a sufficient focus on tackling this issue which is fundamental to regional productivity.

SCIENCE/R&D Progress: The announcement of Daresbury as one of two major science centres in the country, the launch of the Daresbury Science and Innovation Centre, the updating of the Northwest Science Strategy and the establishment of the N8 Research Centres through Northern Way all represent significant progress in this factor. The two disappointments through the year were the unsuccessful NHS Research Centre bid in Manchester and HECTOR Supercomputer Bid at Daresbury. Data: None of the datasets for this factor have been updated. Implications & further action/ barriers: There were no specific issues raised by the leads on the implementation of this factor.

INTERNATIONAL COMPETITIVENESS Progress: The production of the Internationalisation Strategy represents a major step forward for the region in focusing on this factor. Data: Although the data is for 2006 and before the Internationalisation Strategy has been completed, the number of exporters in the region has fallen although the value of exports from the region has increased substantially. Other significant data has not been updated during the year. It should be noted that inward investment is still hugely important to the region, accounting for 16% of GVA and 1 in 9 jobs. Inward investors pay 29% more and are 34% more productive than indigenous firms. Implications & further action/ barriers: It will be essential to ensure that the Internationalisation Strategy is fully implemented if the region is to compete effectively in the global economy. This means ensuring sufficient resources are dedicated to delivering the action plan. There is a potential risk from the Comprehensive Spending Review in reducing resources and regional decision making regarding internationalisation. Overseas presences are very significant in capturing mobile inward investment projects with 60% coming from countries where we have an overseas presence and less than 10% of FDI enquiries coming from UKTI.

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ICT Progress: Mixed progress has been made during the year. A number of Intelligent Business Events have been held and a “Closing the ICT Knowledge Gap” project set up, although progress has been slower than planned. There is a significant Homeworking project in the region (supported by BT) although the impact on the number of homeworkers is likely to be small. The ICT infrastructure and its speed continues to expand. Data: There has been no data updates for the majority of the impact measures in this factor. 2 Mb broadband availability has however exceeded its 2009 target. Implications & further action/ barriers: ICT underpins all the 3 drivers in the RES and as such needs to be embedded into the delivery of other RES factors such as regional sectors, internationalisation, job linkages and community. It must not be seen as a separate entity.

SUSTAINABLE CONSUMPTION AND PRODUCTION Progress: The regional Climate Change Action Plan has been produced and will be implemented in the coming years. This is a significant step forward for the region on this agenda. The BREW project has been successfully working with businesses on sustainable consumption and production and the small regional programme on Corporate Social Responsibility has continued well. Data: There have been no data updates for the impact measures in this factor. Implications & further action/ barriers: Climate Change is now a major national issue and one which businesses are increasing taking action on, showing their “green” credentials. There are opportunities for this region to be at the forefront of this agenda, particularly linked to our significant priority sector of energy and environmental technologies. The region needs to ensure that concerns around this agenda are turned into business opportunities and a real focus on sustainable consumption and production by all businesses – whether to benefit their own business processes or to capture a wider share of, or new, markets.

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Northwest Regional Economic Strategy 2006

Skills and Education BASIC SKILLS Progress: Good progress has been made with targets for the delivery of Skills for Life being exceeded and new LSC/Jobcentre Plus employability programmes being launched. Data: The latest data available is for 2006, but shows a small increase in the number of people with no qualifications over and above the England average. However there are now no districts with more than 29% of the population without qualifications. Implications & further action/ barriers: Delivery on basic skills is now being taken forward under the North West Skills for Life Strategy with specific actions to increase numeracy and adult participation in Skills for Life Programmes. The data would suggest that we are making progress in the most deprived parts of the region in tackling the lack of basic skills, although the progress across the region is not as fast as in England. There will therefore be a major challenge if the region is to achieve the targets set out within the Leitch Review which are 3 times current targets, and ESOL provision could overwhelm existing budgets in future.

SECTOR SKILLS AND WORKFORCE DEVELOPMENT Progress: There has been good progress in delivering the skills required by the priority sectors, working through the Sector Skills Councils and the Regional Skills Partnership’s Statement of Skills Priorities. The Higher Level Skills Pathfinder project has also been introduced. There has been some work at a sub regional level to plan for the skills required for specific growth opportunities such as Omega, Kingsway, Capital of Culture and more widely for the rural economy. Train to Gain has been successfully rolled out. Less significant progress has been made in delivering IT skills, language skills and business improvement techniques to businesses. (The lack of progress on IT skills is in part due to a lack of expressed demand – this needs to be better understood.) There is also no specific provision focused on supporting workers to move from declining to growth sectors or on tackling skills disparities amongst key groups. The “skills escalator”, whereby intermediate and higher level skills are developed in a company’s current workforce creating vacancies at lower levels to be filled by local workless people, is recognised as a concept but does not seem to be making much progress in reality. Data: Many of the impact datasets for this factor have not been updated since the RES Baseline report was produced. However there have been large increases in the number and achievement of adult learners studying full Level 2 qualifications and full Level 3 qualifications, and a large increase in the number of students engaged in Foundation degrees putting the region on track to meet its target. Implications & further action/ barriers: If the region is to ensure sustainable growth in the major cities, it must tackle the concentrations of worklessness in these cities and make use of that huge untapped potential. It is not sustainable, economically or socially, to draw more and more people into the cities (usually commuting longer distances) whilst leaving a large number of people workless in these cities. The concept of the “skills escalator” must therefore become a reality. It addresses employers needs for higher skills levels, whilst giving appropriate opportunities to workless people. Stimulating employer demand for higher levels skills is an important part of this equation and the higher level skills pathfinder is important in this regard. Developing Level 4 skills is addressed within a wide range of RES actions but it may be useful to have a more explicit focus on higher level skills, particularly within the context of Leitch. Based on future milestones there does not appear to be a comprehensive plan in each sub region to develop the skills required focused on the key growth opportunities that are being pursued, a reflection of the fact that skills issues are not central to sub regional plans. This has to be of some concern. There are also concerns over the future funding for rural skills development and, based on Sector Skills Agreements, the appropriateness of IT, Language and Business Improvement Techniques for businesses.

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LEADERSHIP AND MANAGEMENT (L&M) Progress: Good progress has been made in this area with the establishment of the Northern Leadership Academy, a Northwest L&M Advisory Board (as part of the RSP), and a Northwest L&M Action Plan. In addition there has been delivery of coaching to high growth SMEs, a business volunteer mentoring programme and significant work in colleges around developing enterprise skills. Data: A range of Management and Leadership indicators are still being established as part of the Regional Skills Partnership. There has been no change in the percentage of the workforce employed as managers/senior officials in the Northwest or England. Implications & further action/ barriers: There were no major issues raised by the leads, except the need to ensure the Northern Leadership Academy supports the implementation of regional priorities and initiatives. Leadership/ Management and “work organisation� skills were highlighted in the RES as crucial to companies ensuring the skills/ideas of the whole workforce are used effectively, closely linked to innovation and therefore an essential part of tackling the productivity gap. The region will need to ensure enough focus is given to this highly important factor. The RES raised the issue of making leadership development a condition of taking up business support grants and this idea is worth exploring further. The focus of this factor is on leadership and management skills, with a lower emphasis now on corporate social responsibility, environmental management and enterprise skills. On the latter the challenge is to ensure enterprise becomes a core and sustained activity in colleges and students do indeed have every opportunity to become entrepreneurs.

EDUCATIONAL INFRASTRUCTURE Progress: Good progress has been made in enhancing FE/HE provision in Burnley (East Lancashire) and in developing the University of Cumbria (albeit slightly behind target dates at this stage). A new post 16 learning Kitemark has also been launched. There has been limited progress on new work to increase the number of HE students studying science, engineering and technology, although there are a range of existing schemes which need to be analysed to ensure any new schemes do not duplicate. Data: There have been no data updates for many of the impact measures in the RES baseline report. However good progress has been made in terms of the number of full time equivalent HE students, although the percentage of HE students studying Science, Engineering and Technology has declined slightly. Implications & further action/ barriers: The Northwest economy must compete on the basis of high added value. Graduate level skills are therefore crucial to the economy. It will be essential to ensure that the University of Cumbria links into the needs of the Cumbrian economy, particularly around energy and environmental technologies. The University should act as a catalyst to stop young people leaving the area and increasing levels of high added value employment.

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Northwest Regional Economic Strategy 2006

People and Jobs JOB LINKAGES Progress: There has been good progress with most of the actions in this RES factor. Three City Employment Strategies are now up and running (Liverpool, Manchester and Blackburn) and working with DWP on freedoms and flexibilities needed to deliver on this agenda. Jobcentre Plus has continued to deliver significant programmes, including the Pathways to Work programme, with Northern Way enhancements. There has also been a pilot outreach programme to partners of those claiming benefits in ethnic minority groups, to improve employment rates. Two Job Developer posts have been launched in Manchester and Liverpool and a range of other activity carried out to develop job brokerage in the region. The Deprived Area fund was due to be launched during the year, but this will now be launched in 2007/8. A new Northwest Equality and Diversity group has also been set up during the year. Data: The data gives mixed messages in relation to this RES factor. As noted in the headline targets, the employment rate in the region has declined (although not as fast as the England rate) but convergance with the England employment rate by 2009 looks unlikely. (The gap with England in terms of the number of people working has declined slightly but not nearly as fast as targeted.) 4 districts still have employment rates of less than 68%. The percentages of the working age population on incapacity benefit, JSA and income support have all increased relative to England. On the positive side the employment rates of disabled people, non-white and the over 50’s have all increased relative to England. Implications & further action/ barriers: Job brokerage (linking employers and workless individuals in a customised way) is essential to delivery on this agenda. Good progress has been made in this regard during the year, although more could still be done. A key issue for the future will be the ability of the City Employment Strategy Partnerships to make a real difference to tackling worklessness on the ground in a targeted and focused way. This is one of the most significant challenges facing the region, particularly in the light of immigration. Other concerns include whether local authorities will have sufficient resources to meet the childcare needs of all those seeking employment, and the proliferation of organisations seeking to address the Equality and Diversity agenda.

LOCAL EMPLOYMENT Progress: There has been mixed progress in this factor. In terms of the 4 areas remote from growth in the RES, Blackpool suffered a major setback with its regeneration plans with the unfavourable casino decision; a start has been made on the Integrated Economic Plan for East Lancashire; progress has been made in implementing the Barrow Masterplan with the acquisition of 35Ha of land from Associated British Ports; and the West Cumbria Masterplan is nearing completion. In terms of the growth areas good progress has been made in Liverpool with a number of major schemes coming to fruition, including Kings Dock and Liverpool 1; considerable progress has been made in Manchester, not least with mediacity:uk and the Oxford Road corridor; and the Grosvenor development in Preston has moved closer to reality. There have also been key developments around Chester Culture Park, Omega in Warrington, Crewe Gateway, Lancaster Vision and the Carlisle economic strategy. Finally the Regional Rural delivery framework has been developed. Many of the above developments include the encouragement of employment creation in/near deprived areas and the new business start service, focused on such areas, will be an important addition in 2007/8.

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LOCAL EMPLOYMENT (continued) Data: There are limited data updates in relation to this factor. The median taxpayer income in the Northwest has increased, but declined relative to England. The business density in rural areas and the median taxpayer income in rural areas have both increased. Implications & further action/ barriers: It is vital that the key places within the region fulfil their potential and this RES factor is a key to that. The region must continue to focus on the “Arc of Opportunity� in Manchester (from mediacity:uk in Salford, through the city centre and culture opportunities to the Oxford Road corridor and science opportunities). Delivery of key infrastructure improvements and capitalising on the benefits of Capital of Culture will be essential to the continued resurgence of Liverpool. The opportunities offered via Omega must be fully understood and exploited. A clear regeneration plan for Blackpool must be developed. Finally the opportunities to make Cumbria a centre for the Energy and Environmental Technologies industries, via the West Cumbria Masterplan must be seized. The key barrier identified by lead organisations to delivering on these agendas was a lack of funding. The region must prioritise funding for such developments, linked to creating the conditions where the private sector wants to invest, if it is to deliver economic success. A range of measures to deliver employment creation in deprived areas need to be progressed (including high quality sites/premises and inward investment), not least via the URCs. The emerging Regional Enterprise Strategy, which must engage appropriately with the economic priorities and business needs of each sub region, will be important in this regard too. Finally there is some concern that in mainstreaming the rural economy there is danger of a fragmented approach and duplication of delivery.

HEALTH Progress: There is limited progress to report in relation to this RES factor. Although the Northwest Healthy Workplace Strategy has been published it is unclear how it will be implemented. Data: Some of the data in this area has not been updated since the Baseline Report. However the percentage of people in the Northwest who are obese has increased and the percentage who smoke has remained static. Other Northwest health statistics made depressing reading. The number of incapacity benefit claimants has also increased and the percentage has not declined as fast as the England average. Implications & further action/ barriers: The major concern raised by lead organisations was the need to ensure that the Healthy Workplace Strategy is implemented. The current group does not appear to be working effectively to take these issues forward. Tackling ill-health in the region has to be a major long term priority if the region is to compete economically and use the skills of the whole workforce.

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Northwest Regional Economic Strategy 2006

POPULATION CHANGE Progress: As with Health, there is limited progress to report in relation to this RES factor. Migrant Workers Northwest has been launched and the 5050 Vision Business Plan implemented. However there has been no progress in promoting quality employment opportunities available in the region, and there are concerns about the demands for ESOL provision in the future. Data: The data here shows a mixed pattern – with an increase in the number of NI registrations for non-UK nationals and a minor increase in the employment rate of over 50s. It also shows an increase in the retention of non Northwest students in the region after graduation and an increase in the percentage of students returning to the region after qualification. However the percentage of Northwest students studying in the region and then leaving has increased. Implications & further action/ barriers: The region needs to be clear how it will address the issues of population change, including an ageing population and an increase in migrant workers. While the latter has had a positive short term effect on the Northwest labour market, the region needs to seriously consider the wider long term effects of population change on the economy as a whole. The region needs to consider its response to the Lisbon Targets (% of people aged 55-64 remaining in employment) where we are currently lagging behind the England and EU average. Lead organisations have identified that wider support is needed to migrant workers beyond ESOL provisions e.g. housing, benefits etc, although much of this could be provided via Migrant Workers Northwest. There is also concern about ESOL policy in relation to skills funding and the need to be specific about employer/state and individual contributions.

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Infrastructure TRANSPORT Progress: Good progress has been made in selection and implementation of priority schemes via the Regional Funding Allocations (RFA) exercise. The Highways Agency has also made a number of significant road/ junction improvements including the introduction of active traffic management at 10 locations on the motorway network. Bids for the M60 Jn18-12 study and M6 widening preparatory work are to be submitted to DfT this summer. Progress has been made with the Second Mersey Crossing and Edge Lane in Liverpool, although there are outstanding legal issues with the completion of the latter. Improvements to the Manchester Rail Hub are dependant on the North West Route Utilisation Strategy which has been delayed until May and overall levels of congestion in the region have not been reduced. Airport Masterplans have been published and associated road schemes prioritised via RFA. The Port of Liverpool has been granted the Harbour Revision Order to enable it to take post panamax ships and the associated road/ rail improvements prioritised through the Northern Way. Metrolink Phase 1 and 2 renewals will start in summer this year and the tendering process is underway for Phase 3. Data: Much of the data in this factor has not been updated however there have been increases in the number of passengers at the 3 main airports and the numbers using Metrolink. New data on average vehicle delays on key routes makes interesting reading, with some increases in the average delays on the routes with shortest delay times and some decrease in average delays on the routes with longest delay times. Implications & further action/ barriers: Although there is much good progress on the ground, the concern remains that there is no overall strategy for congestion reduction and the schemes are having little measurable impact on peak period traffic. The region has to consider influencing patterns of behaviour, staggering working times and its investment in public transport (including buses and parking at stations) if it is to avoid ever increasing levels of congestion. There is a need to introduce an effective traffic monitoring system across the region to determine if RSS/RTS policies are having any effect. The Highways Agency intends to introduce “Influencing Travel Behaviour Programmes” (ITB) in the region in 2007 and there is a need for the region to support these to manage demand and so reduce congestion. The region also needs to think carefully about new developments and public transport access to them, with developers taking account of the impact that sites will have on the strategic road network, working with the Highways Agency. Key barriers / threats are funding availability for implementation of Local Transport Plans and introduction of wider demand management measures such as road user charging. DfT intend to publish the rail High Level Output Specification (and associated Statement of Funds Available) in Summer 2007. This will set the levels of investment the Government plan to put into the railways and will influence how many of the Route Utilisation Strategy proposals are deliverable. Funding is the key concern for delivery of the Manchester Rail Hub and Metrolink. Finally lead organisations identified the need to invest in R&D to reduce environmental impact of increased aviation traffic, building on work currently being undertaken by MMU in “Clean Aviation”.

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Northwest Regional Economic Strategy 2006

LAND USE Progress: Good progress is being made in implementing the Strategic Regional Sites and this is summarised in the Annual Monitoring Report. Sub regions are developing plans for investment in sub-regionally important employment sites and premises. Data: The data for this RES factor gives mixed messages and much of it has not been updated. There has been a substantial increase in the square metres of floorspace developed in the Northwest, but a reduction in the percentage of this in regeneration areas. The percentage of houses built on brownfield land has increased. Implications & further action/ barriers: Two issues have emerged in relation to this factor. Firstly the issue of adequate power supplies to key sites. This is becoming an increasing issue in parts of the region, both for existing businesses wishing to expand and new site development. The region needs to consider how it tackles this issue. The other issue is the availability of funding to develop sites/ premises to a point where the private sector is willing to invest – joint ventures are sometimes useful to reduce public sector risk, but seed corn funding may be needed in some cases.

HOUSING Progress: The framework for housing provision has been set by the Regional Spatial Strategy and Regional Housing Strategy. An action plan on affordable housing has also been developed. Sub regions have carried out housing assessments and are producing housing strategies with a focus on the link between economic strategy and the housing offer. Progress is being made via the Housing Market Renewal areas in developing plans for investment linked to economic renewal and significant outputs have been achieved in terms of new housing provision and renewal. Data: The indicators used may need to be reviewed to reflect the suite of indicators being used to measure the success of Pathfinders. However current data shows mixed progress on this factor, with the ratio of house prices to earnings in the Northwest lower than in England, although increasing faster. (It can be argued whether this is a good thing or not). The number and percentage of low demand dwellings and percentage of vacant dwellings have all also decreased relative to England. Although the % of unfit dwellings has increased, it has increased relative to England. The number and % of Local Authority dwellings has increased (again it can be argued whether this is a good thing or not). Implications & further action/ barriers: A key issue of concern is the continuing disparity between incomes and house prices and the impact on affordability and access to housing for key workers. Ensuring a mixed economy of provision of housing types and tenures at a range of prices cannot be understated in creating the conditions for economic success. Further work to align the plans of the Regional Housing Group and RES, and achieving housing/economic renewal through Housing Market Renewal areas will continue to be of vital importance.

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PLANNING Progress: There has been limited progress in this RES factor. The RSS sets the planning framework for the Northwest. Northern Way is doing some research into utility issues using the Manchester City Region as a case study. Other than this, no progress has been reported. Data: Much of the data for this factor has not been updated or shows no change from the RES Baseline Report Implications & further action/ barriers: The key issue raised here is the forward planning needed by utility companies and local authorities to ensure an appropriate utilities infrastructure, especially power. This applies not only to new sites and expansions of existing businesses, but also to the larger infrastructure needed to transfer power from its place of generation (sometimes offshore windfarms) to its place of use. This is becoming an increasingly important issue in the region and one which will act as a barrier to growth if the region is not careful.

ENERGY Progress: Limited progress on this RES factor has been reported, although the Northwest Energy Strategy continues to be implemented Data: There have been no data updates on this factor Implications & further action/ barriers: Ensuring efficient use of energy and alternative sources of generation will remain an important issue for the Northwest. Energy and Environmental Technologies are one of the six priority sectors and could represent a source of competitive advantage for the region.

INVESTMENT Progress: Good progress has been made in terms of ensuring the new ERDF, ESF and Rural Development Programme for England (RDPE) programmes in the region reflect the RES, and the development of the Northwest Regional European Partnership. Work to align regional strategies has continued and SRPs have produced action plans for their sub region aligned to the RES. Government Office also considers alignment of LAA 4th Blocks to the RES as appropriate. Limited progress has been made in mechanisms to stimulate private sector investment, although a major Northern Way study has been commissioned on this as it is now one of only 3 priorities for the Northern Way. Data: Appropriate baselines for this RES factor still need to be established. Implications & further action/ barriers: The role of the public sector in economic development must be to create the conditions where the private sector is willing to invest. Understand mechanisms to stimulate private investment is therefore essential to the economic regeneration of the region. As such the Northern Way Study, and any mechanisms introduced as a result of the Comprehensive Spending Review will be of great importance to the region. On European issues the region needs to examine its representation in Brussels to ensure it has the right resources in place to benefit from the EU agenda in all areas including structural funds, R&D funding, agricultural support, and other budget streams.

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Quality Of Life CULTURE AND IMAGE Progress: Good progress has been made in marketing the region and in developing the cultural offer (including announcement of the Capital of Culture programme, planning for 2012 Cultural Olympiad, planning for Preston Guild in 2012 and developing new cultural centres in Chester and Crewe). The region bid for or supported 14 major events during the year. Key developments in the tourism attack brand locations included Hadrian’s Wall Heritage Board and the Chester Culture Park Board being formed and the Lake District Vision being published as well as progress with Lowther Castle, Chester SuperZoo and significant developments on the Liverpool waterfront. Slower progress was made on the Manchester Conference Quarter and the decision not to award the regional casino licence to Blackpool has obvious implications. Data: None of the data for this RES factor has been updated since the Baseline Report. Implications & further action/ barriers: Culture and the Visitor economy are clearly very important to the regional economy, both in terms of the GVA / number of jobs that they support directly and in terms of making the region somewhere where people want to live, work and invest. It will be essential to ensure that the product on offer in the Northwest is second to none in terms of key tourism locations and individual tourist offers. Ensuring a lasting legacy from Capital of Culture is vital, particularly with future investment likely to be tight in part due to London 2012. Further progress still needs to be made to develop the Business Tourism Offer of the region, although the new Kings Dock Arena will help in this respect.

COMMUNITY Progress: Mixed progress has been made in this factor. The Northwest Reducing Reoffending Action Plan is in place and a programme of capacity building events and good practice masterclasses run by RENEW. Progress with developing a Voluntary Sector Strategy has been slower than planned. The Northwest Equality and Diversity Action Plan has been developed but year 1 actions are still currently being reviewed. Finally limited progress has been reported on the Investment for Health Strategic Plan and Implementation Plan. Data: There is mixed evidence from the impact measures on this factor, with levels of burglaries, car crime and violent crime decreasing, but worry about most of these forms of crime, and our position on these forms of crime relative to England, getting worse. Other measures such as the employment rates of disabled, non-white and the over 50s have improved as has the number of local authorities with 4* rating. The data gives mixed evidence about whether disparities within the region are getting worse or not. Implications & further action/ barriers: There is considerable activity in this factor, but it is difficult to see if this is all having the desired impacts in creating cleaner, safer, greener communities, developing community cohesion and developing high quality local services. There is a concern that milestones being measured for individual RES actions are not getting to the heart of the issues in creating sustainable communities. Local authorities, LAAs and the voluntary sector all have a crucial role to play in this regard. The Voluntary Sector strategy and ensuring full implementation of the Regional Equality and Diversity Action Plan will therefore be very important. The new National Improvement Strategy (CLG) will set the context for work in developing sustainable communities and the region will need to prioritise this action, giving guidance to the proposed Regional Improvement Partnership.

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ENVIRONMENT Progress: Good progress has been made with implementing the Natural Economy Northwest programme to develop the economic benefit of the region’s natural environment. Progress has also been made with plans for a number of the regional parks. The Lake District Vision has been published, but limited progress has been reported to date in its implementation. The Newlands Programme has been delivered and the Regional Forestry Framework Action Plan is in place. A draft delivery plan for the Strategy for Sustainable Food and Farming (SSFF) and the regional Food and Drink Strategy have been produced. Good progress has been made in key elements of the public realm of the region, including the Manchester Oxford Road masterplan, Liverpool Mann Island, the Mersey Waterfront Regional Park and Blackpool Seafront. A good practice design guide has been published and improvement made to flood warning and flood protection at key locations. Data: Most of the impact measures used in this factor have not been updated since the RES Baseline Report was produced Implications & further action/ barriers: Delivering quality public realm is essential to create an environment in which people want to live, work and invest, as is making the most of the region’s natural assets. There is a concern that the region does not have a clear plan about the key public realm improvements which would make the most difference to the economy. The key barrier that lead partners identified in implementing this factor is funding. Implementing high quality in the design and commissioning of the built environment needs support from all key partners in the region. If the region is to “future proof” physical development projects and ensure sustainable development, key strategic tensions within the regional policy framework highlighted as part of the aligning regional strategies work, must be taken seriously.

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The Northwest Regional Development Agency manages all operations from its Headquarters at: PO Box 37 Renaissance House Centre Park Warrington WA1 1XB Tel: +44 (0)1925 400 100 Fax: +44 (0)1925 400 400 www.nwda.co.uk

June 2007 NWDA H6-01


http://www.nwda.co.uk/PDF/RESBaselineUpdate2007