Northern Devolution: West Yorkshire Combined Authority and Leeds City Region Enterprise Partnership Joint Response

Transcription

1 Northern Devolution: West Yorkshire Combined Authority and Leeds City Region Enterprise Partnership Joint Response Why Whitehall should devolve On current forecasts, the 56 billion Leeds City Region economy - the largest outside London - is already on course to add 7bn and 50,000 jobs by These are huge numbers, but they hide an inconvenient truth. Whilst Leeds GVA per head of population is 116% of the UK average, the GVA produced per worker - for both Leeds and the wider City Region - falls short of the UK average. We have a productivity challenge that cannot be addressed by the currently centralised system, but only by devolving powers and resources to increase the return on investment and shorten the timescales for transforming the City Region from a net beneficiary into a net contributor to the public purse. We take very seriously our responsibility to contribute meaningfully to overall national debt reduction by delivering a sustained Devolution Dividend. To deliver a transformed North, we will need strong, empowered cities and city regions. This City Region proposition for devolution is the local counterpoint to pan- Northern proposals, including our shared One North proposition. What we will deliver by 2021 improving the odds Our devolution proposal will deliver the full extent of the ambition contained within our Strategic Economic Plan (SEP) which is to unlock the potential of the City Region, accelerating growth and thereby delivering an economic powerhouse that will create more better jobs and prosperity for all to share. 1

2 What we have already achieved This challenging ambition is grounded in realism: our track record is strong and shows that devolution rather than more decentralisation really delivers. Government s trust in our ability to deliver is evident in the scale of our Local Growth Deal, and the additional freedoms and flexibilities we have been granted. We have achieved already: A 470m reduction in Government grant across West Yorkshire and York (between and ), improved public service outcomes, an increase in private investment and jobs, and rising levels of public engagement and trust. Business grant programmes delivered three times faster with at least double the impact of national programmes - supporting 300 small businesses to date and creating 3,000 jobs. Substantial progress towards our City Deal pledge of a NEET-free City Region with 69% of young people starting our Devolved Youth Contract moving from NEET to EET compared to approaching 30% on the national model. an additional 1,000 small businesses offering apprenticeships as a result of our Apprenticeship Hubs programme Almost 8,000 housing starts in 2013/14 and over 5,000 completions. How we can do it We will focus on three key priorities (outlined in more detail in the Annex) for achieving an extraordinary level of sustained economic growth to national benefit: A transformational Leeds City Region metro system to maximise the impact of HS2. A mass transit system is a necessary condition for growth building on the existing heavy rail infrastructure with additional investment eg in NGT - that shrinks the distances between the City Region s growing towns, cities and Leeds Bradford International Airport, and which ensures we are HS2 and HS3 ready. We also require a suite of powers and funding relating to local bus franchising, investment in smart transport technology and the ability to manage strategic highway and rail networks. Collectively, this will deliver our ambition to become the hub of a single Northern economic zone including Manchester, Sheffield, Liverpool, Newcastle and Hull. Housing growth and regeneration infrastructure for a 21 st century economy. We need a devolved single consolidated housing budget to double house building by 2021 (developing over 10,000 new homes p.a.); to create significantly more affordable houses; and to lower a Housing Benefit bill currently standing at nearly 1 billion p.a. in the City Region. Jobs for all in a NEET free, innovation-led City Region. What we require is a single, long term skills and labour market agreement to devolve skills and employment funding to the City Region. The devolved funds would enable the City Region s businesses to create 20,000 high quality jobs, supported by the higher level skills (eg software coding) and apprenticeships needed to drive future economic growth. 2

3 An empowered, fiscally devolved City Region Our City Region is a unique portfolio of large towns and cities, centred around the Core City of Leeds. The full potential of our City Region can therefore only be realised through empowered towns and cities working together collaboratively and consistently, alongside an innovative and entrepreneurial multi-faceted private sector. As part of our City Deal, a Combined Authority (CA) has been established for the area of West Yorkshire. This includes York as a partner member and also the Local Enterprise Partnership (LEP), alongside the West Yorkshire leaders and opposition members, on one strong board of equals spanning both the private and public sectors. Our CA and LEP are united behind a single Strategic Economic Plan and our strategic investment decisions are taken within a single appraisal framework. By introducing this stable, robust and accountable governance model, we have created the conditions in which we can build on the successes summarised earlier and deliver effectively our Growth Deal and maybe more. Piecemeal and conditional allocations of funding are hindering the coherent local planning and co-ordination of strategic investment decisions. To address this empowerment gap, our ask is for a West Yorkshire and York Act which enables the following: a) Introduction of a single CA area budget to maximise value for money and further advance coherent planning, including the following elements as a practical first step, but not the end point, of the fiscal devolution journey: o Long term funding based on % of GVA growth incentivising local investment in economic growth. o 100% retained business rates. o Unfreezing council tax. o Pooling the funding and assets of national and local public sector agencies. b) Requisite functional powers, including: o Powers to put in place an integrated transport system for the City Region (such as found in London and major European city regions). o Powers for the City Region to determine its own housing strategies. o A collaborative approach to commissioning of non-specialist health services. c) Introduction of enabling legislation that allows our Combined Authority to determine its own membership and scope as well arrangements for ensuring strong, visible, political leadership. 3

4 Our First 100 Days We are ambitious to make early progress and would envisage taking forward the following first steps: Identifying the CA area budget envelope. Publication of the West Yorkshire and York Bill. Legislative reform enabling local determination of CA membership and leadership arrangements. Preparing headline costing, options assessment and economic appraisal for a metro system for the City Region forming the core of an integrated future proofed 21 st Century transport system. Draft housing strategy locally agreed and component parts of a single housing budget identified. Design of comprehensive package of local employment programmes. Agreeing with Government the heads of terms of a single long term Skills and Labour Market Agreement. 4

5 Annex Transformed transport system The problem: Through the creation of the 1bn West Yorkshire plus Transport Fund and the commitment to HS2 and HS3, decades of under-investment in the City Region and over-centralised decision making are starting to be reversed, but much, much more remains to be done to ensure that our transport system becomes an enabler, and not an inhibitor, of growth fit for the 21 st Century. What can be done: 5 a) Funding a transformational metro system for the City Region, based on a mass transit system building on the existing heavy rail infrastructure with additional investment eg in NGT - that shrinks the distances between the City Region s growing towns, cities and Leeds Bradford International Airport, and which ensures we are HS2 and HS3 ready, and will deliver our ambition to become the hub of a single Northern economic zone including Manchester, Sheffield, Liverpool, Newcastle and Hull. b) A suite of devolved powers and funding including: o Local franchising for bus service provision across West Yorkshire and York in order to achieve co-ordinated, planned services, ensuring that taxpayer inputs produce high value outputs and outcomes. o Investment in smart transport technology and funding to reduce the impact of road traffic and improve the quality of life in the main centres. o the ability to manage City Region strategic highway and rail networks aligned with local growth priorities. c) A coherent programme of major investments in strategic rail, including achieving a step-change in capacity into the Leeds City Region, faster links to other major cities on existing lines, HS2, and HS3/East-West improvements d) Ensuring that the City Region is HS2 and HS3 ready with a world class Leeds transport hub and high frequency, high quality connections with Wakefield, Kirklees, Calderdale and Bradford Districts via a City Region metro system. e) Aligning national and local investments and putting in place financing mechanisms to secure growth from HS2 and improvements to the existing transport network. This should include action and investment in skills, supporting businesses and accelerating regeneration. The finance mechanisms should encompass TIF powers for the major areas of development around our main transport hubs, including Leeds South Bank, York Central and Bradford City Centre. f) Powers to intervene in the market to develop digital infrastructure including broadband and promote its take up and greater influence over the integration of digital infrastructure including within local planning systems.

6 Housing growth and 21 st century infrastructure The problem: A major structural change has occurred in housing markets over recent years, resulting in development stagnation and a major imbalance in housing supply and demand, including a shortage of affordable housing and a lack of the provision of supporting infrastructure. At the same time, too much local resource is spent on applying for an increasing series of nationally competitive funding pots to support the delivery of City Region housing and regeneration projects. What can be done: a) Build on strong local HCA board arrangements to drive the devolution of a single consolidated housing budget including HCA assets and other returnable HCA funds such as Get Britain Building local investments. If matched with recycled funds from, for example, the European Union, funding for housing and regeneration will become an evergreen. This would double house building by 2021, developing over 10,000 new homes pa, creating significantly more affordable houses, and reducing the City Region Housing Benefit bill that currently stands at nearly 1 billion pa. b) Local flexibility to develop financial instruments that reduce the risks associated with development, stimulate housing starts and stimulate institutional investment in housing of all tenures. This would include exploring regulatory flexibilities around innovative use of the Housing Revenue Account headroom across the City Region. c) Develop new models of strategic local housing development and the ability to devise a more targeted local Help to Buy scheme appropriate for the City Region. d) Testing new alliances with housing associations to make the transition from benefits to bricks by investing housing benefit in new forms of community housing, linked to a double payoff in terms of jobs, skills and enterprise opportunities for people otherwise stuck in benefit dependency and/or in-work poverty, including community support networks for elderly residents. e) Creation of a Leeds City Region Open Data platform as a key information resource for business. f) Leeds City Region to be part of a concerted TechCity UK North initiative to promote the growth of, inter alia, the digital sector, including formation of a Capital Enterprise North business growth finance scheme. 6

7 Jobs for all in a NEET free and innovation-led City Region The problems: Business is telling us that, poor and mis-matched skills including in our young people - remain a major drag on business development and growth. Demand for higher level professional skills is increasing and there is a hollow middle where declining numbers of intermediate jobs no longer offer enough opportunities for people to progress from entry level jobs to the higher level skills and education needed to drive the knowledge economy. Unemployment is declining but still too high; those remaining on benefit need more tailored support to gain the jobs being created in the City Region local labour market. Employers report worsening shortages of engineers and software coding skills that are holding back growth across our key sectors. Low levels of investment by business in both R&D and new technology, poor rates of commercialisation of university IP by SMEs in the region and historic cultural deficits in enterprise, international trade and innovation rates. The current approach to promoting business growth is complex, confusing, and centralised. In addition, the failure of some national SME support products and services to fully integrate with local offers, and the subsequent lack of understanding amongst SMEs of the support available. We need to work with our businesses and universities in a way that reflects better the nature of our economy and is more responsive to opportunities on the ground in Leeds City Region. The Growth Hub proposals are a good start but we need to do more. What can be done: A single long term Skills and Labour Market Agreement devolving skills and employment funding and programmes to the City Region. This will enable the LEP and the CA to work with businesses, schools, colleges, universities and learning providers, and local communities to support more people into work, and ensure that people are being trained in the skills that are really needed in the local economy. This should include: a) Respond better to employer skill demands, particularly in engineering, manufacturing, digital and knowledge industries, trialling new approaches to attract more students to train and work in skills shortage areas critical to the success of our regional economy, notably engineering, technology and software/coding disciplines. b) Devolution of funding for skills programmes, particularly by building on the Leeds City Region SME Skills Fund, our employer ownership pilot, to enable employers to gain more direct influence over the skills system. c) Invest in state of the art Higher Level skills, education and innovation facilities to create a Silicon Mill, building on core assets to create a strong network of universities, colleges and UTCs which inspire and nurture talent for our advanced industries. d) Create at least a 10m Northern Talent bursary endowment fund to co-sponsor level 5, 6 and post-graduate degrees in technologies linked to our future growth industries. 7

8 8 e) Incentives for schools to further engage with employers, inspirational role models and mentors to inspire higher aspiration and achievement, instil employability attributes, and provide meaningful guidance as well as career tasters. Every pupil will be supported to make well informed choices from primary through until they transfer to an apprenticeship, further or higher education, with equal status of funding and outcomes. f) Building on our NEET free ambition, an offer to all unemployed young people under 24 of a guaranteed apprenticeship, work placement or paid internship for six months after they have completed their education. g) Pave the way for apprenticeship reform by ensuring that every SME is supported to employ an apprentice. h) Devolution of employment programmes for all ages to deliver a comprehensive package of support tailored to local circumstances, building on the Troubled Families approach to tailoring local solutions and expanding on the success of existing LCR devolved schemes. i) Local commissioning of integrated training, welfare and adult education measures to help people progress out of low pay and in work benefit dependency into better jobs. We also need an innovation-led City Region to create more of the higher level jobs to retain more of our graduates and thereby deliver Good Growth, more and better jobs acting as a counterweight to the intense pull of London and the wider South East: a) Shift major cultural, government and institutional investments/relocations to our Northern supercity conurbation to create more professional career opportunities that will counterbalance the pull from London which has a net influx of graduates of 56% compared to 1% in Yorkshire, to reverse the brain-drain northwards and rebalance the two-nation distorted housing market. b) Invest in game-changing Northern research centres akin to London s Crick Institute, attracting global talent and building on our HEIs knowledge strengths in big data, health technology, the bio-economy and advanced engineering/robotics, which will grow clusters of high value supply chains similar to those in the Cambridge/M4 corridor. c) Increase R&D tax credits in Assisted Areas and University Enterprise Zones. d) Devolve Innovation Funding for SMEs to LEPs backed by Combined Authorities, supported by incentives for universities and other centres of expertise to work more proactively with SMEs by offering lower fee rates, shared IP and fast response times for joint innovation projects leading to rapid commercialisation. e) Agree with Innovate UK (formerly the Technology Strategy Board) a programme of investment and activity (including some funding ring-fenced to Leeds City Region) to promote commercialisation of innovation. f) Extend the devolution of RGF via Combined Authorities to enable LEPs to fund more SMEs with lower entry threshold projects from 10k to 1m which reward investment in technology, supply chain development and innovation and export, to

9 create more new and sustainable jobs with high leverage and improved value for money. g) Devolve export and an element of business support funding to enables LEPs and Combined Authorities to pioneer business-led Export and Enterprise Challenge programmes to inspire a new cultural norm of self-reliance and confidence to trade in global markets, backed up by robust peer-to-peer support and leadership programmes which expose local businesses to global thought leadership and a richer network of contacts and capital. h) Devolution of an agreed proportion of the communications / SME engagement budgets of national business support programmes to support the sustainability of the Business Growth Hub as the primary vehicle for SMEs to access growth-focussed support around the three I s of Innovation, Investment and Internationalisation. i) Leeds City Region should oversee existing national business support schemes, including Manufacturing Advisory Service and Growth Accelerator, and the existing arrangements for promoting trade and investment through UKTI should be strengthened. j) Develop through BIS and the Corporation of London, a coherent approach to promoting globally Leeds City Region as the second largest UK Financial and Business Services hub. 9