Agenda item

County Durham Economic Partnership - Overview of activity

(i)        Joint Report of the Director of Transformation and Partnerships and            the Corporate Director of Regeneration and Local Services.

(ii)       Overview of the work of the County Durham Economic Partnership –           presentation by Professor Brian Tanner, Chairman, County Durham    Economic Partnership.

Minutes:

The Chairman introduced the Chairman of the County Durham Economic Partnership (CDEP), Professor Brian Tanner who was in attendance to provide the Committee with an overview of the activity in relation to the CDEP (for copy see file of minutes).

 

The Chairman, CDEP explained that the report and presentation would not differ greatly from the previous year, however, noting several new Members on the Committee it would be of benefit for those Members.  He explained he was one of several Chairman of thematic groups, under the umbrella of the County Durham Partnership (CDP).  Members noted that the CDEP had a vision: “We wish to see County Durham as a highly valued centre for business growth and innovation; with a vibrant local economy, high value employment opportunities, a quality housing offer and a highly skilled local workforce”.  It was added that the top priority was in trying to improve the employment rate for County Durham.  The Committee were reminded that the CDEP had no funding of its own, rather it acted to help coordinate and foster cooperation between partners, not operate programmes of its own.

 

Councillors noted that in order to help judge levels of success, five measures were looked at: employment rate; gross value added (GVA); number of businesses; household disposable income; and employment deprived index deprivation.

 

The Chairman, CDEP noted it was important to note that the targets set out were for 2030, and that while there was progress in four out of five of the measures, GVA had lost ground, though the number of Lower Super Output Areas (LSOAs), those areas in the top 20% of employment deprived areas, was reducing.  It was noted that while there was a general positive picture there was a deeper issue in terms of the employment rate, being better than the regional average, however, substantially less than the national average with the gap not closing.  Members were referred to a graph showing the relative changes in employment rate over the period 2004 to 2017.

 

Councillors noted that GVA was a measure of the value added by the processes, products and services provided in County Durham, a measure of our productivity.  Members noted a graph showing that there was a widening gap between the County Durham GVA and that of the North East and the rest of the United Kingdom.  Members were reminded of an aim of the North East Local Enterprise Partnership (NELEP) to provide “more and better jobs” and noted that while “more” jobs was easy to quantify, “better” was more difficult.  The Chairman, CDEP noted figures in terms of the GVA per filled job and Members were referred to a further graph showing this trend over time from 2002 to 2016, with the target for 2020 also shown.  It was highlighted that this showed that there were better jobs being created and it was noted that the GVA per filled job in County Durham was roughly the same as the region, although the gap to the United Kingdom figure remained. 

 

The Chairman, CDEP noted that productivity was a national challenge.  He referred to a map of County Durham highlighting the areas of deprivation, and explained that it was not simply a matter of geography, with some of the most deprived areas sitting alongside the largest areas of development, for example Aycliffe, a deprived area sitting next to the largest industrial park in England.  Members noted that place investment was not simple and that there were many factors including skills, infrastructure and transport.  The Chairman, CDEP noted that the County had very good north/south transport links with the A1(M) and A19, though the links east/west were not so good.

 

The Committee noted that a partnership approach was undertaken in terms of “more and better jobs”, with this being the NELEP’s strategic economic plan.  It was noted that this followed an investment approach, with place based regeneration, human capital and business growth.  It was added that through the CDEP there was: work in terms of understanding and tackling barriers to investment; response to change and effective collaboration; and promotion of Durham as an area to do business - “playing to our strengths”.

 

Members were given several examples of placed based regeneration and growth such as: the County Durham Plan, NETPark, Forrest Park, Aykley Heads Strategic Employment Site; Auckland Castle and Horden Rail Station.  Councillors noted in respect of business investment and growth there were opportunities via: Durham Business Opportunities Programme (DBOP) – European Regional Development Fund (ERDF); Enterprise Support in the North East (ERDF); North East Access to Finance (ERDF); Durham Finance; and the Business Energy Efficiency Project (BEEP).

 

The Chairman, CDEP explained that in terms of Human Capital, there were several examples such as: the Youth Employment Initiative Scheme, DurhamWorks - European Social Fund (ESF); Skills Support for the Unemployed (ESF); and Department for Work and Pensions (DWP) Support (ESF).

The Committee noted that there were challenges ahead, including Brexit and devolution.  The Chairman, CDEP explained that Government had stated that funding would be made available after Brexit via a Shared Prosperity Fund.  He added that it was hoped that it would be comparable in terms of previous EU funding, however, it was not known if this would be the case or how the funding would be distributed across the country in terms of need or opportunity, noting currently County Durham has special status as a Transition Region in terms of EU funding.  Members were reminded that the Vice-Chair of the CDEP, Sue Parkinson was on the committee looking at these issues, providing a strong voice for County Durham.

 

The Chairman, CDEP noted in respect of devolution that the 3 “North of Tyne” Local Authorities were going ahead with devolution and added that there would be a need to ensure that County Durham was not left behind should an equivalent “South of Tyne” package develop.

 

The Chairman, CDEP concluded by reiterating that the CDEP was: working together with partners to add value; coordinating what we were doing in County Durham; and informing partners of opportunities.

 

The Chairman thanked the Chairman, CDEP for his update and asked Members for their questions and comments.

 

Councillor E Adam asked in relation to Brexit and funding, whether there had been any risk strategy in terms of not getting comparable funding to the EU funding we currently receive, especially as the plan was based on investment through to 2030.  The Chairman, CDEP noted he did not think there was a risk of receiving no funding, however, the amount was the important issue, looking at examples such as Finance Durham, our own local investment fund.  He added that the strategy was to try and influence policy before it was made, the work of the Vice-Chair, CDEP being very important in terms of this and greatly appreciated on behalf of the County.  Members noted that a definitive course of actions would only become apparent once the rules in terms of funding were known.

 

Councillor J Atkinson noted the measures of success and asked why some of the data used was from 2015.  The Chairman, CDEP noted that this was the most up-to-date data, noting there was an issue in terms of data-lag.  Councillor J Atkinson asked in terms of what salary qualified as a “high value job”.  The Chairman, CDEP noted that the absolute value of a job was not looked at in terms of salary and added that instead GVA was used, however, this did not represent the money within the economy.  Councillor J Atkinson added he did not believe the amount of funding from Government would be comparable to the EU funding received currently.  The Chairman, CDEP reiterated that there was not much clarity on this issue at this time and added the Shared Prosperity Fund that was in discussion would appear after Brexit, for those agreed programme beyond March 2019, however, what would happen next and beyond this was unknown. 

 

Councillor L Maddison asked if he felt that this would create somewhat of a vacuum.  The Chairman, CDEP noted that this was the danger citing examples in terms of programmes.

 

Councillor P Jopling noted that a high wage economy depended upon skills with the issue being how to deliver the right skills in County Durham, and asked if there was balance in terms skills and jobs. 

The Chairman, CDEP noted that it was an element of both, noting that one area that was very good in County Durham was apprenticeships.  He added that the Apprenticeship Levy was proving to be an issue for Small and Medium sized Enterprises (SMEs) and that also there was a need to encourage post 16-18 level technical qualifications.  He added there were a number of success stories in out County, especially in terms of engineering and that these needed to be highlighted more.  Members noted that a general comment from employers at a recent local “Brexit meeting” was not that there was a lack of specific skills, rather more young people were not “employment ready”, in terms of attitudes and their aspirations.

 

Councillor P Jopling asked as regards devolution, and the potential for County Durham to be left behind, and whether the Chairman, CDEP saw any positives.  The Chairman, CDEP noted that this was a political question for elected representatives, and reiterated that it was an important decision to make. 

 

Councillor R Ormerod noted the Brexit decision and asked if the idea of tariff free “free ports” had been mooted as an idea for County Durham and the North East.  The Chairman, CDEP noted this had not been discussed and added he would ensure this was put into the mix.  Councillor P Howell endorsed the idea of free ports for our area and added that GVA was misunderstood at the best of times noting it did not include the value of service sector jobs of which there were a great many in the County.  The Chairman, CDEP confirmed that GVA did not include the service sector and added that for example the University would not have a very good GVA, however, it was very important in terms of the County.  He noted that GVA was simply the best measure we had, despite the County having a strong service sector, and that this was why there were a range of measures, including GVA.  Councillor P Howell noted that the Aykley Heads developments were very much back-loaded in terms of the numbers of jobs to be delivered.

 

Councillor S Dunn explained that he had noted the number of EU funded programmes and of need versus opportunity, and asked in worst case scenario if all the EU funding was effectively “lost” how much would County Durham lose.  The Partnerships Team Leader, Tarryn Lloyd Payne noted Transition Region funding was around €147 Million over 5 years, and the Chairman, CDEP added that figure of around £1/4 Billion was one to think of.

 

Mrs R Morris noted the challenges as described and asked as regards the “Northern Powerhouse” as a strategy, with the County Durham being very much lesser a consideration than Manchester, Leeds or Liverpool.  The Chairman, CDEP noted that as structured it did not favour County Durham, as we were beyond what it considered “north”.  He did note that there was a push in all communications in this regards High Speed Rail II (HSII) joining to the North East and to be part of the Northern Powerhouse infrastructure plans.  Mrs R Morris asked as regards the Northern Powerhouse and public/private partnerships, and more in general in terms of this as a way of funding in the future.  The Chairman, CDEP noted that Members would be aware that EU funding requires match funding and that this element would be similar in terms of private sector investment.

 

Resolved:    

 

That the report and presentation by the CDEP be received and comments made by Members be noted and reflected in the consideration of the Committee’s 2018/19 Work Programme.

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