greater birmingham and solihull local enterprise ......5 9.18 lep executive director’s report...

GREATER BIRMINGHAM AND SOLIHULL LOCAL ENTERPRISE PARTNERSHIP

BOARD MEETING

Thursday 24th January

LEP Board meeting – 9.00am-12.00pm

Location: Prince’s Trust, The Cold Store, Beorma Quarter, Digbeth, Birmingham, B5 6DR

AGENDA

Item Time Owner Subject Pre Read Presenter Purpose of the Report

1 9.00 Chair

Welcome and Apologies N/A Tim Pile

To note attendance and apologies

2 9.05 LEP Executive Notes / Matters Arising: • 20th December • 22nd November

Attached Tim Pile To agree notes of the last meetings and any matters arising

3 9.10 LEP Board Review of Agreed Actions Attached Tim Pile To note progress against agreed actions

4 9.15 LEP Executive Forward Plan Attached Tim Pile To agree Forward Plan

5 9.18 LEP Executive Director’s Report Attached Katie Trout To note key strategy and delivery developments

6 9.25 LEP Executive KPI Report Attached Katie Trout To note GVA data released since the last Board meeting

7 9.30 LEP Board Annual Performance Review

Verbal Katie Trout To update on and discuss outcomes of the Annual Conversation

8 9.40 LEP Board LEP Review Verbal Katie Trout To provide an update on the LEP Review

9 9.50 Programme Delivery Board

Growth Programme Update Attached Russell Eacott This report provides a brief update on key issues relating to the Local Growth Fund (LGF) programme since the last meeting.


Aston Advanced Manufactuing Hub

Verbal Ian Macleod To update on the progress of the Advanced Manufacturing Hub’s development

2



Enterprise Zone Update Attached Tom Fletcher This report provides a brief update on key issues relating to the Enterprise Zone (EZ) programme since the last meeting.

12 10.20 Pillar Board SEP Delivery Plan – Place Attached Mike Parker The Board is requested to note progress on the interventions set out in the Place Delivery Plan, note future priorities for Place Board and comment, as felt appropriate.

13 10.30 LEP Board Stakeholder Engagement Plan

Attached Katie Fulcher Board Directors are asked to consider and approve the proposed Stakeholder Engagement Plan

14 10.40 LEP Board Department for International Trade Update

Verbal Ian Harrison To update on how DIT is working with GBSLEP to promote exports

15 10.55 Break

16 11.05 LEP Board Legal Status Private Katie Trout To update the Board on the legal status of the LEP

17 11.25 LEP Board Finance Update Attached Katie Trout To update on the high-level financial position, the capital programme, the revenue spend to date and the forecast outturn for the year

18 11.35 AOB N/A

Reports for noting

19 - LEP Board

Channel 4 report Attached N/A Paper setting out the lessons learned from the failed Channel 4 bid and next steps in driving forward growth of creative industries in GBS

3


20 - WMCA SED Board

Local Industrial Strategy Attached N/A Paper to update on the emerging Local Industrial Strategy, its implications for GBSLEP and next steps.

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GREATER BIRMINGHAM AND SOLIHULL LOCAL ENTERPRISE PARTNERSHIP BOARD MEETING

Thursday, 22nd November

Trowers & Hamlins LLP, 10 Colmore Row, Birmingham, B3 2QD

DECISIONS & ACTIONS

Present In Attendance Apologies Tim Pile Chair Katie Trout LEP Executive Saqib Bhatti Chris Loughran Deputy Chair Tom Fletcher LEP Executive Cllr Ian Ward Cllr Brigid Jones Birmingham CC Paul Edwards LEP Executive Cllr Steve Claymore Cllr Bob Sleigh Solihull MBC Helen Harper LEP Executive Cllr George Adamson Cllr Mike Wilcox Lichfield DC Peter Jenion LEP Executive Cllr Patricia Ackroyd Cllr Chris Rogers Wyre Forest DC Dean Piper Cannock Chase Cllr Richard Grosvenor East Staffordshire DC Ian Pritchard Lichfield DC Matthew Rhodes Energy Capital Andrew Barratt Tamworth BC Mike Lyons HS2 Ltd. Mike Parker Wyre Forest DC Pat Hanlon Kevin Dicks Redditch BC Simon Marks Arcadis Andy O’Brien East Staffordshire BC Sophie Drake Story Comms Rachel Westwood Solihull MBC Anita Bhalla Performance Birmingham Ltd Michelle Nutt BEIS John Callaghan Solihull College Cllr Ian Courts Solihull MBC David Eastwood University of Birmingham Roger Mendonça West Midlands

Growth Company

Clive Heaphy Birmingham CC Martin Owen National College for High Speed Rail

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Decision

Action

Timescale

Owner

1 Welcome and Apologies

Amardeep Gill, Partner at Trowers & Hamlins, welcomed the Board to the venue and provided an introduction to Trowers & Hamlins law firm. The Chair thanked Trowers & Hamlins for hosting the meeting and welcomed all present. Apologies were noted for the following:

• Cllr Patricia Ackroyd • Cllr Steve Claymore • Cllr Ian Ward • Cllr George Adamson • Saqib Bhatti

2 Notes / Matters Arising from the last meeting – 13th September

The Decisions and Actions Note from the last meeting on 13th September was endorsed as an accurate record

3 Review of Agreed Actions

The Board noted progress updates for items on the Actions Log.

4 Board Forward Plan

The Board noted the Forward Plan which outlines items scheduled for future Board meetings.

5 Director’s Report The Board noted the Director’s update on the activity of the LEP which included: strategy; delivery; 5 G

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Decision

Action

Timescale

Owner

infrastructure project; governance and future operating model; and GBSLEP Conference 2018. The Board decided that there should be further presentation on the economic impact of the 5G infrastructure project.

LEP Executive to invite Dave Maclean, Chair of WMCA Digital Board, to present on the anticipated economic impact of the 5G infrastructure project to Board in January

January

LEP Executive

6 KPI Update The Board received an update on the most recent KPI report outlining economic performance across the GBSLEP area. The Board noted the publication of data, since the last Board meeting in September 2018, for the following indicators: private sector job creation; unemployment rate; qualifications rates; quality of life. All four of these indicators showed improvement for the most recent period. The Board reflected that since the region is ahead of schedule for meeting its 2030 target for private sector job creation, it should perhaps consider adding new, more ambitious targets for the interim period. The Board decided that the LEP Executive should

LEP Executive to consider private sector job creation KPI and whether new, more ambitious targets for between now and 2030 should be added. LEP to analyse why

January January

LEP Executive LEP Executive

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Decision

Action

Timescale

Owner

explore best practice and lessons from LEPs that are highest performing in PwC’s Good Growth Index. The Board asked the Executive to provide more information at the next Board meeting on the relationship between GVA growth and private sector job creation.

highest performing LEPs have high index scores and whether there are any lessons to be learned. LEP Executive to carry out analysis on drivers of GVA growth.

January

LEP Executive

7 Growth Programme Update

The Board:

• noted the current Local Growth Fund (LGF) programme status for forecast grant claims and outputs;

• noted the current status with project LGF development and delivery, including change controls;

• noted the additions to the Growth Programme strategic pipeline;

• noted the LGF project investment decisions made by the LEP Director under delegated;

• noted the approval of an increase of £1,500,000 of the conditional funding allocation to the Symphony Hall Extension project, following a change request;

• noted the LGF programme has nearly allocated all available funding, but overprogramming of conditional funding allocations will continue in order to mitigate

.

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Decision

Action

Timescale

Owner

against project slippage;

• noted the review of the Revolving Investment Fund (RIF);

• approved the return of RIF funds to the Local Growth Fund;

• approved the continued offer of loan funding to suitable projects;

• noted the current Enterprise Zone (EZ) programme status for finances and outputs;

• noted the forward plan of EZ project investment decisions;

• noted the risk to reduced contingency due to forecast annual deficits and the actions being pursued to mitigate this; and

• noted the progress with the EZ project health check commission.

The Board agreed that there should be an update on the Enterprise Zone at each Board meeting.

The Board agreed that Tom Fletcher would circulate a note that explains the financial model of the Enterprise Zone. The Board decided that an update on the Commonwealth Games should be scheduled for an upcoming meeting.

LEP Executive to update on the Enterprise Zone at each Board meeting Tom Fletcher to circulate a note in advance of the next Board meeting Cllr Ward to update on the Commonwealth Games

Regularly Before January Board March

LEP Executive Tom Fletcher Cllr Ian Ward

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Decision

Action

Timescale

Owner

8 National College for High Speed Rail

The Board noted an update from Martin Owen, Commercial Finance Director at the National College for High Speed Rail on the activities and progress of the College since opening. The Board agreed that Cllr Brigid Jones and Martin Owen would meet to discuss the College’s engagement with schools, students and parents to promote engineering and high speed rail as a career.

Cllr Brigid Jones and Martin Owen to arrange meeting

January

Cllr Brigid Jones/ Martin Owen

9 HS2 and regional growth

The Board noted an update by Mike Lyons, Programme Director of HS2 LTD, on HS2 developments and the impact on economic growth in the region.

10 Local Industrial Strategy Consultation Outcomes and Next Steps

The Board noted the update on progress in development of the West Midlands Industrial Strategy and proposed next steps in development of the Strategy.

11 SEP Delivery Plans – Creative Industries and Business Professional and Financial Services

The Board noted an update on progress against interventions set out in the Sector Delivery Plans for Creative Industries and Business, Professional and Financial Services, as approved at LEP Board in March 2018. The Board agreed that delivery plans should focus on quality and deliverability of interventions rather than quantity of interventions.

Paul Edwards to review delivery plans, with the relevant Pillar Board, and come back to Board with more ambitious interventions, where applicable, in 2019.

June 2019

Paul Edwards

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Decision

Action

Timescale

Owner

In relation to the unsuccessful Channel 4 bid, the Board agreed that there should be an objective analysis of lessons learnt why it failed and what lessons can be learned from the process.

Paper to be produced setting out the lessons learned from the Channel 4 bid and next steps in driving forward growth of creative industries in GBS.

January

Anita Bhalla

12 1001 Trades Project update

The Board noted progress on the 1001 Trades project The Board agreed to receive the report for the 1001 Trades Project once it is complete before the next Board meeting.

Sophie Drake to circulate the finished report to Board in advance of the next meeting.

Before Board meeting on 24 January

Sophie Drake

13 LEP Review Update The Board noted an updated on the LEP Review, including informal feedback on the GBSLEP’s Implementation Plan, and recent developments in relation to the geography recommendations and discussed next steps.

14 Governance Arrangements

The Board agreed to a series of amendments and additions to the Assurance Framework (set out in paragraphs 14 to 20) and raised in the meeting, in relation to the Enterprise Zone, Accountable Body arrangements, identification of decision-making bodies, the Supervisory Board, Joint Scrutiny Committee and Growth Programme processes. The Board agreed to recommence the Governance Review that began in March 2018; and The Board agreed to further extend the terms of

Revised Assurance Framework to be considered by the Supervisory Board and once agreed published on the GBSLEP website

Start of December 2019

LEP Executive / Supervisory Board

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Decision

Action

Timescale

Owner

office of Saqib Bhatti, Pat Hanlon and Simon Marks until 31st March 2019, as recommended by the Nominations & Governance Committee.

15 Paradise Update This report is exempt from disclosure because it contains information relating to the financial or business affairs of any particular person (including the authority holding that information).

N/A N/A N/A

16 AOB N/A N/A

N/A

N/A

FUTURE LEP BOARD MEETING DATES:

• Thursday 24 January 2019 9.30 – 12:00 (Prince’s Trust, Cold Store, Digbeth, Birmingham, B5 6DR) • Wednesday 27th March 2019 9.30 – 12:00 (First Choice Group, Blackeney Way, Kingswood Lakeside, Cannock, WS11 8LD)

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GREATER BIRMINGHAM AND SOLIHULL LOCAL ENTERPRISE PARTNERSHIP BOARD MEETING

8:45 – 10:00 Thursday 20th December

Conference Room, Baskerville House, 2 Centenary Square, Birmingham, B1 2ND

DECISIONS & ACTIONS

Present In Attendance Apologies Tim Pile Chair Katie Trout LEP Executive Sophie Drake Story Comms Chris Loughran Deputy Chair Tom Fletcher LEP Executive Anita Bhalla PBL Pat Hanlon Peter Mawson LEP Executive Matthew Rhodes Energy Capital Saqib Bhatti Younis Bhatti & Co Ltd Graham Russell Amion Consulting Mike Lyons HS2 Ltd Simon Marks Arcadis Jon Turner Cushman & Wakefield John Callaghan Solihull College Cllr Bob Sleigh Solihull MBC Andrew Barratt Cllr George Adamson Cannock Chase DC Cllr Mike Wilcox Lichfield DC Cllr Chris Rogers Wyre Forest Cllr Steve Claymore Tamworth BC Cllr Ian Ward Birmingham CC Cllr Patricia Ackroyd Sir David Eastwood University of Birmingham Cllr Richard Grosvenor East Staffordshire BC Clive Heaphy Birmingham CC

2

Decision

Action

Timescale

Owner

1 Welcome and Apologies

The Chair thanked Board Members for attending this meeting at short notice. The Chair welcomed Peter Mawson who has been appointed as an advisor for the LEP Executive on the Paradise project, on an ongoing basis. The Chair welcomed Graham Russell, Amion Consulting, and Jon Turner, Cushman & Wakefield, who were invited to the meeting to present the finding of the independent appraisal report. The Chair noted apologies from:

• Sophie Drake • Anita Bhalla • Matthew Rhodes • Mike Lyons • John Callaghan • Andrew Barratt • Cllr Mike Wilcox • Cllr Steve Claymore • Cllr Patricia Ackroyd • Cllr Richard Grosvenor

2 Declarations of interest

The Board acknowledged the existing declared conflicts of interest. It was agreed that Cllr Ian Ward would remain for the discussion of item 3 (Paradise), but would leave the room when the decision is taken. No new interests were declared.

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Decision

Action

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Owner

3 Paradise Simon Marks provided an introduction for this item.

Graham Russell and Jon Turner, from the independent review team, presented the findings of final report on the independent appraisal of the revised Paradise Full Business Case. An overview of the assessment of the five cases, lessons learnt, key risks and recommended conditions of approval were presented.

The Board:

• Noted the findings of the independent appraisal of the Paradise project Full Business Case;

• Conditionally approved the award of up to £51,277,000 of EZ grant funding to Birmingham City Council for the delivery of the Paradise project Phase 2, as a capped maximum amount. This funding award is inclusive of the £2,236,337 of EZ forward funding previously approved by the LEP Board in September 2018;

• Noted that the Full Business Case is predicated upon a further EZ funding request of up to £54,347,000 for the delivery of Phase 3, subject to a further Full Business Case to be submitted once the designs and costs are appropriately developed. This would take the total funding granted for the delivery of the entirety of the project to up to a maximum of £193,414,000;

• Considered and agreed the recommended conditions of the additional funding approval, as detailed in the independent

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Decision

Action

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Owner

appraisal report;

• Noted that the Full Business Case has been reviewed separately by the Department for Business, Energy and Industrial Strategy in an advisory capacity, and points raised by them have been addressed;

• Noted that due to the time sensitivity of the decision, the Full Business Case has been circulated to the Programme Delivery Board for comment via written procedure, in parallel to consideration by the LEP Board, and noted the comments raised by Programme Delivery Board members;

• Noted that the approval of the additional funding by the LEP Board will be reported to the GBSLEP Supervisory Board for noting, and subsequently to the Joint Scrutiny Committee; and

• Approved the co-commissioning of an independent audit into the Paradise project with Birmingham City Council, in its role as Accountable Body to the GBSLEP.

4 AOB

5

Decision

Action

Timescale

Owner

FUTURE LEP BOARD MEETING DATES:

• Thursday 24 January 2019 9.30 – 12:00 (Prince’s Trust, Cold Store, Digbeth, Birmingham, B5 6DR)

Item 3

ACTIONS LOG

The Actions Log is a record of actions agreed upon to support Board decisions. It provides an indication of the progress made against each action.

Board Date Agenda Item Number

Action Agreed Owner(s) Date due for completion

Status Date Completed

Progress update

01/02/2018 12 LEP Director, Head of Strategy and Head of Delivery to complete the “Appointment of Bankers” form

LEP Director /Heads of Strategy & Delivery

21st February On hold This is on hiatus pending the outcome of the LEP Review and the LEP’s future operating model.

13/09/2018 9 Paul Edwards to explore points made by Directors in relation to the Life Sciences and Advanced Manufacturing delivery plans and factor them into the delivery plans where appropriate.

Paul Edwards

March Board Ongoing As part of the work on the Delivery Plans a “deep clean” of interventions will be completed by the end of January 2019. Delivery Plans will then be updated, following consultation with relevant Pillar Boards, on a quarterly basis.

13/09/2018 11 Nicola Hewitt to be invited to a future board meeting to discuss the West Midlands Growth

LEP Executive/ Nicola Hewitt

Future Board meeting as appropriate

Ongoing LEP Executive to invite Nicola Hewitt to future Board meeting.

Item 3




Progress update

Company’s Inward Investment Strategy.

13/09/2018 16 Chair to present proposals for a Board Director for the remit of Health and Wellbeing at a future date

Chair No date Ongoing This action is held pending a full review of LEP governance

13/09/2018 18 The Board agreed to form an Alumnus group for past and present Directors of the LEP Board

Chair Early 2019 Ongoing This action will be revisited later this year

22/11/2019 5 LEP Executive to invite Dave Maclean, Chair of WMCA Digital Board, to present on the anticipated economic impact of the 5G infrastructure project to Board in January

LEP Executive

January Ongoing Due to priorities for January Board this item has been postponed and Dave will be invited to attend March Board.

Item 3




Progress update

22/11/2019 6 LEP to analyse why highest performing LEPs have high PwC Good Growth Index scores and whether there are any lessons to be learned.

LEP Executive

March Board LEP Executive undertaking research on outcomes indicators and best practice to inform Delivery Plan interventions.

GBSLEP Board Forward Plan Item 4a

Item Purpose Owner Lead officer Standing item/Regular item/ Ad hoc item

Supervisory Board

Wednesday 27th March 2019

Director’s Report To raise and discuss headline business on the agenda, and to note performance against KPIs

LEP Director Katie Trout Standing item

Growth Programme To update on Growth Programme progress

Programme Delivery Board

Russell Eacott Standing item Yes

Enterprise Zone Programme To update on delivery progress with the Enterprise Zone and consider the funding approval for the Curzon Station Public Realm project



Local Industrial Strategy To discuss the emerging Local Industrial Strategy, its implications for GBSLEP and any next steps

WMCA SEP Board Paul Edwards Standing item

Business Plan & Budget 2019/2020

To update on the Business Plan for 2019/2020, and agree the LEP’s operating budget for 2019/20

LEP Board Katie Trout Standing item (annual)

Regional Energy Strategy To update the Board on the Regional Energy Strategy

LEP Board Matthew Rhodes Ad Hoc



Supervisory Board

Future Operating Model To update the Board on the Future Operating Model

LEP Board Katie Trout Ad Hoc Yes

Governance Review To seek agreement on revised governance arrangements , including any proposed changes to the Articles of Association

LEP Board Nick Glover Ad hoc Yes

Assurance Framework To seek agreement on revisions to the GBSLEP’s Assurance Framework in light of the new national guidance

LEP Board Nick Glover Ad hoc Yes

Finance update To update on the high-level financial position, the capital programme, the revenue spend to date and the forecast outturn for the year.

LEP Board Keith Mitchell Standing Item

Business Rates To update on changes to the business rates policy and the implications for GBSLEP

LEP Board Nick Glover Ad hoc



Supervisory Board

Growth Hub Next Phase To note the Pillar Board’s approval of t the Growth Hub next phase business plan 2019-2022 and progression of the associated ERDF bid to full application stage

Business & Innovation Pillar Board

Katie Judge Ad hoc item

Paradise Development project

To confirm funding approval of the project following confirmation of conditions being met or assurance that they will be satisfied


Russell Eacott Ad hoc Yes

Enterprise Zone Investment Plan

To note the progress of and approve the updated Enterprise Zone Investment Plan

Programmed Delivery Board

Russell Eacott Ad hoc Yes

Smithfield Project Update To update the Board on the Smithfield Project


Richard Cowell (BCC) Ad Hoc

Commonwealth Games update

To update on the Commonwealth Games progress

Birmingham City Council

Cllr Ian Ward Ad Hoc



Supervisory Board

ESIF Update To provide an update on ESIF LEP Board Cllr Ian Courts Ad Hoc

1001 Trades Project Update To provide an update on the progress of the 1001 Trades Project

LEP Board Sophie Drake Ad Hoc

Economic Impact of 5G Infrastructure Project update

To update on the anticipated economic impact of the 5G infrastructure project

LEP Executive Dave Maclean, Chair of WMCA Digital Board

Ad Hoc

Thursday 6 June 2019






Enterprise Zone Programme

To update on the Enterprise Zone Programme Delivery Board

Russell Eacott Standing Item Yes

Local Industrial Strategy To discuss the emerging Local Industrial Strategy, its implications for GBSLEP




Supervisory Board

and any next steps

SEP Delivery Plans To review and endorse the Delivery Plans

Pillar Boards Paul Edwards Standing item

GBSLEP Operating Budget 2018+

To approve the Medium Term Financial Plan (MTFP) for the 3 years after the budget period (2020-2023)

LEP Board Nick Glover Regular item (annual)

Yes

Future Operating Model Update

To update the Board on the Future Operating Model

LEP Board Nick Glover Ad Hoc



Thursday 18 July 2019








Supervisory Board

Enterprise Zone Update To update on the Enterprise Zone Programme Delivery Board

Russell Eacott Standing Item Yes





Statutory Accounts To approve 2018/19 statutory accounts LEP Board Nick Glover Ad Hoc



Thursday 19 September 2019





TBC Standing item Yes



Supervisory Board

Enterprise Zone Update To update on the Enterprise Zone Programme Delivery Board

TBC Standing Item Yes







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GREATER BIRMINGHAM AND SOLIHULL LEP BOARD MEETING

24 January 2019

Director’s Report

Recommendations Board Directors are asked to:

1. Note the Director’s update on the strategy and activity of the LEP.

Annual Performance Review

1. Our Annual Performance Review (APR) with Government took place on 15th January 2019. This was an opportunity to discuss the progress we have made across the themes of Governance, Delivery and Strategy over the past year. We were able to report significant achievements across all areas, including strengthened governance arrangements, full utilisation of the Local Growth Fund in 2018/19 to deliver increased jobs, apprenticeships, skills & housing and enhanced business engagement which has contributed to the development of our Strategic Economic Plan (SEP) Delivery Plans and the West Midlands Local Industrial Strategy (WMLIS). We were also able to demonstrate our commitment to continuous improvement and how we have proactively tackled issues that have arisen. It was a positive meeting and our progressed recognised by BEIS officials. There will now be a national moderation of the APRs before each LEP is notified of their outcome.

Economic Performance

2. The APR was held against a backdrop of a local economy that is continuing to grow. Recently released statistics show that in 2017, Gross Value Added in the GBSLEP area grew by 1.56%. Whilst this increase is slightly below the Core City LEP average growth rate of 1.65%, the overall trend from 2010 to 2017 is extremely positive. During this period, our economy grew by 20%, compared to the Core City average of 11%. When viewed alongside job creation statistics presented at the last LEP Board, progress against our SEP KPIs is strong. Whilst this growth is due to many factors, it does suggest that we are playing our part in supporting the local economy.

Strategic Update

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3. At its Board meeting on 11th January 2019, the West Midlands Combined Authority (WMCA) approved the WMLIS. The strategy is the culmination of significant work by the WMCA, the three West Midlands LEPs and key partners. It represents an ambitious vision of inclusive growth and improved productivity underpinned by detailed evidence and extensive engagement with businesses and stakeholders. The WMCA will now work with Government to finalise the LIS and seek resources to deliver it.

4. The development of the five sector plans for the WMLIS that we have led on, has helped to further strengthen the connections we have with businesses in our key growth sectors. We are now keen to formalise these relationships and further increase business engagement in the development of our future plans and interventions. The Stakeholder Engagement Plan sets out key actions to achieve this aim in a meaningful and planned way. I am pleased to let you know that Katie Fulcher has been appointed as Stakeholder Engagement Manager to lead on this work on the LEP’s behalf.

Delivery

5. Board Directors will receive a presentation on the Advanced Manufacturing Hub (AMH) in Aston at the meeting. The AMH is a great example of how public funding can be used to unlock a site, deliver real benefits and leverage in significant private sector funding. The Employment Site Study referenced in the Place Delivery Plan will hopefully identify further sites that have similar potential.

6. An Extraordinary Meeting of the LEP Board was held on 20th December 2018 to

consider a request for £51m of additional funding for the Paradise development in Birmingham city centre. The revised full business case for the scheme was subject to a robust independent appraisal. The Board agreed to conditionally approve the funding, recognising the significant economic impact the scheme will have and how Phase 2 will continue to transform the city centre core.

7. Given the significance of the Enterprise Zone and the fact that it is now being

managed through the LEP Executive, updates on progress and funding decisions relating to it will now be the subject of a separate report on the Board agenda rather than being part of the Growth Programme report.

8. Over the past month we have further strengthened our Performance Management

Office (PMO). Appointments include Russell Eacott who has joined us as Interim Programme Director. Russell comes with a wealth of experience in managing complex projects and programmes. An early focus of his will be reviewing the PMO function to ensure that we are appropriately set up to support the Growth Programme and the Enterprise Zone. .

Report by: Katie Trout LEP Director

Contact: [email protected]

Date Created: 16th January 2019

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24 January 2019

Economic Performance and KPIs

Recommendations The Board is asked to:

1. Receive the most recent KPI report outlining economic performance across the GBSLEP area.

2. Note the following publication of data since the last Board meeting in November 2018: Gross Value Added statistics for 2017 were released on 12th December 2018 by the Office for National Statistics.

3. Note an update on the relationship between economic growth and private sector job creation since 2010.

Key Issues GVA

4. GBSLEP’s Gross Value Added grew by 1.56% in 2017, rising from £49.5 billion to £50.3 billion. This is slightly below the Core City LEP average growth rate of 1.65%.

5. Nevertheless, the overall trend between 2010 and 2017 remains extremely positive. During this period, GBSLEP’s economy has grown by 20%, compared to the Core City LEP average of 11%. The LEP area has been by far the fastest growing Core City LEP economy in this period.

GVA by Geography

6. Within our geography, Cannock Chase has seen the largest proportionate

increase of 9.11% in 2017, followed by Bromsgrove, 7.62%, and Redditch, 2.59%; However, GVA has fallen in Wyre Forest, -5.62%, East Staffordshire, -3.85% and Tamworth, -3.8%. Birmingham has grown by 1.81% and Solihull by 1.95%.

7. There is, however, a substantial health warning on growth figures at a sub-

regional level due to an inherent susceptibility to fluctuations in the data that disproportionally impact on smaller economic geographies.

GVA per Worker

8. GBSLEP’s GVA per worker has declined by 1.38% (from £52,767 to £52,037); this is a larger fall compared to Core City LEPs which have seen GVA per worker drop by 0.25% (£49,044 to £48,920). However, the long term trend remains

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positive, showing that GVA per worker has increased by 2.61% in GBSLEP compared to a 0.86% average growth for Core City LEPs since 2010.

Relationship between GVA growth and Private Sector Job Creation 9. Latest figures for private sector job creation were released in September and

reported to the Board at the last meeting in November. At this meeting, the Board requested that the LEP Executive analyse and report on the long term relationship between private sector job creation and GVA growth.

10. The charts below outline the long term trends in GVA and employment growth, including private sector and public sector employment trends for GBSLEP and the average for Core City LEPs.

11. GBSLEP’s economy has grown by 20% since 2010. Employment has increased by 17% in the same period.

12. While there is an apparent disparity between the two sets of data, this can be

broadly explained by two ways in which employment and productivity impact on overall growth.

13. In the GBSLEP area, private sector jobs have grown by 167,042 since 2010,

which is a 26% increase. Despite this significant growth, there has been a decrease in public sector employment, which has fallen by 28,114, a decrease of 15%, in the same period. This reduction in public sector employment has been a break on the overall growth of the GBS economy.

14. In comparison to Core City LEP averages, while GBSLEP’s employment growth

has been similar to the average, GVA has increased by a notably higher rate. Since 2010, GVA per worker has increased by 2.61% in our region, compared to a Core City LEP average of 0.83%. This relative increase in productivity per worker indicates that our economy has become more productive relative to other Core City LEPs, which has a concomitant impact on driving increased growth.

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Conclusion 15. This report summarises headline KPI and economic performance data with

further detail provided in the KPI dashboard appended to this report.

Prepared by: Paul Edwards Head of Strategy, [email protected] / 07712 436969

Date created: 16th January 2018

mailto:[email protected]

November 2018

GBSLEP KPI Report

1

KPI Baseline

(2010) Current Progress

To Date Latest Data

Create 250,000 Private Sector Jobs by 2030 to be the Leading Core City LEP for Private Sector Job Creation

633,600 800,686 (2017)

167,086

67% Delivered 29,452

Increase GVA by £29bn by 2030 £42bn £50.3bn

(2017)

£8.3bn 20% Delivered

£0.8bn

Decrease Unemployment to the National Average by 2020

2.7% Point Gap with UK


(June 2018)

1.4% Points

52% Delivered

-0.6% points

GBSLEP to be the Leading Core City LEP by 2030 for GVA per Head

£6,300 Per

Head Gap

£4,159 Per Head Gap

(2017)

£2,141 Per Head

34% Delivered

-£262 Per Head gap

Increase the % of Working Age Population with NVQ3+ to the National Average by 2025

5.6% Point Gap with

UK


(Sept 2017)

-0.6%

Point

-1.7% Point

Increase Productivity Rates to the National Average by 2030

-£3.88 GVA per Hour Gap

(2015 data)

£3.73 GVA per Hour Gap

(2016)

-0.15

-4%

£0.2 Per Hour

GBSLEP to be the Leading Core City LEP for Quality of Life by 2030

-Ranked 5/8

(2013-15)

Ranked 3/8

(2015-17)

Up 2 Places

Up 1 Place

New KPIs - Baselined from 2015

To Have the Lowest Unemployment Amongst the LEP Core Cities by 2030

5.1% Point Gap with Lead-

ing CC

2.3% Point Gap with

Leading CC (West of England, June

2018)

2.8% Points

55% Delivered

-0.1% Points

KPI Dashboard

GBSLEP KPI Report November 2018

Baseline

(2010) Current

Progress

To Date Latest Data

Labour Market Indicators

Claimant Unemployment (Sept

2018) 67,260 49,350 -17,910 +760

WM Employment (August 2018) 2,489,000 2,665,554 +176,554 -11157

WM Emp. Rate (August 2018) 69.0% 74.5 +5.5% -0.3%

WM Unemployment (August 2018) 243,700 138,198 -105,502 +4663

WM Unemployment Rate (August

2018) 8.9% 4.9% -4.0% +0.1%

% Business 10%+ Employment Growth in 3 Consecutive Years (2014-17)

24% 16% -8% -2.3%

FDI Jobs Created (2017/18) 764 3138 2,374 +1428

Economic Output Indicators

Private Sector Business Start-ups (2014-17)

5,021 13,595 +8,574 +4,417

Business Start-up Rate per 10,000 of Pop (2014-17)

26.0 67.4 +41.4 +21.4

Start-up 3 Year Survival Rate (2014-17)

48.4% 54.5% +6.1% +2.9%

% Start-ups Reaching £1m+ Turnover After 3 Years (2014-17)

5.8% 4.0% -1.8% -0.8%

QBR - Domestic Sales Index (Q4 2018)

66 70 +4 +1

QBR - Export Sales Index (Q4 2018)

63 65 +2 +8

West Midlands Exports (goods only) (Q4 2017)

£4.1bn £7.9bn +£3.8bn -£1bn

Leading Indicators

GBSLEP KPI Report November 2018

KPI Baseline

(2010) Current

Progress

To Date Latest Data

Claimant Unemployment Rate Differential (Sept 2018)

+2.6% point gap (with UK)

+2.3% point gap -0.3% point

+0.1% points

+1.6% point gap (with Core City

LEPs) +1.5% point gap

-0.1% point

+0.1% points

GBSLEP Employment Rate Differential (June 2018)

-5.3% point gap (with UK)

-4.3% point gap -1% point

-0.4% points

-2.9% point gap (with Core City

LEPs) -3% point gap

+0.1% point

0.4% points

% Business 10%+ Em-ployment Growth in 3 Consecutive Years

(2014-17)

-0.5% point gap (with England)

+0.0% point gap +0.5%

point No

change


LEPs) -0.3% point gap

+0.3% point

+0.3% point

Economic Output Indicators

Business Start-up Rate Differential (per 10,000 of Pop)

(2014-17)

-4.2 gap (with England)

+14.3 gap +18.5 gap +11.3 gap

+1.9 gap (with Core

City LEPs)

+23.5 gap (with Core City LEPs)

+21.6 gap +15 gap

Start-up 3 Year Survival Rate Differential (2014-17)

+3.0% point gap (with

England) -0.3% point gap

-3.3% point

+1.7% point


LEPs)


LEPs)

-6.3% point

+1.8% point

% Start-ups Reaching £1m+ Turnover After 3 Years Differential

(2014-17)

-0.1% point gap (with England)

-0.3% point gap -0.2%

point

No change


LEPs)

+0.3% point gap (with

Core City LEPs)

+0.1% point

-0.1% point

Leading Indicators Comparison Dashboard

KPI 1 Create 250,000 Private Sector Jobs by 2030

Private Sector Workplace Employment

Area 2010 2011 2012 2013 2014 2015 2016 2017

Change 2010 - 2017

Number % of

LEP To-tal

% Growth

Birmingham 338,700 355,200 362,700 365,500 386,700 393,200 400,700 409,974 71,274 42.7 21

Bromsgrove 28,700 29,200 30,700 30,300 31,700 33,300 43,500 56,640 27,940 16.7 97.4

Cannock Chase 28,500 28,400 29,600 30,300 33,700 34,200 35,600 37,866 9,366 5.6 32.9

East Staffordshire 45,900 48,100 46,100 48,200 52,600 53,500 52,400 57,311 11,411 6.8 24.8

Lichfield 33,700 34,800 34,700 36,400 39,000 43,400 45,600 45,533 11,833 7.0 35.1

Redditch 29,700 29,900 30,400 30,900 31,100 33,400 32,300 32,848 3,148 1.9 10.6

Solihull 77,400 80,000 87,200 85,100 90,600 98,200 103,600 104,949 27,549 16.5 35.6

Tamworth 23,800 23,500 27,200 25,300 26,500 28,100 26,100 26,317 2,517 1.5 10.6

Wyre Forest 27,200 27,500 27,700 26,100 27,200 28,000 28,000 29,248 2,048 1.2 7.5

GBSLEP 633,600 656,600 676,200 678,000 719,100 745,200 767,800 800,686 167,086 100.0% 26.4%

167,086 Jobs

Created

67% Of Target Delivered

Trends

After declining during the recession to stand at 633,600 in 2010, private sector jobs in the GBSLEP area grew strongly in 2011 (+23,000) and 2012 (+19,600). Growth was slower in 2013 (+1,800) but accelerated again in 2014 (+41,100) and 2015 (+26,100). In 2017 private sector employment grew by a further 32886 amounting to a total figure of 800,686. This is 167,086 above the baseline and 67% of the way to achieving the 250,000 target for 2030.

Milestones

Proposed milestones see the majority of the job growth occurring in the period between 2020 to 2030 with 40% of the target to be delivered in the first decade and 60% in the second. Significant private sector jobs growth to date has resulted in the GBSLEP being well ahead of profile in achieving the 250,000 jobs target.

0

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40,000

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80,000

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180,000

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100,000

200,000

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2010 2012 2014 2016

GBS LEP Private Sector Employment

Change from BaselineTotal Private Sector Employment

0

5,000

10,000

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20,000

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45,000

600,000

650,000

700,000

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800,000

850,000

Private Sector Jobs Milestones

Annual Job Growt h Actual Employment

Target Profi le

LEP LA Performance

All nine areas have seen private sector employment growth since 2010. Birmingham has seen the most growth in employment with 71,274 more private sector jobs than in 2010. However, Bromsgrove (97.4%), Solihull (35.6%), Lichfield (35.1%), Cannock Chase (32.9%) and East Staffordshire (24.8%) have all grown by a greater proportion than Birmingham (21%).

KPI 1 Create 250,000 Private Sector Jobs by 2030

Intermediate & Contextual Indicators As this KPI is measured by data released annually with a one year time lag the following intermediate indicators are displayed in order to highlight current performance and trends relating to this KPI.

Q3 2018 Q4 2018

Attempted to Recruit 55% 57%

Difficulty Recruiting 64% 61%

51%

50%

52%

54%

56%

58%

60%

62%

64%

66%

Attempted to

Recruit

Recruitment The Greater Birmingham Chamber Quarterly Business Report (QBR) Q3 2018 shows that between July to September 2018 36% of firms in the region saw their workforce increase, up slightly (+2% points) from Q3. The share of firms whose workforce fell was 9% (+1%) from the previous quarter.

Recruitment Difficulties The Q3 QBR found that 57% of firms attempted to recruit in Q4 2018, up slightly by 2% on the previous quarter. There was a 3% decrease in the percentage of firms experiencing recruitment difficulties in Q4 to 61%.

Resident Employment Rates The number of LEP residents (16+) in employment after falling initially has picked up over recent years to reach a level well above the pre recession peak of 840,000. The latest data for Q2 2018 shows employment in the LEP has risen by 3,800 to 917,400.

36% of firms reported an increase in labour force in

Q3

780,000

800,000

820,000

840,000

860,000

880,000

900,000

920,000

940,000

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Resident Employment

Pre Recession Peak

KPI 2 Increase GVA by £29bn by 2030

£8.3bn GVA

Growth


Trends

Real GVA (which removes the impacts of inflation) in the GBSLEP fell sharply during the recession but has shown a steady recovery since 2009 with the 2014 figures pushing economic output in the LEP area back above its pre-recession peak for the first time. In 2017 GVA continued to grow, although the pace of growth had decelerated over the past two years.

Milestones

The proposed GVA milestones see the majority of the output growth occurring in the period between 2020 to 2030 with 40% of the target to be delivered in the first decade and 60% in the second. This is to take into account that major GBSLEP initiatives will impact more on GVA in the second decade. The 2016 figures continue to measure slightly ahead of profile to deliver the 2020 GVA growth target.

LEP LA Performance

Birmingham was the biggest contributor to economic growth in the LEP area in 2017 (+£492m) accounting for 64% of the LEP’s total GVA growth. Solihull experienced the strongest growth rate with its economy expanding by 1.95% in 2016.

2010 2011 2012 2013

Total GVA (£m) 41,971 43,044 42,954 43,381

Annual Change (£m) 1,073 -90 427

80,000

90,000

100,000

720000

740000

ent

GBS LEP Private Sector Employment

-500

0

500

1,000

1,500

2,000

2,500

3,000

35,000

40,000

45,000

50,000

55,000

60,000

65,000

70,000Real GVA Milestones

Annual GVA Growth Actu al GVA £m Target Profile

GBSLEP Real GVA 2015 £m

Area 2010 2011 2012 2013 2014 2015

Change 2016-2017

£m %

Birmingham 22,787 23,367 23,148 23,899 24,518 25,579 492 1.81

Solihull 5,809 5,939 6,267 6,074 6,331 7,025 147 1.95

Districts 13,374 13,740 13,552 13,413 14,049 14,851 132 0.89

GBSLEP 41,971 43,044 42,954 43,381 44,900 47,457 772 1.56

2016

27,121

7,553

14,875

49,548

2017

27,613

7,700

15,007

50,320

2016 GVA

Birmingham Solihull Districts

GVA up

£492 m

1.81%

GVA up

£147m

1.95%

GVA up

£132m

0.89%

KPI 2 Increase GVA by £29bn by 2030

Intermediate & Contextual Indicators

As this KPI is measured by data released annually with a one year time lag the following intermediate indicators are displayed in order to highlight current performance and trends relating to this KPI.

Increase

67%

Unchanged

25%

Decrease

8%

Business Confidence (Quarter 4 2018) The majority of firms surveyed (67%) in the GBSLEP area are expecting turnover to improve over the coming 12 months. An increase from the 61% recorded in Q3 2018.

Productivity - GVA per Hour Worked (latest data from 2016) The latest official GVA per hour worked figures which are the ONS preferred measure of productivity are displaced in the adjacent chart which shows that of the LEP core cities the GBSLEP has the 5th highest productivity at £28.9 per hour compared to £32.6 for the UK as a whole. The West of England LEP is the only core city LEP with higher productivity than the UK. There was very limited change on last year’s productivity data and GBSLEP did not change at all.

GVA per Worker (2017) GBSLEP still has the second highest GVA per worker among Core City LEPs, although the figure has fallen by £730 between 2016-17. Liverpool City Region has seen the largest increase in GVA per worker, improving by 2.14% since 2016. The figure has fallen most in West of England LEP, reducing by 1.76%, although the West of England LEP remains the most productive Core City LEP in terms of GVA per worker. Notably, London’s figure of £80,830 GVA per worker is substantially higher than all of the Core City LEPs which are closely grouped within a range of £45,145—£54,687 per worker.

67%

of firms expect

turnover to

improve in next

12 months

Ranked Core City Real GVA per Worker 2017

Area 2016 2017

Change 2016-2017

£ %

West of England 55,666 54,687 -979 -1.76

GBSLEP 52,767 52,037 -730 -1.38

Liverpool City Region 48,261 49,296 1,035 2.14

Greater Manchester 49,596 49,126 -470 -0.95

Leeds City Region 48,435 48,162 -273 -0.56

North Eastern 47,986 47,817 226 0.48

D2N2 46,584 46,809 -169 -0.35

Sheffield City Region 44,521 45,145 625 1.40

CC LEP Average 49,044 48,920 -124 -0.25

London 80,830 458 0.57

£0

£10

£20

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£40

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erp

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rn

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eff

ield

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y…

Lo

nd

on

UK

GVA Per hour worked

West of England

Liverpool

D2n2

Greater Manchester

GBSLEP

Leeds City Region

North Eastern

80,372

KPI 3 Decrease Unemployment to the National Average by 2020 & To Have the Lowest Unemployment Amongst the LEP Core Cities by 2030

Intermediate & Contextual Indicators As this KPI is measured by data released quarterly with a four month time lag the following indicators are displayed in order to highlight current performance and trends and provide context for this KPI.

District Claimant Count Unemployment Data

Economic Activity Economic activity is a measure of labour market participation. It is a count of those of working age who are either employed or unemployed but actively seeking work. After falling sharply during 2013-2015, which saw the gap with the UK widen, economic activity in the LEP has begun to recover in recent months. In Q1 2018 the economic activity rate fell slightly from 75% to 74.9% and the gap with the UK increased slightly to 3.4%.

Claimant Count Unemployment After falling sharply in the recovery since the Great Recession, unemployment plateaued. Although, since January 2018, the claimant rate for GBSLEP has increased from 4.0% to 5.1%. The Claimant Count averages for the UK and the Core Cities have not increased to the same extent. The reason for GBSLEP’s increasing Claimant Count is that Birmingham has introduced Universal Credit which requires a broader range of people to seek employment. Claimant unemployment by LEP LA is shown in the table below.

70.0

72.0

74.0

76.0

78.0

80.0

16-64 Economic Activity Rate

GBSLEP UK

Claimant Unemployment - September 2018

Area JSA Claimants UC Claim-

ants

Total Claimant Unemployed

Number Claimant Proportion

%

Claimant

Rate %

Birmingham 13,497 26,113 39,610 5.4 7.8

Bromsgrove 446 354 800 1.4 1.6

Cannock Chase 619 213 850 1.4 1.6

East Staffordshire 611 199 810 1.1 1.2

Lichfield 165 645 810 1.3 1.6

Redditch 234 1181 1,415 2.7 3.3

Solihull 575 2,575 3,150 2.5 3.0

Tamworth 174 831 1,005 2.1 2.4

Wyre Forest 706 194 900 1.5 1.9

GBS LEP 17,027 32,323 49,350 3.9 5.1

UK 380,451 550,599 931,050 2.2 2.8

Claimant proportion: claimants divided by 16-64 population. Claimant rate: claimants divided by economical-

ly active. 16+ population

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%Claimant Count Unemployment

Serie s1 Series2 Series3

KPI 3 Decrease Unemployment to the National Average by 2020

& To Have the Lowest unemployment Amongst the LEP Core Cities by 2030

Milestones

The latest data saw the unemployment differential with the UK fall to 1.3% in Q2 2018. GBSLEP is still currently behind its target profile to close the gap with the UK by 2020.

The unemployment rate in the West of England LEP is 2.3% lower than for GBSLEP. This gap has widened very slightly in the latest data (by 0.2% points). However, the gap is down 3% points on the 2010 baseline position and is currently ahead of profile to catch up by 2030.

Gap Down by 1.4% Points


Gap Down by 2.8% Points

55% of Target Delivered

West of England

3.3%

Sheffield 5.3%

Liverpool 4.2%

Manchester 4.6%

GBSLEP 5.6%

UK 4.3%

North East 5.3%

D2N2 3.7%

LEP Cc Average 5.1%

Leeds 4.4%

LEP Core City Unemployment Rates Q2 2018

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

Unemployment Milestones - UK

A ctu a l Gap Target Pro fil e

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Unemployment Milestones- Core Cities

Actual Ga p T ar g et Profil e

KPI 4 GBSLEP to be the Leading Core City LEP by 2030 for GVA per Head

Gap Down £2141

Per Head


Trends

Since 2014 the gap between GBSLEP and West of England LEP has narrowed as GBSLEP’s GVA per head has increased from 22,630 in 2014 to 24,772 in 2017 while West of England LEP’s rate has remained comparatively static.

Milestones

The proposed GVA per head milestones see the majority of the closing of the GVA per gap occurring in the period between 2020 to 2030 with 40% of the target to be delivered in the first decade and 60% in the second. The GVA per head differential is below the 2010 baseline and broadly on profile (2016 is just £236 below the profile target). -1,000

-800-600-400-20002004006008001,0001,2001,4001,6001,800

0

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Annual Change in GVA per Head Gap Actual Gap £ Target Profile

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GVA per Head Differential

GBS LEP W est of Eng land Gap

KPI 5 Increase the % of Working Age Population with NVQ3+ to the

National Average by 2025

Gap down by

1.7% Points

26% fall in

Gap on Baseline

Trends

The GBSLEP has consistently underperformed compared to the national average on this KPI. The skills gap widened sharply in 2011 before closing again. The most recent data for 2017 shows the gap narrowing from 6.6% points to 4.9% points.

Milestones

Proposed milestones see the majority of the NVQ3+ gap being closed between 2020 and 2025, reflecting the longer term nurture of achieving change in qualification levels. There has been an increase in the differential since the baseline year so currently we are behind the target profile ion this KPI.

LEP LA Performance

Every area in our geography is below the national average except for Bromsgrove and Lichfield. Tamworth and Redditch have the lowest rate for % people aged 16-64 with NVQ3+. The LEP is still below the Core City LEP average although the gap has been reduced by 1.4 points since 2016.

Annual Population Survey NVQ qualifications data is available at district level however, due to the small sample sizes at the lower geographical levels the ONS do not advise using the data at this level. Therefore the district data in the table below is subject to sampling error and change in annual qualification levels may not reflect genuine movements in NVQ3+ attainment

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

30.0%

35.0%

40.0%

45.0%

50.0%

55.0%

60.0%

NVQ3+ Differential

GBS LEP UK Gap

0.0%

2.0%

4.0%

6.0%

8.0%

NVQ3+ %

NVQ3+ Milestones

Actual Gap Target Profile

Area 2010 Baseline 2016 2017 Change 2016-17

Number % Number % Number % Number %

Birmingham 281,600 41.5 341,100 48.4 361,900 50.4 20,300 6

Bromsgrove 28,000 49.6 33,500 59.5 37,500 66.0 4000 11.9

Cannock Chase 23,800 38.3 28,700 47.0 32,600 53.7 3900 13.6

East Staffordshire 36,100 49.8 35,500 49.3 35,700 49.6 200 0.6

Lichfield 30,500 49.2 34,400 55.9 37,100 60.3 2700 7.8

Redditch 19,300 33.6 23,100 43.6 22,900 44.5 -200 -0.9

Solihull 66,100 52.4 70,900 55.2 72,100 56.6 1,200 1.7

Tamworth 17,300 35.1 21,200 44.5 20,400 42.9 800 -3.8

Wyre Forest 26,600 43.5 34,400 58.5 32,600 56.3 -1,800 -5.2

GBSLEP 529,200 43.2 622,900 50.1 652,800 52.1 29,900 4.8

LEP Core City Average 4,681,200 45.7 5,474,400 53.0 5,546,300 53.6 71,900 1.3

UK 19,667,600 48.8 23,189,700 56.7 23,391,600 57 201,900 0.9

0%

1%

2%

3%

4%

5%

6%

7%

8%

20%

25%

30%

35%

40%

NVQ4+ Differential

GBS LEP UK Gap

KPI 5 Increase the % of Working Age Population with NVQ3+ to the National Average by 2025 Intermediate & Contextual Indicators As this KPI is measured by data released annually the following indicators are displayed in order to highlight current performance and trends and provide context for this KPI.

0%

1%

2%

3%

4%

5%

6%

4%

6%

8%

10%

12%

14%

16%

18%

20%

No Qualifications Differential

GBS LEP UK Gap

NVQ4+ The percentage of the 16-64 population with NVQ4+ (degree and above) has grown in the GBSLEP since 2004. The gap with the UK proportion widened as the recession hit before narrowing sharply in 2014. However, the latest data for 2017 shows the gap with the UK widening again, up from 5.4% points in 2016 to 6.6% points in 2017.

No Qualifications The GBSLEP has a higher percentage of working age residents with no qualifications compared to the UK average. However, The proportion of unqualified residents in the LEP has fallen in recent years and the most recent data for 2017 shows the gap with the UK has narrowed to 2.4% as the percentage of residents aged 16-64 with no qualifications has fallen at a faster rate in GBSLEP compared to the national average.

School Attainment - GCSE 5+ A*-C Inc. English & Maths 2015/16 and Change on 2014/15

KPI 6 Increase Productivity Rates to the National Average by 2030

GBSLEP £28.9 GVA Per Hour

-1.00

-0.50

0.00

0.50

1.00

25.00

26.00

27.00

28.00

29.00

30.00

GBS LEP Real GVA per Hour

Annual Change GVA per Hour (£)Trends

Productivity as measured by GVA per hour worked has consistently been lower in the GBSLEP economy than at a national level and the differential with the UK has actually widened during the recovery as productivity levels declined locally. Core city LEP productivity over the last 5 years is shown in the table below, currently the GBSLEP has the 5th highest productivity amongst the core city LEPs.

West Midlands LAs - 2016 Productivity

The 2016 GVA per hour worked figures for the unitary authorities in the West Midlands region are shown in the table below. Solihull has the highest productivity rate in the region and is the only area with productivity rates above the UK average. GVA per hour fell notably in Sandwell, Dudley and Walsall (by 2.5%, 1.1%, and 2.0% respectably). Elsewhere, growth was relatively static, except for Coventry at 0.9% growth in GVA per hour.

Real GVA per Hour Worked (£) - West Midlands (2016)

Area 2010 2011 2012 2013 2014 2015 2016

Change 15-16

Amount

£ %

Worcestershire CC 26.6 26.8 27.3 28.2 28.7 29.6 29.4 -0.2 -0.6

Staffordshire CC 27.2 26.9 26.4 26.0 26.1 26.8 26.8 0.1 0.2

Birmingham 29.3 28.6 28.0 27.5 27.6 28.1 28.1 0.0 0.1

Solihull 35.0 34.6 34.6 34.9 35.5 36.4 36.4 0.0 0.0

Coventry 27.3 27.1 27.3 27.5 28.1 29.1 29.4 0.3 0.9

Dudley 25.7 25.9 26.4 26.6 26.7 27.1 26.8 -0.3 -1.1

Sandwell 26.9 27.1 27.0 26.4 25.7 25.3 24.7 -0.6 -2.5

Walsall 26.2 26.8 27.5 27.9 28.1 28.0 27.5 -0.6 -2.0

Wolverhampton 23.5 23.6 24.4 25.1 25.8 26.5 26.4 0.0 -0.1

West Midlands Region 28.0 27.8 27.8 27.7 27.9 28.4 28.3 -0.1 -0.3

UK 32.1 31.9 31.9 32.0 32.1 32.7 32.6 -0.1 -0.4

Ranked Core City LEP Real GVA per Hour Worked (2016)

2010 2011 2012 2013 2014 2015

Change 15-

16

Area £ %

1 West of England 32.4 31.9 32.0 32.0 32.5 33.3 0.0 -0.1

2 Liverpool City Region 31.1 30.6 30.0 29.7 29.6 30.1 -0.1 -0.4

3 D2N2 28.1 28.0 28.1 28.2 28.3 28.7 -0.1 -0.4

4 Greater Manchester 29.6 29.3 29.2 29.1 29.0 29.4 -0.2 -0.6

5 GBSLEP 29.1 28.6 28.2 28.0 28.2 28.9 0.0 0.0

6 Leeds City Region 28.2 27.8 27.7 27.6 27.7 28.2 -0.1 -0.4

7 North Eastern 27.8 27.9 28.1 28.1 28.2 28.6 -0.1 -0.3

8 Sheffield City Region 26.6 26.4 26.5 26.7 26.8 27.2 -0.2 -0.9

London 43.2 42.7 42.6 42.6 42.9 43.7 -0.2 -0.4

UK 32.1 31.9 31.9 32.0 32.1 32.7 -0.1 -0.4

Gap with UK 3.0 3.3 3.7 3.9 3.9 3.9 -0.2 -5.1

2016

33.3

30.0

28.6

29.3

28.9

28.1

28.5

27.0

43.6

32.6

3.7

GBSLEP Ranked 3/8

KPI 7 GBSLLEP to be the Leading Core City LEP for Quality of Life by 2030

Quality of Life Index Rankings

The GBSLEP is currently the 3rd ranked core city LEP area in the PWC Good Growth Index which is the chosen tool for monitoring quality of life in the area and our performance relative to other LEP areas. The ranking for the GBSLEP improved by one place in the most recent report moving from 4th to 3rd place. The gap in index score with the leading core city LEP area (West of England) has narrowed by 17.7%. Much of this improvement has been driven by Birmingham which is the 5th most improved city in the country for Good Growth and has seen an increase in its index score of 0.18. Birmingham’s improvement can be explained by a sharp reduction in its unemployment rate, from 9.8% in 2014 to 6.5% in 2017.

Index Score Performance

Index Score

PWC Good Growth Index Rank and Scores Core City LEPs

2011-13 2013-15 2014-16 2015-17

Score Rank Score Rank Score Rank

West of England 0.33 1 0.57 1 0.68 1

Leeds -0.21 3 0.05 3 0.18 3

GBSLEP -0.37 5 -0.09 5 0.06 4

D2N2 -0.2 2 0.09 2 0.19 2

Greater Manchester -0.27 4 -0.06 4 0.05 5

Sheffield -0.55 7 -0.28 6 -0.11 6

North East -0.57 8 -0.29 7 -0.12 7

Liverpool -0.49 6 -0.36 8 -0.16 8

Gap with

West of England 0.70 0.66 0.62

Score Rank

0.73 1

0.27 2

0.22 3

0.21 4

0.21 5

-0.04 6

-0.07 7

-0.02 8

0.51

PWC Good

Growth Index

Performance

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Public Report 1 of 11

GREATER BIRMINGHAM & SOLIHULL LEP

BOARD MEETING 24th January 2019

Local Growth Fund Programme Update Report

Purpose This report provides a brief update on key issues relating to the Local Growth Fund (LGF) programme since the last meeting. An update on programme performance to the end of quarter 3 for the LGF will be provided at the next LEP Board meeting.

Recommendations The GBSLEP Board is requested to note the:

• LGF project investment decisions made by the LEP Director and Programme Delivery Board (PDB) under delegated authority; and

• Proposed improvements to the programme-level reporting across all LEP programmes.

Project investment approvals 1. The following project investment decisions have been made since the last meeting by the PDB

or the LEP Director under the scheme of delegation:

• Kidderminster Railway Station Building and Forecourt Redevelopment project (Worcestershire County Council) received full approval for £2,407,000 of LGF capital grant towards total project costs of £5,295,808, following the independent appraisal of a Full Business Case. The project was approved by the LEP Director on 9th December 2018.

• A38 Bromsgrove Major Scheme – Package 1 project (Worcestershire County Council) received Programme-Level Entry and conditional approval for £2,261,993 of LGF capital grant towards total project costs of £, following the independent appraisal of an Outline Business Case. The project was approved by the LEP Director on 21st November 2018.

• Redditch Gateway project (Redditch Borough Council / Redditch Gateway Infrastructure Ltd.) received Programme-Level Entry and conditional funding approval for £1,840,000 of LGF capital grant and £2,500,000 of Revolving Investment Fund capital loan funding, following the independent appraisal of an Outline Business Case. The project was approved by the PDB on 14th December 2018.

2. Further background information on these investment decisions is included in Appendix A.

Programme Management Office (PMO) review 3. Following the Executive’s action, reported to the Programme Delivery Board on the 6 September

2018 (Item 7) Russell Eacott was appointed as Interim Programme Director and started part time before Christmas. He is currently undertaking a review of the PMO function whilst making

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some early interventions to ensure that there is greater overall confidence in the reporting approach for all the programmes.

4. The initial focus of the review is to establish a risk based highlight report approach on the whole programme with the LGF being the first programme to ‘test’ this approach. It is proposed in the future to report on all active projects each quarter, reporting any deviations from forecasts on time, finance, resourcing, benefits and highlighting any concerns around risks, impending issues and any risks to reputation. An initial presentation and ‘sample’ report was considered at the PDB on the 16 January 2019 and was supported by PDB members. This will now be developed further with discussions involving the partner organsations with a view of implementing fully during the end of the final quarter 4 in March 2019. The risk based approach meets the requirements outlined in last years’ Conversation and Deep Dive.

5. In addition to the highlight reporting early work has commenced on

o Developing a Programme Risk Register (which will link to the corporate risk management approach)

o How best to integrate the Enterprise Zone Projects into PMO reporting and develop action plans to improve confidence that issues raised from reports into EZ projects are progressing.

o Necessary changes to develop a flexible and fit for purpose PMO with clear project governance and identify improvements with partners for overall project training and upskilling.

Conclusions

6. This report provides a brief update on key issues relating to the LGF programme since the last meeting. An update on programme performance to the end of quarter 3 both for the LGF and Enterprise Zone will be provided at the next LEP Board meeting.

Prepared by: Russell Eacott, Interim Programme Director

Tom Fletcher, Acting Head of Delivery Contact: [email protected]

0121 303 2150 / 07860 906438 Date: 9th January 2019


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Appendix A – Project Investment Decisions

Investment Report - Kidderminster Railway Station Building and Forecourt Redevelopment

Recommendation The LEP Board is requested to note the approval by the GBSLEP Director of the award of £2,407,000 (two million and four hundred and seven thousand pounds) of Local Growth Fund capital grant to Worcestershire County Council for the delivery of the Kidderminster Railway Station Building and Forecourt Redevelopment project. This decision is in accordance with the GBSLEP Assurance Framework following the submission of the Full Business Case and its independent technical evaluation.

Background 1. Worcestershire County Council (WCC) submitted an Expression of Interest (EoI) for the

Kidderminster Railway Station Interchange project in September 2014 as part of the Growth Deal 1&2 process. At that stage, the total project cost was estimated to be £4.3m, with a £1.8m request to the GBSLEP and the remaining £2.5m being sought from Worcestershire Local Enterprise Partnership (WLEP). SLC Rail was commissioned to manage the development of the scheme and WLEP led on the project’s assurance process on behalf of both LEPs.

2. The project completed its GRIP 3 designs in March 2017, following which WLEP’s independent review conditionally approved it for funding by the Local Growth Fund (LGF). GRIP 4 designs were completed in March 2018, and GRIP 5 together with appointing the contractor – in May 2018. The Full Business Case (FBC) was submitted to WLEP in May 2018, and following independent technical appraisal, the project has been approved by WLEP in June 2018.

3. Following the contractor appointment, the total cost for the project was confirmed at £5,295,808. The project approached the two LEPs as well as WCC and Wyre Forest District Council (WFDC) with a request to cover the 0.995m gap. The following additional contributions were confirmed: WFDC (£0.075m), WCC (£0.313m) and GBSLEP (£0.607m, having reallocated unutilised funding from Growth Deal 1&2 projects). This increase in conditional funding allocation was approved by GBSLEP’s Programme Delivery Board (PDB) on 17 May 2018.

4. The project is due to start on site in January 2019 and the scheme is to be completed in October 2019.

Case for change 5. The Kidderminster railway station is located one kilometre to the east of Kidderminster town. It is

an important transport hub for Kidderminster and Wyre Forest, providing the area with access to destinations served by the rail network, including Birmingham, Birmingham International Airport, HS2, Worcester and London. The station also shares its forecourt with the Severn Valley Railway which serves an important generator of income for the Wyre Forest economy. The scheme aims to replace Kidderminster's inadequate railway interchange with a new fit-for-purpose facility that will improve the quality of the station infrastructure and enhance integration between rail and its main feeder modes.

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6. The redevelopment and revised layout of Kidderminster Railway Station is made up of the following five work packages:

• Replace the station building with a new, bigger higher quality building containing improved facilities for passengers and operators;

• A new station forecourt layout with formalisation of drop-off points and taxi rank and a new road layout, with no loss of parking;

• Upgrade of two bus stops on Comberton Hill to provide an improved bus-rail interchange;

• Installation of a signalised crossing at the junction of the A448 Comberton Hill and Lea Street; and

• Provision of improved pedestrian access and complete the enhanced accessibility to the station.

7. By replacing Kidderminster's inadequate railway interchange, the project aims to improve

accessibility to the Wyre Forest. By encouraging greater use of rail the project will deliver benefits in terms of commercial viability of local services, reductions in traffic congestion and carbon emissions.

8. The project has a benefit to cost ratio (BCR) of 1:6.49, which is within Department for Transport’s ‘very high’ value for money category.

Outputs and Outcomes 9. GBSLEP LGF contributes 45% of total capital grant funding and is allocated a pro-rata share of

project outputs and outcomes.

Outputs Output Description Total Output Quantity GBSLEP-attributed

Outputs New station building 250 sqm 113sqm

New redesigned station forecourt 5 taxi drop/pick up bays, 7 drop off bays

2 taxi drop/pick up bays, 3 drop off bays

Upgraded bus stops on Comberton Hill 2 stops 1 stop

Signalised crossing at the Comberton Hill / Lea street junction

1 junction 0.45 junction

Improved pedestrian access

Outcomes

Outcome Description Total Outcome Quantity GBSLEP-attributed Outcomes

Indirect jobs 7 3

GVA per annum £196,039 by 2035 £88,218 by 2035

Passenger numbers 136,000 journeys by 2035 61,200 journeys by 2035

Provision of a fit for purpose regional gateway supporting future growth in employment, housing and tourism

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Improved levels of passenger satisfaction

Funding Profile 2015/16 2016/17 2017/18 2018/19 2019/20 Total £ £ £ £ £ £ Capital (GBSLEP)

- - - 1,323,850.00 1,083,150.00 £2,407,000.00

Capital (WLEP)

- 250,000.00 419,000.00 477,769.00 1,353,231.00 £2,500,000.00

Capital (WCC)

59,044.00 23,216.00 10,522.00 - 221,026.00 £313,808.00

Capital (WFDC)

- - - - 75,000.00 £75,000.00

Total 59,044.00 273,216.00 429,522.00 1,801,619.00 2,732,407.00 £5,295,808

10. The project’s £5.296m budget includes a £0.542m contingency (18% of the overall cost).

Programme Team’s recommendation is that any unspent contingency monies are returned to GBSLEP.

State Aid 11. WCC ascertains that the grant funding is State Aid compliant, due to competitive nature of

supplier selection in project delivery.

Conclusion 12. The GBSLEP Director approved the allocation of £2.407m LGF capital grant funding for the

Kidderminster Railway Station Building and Forecourt Redevelopment project. This is a strategically important project in a key GBS location. The project completed its key development milestones on time and is ready to start works on site.

Reviewed by: Tom Fletcher

Acting Head of Delivery

Prepared by: Lada Zimina Project Champion

Contact: [email protected] 07864 931 943

Date: 7 December 2018


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Investment Report - A38 Bromsgrove Major Scheme – Package 1

Recommendations 1. The LEP Board is requested to note the:

i. approval by the GBSLEP Director of the Programme Level Entry and conditional allocation of Local Growth Funding (LGF) of £2,261,993 (two million two hundred and sixty one thousand nine hundred and ninety three pounds) capital grant to Worcestershire County Council for the delivery of the A38 Bromsgrove Major Scheme – Package 1 project. This decision is in accordance with the GBSLEP Assurance Framework following the submission of the Outline Business Case and its Independent Technical Evaluation.

ii. that approval is subject to availability of funding, submission of Full Business Cases by the dates in this report and additional consideration and analysis in relation to the impact of the proposals upon sustainable transport modes.

Background 2. The A38 Bromsgrove Corridor Major Scheme (the Scheme) was included in the 2016 Growth

Deal 3 submission as part of the Breaking Down Barriers programme.

3. The Scheme comprises ten junction enhancements on the A38 corridor between junction 4 of the M5 to the north and its junction with the B4091 in the south. These works have been split into 5 packages. Given the overall cost and limited availability of funding the Scheme will be delivered in phases, Package 1 is the first phase and the subject of this report.

4. Package 1 of the Scheme includes improvements to the M42 Junction 1, the M5 Junction 4, and the A38 junction with Barley Mow Lane to provide additional capacity at existing pinch-points on the corridor. The proposed works differ at each junction but typically include carriageway widening, lengthening of approach lanes, creation of new lanes for turning traffic.

5. In November 2017 an Expression of Interest (EoI) for Package 1 was submitted to GBSLEP by WCC. At this point two options were under consideration;

i. Package 1a - GBSLEP funding request - £2.26 million

ii. Package 1b – GBSLEP funding request - £5.49 million (Inclusive of Package 1a)

6. The Scheme was assessed as a B strategic fit and an Outline Business Case (OBC) invited for Package 1a only. Subsequently Package 1a became known as Package 1 with the additional works from Package 1b to potentially be picked up as part of future packages.

7. Given the geographical overlap of the project, the sponsor Worcestershire County Council (WCC) are requesting Local Growth Fund capital grant from Worcestershire LEP (WLEP) and GBSLEP as well as Highways England (HE) for Growth Housing Fund (GHF) and a section 106 contribution.

8. An initial Conditional Approval Business Case, the WLEP equivalent of the GBSLEP OBC (referred to as OBC going forward) was submitted in May 2018 however the overall costs had

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increased and the proposed scheme was no longer affordable; HE worked with WCC over the summer to value engineer a revised scheme that delivered the same outcomes, at good value for money, within the funding envelope. A revised OBC was submitted in August 2018.

9. Post OBC, Package 1 will progress as three Full Business Cases relating to the three junctions in order of deliverability and time required to achieve detailed design, cost certainty and technical approvals.

Business Case Evaluation Process 10. In December 2017, it was agreed WLEP, as the major funder of the wider Scheme, would lead

on the project including independent technical evaluation. GBSLEP will attend Worcester Local Transport Board (WLTB) at key points for consideration of outline and full approval and progress funding decisions in line with GBSLEP Assurance Framework.

11. Jacobs ch2m produced an Appraisal Specification Report (ASR) which was agreed with GBSLEP Programme Team in April 2018 to ensure the evaluation covered the assurance requirements of both parties. The ASR also aligned the evaluation to the requirements of the HE GHF application.

12. In August 2018 Waterman Infrastructure & Environment (WIE) commissioned by WCC undertook independent evaluation of the final OBC produced by Jacobs ch2m.

13. Following the GBSLEP approval of the Programme-Level Entry and conditional allocation request, the project has been invited to submit a Full Business Case (FBC) for each of the three junctions. These should be submitted for Barley Mow February 2019, M5 Junction 4 September 2019 and M42 Junction 1 March 2020.

Case for change 14. The A38 corridor has significant congestion with access to and from the M5 and M42

constrained due to limited capacity on the local road network particularly around Worcester and Bromsgrove. It has been reported through local planning work this is constraining housing and economic growth.

15. By addressing issues at key junctions the Scheme aims to relieve current congestion and support planned housing and employment sites, 7,000 homes and 28Ha employment land for Bromsgrove and 6,400 homes and 55Ha employment land for Redditch. The Scheme also aims to improve access to employment opportunities in Birmingham and the West Midlands via the motorway network.

16. Package 1 addresses the M42 Junction 1, the M5 Junction 4, and the A38 junction with Barley Mow Lane relieving some of the key pinch points and is the first phase of the wider Scheme. These junctions play a strategic role on the wider network and link the local road network (A38) and the motorway network. The improvements defined in the Scheme are identified as a priority within the Worcestershire Local Transport Plan (LTP) the Bromsgrove Development Plan and the Redditch Local Plan.

Outputs 17. The Outputs will be shared proportionate to funding between HE, WLEP and GBSLEP.

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Output Description Output quantity; Package 1 Total;

Commercial floorspace 16,000 sq m

Jobs 707

Homes 432

18. The scheme is assessed as High Value for Money (VfM) with a Benefit Cost Ratio (BCR) of 3.03.

Outcomes

Outcome Description

Reduced queue length and delays on the A38

Increased journey time reliability Funding 19. Approvals secured;

i. Package 1 of the Scheme received approval subject to contract for £2,684,000 for GHF from HE in Oct 2018

ii. Section 106 of £1,341,547 has been allocated to Package 1 however this may not all be received prior to construction

iii. WLEP approved £7.5m for the Major Scheme November 2018 of which £1.3m is allocated to Package 1

iv. The Worcestershire Local Transport Board approved the Conditional Approval Business Case for WLEP 02 November 2018

20. Funding Profile:

Previous years 2018/19 2019/20 2020/21 Total

£ £ £ £

Capital (LGF) GBSLEP 414,123 1,433,747 414,123 2,261,993 Capital (LGF) WLEP 458,501 266,115 579,621 1,304,237 HE GHF 250,000 2,028,119 404,975 2,683,094 Section 106 383,119 0 0 949,898 1,341,547 Total 383,119 1,122,624 3,727,981 2,348,617 7,590,871

Conclusion 21. The project aims to reduce congestion and improve journey time and reliability through

efficiency of key junctions on the A38 corridor to enable economic growth across Bromsgrove and Redditch as the first phase of the Major Scheme.

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22. The LEP Director approved Programme-Level Entry and the conditional allocation of £2,3m LGF capital grant funding for the A38 Bromsgrove Major Scheme – Package 1 project over 2018/19, 2019/20 and 2020/21. The approval was conditional on:

i. submission of three acceptable Full Business Cases at the dates stated; Barley Mow February 2019, M5 Junction 4 September 2019 and M42 Junction 1 March 2020;

ii. availability of LFG capital funding; and

iii. the Full Business Cases providing additional consideration and analysis in relation to the impact of the proposals upon sustainable transport modes.

Prepared by: Wendy Edwards

Contact: [email protected]

07548 712827 Date prepared: 08 November 2018


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Programme Level-Entry Decision: Redditch Gateway

Recommendation 1. The LEP Board is requested to note the:

i. Approval by the Programme Delivery Board (PDB) of the Programme-Level Entry for the Redditch Gateway project following the submission and independent appraisal of an Outline Business Case, in accordance with the GBSLEP Assurance Framework;

ii. Approval of the conditional allocation of £1,840,000 (one million and eight hundred and forty thousand pounds) of Local Growth Fund (LGF) capital grant to Redditch Borough Council for the delivery of the Redditch Gateway project, subject to a satisfactory Full Business Case (FBC) and the availability of funding; and

iii. Approval of the conditional allocation of £2,500,000 (two million and five hundred thousand pounds) of Revolving Investment Fund capital loan funding to Redditch Gateway Infrastructure (RGI) Ltd. for the delivery of the Redditch Gateway project, subject to a satisfactory Full Business Case (FBC) and the availability of funding.

Background 2. Redditch Gateway (formerly known as Redditch Eastern Gateway) is a 25.5ha commercial

development site located on the Eastern side of Redditch, with a forecast of 1 million sqft of new commercial space; creation of around 2,060 jobs; and £90m additional GVA.

3. The Expression of Interest to LGF was submitted in October 2017 and received an ‘A’ strategic fit rating. GBSLEP Executive subsequently worked with project sponsors to develop an Outline Business Case (OBC), which was submitted in September 2018.

4. The OBC contains a dual application for a grant (applicant: Redditch Borough Council) and a loan (applicant: Redditch Gateway Infrastructure (RGI) Ltd., a Stofords Ltd subsidiary). The application is to GBSLEP and Worcestershire LEP, with both grant and loan broken down according to a 67%-33% share (grant total: £2.75m, out of which £1.84m to GBSLEP; loan total: £3.7m, out of which £2.5m to GBSLEP). The project’s total cost is £84m.

5. The grant element of the project is to support the road access to the business park; the loan is to support the cashflow of RGI during the construction, to be repaid by 31 March 2021.

6. The project is time-critical due to a transient nature of interest from prospective site tenants. In the current programme, highway works is planned to be procured in December 2018 and unit development to start in summer 2019.

Outline Business Case Appraisal 7. In recognition of the project’s complex stakeholder structure, budget and contractual obligations,

GBSLEP Executive commissioned two appraisals: Finance Birmingham to conduct due diligence on Stoford Ltd as the site developer, and produce a report proposing conditions on investment; and AECOM to undertake the Green Book-aligned technical evaluation of the OBC in support of the grant application. The appraisal of the OBC Strategic Case has been undertaken in-house by GBSLEP Executive. The red-flagged issues identified by the

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Independent Technical Evaluation have been subsequently resolved with the applicants; the remaining ‘amber’ issues will be addressed in preparation of the FBC.

8. At present, the summary of the appraisal is as follows:

Category Red Assessments (n)

Category Amber Assessments (n)

Category Green Assessments (n)

No Further Action (NFA) Assessments (n)

Strategic Case 0 4 8 0

Economic Case 0 3 6 2

Financial Case 0 3 6 3

Commercial Case 0 2 6 4

Management Case 0 7 8 1

Total 0 19 34 10

9. Direct outputs of the grant-funded element of the project include:

• 348m of new /altered road (dual carriageway), including junction • 89m of new (adoptable) road on development sites (both sides)

10. The project’s Benefit to Cost Ratio (BCR) is 1:5.8 which represents high value for money.

11. The project is affordable to LGF, with 95% of the grant request scheduled for FY2019/20.

12. The repayment profile for the loan will be determined at the FBC stage.

13. While the OBC was being appraised, the applicant submitted a request for grant allocation increase to £2.95m (an increase of £0.2m), necessitated by updated cost plans. Project costs will be confirmed at the FBC stage, at which point any changes in funding allocation will be appraised further.

14. The GBSLEP is acting as the lead body for the independent appraisal of the project on behalf of WLEP.

Conclusion 15. Redditch Gateway is recognised as an economic ‘game changer‘ within Worcestershire and

referenced as a key economic growth and regeneration project in GBSLEP’s Strategic Economic Plan.

16. The PDB approved the Programme-Level Entry and conditional allocation of grant and loan funding to the Redditch Gateway project.

Reviewed by: Tom Fletcher Acting Head of Delivery

Prepared by: Lada Zimina Project Champion Contact: [email protected]

07864 931 943 Date: 30 November 2018


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GREATER BIRMINGHAM & SOLIHULL LEP

BOARD MEETING 24th January 2019

Enterprise Zone Programme Update Report

Purpose This report provides a brief update on key issues relating to the Enterprise Zone (EZ) programme since the last meeting. An update on programme performance to the end of quarter 3 EZ will be provided at the next LEP Board meeting.

Recommendations The GBSLEP Board is requested to note the:

• Forward plan of tasks and activities in relation to the Paradise project, following its conditional funding approval by the LEP Board on 20th December; and

• Update on the review of EZ expenditure and the updated financial principles for managing the EZ programme.

Paradise 1. Following the conditional approval of EZ funding for Paradise Phase 2 by the LEP Board in late

December, the Supervisory Board noted the decision at its meeting on 14th January. A report will be taken by the Accountable Body to BCC Cabinet meeting to ratify the EZ funding decision and seek approval of the prudential borrowing on 22nd January.

2. The LEP Executive, BCC and the independent review team met in early January to prepare an action plan for the contract finalisation stage, including seeking assurance that the conditions of approval will be met. At the 27th March LEP Board, it is proposed that confirmation that these conditions have been satisfied (or assurance that they will be, for those that are a later date) will be provided. A further verbal update will be provided in the meeting.

Programme finances 3. At the last LEP Board meeting, Board Directors were asked to note a number of issues which

impacted on the in-year spend and overall level of contingency funding for the EZ in 2018/19 and 2019/20. In summary these were:

• Based on the current projections for business rate income, the programme is forecasting annual deficits for 2018/19 and 2019/20 which will result in an overall cumulative deficit of £2.7m in March 2020.

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• As a result this would require the use of contingency funding to fund the annual deficits, which would then provide a forecast contingency of £2,677 (two thousand six hundred and seventy seven) in March 2020.

4. Due to the risk of business rate income being below forecast and Birmingham City Council (BCC) not being in a position to fund the programme, the BCC EZ Delivery Team were asked to review the spend profile and identify measures to mitigate this risk and increase the level of contingency funding by March 2020. Below is a summary of that work and the impact on the programme.

5. A detailed review of expenditure has been undertaken to categorise projects into 3 scenarios as follows:

1. Contractually committed projects;

2. Projects with development funding against which future expenditure is forecast, subject to GBSLEP approval; and

3. Unallocated spend against EZ Investment Plan priorities.

6. Within each scenario the budgets have been reviewed to determine where spend could be withdrawn or slipped into later years. The focus for this work has been primarily to review revenue projects as this has the biggest impact on spend because the activity is directly funded from business rate income and not through prudential borrowing.

7. In scenario 1 only the projects which are contractually committed would be delivered, this would achieve a contingency budget of £447,000 by March 2020.

8. Scenario 2 includes those projects in scenario 1, plus projects for which the business cases are being developed and will be presented to the LEP in the next 2 years, such as the HS2 Curzon Station Public Realm, Digbeth High Street Public Realm and Smithfield projects. These are set out in the investment strategies for the 2014 and 2016 EZ Investment Plans and will be included within the forthcoming 2019 EZ Investment Plan. Under this scenario the contingency budget reduces to £270,000 and whilst it’s not possible to provide detailed spend profiles for these projects it’s anticipated that funding will be required in 2018-2020. Therefore, it’s recommended that this funding is ring fenced within the programme to maintain delivery.

9. Scenario 3 includes unallocated budgets against specific EZ priorities, but detailed projects have not been identified. This includes marketing activity and a proposal to extend the Sector Sales project. Including this expenditure reduces the contingency budget £2,000 and it’s recommended that this activity is not progressed at this stage and expressions of interest for funding against these priorities will be reviewed on a case by case basis and subject to the overall funding position for the programme.

10. At its last meeting, the Programme Delivery Board agreed to continue to deliver contractually committed projects and those in development (scenario 2). The Board agreed to ring-fence funding in the programme for projects within Scenario 2.

Capitalising revenue expenditure

11. As outlined above, reducing revenue expenditure will have the biggest impact on the overall level of spend in 2018-20. This is because every £1.00 of prudential borrowing for capital

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spends only requires £0.05p of business rates income, whereas every £1.00 of revenue spend requires £1.00 of business rates income.

12. In addition to re-profiling spend; a further way of reducing revenue is to account for it as capital expenditure, which can be done where the activity is supporting the development of a capital asset. Primarily this can be done for staff time and professional fees and following a review of the programme it has been identified that £389,000 of revenue spend could be capitalised as outlined below.

• EZ Delivery Team - £160,000

• Smithfield Project Development Costs - £117,000

• Paradise Business Case Appraisal – £112,000

13. Further work with BCC Finance is required to confirm that this capitalisation is acceptable under BCC’s procedures, the outcome of which will be reported at the next LEP Board meeting. When combined with the forecast contingency of £270,000 set out in scenario 2 this would create an overall level of contingency of £659,000 for the programme by March 2020.

Updated financial principles

14. In the Programme Delivery Board’s November meeting, the members requested that the financial principles which underpin the management of the programme are reviewed to ensure they provide sufficient safeguards against unforeseen reductions in business rates income. Following this work additional financial principles have been established as set out below:

1. An additional 5% of gross business rate income per annum is ring fenced for appeals. This is in addition to the 4.38% already set aside for appeals;

2. 5% of gross business rate income per annum is ring fenced to mitigate the impact of future business rate revaluations by Central Government. This would provide a greater level of funding against the current principle which allocates a notional £1m every 3 years; and

3. In the period 2020/21 to 2022/23 provision is made to repay the contingency budget from business rate income generated in those years for the use of Contingency sums that were previously utilised up to 2019/20 when in-year income was insufficient to repay the borrowing costs. This will ensure that the contingency budget is re-instated and sufficient to safeguard against lower than forecast business rate income in future years.

15. It was agreed at the last LEP Board meeting that an overview paper on the EZ financial model would be provided to the Board for further information. The overview is provided in Appendix A.

Conclusions 16. This report provides a brief update on key issues relating to the Enterprise Zone programme

since the last meeting. An update on programme performance to the end of quarter 3 for the Enterprise Zone will be provided at the next LEP Board meeting.

Prepared by: Tom Fletcher, GBSLEP Acting Head of Delivery Contact: [email protected]


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0121 303 2150 / 07860 906438 Date: 9th January 2019

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Enterprise Zone Financial Model Overview

Purpose At the last LEP Board meeting, it was agreed that further background information on the Enterprise Zone financial model would be provided, primarily for the benefit of Board Directors who have not been as closely involved in the Enterprise Zone. This report, provided for information only, gives an overview of the model and can be supported by a presentation at a future meeting if desired.

Background 17. The GBSLEP Enterprise Zone is a significant investment programme comprising capital projects

(£928m) and revenue projects (£86m) over a timeline through to 2045/46. The cost of the Investment Programme amounts to circa £1.5 billion with the associated costs being funded from the uplift on business rates generated from 39 specific sites in and around Birmingham city centre.

18. To help deliver and manage the programme a financial model has been established, which is based on the Enterprise Zone Investment Plan and updated on a bi-monthly basis. This model is held and maintained by Birmingham City Council (BCC) who has taken on board the role of Accountable Body for the Enterprise Zone and for GBSLEP.

Overall Structure of the Model 19. The model is held in an Excel format and comprises various background sheets which then feed

into a ‘consolidated summary’ to show the annual surplus / deficit position occurring each financial year. A cumulative position statement at the end of each year is also provided through the lifetime of the programme. To this end it contains 3 elements:

o Capital project expenditure profiles;

o Revenue project expenditure profiles and other revenue costs – including the borrowing costs (debt repayment and interest charges) arising from capital investment proposals (‘a’ above); and

o Income - business rate uplift and other income projections for each hereditament within the 39 EZ sites.

20. All projects are approved by the GBSLEP. Enterprise Zone projects are sponsored through BCC at present - be they directly delivered through the BCC, or, through another delivery partner i.e. under cover of a grant arrangement. This means that all EZ expenditure is accounted for through BCC’s audited accounts.

21. Despite its significant capital investment the EZ is a revenue based programme as the debt and interest costs arising from borrowing funds to undertake capital investment projects are then aggregated with other revenue project costs. In simple terms, the overall revenue costs incurred in year are then funded out of the business rate income uplift generated from the hereditaments located within the 39 EZ sites. In year surpluses or deficits in income over cost are then carried

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forward from year to year to give a cumulative funding position. This overall funding position is underwritten by BCC as part of the Accountable Body role. A model summary is presented below:

Capital

A Capital Infrastructure Projects

Revenue

B Borrowing Costs arising from Capital infrastructure Projects (A)

C Revenue Project Costs (and Allowances 15% Secured Income Contingency *)

D(B+C) Total EZ Revenue Expenditure

Funded From

E Gross Business Rate Income Forecast

F less Non Secured Business Rate Income & Provisions

G(E-F) Net Business Rate Income

H(D+G) Annual (Surplus)/Deficit Arising

I Cumulative (Surplus)/Deficit pre 15% Secured Income Contingency Sum

J Add back 15% Secured Income Contingency Sum *

K Cumulative (Surplus)/Deficit post 15% Secured Income Contingency Sum *

* see paragraph 12 g) which explains the Income Safety margin retention of 15%

22. The capital and revenue projects (and expenditures) detailed in the model are derived from the approved GBSLEP EZ investment Plan, as updated by the relevant BCC Project Officers.

23. At any given time the programme will include projects that have received full EZ approval and which are underway, along with future project programmed cost lines which have no formal approval status. Programmed lines will only mature into live projects once they have been appraised, assessed for affordability and approved.

24. Regardless of the approval status of specific projects the financial model takes the capital expenditure profiles of all projects into a separate spreadsheet whereby the associated borrowing costs (debt repayment and interest) are calculated. The borrowing costs from this calculation then return to the overall Consolidated Summary as a separate ‘infrastructure financing’ revenue cost figure in each financial year through to the programme end date in

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2045/46. This allows the actual and potential cost of the planned EZ capital investments along with the other revenue project costs to be identified.

25. Similarly, a separate excel sheet exists to record the actual and anticipated profile of business rate income that will be generated from all the properties within the nominated EZ sites, including future speculative development sites through to 2045/46.

26. Given the risk and uncertainty behind future business income being received on embryonic developments and the impact that this would have on the affordability of the EZ, the model removes those business rate income projections which are deemed to be ‘Not Secured’. This allows the model to present a more realistic position statement of overall affordability, especially when considering the approval of new investments. As the programme matures the level of identified ‘Not Secured’ business rate income should reduce.

27. At the end of the financial year the actual outturn figures recorded on BCC’s accounts for capital and revenue projects are populated onto the EZ Consolidated Statement. Future year cost profiles are then updated on the model as necessary to take account of either slippage or accelerated expenditure. The actual borrowing costs charged against capital outturn expenditure are also recorded. The Consolidated Statement therefore presents an actual and future budgeted financial position statement for the EZ Investment Plan.

Features of the EZ Investment Model and Financial Controls 28. In accepting the Accountable Body role for the Enterprise Zone, BCC has introduced a number

of controls for reasons of financial prudency. These controls are reflected in the operation of the financial model:

a) In accordance with BCC’s accounting and debt repayment policies all EZ borrowing costs arising from capital investments are repaid within the life of the EZ i.e. 31st March 2046 using an annuity;

b) Interest rates for EZ prudential borrowing costs mirror those applied by BCC for its own capital investment programme and are received from BCC’s Treasury Management team. Movements in interest rates are applied as directed by the Treasury Management team depending on the prevailing markets with different interest rates being applied for current and future year expenditure profiles;

c) A general inflation allowance of 2.5% is built into the financial model against revenue project costs as a control ‘buffer’;

d) Business Rate Income is assessed and categorised as either being ‘Secured’ or ‘Not Secured’. Only secured business rate income is taken into the financial model to ensure decisions on the investment programme are affordable;

e) An extended ‘lead in time’ of 6 months has been allowed for in the profiles for income appearing in the model i.e. from the time the Valuation Office sign off completion statements to the time business rate income matures;

f) Close assessment of developments for future business rate income projections. This involves inspection of planning applications and liaison with the Business Rate teams;

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g) To ensure that there are sufficient reserves available to meet short term falls in income or unexpected programme cost increases a sum equivalent to 15% of the annual secured business rate income is set aside on a cumulative basis as an Income Safety Margin. This sum is held as a Contingency;

h) A ‘Financial Principle’ test has been introduced whereby borrowing costs are monitored against a principle which says that they should be no greater than 65% of 85% of secured business rate income generated in any given year. (The 15% balance of secured business rate income is held as a contingency sum see g). This test is applied in appraising the affordability of new capital investment proposals and prevents the EZ from being over exposed to borrowing costs which cannot be afforded;

i) Based on advice from the Business Rates team a number of provisions are built into the financial model to allow for commercial reality:

a. 2% provision for Reliefs on Business Rates;

b. 2% provision for Bad Debts; and

c. 4.38% provision for Appeals.

j) Following the Government revaluation of business rate RV’s in 2017 the GBSLEP EZ suffered a significant downturn in its business rate income. To safeguard against the impact of this happening in future years a £1,000,000 deduction has been factored into the Business Income forecasts every 5th year as a ‘Revaluation Allowance’; and

k) Utilising Assets under Construction Policy. For BCC sponsored EZ projects which have assets under construction, BCC is able to take advantage of a local authority accounting guideline for the EZ’s benefit by smoothing out cost and income cash-flows by ‘rolling up interest’ so that borrowing costs hit the revenue account in the same period as business rates income arises.

Model Usage

29. The EZ financial model has a number of uses which complement the governance arrangements afforded to GBSLEP and BCC’s requirements. At any given time the model allows the costs of individual projects (actuals and forecast) to be seen within the context of the overall affordability of the programme. The design of the model therefore allows for:

a) Affordability assessments to be undertaken for potential new projects or project re-phasing;

b) Re-programming exercises and developing new Enterprise Zone Investment Plans;

c) Project prioritisation exercises;

d) Recording outturn;

e) Programme performance reporting; and

f) BCC Capital Budget monitoring / Prudential borrowing ‘ask’.

Updating the Financial Model

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30. The financial model is treated as a ‘working live’ model which is reported to the appropriate GBSLEP governance meeting as required. For version control purposes each reported model has a unique name before being saved to a new name for subsequent working updates. In this way the current model can be updated for known changes to expenditure phasing, business rate movements, interest movements (prudential borrowing) as well as any other issues which would impact positively or detrimentally on the finances of the EZ. The working version therefore presents the most accurate EZ financial position statement at any given time. A summary of the principal updates to the model are set out below.

a) Capital and Revenue Costs - provided for by BCC Project Officers as part of their regular EZ updates (also mirroring the BCC’s own Capital Monitoring & Reporting requirements);

b) Borrowing Costs - these are updated as capital expenditure profiles are varied;

c) Prudential Borrowing Interest Rates – borrowing for the EZ is managed as part of the BCC’s overall borrowing strategy and is managed by the authority’s Treasury Management team who advise about interest rate movements in accordance with the Money Market; and

d) Business Rate Income – for the 39 EZ sites there are currently in excess of 300 individual hereditaments which are or are planned to generate business rate income for the EZ / financial model. Each hereditament is reviewed on a bi monthly basis and updated for known changes in circumstance which would affect the business rate income profile. Specific intelligence is used to gather information including:

i. Reviewing planning applications;

ii. On site visit / updates;

iii. Reviewing business and property journals for site information / new development proposals; and

iv. Liaison with Business Rate team re: Appeals.

Sensitivities 31. The Enterprise Zone Investment Plan is predicated on a plan which contains expenditure

projections for major capital investment, revenue project support and the capital financing implications arising from debt repayment. It also contains income projections arising from the uplift in business rate income across the lifetime of the programme. Whilst high level risks have been identified and modelled out through sensitivity testing the assumed level of business rates income for the EZ is still highly sensitive to anticipated levels of development activity, especially if developments fail to materialise in line with projections. Similarly increased project costs or unexpected increases in interest rates on the cost of borrowing would also be detrimental to affordability and impact on the overall programme.

32. To manage out these risks a financial strategy along with the continual development reviews of the financial model has sought to put a set of financial principles and controls in place as mitigation measures. However whilst every effort is made to safeguard against the effects of any cost exposure the EZ will always have to react to events that are not within its control or influence e.g. property developer decisions, significant ‘Black Wednesday’ type interest increases or economic downturns. In such circumstances the EZ programme will need to be managed carefully by managing overall EZ revenue costs. The principal means of achieving this

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would be by a combination of restricting borrowing costs from new capital proposals or limiting new revenue project expenditure proposals.

Prepared by: Nigel Greenwood Finance Manager – Birmingham City Council

Contact: [email protected] Date: 16th October 2018


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GREATER BIRMINGHAM AND SOLIHULL LEP

24 January 2019

Place Delivery Plan Recommendations

1. This paper updates the LEP Board on progress against interventions set out in the Place Delivery Plan as approved by the Board in June 2018.

2. The paper also provides a set of priorities for the forthcoming year as reviewed and agreed by the Place Board on 10 January 2019.

3. The Board is requested to note progress achieved to date, future priorities for Place Board and comment, as felt appropriate.

Background

4. Following the approval of the Place Delivery Plan by the LEP Board in June 2018 progress has been made but not on the anticipated timescales. This is primarily due to staffing changes within the LEP Executive and a need to focus resource on issues arising from the LEP Review. This has resulted in delays, particularly in taking forward some elements of the Frameworks, as indicated in the attached updated Plan.

5. Since December 2018 a consultant Head of Place has been appointed to review the plan and take forward previously agreed actions including the Town and Local Centres and Housing Frameworks.

6. The Place Board recently met to discuss the updated plan and agreed a proposed way forward.

Progress Update

7. The Place Delivery Plan proposed LEP interventions in a number of areas where the LEP can add value. Progress includes:

8. Intervention: Commission Strategic Employment Sites Study (across the West Midlands

with Coventry and Warwickshire LEP and the Black Country LEP) to provide clear evidence-based recommendations for future major employment sites.

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• Work has commenced on the West Midlands Strategic Employment Sites Study. It is expected that an initial set of findings will emerge in January. This will be based on desk research and initial engagement activities. Further engagement will be taking place with stakeholders, both on the client group and wider GBSLEP stakeholders, including local authority partners, property agents and developers.

9. Intervention: Development of Energy Capital Initiative and implementation of Energy Innovation

Zones. • Progress is being made, although not as quickly as originally planned. This is primarily due

to slow responses from government to proposals. However, the response from government has been generally positive to proposals with specific progress as follows:

• Year 1 (to Mar’19) staffing resource secured with request for future staffing resource made to WMCA with the intent that Energy Capital staff are employed by WMCA. This will be confirmed (or otherwise) by end of Q1 2019.

• WMCA Board has approved and support the Regional Energy Strategy • Devolved powers and long-term finance package in early stages of discussion

with government • Two pilot EIZs in development at Tyseley Energy Park, Birmingham and UK

Central, Solihull. Third pilot in discussion with Engie, Cannock Chase DC and Lichfield DC in Rugeley.

10. Intervention: Develop a Towns and Local Centres Framework, which will allow us to:

• Support our local authority partners to develop individual town and local centres plans

to maximise attractiveness of places to live and work.

• Six funding bids to this end were approved with £266,000 being committed from the Strategic Economic Plan (SEP) Enabling Fund. These include Burton Town Regeneration Programme; Cannock Town Centre Investment Prospectus; Tamworth Gungate Development Project; Kidderminster Horsefair; Kidderminster Lion Fields; and the Redditch Town Centre Regeneration Project.

• The LEP Executive is also working with three Business Improvement District (BID)

proposals, including Sutton Coldfield Masterplan, Soho Road Highway Connectivity and Erdington Masterplan, with a view to taking them forward in 2019/20.

• Development of an ecosystem / economic geography approach to town and local centre

development, based on commissioned research, as outlined in the TLC Framework, is underway with a study brief in development.

• Deliver other key recommendations as outlined in the TLC Framework

11. Intervention: Deliver the key recommendations of the Housing Framework:

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• GBSLEP participating in conversations around the establishment of joint delivery vehicles, linked to the TLC Framework actions, with national experts which include funding options to support investment and development, exploring options where it can add value

• Research undertaken into feasibility of developing a cost of acquisition revolving loan fund appropriate by end of Q1 2019

• GBSLEP participating in conversations around the establishment of a pool of planning

expertise to tackle planning delays and build out delays, exploring options where it can add value

12. Intervention: Develop a Cultural Action Toolkit to identify funding instruments and

prioritise investments that will strengthen the region’s cultural offer for economic growth

• Cultural Action Toolkit in draft. The cultural questions component of it has been tested and is being incorporated into GBSLEP funding applications from January 2019.

• Publication will be forthcoming in Q1 2019. Place Board Priorities for 2019-2020

13. Priority 1: Establish a TLC network by Spring 2019:

• Hold the first meeting of the TLC network bringing together local authority partners and BIDs to support the Ecosystem research and bids to the Future High Streets Fund where appropriate.

• Establish bi-annual network meetings to support partners in developing local plans and strategies and supporting future funding bids including commissioning research and projects where appropriate.

14. Priority 2: Commission and complete ‘Ecosystem’ research by end Q3 2019:

• This will identify the role, assets and opportunities of each local centre across the

LEP geography which, in turn, will support the development of plans and strategies by partners for their centres.

• The research will provide GBSLEP with an understanding of the role of local centres across the geography and support future investment priorities.

15. Priority 3: Feasibility study into appropriate investment model by end Q2 2019:

• Establish the feasibility of an investment model, based upon the Town Centre

Investment Zones model, for the GBSLEP area and options to include a revolving/recyclable loan fund to support the cost of acquisition and speed up development.

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16. Priority 4: Host a public launch of the TLC and Housing Frameworks by end Q1 2019:

• An event will be held with key partners and stakeholders to formally launch the Frameworks, setting the scene and demonstrating the LEP’s commitment to the Place agenda.

• Invite Ministers to attend the event thereby creating a dialogue with central government around our work in these areas and demonstrating that the GBSLEP is leading the way on innovative and strategic thinking.

17. Priority 5: Establish the resources required to continue delivery against the Frameworks by

end Q1 2019:

• Identify future funding requirements to support partners to deliver local actions • Identify where LEP intervention is required to kick-start and/or deliver local projects.

Conclusion

18. The Board is asked to note progress achieved to date, future priorities for Place Board and comment, as felt appropriate

Prepared by: Shanaaz Carroll on behalf of Paul Edwards Place Consultant Contact: [email protected] 07795 267381 Date: 11 January 2019


1

GBSLEP Place Delivery Plan 3 Year Delivery Plan (2018/19-2020/21)

Proposed GBSLEP intervention(s)

Market opportunities and failures

Milestones Success measures Lead(s) and partners LEP resources Progress Update RAG

(a) Commission Strategic Employment Sites Study (across West Midlands metropolitan area with Coventry and Warwickshire LEP and the Black Country LEP) with clear recommendations for future sites.

Insufficient key employment sites constraining growth Clear opportunity to pull together information which will inform the development of the Local Industrial Strategy.

Study drafted by autumn 2018 Study finalised by end of 2018

Success measures will be identified as part of the development of the SES Study, which will be completed by the end of 2018. However, the longer-term aspiration will be to develop a pipeline of locations.

Private sector GBSLEP Coventry and Warwickshire LEP Black Country LEP Staffordshire County Council LEP area Local Authorities WMCA

£50,000 from SEP Enabling Fund to deliver the SES Study. Staff time – GBSLEP Head of Strategy.

Study underway. Milestones missed due to delay in agreeing study brief across multiple partners. Long list of sites provided for review/refinement with round table planned for January for LPAs. Round table session planned with developers to ensure engagement in the project. Phase 1 baseline report expected by end of January

AMBER ⃝ ⃝ ⃝

(b) Development of Energy Capital Initiative and implementation of Energy Innovation Zones.

Energy Infrastructure is constraining growth across our key industries

Energy Capital to be formally launched in March 2018 with clear policy recommendations. (achieved) Secure government support to enable Energy Innovation Zones through the Industrial Strategy Challenge Fund and a place-led

By end of 2018: Establish and recruit Energy Capital working groups and staffing resources. Agree appropriate devolved powers with government. Establish pilot EIZs, including at least two in the GBSLEP geography.

GBSLEP WMCA LEP area Local Authorities Private sector

£20,000 from SEP Enabling Fund to develop and launch Energy Capital. Staff time – Executive Officer for Innovation BEIS funding for Energy Officer (tbc)

Energy Capital was formally launched in March 2018. Progress is being made, although not as quickly as originally planned. This is primarily due to slow responses from central government to proposals. When responses have come they have been generally positive. Two pilot EIZs in development in GBSLEP geography at Tyseley Energy Park, Birmingham and UK

AMBER ⃝ ⃝ ⃝

2




Clean Growth Sector Deal.

Detail and negotiate a long-term finance package.

Central. Third pilot in discussion with Engie, Cannock Chase DC and Lichfield DC in Rugeley. There is likely a strong case for a SEP Enabling Fund bid from the local authorities to support development of this third EIZ.

3




(c) Develop a Towns and Local Centres Framework, which will allow us to:

(i) Support our local authority partners to develop individual towns and local centres plans to maximise attractiveness of places to live and work. (ii) Develop an ecosystem / economic geography approach to town and local centre development, based on commissioned research, as outlined in the TLC Framework. (iii) Deliver other key recommendations as outlined in the TLC Framework

Thriving towns and local centres are key to economic growth across the region, attracting and retaining talent, and providing welcoming environments for quality jobs. However, our local authority partners have seen their regeneration and economic development budgets cut, and have struggled to deliver projects. The LEP can assist by enabling partners to develop individual master plans for their centres, and by commissioning research to see how towns can collaborate and complement each other across the GBSLEP area.

TLC Framework signed off by LEP Board on 5 June 2018. Each local authority partner supported to develop town centre master plans by 2020. Research undertaken into feasibility of and developing a business case for a cost of acquisition revolving loan fund appropriate by end of 2018. Economic geography / ecosystem report produced by summer 2019. GBSLEP beginning to act as a project commissioner by end of 2018. GBSLEP facilitating a TLC network by the end of 2018. GBSLEP working with the What Works Centre for Economic Growth on best practice in

l i f

Partners have town centre plans in place and are applying to a number of sources for funds for town centre regeneration projects – both capital and revenue – based on the contents of those plans. Cost of acquisition revolving loan fund operational by 2020. (tbc) Ecosystem / economic geography study completed, enabling the LEP and partners to take forward complementary development and activities across the area. GBSLEP acting in the interests of the whole LEP area, commissioning complementary town centre projects. TLC network established and providing added value to partners. G S l i

GBSLEP LEP area Local Authorities WMCA TfWM WWCEG

Additional £500,000 for the development of TLC plans from the SEP Enabling Fund (£500,000 already ring-fenced). c. £75,000 for the development of the ecosystem study from the SEP Enabling Fund. Funding for capital projects through LGF (over £60m of TLC capital projects already on the pipeline, with more project proposals expected). c. £20,000 pa for networking activities. c. £10,000 for feasibility research, and £XXm to deliver a revolving loan fund for acquisition costs. Staff time – Executive Manager for Place, Executive Officer for Assets; Programme Team; Head of Delivery

Initial review underway of work/projects and applications for funding. Engagement with local areas as needed to provide input to projects (e.g. Soho Road). Options for loan fund/JV being explored including Town Centre Investment Management model (see BPF Report here). Initial discussions on ecosystem research piece held with a view to producing a brief/scope of work. Discussions underway re coordination of BIDs across GBSLEP area to ensure joined up approach and ease of communication. Other non-BID areas to be contacted in the January with common areas of interest identified

(i) AMBER ⃝ ⃝ ⃝

(ii) GREEN ⃝ ⃝ ⃝

(iii) AMBER ⃝ ⃝ ⃝

https://www.bpf.org.uk/sites/default/files/resources/TCIM-summary-paper.pdf

4




(d) Deliver the key recommendations of the Housing Framework

An appropriate supply of housing is essential to the continued economic growth of the LEP area. The lack of good quality affordable housing and the overall housing shortfall within the region will have a detrimental impact on growth if left unchallenged.

Housing Framework signed off by LEP Board on 5 June 2018. GBSLEP participating in conversations around the establishment of joint delivery vehicles, exploring options where it can add value. Research undertaken into feasibility of developing a cost of acquisition revolving loan fund appropriate by end of 2018. GBSLEP participating in conversations around the establishment of a pool of planning expertise to tackle planning delays and build out delays, exploring options where it

GBSLEP playing a role in joint delivery vehicle(s) as appropriate e.g. as a funding partner (tbc). Cost of acquisition revolving loan fund operational by 2020. (tbc) Pool of expertise to tackle delays established and operational by 2020. (tbc)

GBSLEP LEP Local Authorities WMCA Housing providers

Resource requirements under review pending options analysis. c. £XXm through LGF to deliver joint delivery vehicle activities. c. £10,000 for feasibility research, and £XXm to deliver a revolving loan fund for acquisition costs. c. £xxk to facilitate the operation of a pool of expertise. Staff time – Executive Manager for Place, Executive Officer for Assets; Programme Team; Head of Delivery.

Options for loan fund/JV being explored including Town Centre Investment Management model which could include housing (see BPF Report here). Discussions being held with networks to establish applicability/appropriateness within GBSLEP area. No progress. Initial discussions being had with MHCLG relating to ‘High Streets fund/Task Force’ including on national level expert resource pool and GBSLEP as exemplar for local action

AMBER ⃝ ⃝ ⃝

https://www.bpf.org.uk/sites/default/files/resources/TCIM-summary-paper.pdf

5




can add value.

(e) Develop a Cultural Action Toolkit to identify funding instruments and prioritise investments that will strengthen Birmingham as a leading global city and improve the region’s cultural offer Identify, improve and invest in the region’s cultural offer to create a distinctive sense of ‘place’ Develop a world class creative, cultural and digital infrastructure across the region

Key role of cultural infrastructure, skills development and community capacity building in developing and retaining talent, at a time when culture budgets are being cut. Commonwealth Games 2022.

Publish the Cultural Action Toolkit by June 2018. Develop access to new funding instruments and specific cultural investment actions from September 2018 Develop the range of strategically important cultural projects in GBSLEP’s programme pipeline

Industry has a greater awareness of new approaches to funding culture New funding instruments for culture have been launched More strategic capital cultural projects are progressing through GBSLEP’s programme pipeline

GBSLEP through its Creative Industries Partnership Culture Central Sector Intermediaries WMCA

£50,000 through the SEP Enabling Fund. c. £Xm to deliver cultural projects Staff time – Executive Officer for Culture and Creativity

Cultural Action Toolkit in draft. The cultural questions component of it has been tested and is being incorporated into GBSLEP funding applications from January 2019. Delays due to changes in national policy, awaiting the results of a new national cultural enquiry and capacity issues at GBSLEP. GBSLEP has been engaging on the development of funding instruments by working with consultants on the Core Cities Cultural Enquiry and with Arts Council England. Details within the cultural component of GBSLEP’s Placemaking Delivery Plan will be developed to a first draft by April 2019. GBSLEP will publish a shorter version of Culture Central’s report: ‘Investing in Culture: The opportunity to Capitalise on our cultural strengths’ during first quarter 2019.

AMBER ⃝ ⃝ ⃝

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GBSLEP has been engaging with DCMS as well as the WMCA and other stakeholders locally, regionally and nationally as a new approach to cultural funding is developed.

Place Delivery Plan Update – Jan ‘19

TLC Framework

• Initial review underway of work/projects and applications for funding.

• Engagement with local areas provide input to projects (e.g. Soho Road).

• Options for loan fund/JV being explored including Town Centre Investment Model

• Ecosystem research discussions underway to produce brief/scope of work.

• TLC network discussions underway with national organisations. ToR for group in development.

Strategic Employment Site Study

• Initial results expected Jan 19

• Wider stakeholder engagement planned (inc. developers/agents)

Energy Capital • Two pilot EIZs in development in

GBSLEP geography at Tyseley Energy Park, Birmingham and UK Central.

• Third pilot in discussion with Engie, Cannock Chase DC and Lichfield DC in Rugeley

Housing Framework

• Options for loan fund/JV being explored including Investment Management model

Priority Actions Deliverables 2019/20 Outcomes/Success Measures Q1 Q2 Q3 Q4

Better connect GBSLEP with industry to improve the quality of our interventions, leading to improved economic growth for Greater Birmingham & Solihull

Formalise existing industry linkages by launching GBSLEP 'Industry Connect' Members will help inform LEP thinking on the needs, challenges and opportunities for business growth in our region, framed within our key sectors focus and delivery plans. Sector groups will provide the LEP a sounding board for designing and developing our interventions through targeted consultation. For the businesses, it will provide a dedicated forum to provide their feedback, thoughts and ideas all year round.

Launch dedicated page on the GBSLEP website, to include;

i. Information on purpose of Industry Connect initiative

ii. Contact information to

express an interest. Launch a light touch social media campaign via twitter & LinkedIn. Message positioning (high-level):

i. We want to listen to industry perspectives when designing policy

ii. We are launching the

Industry Connect forum to make it easier for businesses to engage with us

Contact businesses already engaged in development of sector interventions, to explain the purpose of our Industry Connect initiative and invite them join:

1. Businesses from our key sectors, recently engagement in the development of LEP delivery plans and WM Local Industrial Strategy

2. Businesses who have expressed an interest following the GBSLEP annual conference

Industry engagement to refresh the LEP’s delivery plans:

i. Sector specific targeted consultation to inform the development of LEP sector delivery plans

ii. Cross sector group to consult on cross cutting delivery plans, inc. emerging technologies/innovation, skills, and business support

Further development of the webpage to:

1. Showcase participating businesses on our website, recognising them as supporters actively engaged in shaping the regional economy as a private sector collective, via members directory

2. Provide a forum for them to connect with each other

3. Portal to access research reports, sector intelligence etc. on a curated page

Launch a dedicated forum for training providers, to increase dialogue around matching regional training provision supply and demand Example of working in practice: Life Sciences Through its industry engagement GBSLEP has identified a skills gap in a lack of Lab Technicians, and limited local training provision, despite there being an approved apprenticeship standard since 2014. GBSLEP currently is unaware of why employers are not utilising the standard. The Industry Connect forums would provide a simple mechanism to create new provision to match the employer’s demands.

Outputs: A dedicated forum to engage industry on targeted consultation, as well as an ‘open door’ to receive industry input, ideas and feedback all year round More businesses engaged in the development and interventions of the LEPs delivery plans Demonstrate commitment to working with our stakeholders to help us identify barriers to growth and working collaboratively to overcome those barriers Baseline measurement of GBSLEP’s reputation within key sectors, Target 100 responses. Outcomes: Businesses feel better listened to, and more able to input into strategy – in turn increasing credibility of LEP interventions Increased awareness of GBSLEP strategy amongst businesses within our key sectors Increased confidence in GBSLEP’s strategy amongst businesses within our key sectors

Create ‘baseline’ survey to measure business sentiment toward GBSLEP Survey to measure 4 key areas: 1. Awareness of GBSLEP 2. Awareness of GBSLEP strategy 3. Confidence in GBSLEP

Marketing campaign with a stronger push on reaching and appealing to ‘new to the LEP’ businesses (no previous engagement) to join the initiative

Survey (as Q1) to measure improvement


strategy 4. Understanding of how businesses can input into the strategy Collect survey responses:

1. Share link to survey via social media channels and newsletter

2. LEP Executive to take survey link to events where industry

present

Analysis of survey results to inform further development of the engagement strategy

Better connect GBSLEP with industry to improve the quality of our interventions, leading to improved economic growth for Greater Birmingham & Solihull (continued)

Deliver more high impact events across the GBSLEP geography, as an opportunity to engage stakeholders 1. Launching interventions with potential impact on local businesses 2. Partnering with business representative organisations to host roundtables with the business community on specific topics

Work collaboratively with Business Representative Organisations (BRO), as well sector specific professional bodies and trade associations to plan a small number of co-hosted roundtables/workshops with private sector members across the geography Roundtables will focus on defined topics, related to specific challenges/opportunities for business growth, and will feed into the development of GBSLEP interventions/provide an opportunity for GBSLEP to update on specific pieces of work

Outputs: Increased opportunities to listen to industry perspective Enhanced working relationship with BROs to gain industry input Businesses feel better listened to, and able to input into strategy Outcomes: Increased understanding of GBSLEP strategy amongst BROs, who will be better equipped to communicate GBSLEP strategy to their membership Increased awareness of GBSLEP strategy amongst businesses within our key sectors Increased confidence in GBSLEP’s strategy amongst businesses within our key sectors

Work collaboratively with the Federation of Small Businesses (FSB) to plan a small number of roundtable events, focused on topics relating to areas of challenge/opportunity for members E.g. Small businesses accessing university support programmes Roundtable event co-hosted with FSB Identify and approach further BRO partners / topics Create events schedule for 2019

Roundtable event (topic/partner tbc)



Date/venue secured for the Annual Conference 2019 Theme(s) agreed for Annual conference 2019

Annual conference 2019 (June)

Annual conference evaluation and planning for 2020


Increase level of visibility of GBSLEP interventions and impact, to build credibility, and feeling of relevance within our target business community

Increased schedule of thought leadership pieces from Board Directors and the LEP Executive, in line with launching interventions/projects from GBSLEP A new approach to sharing information: alongside detailed pieces of work, clear and informative ‘bite size’ content will also be shared, for example infographics and videos, to ensure that impact is easily understood

Infographics campaign to run alongside KPI achievements press release Launch 1001 Trades report, accompanied by summary piece and video from GBSLEP Young Person’s NED Launch Towns and Local Centres Framework Future of regional funding

BPFS: Apprenticeships - Invite BPFS business leader to contribute to thought leadership piece on apprenticeships as an alternative route into the sector SME focus: inclusive business support Energy Technologies: Energy Innovation Zones /Launch of TEP refuelling station

Life Sciences: Local Industrial Strategy sector action plan/cluster development plan Funding for Growth Creative Industries: Local Industrial Strategy creative industries sector action plan

Advanced Manufacturing: Diversification - Invite the Rail Alliance to contribute to thought leadership piece, incorporating learnings from one year of Rail Mentor work with businesses Innovation: demand-led innovation

Outputs: Provide higher level of visibility of GBSLEP interventions, as well as 'expertise' and impact, to build credibility, trust and feeling of relevance within our target business community Clearer & informative information to ensure that GBSLEP interventions and impact is easily accessible and more widely understood Outcome: Raise the profile of GBSLEP within our target business community

Increase integration and alignment of GBSLEP and the GBSLEP Growth Hub communications, to enhance the reputation of the LEP as a credible delivery partner within the business community

Input into the development of a refreshed marketing strategy for the Growth Hub, particularly focused on reaching our key sectors, and increased visibility of the Growth Hub’s impact within the SME community Better utilise the Growth Hub database to provide a better quality of data insight and evidence from SMEs when developing interventions

Organise a ‘marketing workshop’ with key individuals involved in Growth Hub marketing & communications to agree approach Update the GBSLEP website to provide better signposting to the Growth Hub Update the GBSLEP website to strengthen messages on Growth Hub impact

‘Advocacy Pilot’ focused on creating a network of business supported by the Growth Hub, who will become advocates for the Growth Hub services/impact amongst our key sectors: Decide the scope/purpose and best platform for communication/how regularly to communicate – to integrate with the development of the Growth Hub peer to peer learning network(s) Develop content plan, focused on providing information and tools to best enable individuals to provide advocacy for the Growth Hub Pilot: Invite businesses participating in the Mentoring for Growth programme to become advocates for the GBSLEP Growth Hub - providing a forum to maintain engagement post 12 months of support via the MfG programme

Invite wider network of businesses supported by the Growth Hub to become advocates for the GBSLEP Growth Hub - providing a forum to maintain engagement post diagnostic and referral

Outputs: Raise the profile of GBSLEP as a credible delivery partner Raise the profile of GBSLEP Growth Hub amongst key sector businesses Businesses supported by GBSLEP Growth Hub become advocates for the Growth Hub services, leading to increased credibility Better quality of insight gained to inform design of business support interventions Outcomes: Increase in reputational credibility of Growth Hub Increase in companies contacting Growth Hub following direct referral from business

Ongoing support obtaining local insights into business concerns and preparations for Brexit


Meaningfully engage our young people - the next generation of this region’s leaders - in the next generation of the Greater Birmingham economy

Develop and launch the GBSLEP ‘Future Economy’ initiative: A recognised forum to engage with young people, with a particular focus on designing policy interventions in relation to the future of our economy, including topics:

i. Jobs of the future

ii. Future Economy Delivery Plan: interventions focused on designing an economy that benefits all of our young people

Identify and invite partner organisations to take part. Identify in more specific detail which groups of young people we'd like to engage with for this initiative, for example, groups that have been traditionally disengaged with developing the economy, and identify partners who have particular expertise or strong existing engagement with the identified groups Invite identified partners to a project Advisory Group, chaired by GBSLEP Young Person’s NED Identify members of small dedicated project group to take the project forward Soft launch in Q2

Develop schedule for a series of engagement events, to take place in venues outside of the city centre, facilitated by project partners Q4: Develop PR and wider stakeholder engagement strategy to launch full project Q1 2020

Outputs: Young people feel that they are able to affect change and input into the GBSLEP strategy Young people directly inform policy design, leading to better quality interventions, particularly those affecting the future of the GBSLEP economy Better quality of insight gained to inform design of interventions Outcomes: Future Economy initiative informs interventions across LEP Delivery Plans Production of Future Economy Delivery Plan with key interventions identified

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January 24th 2019

Stakeholder Engagement Plan

Recommendations

Board Directors are asked to:

1. Consider and approve the proposed Stakeholder Engagement Plan attached at Appendix 1.

Background

2. At the July 2018 GBSLEP Board meeting, the Board approved a Stakeholder Engagement Strategy which outlined the intent of a new Stakeholder Engagement Plan aimed at:

i. Maximising the influence of GBSLEP as a key regional voice and credible delivery partner

ii. Increasing meaningful engagement with business and other partners to inform future interventions for the benefit of the economy

3. The Stakeholder Engagement Strategy identified a clear need to increase the types, level and frequency of stakeholder engagement with our business community. In particular, the focus was to be on better connecting GBSLEP with industry to improve the quality of our interventions.

4. The agreed strategy is primarily a listening strategy. It is about listening to what our companies and partners tell us is important to unlocking economic growth and acting on those conversations.

5. The focus of engagement activities will be on building profile amongst the business community, and engaging them in the development and interventions of the LEP’s delivery plans. We will do this by providing opportunities to listen and discuss growth challenges & opportunities.

Key Issues

6. Since the July Board, the executive team have developed a high-level Stakeholder Engagement Plan, based on the agreed strategy.

7. The stakeholder engagement plan presented is based on the five key approaches to increase business stakeholder engagement as outlined and agreed at July Board. The plan details the key deliverables required in 2019 to achieve the priorities detailed in the aforementioned plan.

8. The key actions to increase our stakeholder engagement are:

i. Formalise existing industry linkages by launching GBSLEP 'Industry Connect'

ii. Deliver more high impact events across the GBSLEP geography, as an opportunity to engage stakeholders

iii. Increased schedule of thought leadership pieces from Board Directors and the LEP Executive, in line with launching interventions/projects from GBSLEP

iv. Better utilise the Growth Hub database to provide a better quality of data insight and evidence from SMEs when developing interventions

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v. Develop and launch the GBSLEP ‘Future Economy’ initiative: A recognised forum to engage with young people, with a particular focus on designing policy interventions in relation to the future of our economy

11. In the first instance, the focus of engagement, via ‘Industry Connect,’ will be with business leaders of mid-scale businesses. This is on the basis that LEP-led interventions of relevance to these businesses have potential to unlock the barriers to growth with the largest potential impact on the local economy.

12. Activities are designed to achieve a sustained depth of engagement with businesses in our key sectors. In parallel, the plan also highlights complementary routes to raise the profile of the LEP within our key sectors, increasing the breadth of our engagement with industry.

13. Successful delivery of the stakeholder engagement plan will mean more businesses are engaged in the development and interventions of the LEP’s delivery plans. In turn, increasing the credibility of the LEP’s interventions, and our reputation for delivery.

14. As agreed in the July Board meeting, the budget for this activity will be met through savings incurred by bringing the majority of outsourced activities in-house, including the Growth Hub marketing and communications activity. This will be found within the existing LEP budget for 19/20 and reviewed for future years. Delivery of the Plan will be upderpinned by dedicated resource within the LEP Executive, supported by members of the wider team.

Conclusions 15. GBSLEP Board is asked to comment and, if felt appropriate, endorse the actions highlighted in the

plan for the year ahead.

Prepared by: Katie Fulcher on behalf of Paul Edwards, Head of Strategy Stakeholder Engagement Manager Contact: [email protected] 0121 303 8060

Date Created: 11th January 2018

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19 July 2018 1 of 1

GREATER BIRMINGHAM AND SOLIHULL LEP BOARD

24 January 2019

GBSLEP LTD COMPANY STATUS – PUBLIC

Purpose 1. This item provides the LEP Board with an update on the legal status of GBSLEP

Ltd.

Reasons for Exemption 2. In accordance with GBSLEP’s scheme of publication, this paper is exempted from

publication as though the LEP were subject to the provisions set out in Section 12A of the Local Government Act 1972, paragraph 3, as the paper contains

Information relating to the financial or business affairs of any particular person (including the authority holding that information)

3. The information relates to the legal and financial status of GBSLEP Ltd, which is commercially sensitive and publication could prejudice ongoing negotiations.

4. An accompanying private paper has therefore been prepared and has been circulated to the LEP Board.

Prepared by: Nick Glover Executive Manager [email protected]

Date Created: 16 January 2019


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GREATER BIRMINGHAM & SOLIHULL LEP BOARD MEETING

15 January 2019

GBSLEP FINANCE REPORT Recommendations 1. The LEP Board is recommended to:

1.1. Note the 2018/19 year-end forecast outturn Local Growth Fund (LGF) and Growing Places Fund (GPF) capital projects income (£19.3m) and projects expenditure (£37.9m) and the March 2019 forecast carry-forward position for LGF, GPF and Revolving Investment Fund (RIF) (£18.2m);

1.2. Note the 2018/19 year-end forecast outturn Business Rates Pool (BRP) revenue income (£3.3m) and expenditure (£2.1m), and the March 2019 forecast carry-forward position for BRP (£4.1m);

1.3. Note the 2018/19 year-end forecast outturn revenue income (£5.7m, including BRP) and expenditure (£4.4m) and the forecast March 2019 carry-forward position for revenue income funds/reserves (£4.7m);

1.4. Note that as a result of the Local Government Finance Settlement 2019/20, GBSLEP will receive no further Business Rates Pool (BRP) income beyond January 2020; and that the Board will receive a further report on this and wider implications of business rates retention in March; and

1.5. Approve the use of BRP funding for operational expenditure of £0.167m.

Background 2. The report contains the following information, and is based on actual spend as at the end

of quarter 2:

• Financial Dashboard

• Key financial reports for:

o Intervention/delivery programmes – capital and revenue

o Operational/revenue activity – income, expenditure, outturn

• Appendices

o Key Financial Risks

o Revenue Projects current status

3. This report is a decision-support tool for the LEP Board – if additional or different financial information is required by the Board to enable financial decisions to be taken, this will be designed into the next and subsequent Finance reports.

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Financial Dashboard 4. The following Table 1 contains the high-level financial position of the LEP in terms of

year-to-date income, expenditure, and year-end forecast outturn for capital projects, revenue projects and operational revenue activity.

BALANCE SHEET

£mCapital – Cash reserves – LGF 36.7 19.3 -37.8 18.2

- GPF 10.0 0.1 -0.1 10.0

46.7 19.4 -37.9 28.2

Revenue – Cash reserves - Operational 0.4 2.4 -2.3 0.5

- BRP 2.9 3.3 -2.1 4.1

3.3 5.7 -4.4 4.6

INCOME & EXPENDITURE

£m

INTERVENTION/DELIVERY PROJECTS

CAPITAL PROJECTS SPEND – LGF 9.0 8.3 28.8 29.5 37.8 37.8

- GPF 0.0 0.0 0.1 0.1 0.1 0.1

REVENUE PROJECTS SPEND – BRP/SEF 0.4 0.3 1.4 1.5 1.8 1.8

OPERATIONAL

Operational Spend (incl rev projects) 1.5 1.3 3.2 3.1 4.7 4.4

Operational Income (incl rev projects) -0.7 -0.6 -5.0 -5.1 -5.7 -5.7

- government funding – LEP -0.5 - government funding – Growth Hub -0.5 - LGF PM Fee -1.2 - BRP -3.3 - Other income -0.2

-5.7

Year-End Forecast Outturn Spend/

(Income)

Period 6 YTD Budget Spend/

Period 6 YTD Actual Spend/

(Income)

Rest of Year Budget Spend/

(Income)

Rest of Year Forecast Spend/

(Income)

Year-end Budget Spend/

(Income)

closingopening Forecast Income in Year

Forecast Spend in Year

5. While LGF and GPF are showing £28.2m in cash reserves, the majority of that funding is allocated to projects and/or is held in the RIF.

6. The strategic financial risks are set out in Appendix A. The key issue to note – the shortfall in funding for the Medium-Term Financial Plan arising from the dissolution of the BRP – is covered in more detail below.

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Key Financial Reports

Capital interventions 7. The summary of the forecast year-end financial position of the capital projects monitored

and managed by the LEP is as follows, in Table 2:

8. The LGF is a six-year programme in its fourth year, where an annual allocation is drawn

down from Government at the start of each financial year.

9. The GPF has £10m of funding allocated to the Mezzanine Fund which is managed by Finance Birmingham on the LEP’s behalf.

10. The LEP recently took over responsibility for managing the Enterprise Zone programme. At this stage, there is no specific funding provided to the LEP for taking on this responsibility, and no costs are included in the budget or the forecast outturn spend either. It will continue to be monitored separately, through the Enterprise Zone’s programme management arrangements.

11. A number of ESIF-funded projects, some of them revenue and some capital projects, will be delivered this year, although funding and costs of these are not included with the LEP’s budget or in the forecast outturn.

12. The LEP Board is asked to note the 2018/19 year-end forecast outturn LGF/RIF/GPF income (£19.4m) and expenditure (£37.9m – including the funding allocated this year) and the March 2019 carry-forward position for LGF/ RIF/GPF unspent funds (£28.2m).

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Revenue interventions 13. The summary of the forecast year-end financial position of the revenue projects

monitored and managed by the LEP and funded by BRP income is as follows, in Table 3:

RESERVES - BALANCE SHEET

£m

Business Rates Pool

- Brought forward 2,949

- approved -416

- under development -469

LEP Exec Costs -193 E&S costs -226 Other operational -127 Project Spend -657 Income Jan 2019 3,274

TOTALS 2,949 3,274 -1,542 -546 4,135

2018/19 Forecast

Operational Spend

Unspent/In-hand funds 31

March 2019

- forecast rest of year

NotesUnspent/In-

hand funds 31 March 2018

2018/19 Forecast Income

2018/19 Forecast

Project Spend

NB: An additional £217k revenue projects are planned to be funded by Growth Hub BEIS funding; and the LEP Board has agreed to fund LEP Exec costs £193k plus Employment & Skills costs £226k

14. There has been a slow start with revenue projects in the first half, as in previous years. Quarters 3 and 4 are predicted to receive the majority of revenue grant claims as happened last year.

15. The forecast project approvals at the year-end are £1,759k as per budget, with £1,542k funded from BRP and £217k from the Growth Hub.

16. A full listing of revenue projects and their status is included as Appendix B. This listing includes new additional projects totalling £220k which were not in the original budget but have been approved by the Board according to the agreed SEP Enabling Fund process, although some of the budgeted projects have not started yet, so the year-end forecast has been maintained at budget levels.

17. The LEP Board is asked to note the 2018/19 year-end forecast outturn BRP revenue income (£3.3m) and expenditure (£2.2m) and the March 2019 carry-forward position for BRP unspent funds (£4.1m).

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Operational revenue 18. The summary year-end forecast revenue income, expenditure and carry-forward

balances are as follows:

2018/19 FORECAST RESERVES £000

In-hand funds 31

March 2018

2018/19 Forecast Income

2018/19 Forecast

Spend Operational

2018/19 Forecast

Spend Projects

2018/19 TOTAL

Forecast Spend

ShortfallFunding

Transfers

Forecast In-hand funds 31

March 2019

FUNDINGGovt funding 0 500 -995 -995 495 0 0 LGF Interest 169 29 -29 -29 0 0 169 Growth Hub 218 552 -302 -217 -519 0 0 251 PM Fee 0 1,204 -605 -605 20 -599 0 BRP 2,949 3,274 -419 -1,542 -1,961 0 -167 4,095 GPF 0 100 -19 -19 0 0 81 LEP Review transition funding 0 0 -251 -251 251 0 0 Enterprise Zone 0 0 0 0 0 0 0 Other income 17 0 0 0 0 0 17

TOTAL INCOME 3,353 5,659 -2,620 -1,759 -4,379 766 -766 4,613

19. All income is expected to be just below budgeted levels (£5.9m) at the year-end (£5.7m).

20. All costs are expected to be just below budgeted levels (£4.7m) at the year-end (£4.4m).

21. The Programme Management Office Capitalisation income (PM Fee in the table above) to be received in 2018/19 (£1.204m) covers 2018/19 Programme Management Office costs (£0.605m), and other costs incurred as set out below.

22. While the table above shows the LEP is likely to have £4.1m unspent BRP income at the end of the year, £3.3m will only have been paid in January 2019.

23. On 13 December 2018, Government announced new 75% Business Rate Retention Pools in Staffordshire and Worcestershire. Ultimately, this means that the current Greater Birmingham & Solihull BRP cannot continue and that GBSLEP will not receive any further Pool income beyond January 2020. The LEP Executive is liaising with local authority Finance Directors on plans to dissolve the Pool and the options for distributing the £2m contingency funding held within it. This method for doing this will ultimately be decided by GBS Pool Leaders.

24. The Board should be aware that this presents a significant fall in forecast income for 2020/21 and 2021/22 in the Medium-Term Financial Plan. Initial forecasts suggest that the LEP should still be solvent, but with significantly reduced reserves. Further work is required to determine the impact, and GBSLEP’s options to be financially sustainable in the future. This will be undertaken in collaboration with local authority Finance Directors. It is therefore important that some BRP funding is held in reserve at this stage.

25. In addition, the table above highlights a shortfall in operational income (£2.385m excluding BRP) of £0.766m. The following key issues have been identified:

• Significant programme management costs have been incurred in previous years that should have been attributed to capital, but could not be as no policy was in place with the Accountable Body. This has depleted in-hand funds. The Programme Management Capitalisation income will therefore be used to meet the costs of the Programme Management Office this year (£605k), and contribute towards other

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revenue costs that would have been met from in-hand funds had the income been received in previous years.

• GBSLEP has not yet secured any of the transition funding made available as part of the LEP Review (GBSLEP bid for £215k as part of this process for 2018/19), and is unlikely to do so given the challenges in resolving overlaps. Forecast income is therefore zero. Funding has been spent on activity related to the development of the Future Operating Model, the costs of which will need to be met from other sources.

26. The Programme Management Capitalisation income received this year can meet a significant portion of costs incurred (£0.599m); however, at least £0.167m will need to be met from BRP this financial year, representing unfunded LEP Review transition costs.

27. The Board is therefore recommended to approve the additional expenditure of £0.167m from the BRP.

28. The Board is asked to note the 2018/19 year-end forecast outturn revenue income (£5.7m) and expenditure (£4.4m) and the forecast March 2019 carry-forward position for revenue income funds/reserves (£4.7m).

29. The Board is asked to note that as a result of the Local Government Finance Settlement 2019/20, GBSLEP will receive no further Business Rates Pool (BRP) income beyond January 2020.

Conclusion 30. This paper sets out GBSLEP’s actual income and spend as at the end of quarter 2, as

well as forecast income and spend for the financial year. It highlights one significant financial risk brought about by the impending dissolution of the GBS BRP. It recommends that the Board approves the expenditure of £0.2m from the BRP to meet a shortfall in operational expenditure, largely brought about by the lack of funding to date from Government to support the implementation of the LEP Review.

Prepared by: Keith Mitchell, Finance & Transformation Consultant Nick Glover, GBSLEP Executive Manager Date: 15 January 2019

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APPENDIX A - Strategic Financial Risks

RiskLikelihood

HighMedium

Low

ImpactHigh

MediumLow

Mitigating actions Status - As at January 2019Residual risk

HighMedium

Low

Risk/Actions Owner

1Revenue Projects Income - Business Rates Pool income fails to materialise (£1-3m pa)

H H Retain a portion of BRP as contingency and for spend in future years

BRP FDs have confirmed that GBSLEP will receive £3.3M BRP income in January 2019 for the year to March 2018.However, as per the Local Government Financial Settlement, Worcestershire and Staffordshire have been awarded 75% rate retention pools which will mean no more BRP income from after January 2020.

H Nick

2Revenue Operations Income - PMO Capitalisation Charge is undeliverable (£2-3m over 6 year LGF period)

M HPMO charging has been agreed by the Board and is being implemented by the Accountable Body

Documentary evidence and formal claim to be made to AB early 2019

M Keith

3Revenue Operations Income - Government commits no further Core Funding (£0.5m pa)

M H

Retain a portion of BRP as contingency for spend in future years and implement PMO charging to reduce reliance on Government funding; consider commercialisation of core LEP activity as part of the FOM

BRP FDs have confirmed that GBSLEP will receive £3.3M BRP income in January 2019 for the year to March 2018Documentary evidence and formal claim for PMO charge to be made to AB early 2019

M Nick/Keith

4Capital Projects Income - Limited funding to deliver LGF strategic pipeline priorities (additional £40-50m needed)

H MExecutive commissioning a Strategic Funding Advisor to develop a funding strategy, looking at wider sources of funding

Strategic Funding Advisor appointed and started October - Hilary Smyth-Allen

L Tom

5Accountable Body Grant Administration - Procedural constraints prevent efficient allocation of funding

H MGBSLEP and BCC governance is being revised to ensure funding can be issued swiftly once GBSLEP has approved funding

Streamlined governance process working better and grants being approved faster

L Nick

6

Revenue Projects LEP Grant Administration - Limited Executive capacity to develop interventions (£1.8m budget set 2018/19)

M M

The Executive will review resource needs in 2018 and continue to develop and commission interventions, and will seek to promote funding opportunities more widely

£250k of rev grants have been approved to date, with another £550k under development in the pipeline

L Paul

7

Revenue Projects Partners Grant Administration - Limited capacity at key partners to develop and propose interventions

M MExecutive commissioning a Strategic Funding Advisor to develop a funding strategy and support partners

Strategic Funding Advisor appointed and started October - Hilary Smyth-Allen

L Tom/Paul

8

LEP Review Income - BEIS funding for the transition to an independent incorporated organisation under the LEP Review fails to materialise (£200k 2018/19 and £200k 2019/20)

M MIf LEP cannot comply with BEIS requirements, seek approval from LEP Board to fund FOM transition from BRP income

LEP requested approval to retain LA boundary overlaps - BEIS rejected and indicated funding may not be provided if non-compliance - under negotiation

M Katie T

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Appendix B - 2018/19 Revenue Projects – Current Status

Service Intervention2018/19

Budget £Actual YTD

Grants £Forecast

Outturn £ NotesScrutiny Work Programme projects 16,666 16,666 £50k over 3 yearsHUB Development Fund projects 17,500 18,850 SEP Enabling Fund - Ringfenced projects previously approved: - cultural economy toolkit 50,000 50,000 - employment & skills resource; grants to local ESBs 80,000 80,500 80,500 - innovation enabler 50,000 50,000 50,000 - towns & local centres framework (TLC) 500,000 266,000 500,000 YTD 6 grants (Wendy) - strategic employment sites study 50,000 50,000 - westside vision 30,000 30,000 - Channel 4 study 25,000 25,000 25,000 - Life sciences inclusive growth 50,000 50,000 - ESF Tech Assistance proposal - match 33,333 33,333 £100k over 3 yearsSEP Enabling Fund - NEW proposed Delivery Plan projects:AME 1: Leadership programme (GHDF) 40,000 40,000 GHDF/HUB Dev FundAME 3: SME Framework 50,000 98,950 98,950 Hi Speed rail mentoringAME4: Supplier Framework 10,000 22,000 AME5: Skills Pilot 40,000 40,000 AME: Lead generation contribution to WMGC commission 100,000 100,000 £50k 17/18 and £50k 18/19BPFS 1: Lab Pilot 15,000 50,000 50,000BPFS 2: Cluster support 10,000 10,000Creative 2: creative industries pathway (brokerage) (GHDF) 25,000 23,650 GHDF/HUB Dev FundCreative 2: creative industries pathway ( cluster excellence toolkit) 30,000 15,000Creative 3: cross sector collaboration (IP test beds) 25,000 0Creative 4: Creative industries promotion (WMGC) 30,000 10,000Creative skills - mapping 60,000 50,000 50,000Life Sciences 2a): scale up support (GHDF) 17,000 17,000 GHDF/HUB Dev FundLife Sciences 2b): cluster support 30,000 30,000Energy 1: opportunities mapping 20,000 20,000Energy 2a): EIZ support 7,000 7,000Energy 3: Low Carbon Network 10,000 10,000Business support 2: Angel Investment Hub advisor (GHDF) 15,000 15,000 GHDF/HUB Dev FundBusiness support 3: A2F portal update for alternative finance (GHDF) 5,000 5,000 GHDF/HUB Dev FundBusiness support 6: inclusive growth workshops & support (GHDF) 40,000 40,000 GHDF/HUB Dev FundBusiness support 6: Black Listings UK (GHDF) 20,000 20,000 GHDF/HUB Dev Fund - under contractBusiness support: Silicon Canal (GHDF) 38,000 38,000 GHDF/HUB Dev Fund - under contractDigital: Digital Skills 50,000 72,000 72,000Channel 4 Stage 2 Study 50,000 40,000 77,500West Midlands Innovation Alliance grant 15,000 15,000 15,000 TLC Ecosystem Study 75,000 75,000 Place Delivery Plan interventionLand Acquisition Loan Fund Feasibility Study 10,000 10,000Place-Making Network Development 20,000 20,000 continuing spend each year over MTFPNEW1001 trades (Beatfreaks) 0 10,000 10,000GBS Ladder (Performance Through People) 0 60,000 60,000CEC BPFS & Enterprise Coordinator (CEC) 0 68,000 68,000creative scale up video series for Growth Hub Knowledge Bank 0 5,000intermediary support - Film Birmingham (BCC) 0 23,530intermediary support - West Midlands Screen Bureau (BCC) 0 10,000creative skills - freelance brokerage pilot (tender) 0 20,000Botanical Gardens Business Plan Development 0 30,700

0 01,759,499 885,450 2,062,679

INCREASE/(DECREASE) 303,180 Cells highlighted in yellow show variance from budget, as addressed in the body of the report.

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24 January 2019 CHANNEL FOUR: LESSONS LEARNT & NEXT STEPS

Recommendations

The Board is asked to:

1. Note, the likely underlying reason for Channel 4 deciding not to move to Birmingham; the long-term disinvestment in the sector by industry and the public sector over several decades.

2. Note, that the Channel 4 bid process has galvanised the sector like never before and has opened up a strong desire amongst creatives to further develop and promote the sector’s talents and strengths on the national and world stage.

3. Note, that GBSLEP will continue to develop its regional leadership position around Creative Industries, including continuing work on the ‘West Midland’s Creative Industries Local Industrial Strategy’ Sector Action Plan (CI LIS) and ‘Creative Industries Regional Skills Task Force’.

4. Note, that GBSLEP will continue investing in the creative sector as agreed within the Channel 4 bid, as this expenditure aligns with the agreed GBSLEP’s Creative Industries Delivery Plan and the regional CI LIS.

Background

5. The West Midlands region did not win either the Channel 4 HQ or one of the Creative Hubs despite a strong campaign and the shortlisting of Birmingham as one of three potential locations.

6. Feedback from Channel 4 indicated that the clinching factor for not moving to Birmingham was the lack of an established production base or a strong production supply chain.

7. During the process, Channel 4 had led us to believe that our strong ‘young, digital &

diverse’ talent pool would give them something new for the future and that this was more than enough compensation for our lack of studios and existing production.

8. At the beginning of the bidding process, Channel 4 indicated they may leave London

completely, but by the end of the process it was clear they would retain a significant presence in London with a scaled back HQ, saying they would move 200 or so staff to Leeds. In the light of that there is an argument that a Birmingham HQ was simply too close to London and that a significant presence in the north of England was politically important to Channel 4.

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9. Industry puts the failure down to one factor; the consistent disinvestment in the sector

over the last 20+ years, starting when BBC and then ITV substantially scaled-back their operations. This was re-enforced by consistent public sector under-investment during the same period. Other cities, notably Manchester, Leeds, Cardiff, Bristol and Glasgow, had sustained industry and public sector investment over the same period, giving them a considerable advantage today.

10. However there is positive news. The Channel 4 Bid has galvanised the sector with over

250+ attending recent events, re-enforcing the view that the bidding process has created a new momentum that should be capitalized on to leverage creative sector growth and its impact across the whole economy.

11. There are genuine growth opportunities across the creative sector right now including:

• Netflix, Apple and Amazon together are spending upwards of £20 billion in the coming year on production; more of that spend can be won within this region

• Mercian Studios (Stephen Knight) has the potential to transform the region’s ability to compete for high-end production

• The region’s 5G large-scale test-bed brings an advantage in trialing new media production techniques and delivering innovative mobile-based storytelling

• Major cultural events are driving global opportunities and regional investment via Coventry City of Culture and Commonwealth Games

• Connecting creatives into all sectors, e.g., technical advances and lowering costs, for example in virtual, mixed & augmented reality, are opening up markets in entertainment, education, manufacturing and healthcare

Key Issues

12. GBSLEP’s creative economy is currently worth £4.1bn GVA1, accounts for 50,000 jobs and has the potential to add 3,965 new enterprises and 30,000 new jobs2, taking our creative workers from 5.6% of the workforce now to 9%, which is the national average.

13. GBSLEP’s Creative Industries Delivery Plan identified substantial emerging growth potential across Film & TV; Games and Serious Games; Virtual Reality (VR) and Augmented Reality (AR); and web based services, focused around Innovative & Immersive Content and High End Content Production within the Creative Content value chain.

14. Sector growth potential is underpinned by existing strengths in Advertising & Marketing;

Design; ICT, software and computer services3 with unique growth opportunities across

1 GVA is Gross Value Added, a measure of the value of goods and services produced in an area, industry or sector of an economy. https://en.wikipedia.org/wiki/Gross_value_added 2 Creative Economy Mapping Study for GBSLEP https://gbslep.co.uk/resources/reports/creative-economy-mapping-study 3 Department for Culture Media & Sport classifies 80% of workers within ‘IT, Software & Computer Services’ as doing creative occupations

https://en.wikipedia.org/wiki/Gross_value_added

https://gbslep.co.uk/resources/reports/creative-economy-mapping-study

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Jewellery & high-value ‘makers’ (including 3D design engineering) within the Creative Originals value chain.

15. In addition there are strengths around Performance within the Cultural Experiences

value chain. 16. GBSLEP’s investments will seek to stimulate region-wide actions wherever possible as

we have been developing the ‘West Midland’s Creative Industries Local Industrial Strategy’ (CI LIS) and are leading work on the ‘Creative Industries Regional Skills Task Force’ on behalf of the West Midlands. Government is expecting new creative industry investments from the region based on this work and so it is timely for GBSLEP to deliver specific measures for the creative sector as in our delivery plan.

17. The proposed timetable for the above work is as follows:

Jan19 onwards

Continue delivering GBSLEP’s Creative Industries Sector Plan, aligning it wherever possible with plans at CWLEP, BCLEP and the CI LIS at WMCA

Jan-Apr 2019 Continue developing the cultural part of GBSLEP’s Place-Making Delivery Plan

Conclusion

18. Board directors should note the reasons for Channel 4 deciding not to invest in the region through its new HQ or Creative Hubs.

19. Board directors should note the intent of GBSLEP’s Creative Industries Delivery Plan and leadership role for the sector as part of the Local Industrial Strategy to put the industry in a stronger position for future opportunities.

Report by: David Furmage, Creative & Cultural Lead Officer, GBSLEP Report for: Anita Bhalla Date Created: 24 Jan 2019

Item 20

19 July 2018 1 of 2

GREATER BIRMINGHAM AND SOLIHULL LEP BOARD

24 January 2019

West Midlands Industrial Strategy

Purpose 1. This paper updates the LEP Board on progress in development of the West

Midlands Industrial Strategy, attaches the version endorsed by the West Midlands Combined Authority (WMCA) Board on 11 January 2019 and outlines next steps in development of the Strategy.

Recommendation 2. To note Local Industrial Strategy as approved by the WMCA Board.

Background 3. The West Midlands is the first place in the UK to develop a local industrial

strategy as one of three trailblazer areas.

4. Development of the Strategy is led by the WMCA, the three Local Enterprise Partnerships (LEPs) in the West Midlands, the West Midlands Growth Company and the Department for Business, Energy and Industrial Strategy (BEIS).

5. The overall aim of the West Midlands Industrial Strategy is to deliver economic growth and drive productivity in a way which fundamentally improves opportunities for all communities, businesses and residents, responding to productivity challenges and that growth and the benefits of growth are uneven within the West Midlands.

6. Development of the Strategy is being overseen by the Strategic Economic Development Board of the WMCA, on which the Chair of Greater Birmingham and Solihull LEP sits.

Key Issues 7. As Board Directors will recall, an industrial strategy consultation process ran from

12 October 2018 until 15 November 2018. This was complemented by a series of engagement events with local businesses, of which GBSLEP led eleven events.

8. Following this engagement the following changes were made to the draft strategy:

• Inclusivity was made even more central. • Improved clarity about the West Midlands’ USPs and distinctiveness whilst

avoiding “picking winners” and being clear about what the evidence tells us about future trends, existing strengths and barriers.

• Expansion of the opportunities on future mobility, creativity, business, professional and financial services as the headline cross-sectoral opportunities based on our economy, its characteristics and strengths.

• More specificity provided on the role and importance of our supply chains

Item 20

19 July 2018 2 of 2

• Improved recognition of place – cities, towns and rural areas - and the diversity of outcomes across the West Midlands geography.

9. Reflecting these comments the Industrial Strategy outlines the following

approach: • Identifying four major national and global strategic opportunities where

the West Midlands has existing and emerging strengths and the supply chains needed to make a major contribution to the new markets being created by global trends:

o The UK centre for the future of mobility, which includes digital and light rail, electric vehicles and connected and autonomous vehicles (CAV), aerospace, data handling, battery manufacturing and the huge supply chain opportunities all this provides to our firms

o Creative content, technologies and techniques including nationally important gaming, TV, Film, VR and AR firms and expertise but also, crucially, using creative skills and assets in businesses and universities to design, develop and deploy new products and service

o Business Services with large scale growth forecast in the sector and in the use of business services skills across wider firms as we move increasingly to a more service-based economy

o Data driven health care through a significant opportunity to combine strengths in translational medicine with real life testing, in partnership with our diverse and growing population. NHS patient records are a huge opportunity, linked to 5G.

10. All of these are underpinned by and will contribute to the Commonwealth Games, City of Culture and collective investments in infrastructure, housing and skills.

11. This approach was fully endorsed by the WMCA Board, which agreed that the next step will be to move quickly to secure government approval.

Next Steps

12. Government have been clear that they want a shared process to finalise this strategy and the WMCA and the three LEPs will continue to pursue these conversations.

13. Future funding for additional implementation of new and existing priorities emerging through the Local Industrial Strategy will be part of Spending Review discussions and potential priorities for the UK Shared Prosperity Fund.

Prepared by: Paul Edwards

Head of Strategy, GBSLEP [email protected]

Date Created: 14 January 2019

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Contents 1 Introduction ..................................................................................................................................................... 2

2 Metrics and Indicators ................................................................................................................................. 5

3 Strategic Opportunities ................................................................................................................................ 8

4 The West Midlands Economy ................................................................................................................. 17

5 Productivity and Output ........................................................................................................................... 21

6 Inclusive Growth ......................................................................................................................................... 24

7 Sectors ............................................................................................................................................................. 28

8 Actions to drive growth and productivity ......................................................................................... 32

Ideas ............................................................................................................................................................. 32

People – Skills and Employment ....................................................................................................... 37

Business Environment .......................................................................................................................... 45

Infrastructure ........................................................................................................................................... 48

9 Commitments and Implementation ..................................................................................................... 55

10 Annex 1 WMCA Performance Management Framework ............................................................ 58

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1 Introduction

1.1 The West Midlands is in renaissance. A global force and major part of the UK economy,

generating £99bn of GVA or 5% of UK output.

1.2 We are growing fast, with output up 27% over the past 5 years. A record number of

people are in work and lowest number are out of work. Productivity is increasing too,

at twice the rate of the UK in 2017/18.

1.3 Our cities, towns and rural areas have long been centres of industrial innovation,

creativity and enterprise. A legacy that survived the industrial restructuring of the

1970s and 80s and is now the engine of our current and future success.

1.4 The West Midlands is large and diverse, consisting of three interlinked, but distinctive

economic areas. Our cities, many towns and important rural areas are home to

distinctive communities with very different characteristics. But all share a long history

of creative design, making and producing. Doing things differently and leading the way

is what defines us.

1.5 We’ve been supplying components and assembling vehicles from the first bikes to

today’s autonomous pods. We built the world’s first production line and now we create

virtual worlds for testing new products based on real data. We provide the real-life

testing needed to get new medicines from the lab to patients. Our firms provide

modern components and materials to global supply chains in a wide range of industries,

and our digital creative businesses create games played across the world.

1.6 Our universities and commercial research and development (R&D) centres are central

to the UK, developing the skills, products and processes it will need tomorrow, as well

as being major employers and core to the future of the towns and cities that host them.

1.7 In 2016 leaders from business, education, local government and a wide range of other

organisations came together to agree an ambitious but achievable economic strategy.

We have focussed on delivery and made good progress. The overall targets and metrics

set in 2016 will continue to drive our actions and investment and be used to measure

our overall progress.

1.8 But alongside celebrating our recent success, we need to remove the barriers that

remain. Performing at its full potential, our economy would be £15.1bn larger and we

would have higher average earnings and more people earning above the real living

wage. Recent growth has also been concentrated in a number of places and too many of

our communities have not benefited as much as they should. Developing a focussed

plan for inclusive growth is an important priority in this strategy.

1.9 Much has changed in the global, national and local economy since our 2016 strategy. In

developing this trailblazing local industrial strategy, we have taken the opportunity to

refresh priorities, take stock of the evidence and agree the actions that will have the

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most impact in unlocking the barriers that lie between us and our long-term goals of

strong growth and improved productivity in a more inclusive economy. This is what

our local industrial strategy is designed to do:

• The strategy begins by identifying four major national and global strategic

opportunities, where the evidence shows that the West Midlands has both existing

strengths and the ability to make a major future contribution. They are cross sector

and not focussed on any one part of our region; all our firms and communities can

benefit in different ways. They also show how the West Midlands can make the

strongest contribution to the Grand Challenges set out in the Government’s national

Industrial Strategy.

• We then set out the distinctive characteristics of our economy with our USPs for

residents, businesses, investors and entrepreneurs. They show what makes us what

and who we are, the strengths that set us up well for the future and where there are

barriers to growth and productivity that we need to address.

• Then we set out the actions that we are going to take, building on our opportunities

and removing those barriers.

1.10 Throughout the strategy we reflect the distinctiveness of the different places and

communities of the West Midlands. Some of the actions in this strategy are region wide.

Others are focussed on specific needs or opportunities. But all will contribute to our

goals of more inclusive growth and higher productivity.

1.11 The 2022 Commonwealth Games and Coventry City of Culture are major opportunities

for local firms and communities and to showcase the region to investors and visitors

and leave a lasting legacy.

1.12 This strategy is based on the most up to date and detailed evidence possible. Over the

last three years, we have developed an extensive evidence base and undertaken a

number of expert independent commissions and studies into skills and productivity,

mental health, leadership and the availability of land for housing and employment. The

actions in this strategy are informed by that highly credible body of evidence.

1.13 It has been co-designed with the involvement of over 350 organisations, led by the

Combined Authority with the 3 Local Enterprise Partnerships, who have worked with

a wide range of organisations and sector groups and carried out public consultation

during the Autumn of 2018.

1.14 Our universities have played a major role in developing our evidence base and our

assessment of the strategic opportunities ahead. Ongoing work with businesses

themselves and industry groups to develop sector action plans has been crucial in

identifying actions and looking ahead. These emerging action plans will be essential in

how sectors and firms themselves implement our local industrial strategy, reflecting

the fact that our growth and productivity is driven by the region’s private sector.

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1.15 Whilst focussed on the 3 LEP area, it also looks to our crucial economic, trading and

supply chain relationships with close neighbours (including non-constituent members

of the CA outside the 3 LEP area) and partners in the UK and globally.

1.16 It is not a strategy set in stone and is designed to continue to evolve as the economy

changes. As we develop it further, we will continue to involve and engage with the

communities, businesses and sector groups across West Midlands.

Ian Ward Andy Street Jonathan Browning

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2 Metrics and Indicators

2.1 In 2016 the West Midlands agreed a comprehensive approach to monitoring the overall

performance of our economy across a wide range of indicators. This is set out in Figure

1 below. The targets we have set against these indicators are set out at Annex 1,

together with the most recent progress against them which we publish in our annual

State of the Region report.

2.2 This local industrial strategy does not set new targets, we have concluded that the long

metrics we set in 2016 are still appropriate. They continue to drive our investment

programme and are delivered through a number of other regional and local delivery

mechanisms, including individual LEP investment plans, the Housing and Land Delivery

Plan, Regional Skills Plan and Transport for West Midlands (TfWM) Movement for

Growth strategy.

2.3 The local industrial strategy is focussed on those actions which will drive future output

and productivity growth, whilst improving inclusion and opportunities for all our

residents. It integrates existing plans, such as those above, updates some actions and

proposes new interventions where the evidence suggests that this is appropriate. It

does not set a new set of targets.

Figure 1 - Tracking the West Midlands Economy

2.4 Figure 2 shows how this approach is reflected in the structure of the local industrial

strategy. Actions are targeted at specific foundations of productivity, based on what

the evidence shows us about our economy and sector specific strengths and barriers,

and where the market alone will not deliver the outcome required. These actions will

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support the whole West Midlands to take advantage of the strategic opportunities

ahead.

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Figure 2 West Midlands Local Industrial Strategy

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3 Strategic Opportunities

3.1 The future success of the West Midlands lies in our ability continue to influence and

adapt to long term global and national trends. These include:

• Large scale urbanisation and population growth.

• Rapid technological change, advances in the creation and use of data, and increasing

automation and artificial intelligence.

• Longer life expectancy, an ageing population with increasingly complex needs and

later pension ages.

• Increasing awareness of local and global environmental impacts and the transition to

a low carbon, resource efficient economy.

• The long-term trend towards a more service-based economy, for example in mobility.

• Growing concern about communities and people that have been left behind by recent

growth.

3.2 All these factors, and others, create demand for new products and services, presenting

opportunities for growth. They are also opportunities to drive productivity, as firms

and individuals change the way they work and develop new skills and techniques to

succeed. These changes affect all areas of our economy, crucially, the existing supply

chains that underpin the region’s success.

3.3 The opportunity and challenge for the West Midlands is to use our existing strengths

and emerging expertise to ensure clarity on our distinctive opportunities, and to ensure

that not only our firms and communities benefit, but that we do so in a way that plays

a leading role in the UK’s response to global trends and future economic success. The

West Midlands has the scale and size - in terms of geography and population - and the

level of committed investments to enable the development of test-markets at scale.

These attributes enable us to address the Grand Challenges that Government has set

out and drive UK economic growth.

3.4 We have been careful to ensure that these opportunities are specific to the West

Midlands and reflect where our USPs link with global trends. We have worked with all

the West Midlands universities, a wide range of sector groups and trade bodies, and

market experts to understand what global trends and new markets mean for the

different sectors and places of the West Midlands.

3.5 The evidence shows there are four distinctive strategic opportunities where we can

play a leading role in the next generation of industry, products and services, improving

the productivity and inclusivity of our economy as we do so. Successfully exploiting

these will involve a wide range of opportunities for all our firms, from the region’s

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existing large firms and anchor institutions through to SMEs and firms of all sizes. Our

SME and micro business base in particularly will see huge opportunities from the

related new markets that are emerging.

3.6 The distribution of our supply chains, universities, colleges and existing and future

employment land means that success in these areas will benefit all our cities, towns and

rural communities, plus other areas across the UK, with the potential for a much more

inclusive future.

3.7 Delivering a greater volume of good quality employment land is critical to the success

of our strategic opportunities, particularly through greater utilisation of brownfield

land. Through the National Brownfield Institute in Wolverhampton the West Midlands

will be a nationally and internationally significant centre of expertise, driving an

increase in potential land availability locally, such as Phoenix 10 in Walsall and i54 in

Wolverhampton. Successful conversion and extension of these kinds of sites will also

underpin the strategic opportunities.

1. Smart Mobility

The West Midlands is the centre of transport innovation in the UK, leading the smart, low carbon movement of people and goods

3.8 The West Midlands is the recognised centre of transport and mobility innovation in the

UK and has some of strongest clustering of automotive technology activity in the world.

Our ability to be a long-term leader in the production of new transport systems is

rooted in our successful history of leading the specialist design and manufacturing of

vehicles from bicycles through to automotive, precision aerospace components and

autonomous pods. We are widely recognised as the existing home of automotive and

the mobility industry of the future, in a global cluster that includes cutting edge

research and development, globally competitive supply chain firms and established and

new OEMs. This is a cross sectoral opportunity, enabling and requiring collaborations

between gamers, designers, digital and physical component makers, data and legal

experts, circular economy and energy firms amongst many.

3.9 We are the UK’s platform for creating, developing, testing and building global and

national solutions to the future of mobility and associated supply chains, including large

scale battery manufacture and the move to electric vehicle (EV) powertrains across the

full range of transport modes. A plethora of firms from the foundation industries of

metals and materials underpin our manufacturing prowess, reflecting the robustness

and inter-connectedness of the region’s supply chains.

3.10 The West Midlands is at the forefront of the research, development and production of

Connected and Autonomous Vehicles (CAV), Electric Vehicles and large-scale battery

manufacture. We will soon be home to the UK Battery Industrialisation Centre (a key

component of the UK Industrial Strategy and focussed on enabling industry to scale up

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and commercialise advanced technologies central to the development and manufacture

of batteries), and we have an unparalleled range of innovation assets (including Horiba

MIRA’s research and testing centre & technology park, WMG, Manufacturing

Technology Centre, National Transport Design Centre, and the Centre of Excellence for

Digital Systems for Rail); OEM’s and tier 1 manufacturers undertaking R&D and

production in this field (including JLR, BMW, Bosch, Brose, Denso, Geeley London Taxi

Company, Siemens, Telent and Volvo); and smaller but leading disruptive entrants and

supply chain companies (including Detriot Electric, RDM and Westfield).

3.11 Many of our supply chain firms are developing, or have already developed, the expertise

needed to succeed in the manufacture of battery, CAV and EV powertrain components,

including Westfield in Dudley, ZF Lemforder in Darlaston and Teepee Electrical in

Bloxwich (Walsall). Our aim is to take a unified and balanced approach to how our

economy and firms manage the transition from the majority of today’s vehicles to EV

and CAV and the opportunities this creates. For example, ensuring a successful

transition will involve ensuring supply chain companies have the right necessary wider

business environment so that they can successfully contribute to the delivery of smart

mobility in the region.

3.12 Our ambition is to continue this success as the centre of the transport manufacturing in

the UK, and to reinforce our strengths in the production of EV and connected and

autonomous vehicles related products and components. The more immediate

opportunity of EVs will require large-scale battery manufacture, the rapid adoption of

EV locally, and the roll out of the necessary local charging and energy transmission

systems. Successfully managing the transition from combustion engine production to

EV production will be crucial to ensure that the West Midlands remains at the forefront

of the automotive industry.

3.13 We are working with Government to maximise the impact of our shared strategic

programme of investment, as the UK’s first Future Mobility Zone, to pilot and prove the

future of smart mobility solutions. We are home to 5 live test beds for CAV, and a range

of specialist testing facilities (including the new TIC-IT high speed CAV test track at

Horiba MIRA). Our strengths go well beyond the automotive sector, and include digital

and ultra-light rail, logistics, aerospace and commercial vehicles. We are building the

transport system of the future through a significant programme of transport

investment, building an integrated, clean, multi modal system linked to High Speed 2

(HS2). This will directly address productivity challenges by connecting people to new

job opportunities and skills provision, improving access to healthcare and green space

and will improve air quality. It will also be integrated with our 5G network to drive a

new traveller-centric system and approach.

3.14 With significant planned investment of over the next ten years, the opportunity to apply

our innovation and manufacturing expertise locally to West Midlands supply chain

firms is vast. We will use the 2022 Commonwealth Games and 2021 Coventry UK City

of Culture to showcase new approaches to mobility and visitor travel information

across all modes of transport, including autonomous services, smart transport

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networks and integrated control and data management. Firms of all sizes in the West

Midlands and from across sectors will be involved in this success.

3.15 The implications for our region could be significant. CAV alone is worth between £50-

£100bn to the UK economy. A single Gigafactory scale battery manufacture would

generate at least £1bn locally, in addition to an integrated transport network and

arrival of HS2, which will add £4bn to the West Midland’s economy, driving major

centres of growth such as UK Central. We will connect these opportunities to our

supply chains, allowing us to boost SME growth and productivity.

3.16 Our 5G infrastructure will enable a totally new approach to real time data and user

management across the whole transport system, including integration with CAV design,

testing and operation. Collaboration with other 5G testbeds, including Worcester

Manufacturing and Midlands Engine 5G project, will deliver productivity

improvements for the wider supply chain.

3.17 We are putting in place the capability needed to use large volumes of near to real-time

data sourced from intelligent roads and vehicles plus spatial and environmental data to

manage new transport systems operating on a complex network. For example, the Open

Data Institute at Warwick Manufacturing Group will provide the open access analysis

and research facilities needed to develop future solutions to the business, legal, ethical

and regulatory challenges and opportunities created by substantial new, real time,

personal data. We will also establish data and mobility technology scholarships for the

analysis of mobility data and application of disruptive technology into the

manufacturing supply chain and logistics.

3.18 Innovation in connected mobility will underpin a new approach to distributed,

connected factories and supply chains, with significant gains for the wider UK economy

and local supply chains across our region and wider Midlands Engine area. For example,

the evidence shows that £1 of productivity gains in the West Midlands automotive

industry is worth up to £2.2 to the UK economy through supply chain benefits.

2. Data driven Health and Life Sciences

Partnering with patients and business to improve health and wellbeing

3.19 The opportunity we have is to make the West Midlands a global centre for the

innovation, translation and real-world evaluation of new diagnostics, devices and

healthcare technologies (including artificial intelligence). Building on the successful

Institute of Translational Medicine and enabled through the best real-world test bed in

Europe, based on a partnership with our large, stable and diverse population.

3.20 AI and large data techniques are driving new approaches to healthcare, in medicines,

devices and services. The next phase of disruptive innovation in the life sciences will be

driven by big data, and the UK’s response to it, at a time when global state actors and

companies are innovating in ways that will dramatically affect the relationship between

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individuals and their health and biometric data. Increasing developments in digital

solutions are driving huge new market opportunities around remote health care and

assisted living and enabling greater cross-overs between our strong digital creative

sector and health & life sciences.

3.21 Recognising this shift to working across disciplines, sectors and institutional

boundaries, over the past 5 years the West Midlands has transformed our contribution

to health and life sciences, centred around the University/NHS strategic partnership

Birmingham Health Partners, and involving new facilities and expertise across our six

universities. We have aligned academic, NHS and industry capabilities across the West

Midlands based on shared mission rather than sector boundaries to deliver an offer

built on our nationally recognised strengths in genomics medicine and diagnostics,

clinical trials, medical technologies evaluation and healthcare data informatics and

systems, and digitisation of health care services. These strengths are underpinned by

significant national, competitively-won investments.

3.22 Our expertise and ability to work with patient data in an inclusive, collaborative way is

a major UK and West Midlands strength. We can provide the translational environment

to develop the testing, evaluation, validation and application of new technologies (e.g.

AI or diagnostic) from other regional and UK clusters.

3.23 Building on these established strengths and strong links to the wider Midlands cluster

will help deliver the key elements of the Government’s Life Sciences Industrial Strategy

and address the mission, announced as part of the AI and Data Grand Challenge, “to

transform the prevention, early diagnosis and treatment of diseases like cancer,

diabetes, heart disease and dementia by 2030.”

3.24 Crucially, our offer and expertise are complementary and distinctive to other UK

clusters in providing:

• A co-located translational environment and access to a diverse population at scale.

• The ability to accelerate translation through strong partnerships between

universities, the NHS and firms.

• The ability to offer real-world and diverse environment testing - ensuring wider

relevance and ability to scale nationally and internationally.

3.25 National and global firms see the commercial opportunity here. We have a growing

cluster of both large and small firms and an associated supply chain, raising at least

£35m of investment in the last 12 months. We have also seen investment of over £150m

in the Birmingham healthcare campus and will continue to invest in the business

support and networks needed to drive cluster development.

3.26 Our approach to supporting innovation within the health and life sciences industry will

be anchored in partnership with the NHS and thereby ensure the potential to translate

directly into better health outcomes for our citizens across the region. This opportunity

will also provide new technical careers in local health care and more personally

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targeted care working with individuals, digitally enabled care reducing the burden on

carers, improving health outcomes and providing the healthcare jobs of the future.

3. Modern services and business, professional and

financial services

3.27 The global trend towards services is a significant opportunity for the West Midlands.

Existing firms will need to adapt to and adopt new technology, new processes, products

and services. The innovative use of business, finance and professional service skills is

increasingly important for the long-term growth and success of firms in all sectors. This

creates growing demand for business and professional services and skills locally and a

growing national and global market for these skills and the firms that provide relevant

services. Talented people with the right experience, networks and ability to innovate in

these areas are in strong demand across all parts of our economy and supply chains.

These trends will drive significant global growth, innovation and disruption to

professional services in the decades ahead.

3.28 Total business, professional and financial services (BPFS) GVA is forecast to double

between 2015-2030, with growth forecast across all parts of the sector. Employment is

expected to grow by 31% over the same period. The sector currently employs just over

400,000 people and contributes over £24bn of GVA to the West Midlands economy.

3.29 We are the only place with a ‘full service offering’ outside London; with the exception

of high-end financial management (related to the stock market and investment) all

services are available. Most nationally significant firms have a full-service team

operating locally. Companies cite the availability and loyalty of skilled talent, the choice

of locations and office space and attraction as a place to retain talent, as strong drivers

of future growth.

3.30 The sector has a highly distributed global client base and the West Midlands has a

different distribution of occupations compared with the national picture, with higher

skilled occupations which reflect the technical and professional, rather than back office,

nature of the West Midlands cluster. World class business schools like Warwick, Aston

and Birmingham mean we have more business students here than any location outside

London and we will continue to develop and foster innovative partnerships and links

between firms and education institutions, including opening opportunities to

communities that may not otherwise see the sector as accessible and ensuring the

availability of the technical skills that continue to be in high demand.

3.31 Changes for which the West Midlands is well placed to take advantage include AI,

automation, cyber security and machine learning. With small technology firms,

regionally embedded larger firms and expertise in our universities we are a test bed for

business innovation to access and embed new applications and techniques, helping

core business services firms and wider sectors deliver next generation services locally,

nationally and globally.

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3.32 The West Midlands is already well connected, but HS2, and further expansion of

Birmingham airport, will drive our success further as a high value business and

professional services location and attractor of talent. Rapid expansion of different types

of high-quality housing, high grade employment spaces and improved connectivity

within the region will do the same. Investor interest is high, and we will continue to

land significant additional investment.

4. Creative content, techniques and technologies

3.33 The West Midlands has a long history of creative business success, from the earliest

development of new techniques in industrial design and processing, to 90,000 creative

jobs today. A major feature of our economy is the extent to which our creative

UK Central – Solihull

UK Central Solihull reflects the huge potential of the West Midlands and the integrated approach to delivery that makes it achievable.

Solihull is an area of strong growth and high demand that is a net contributor to the Exchequer. UK Central brings together Solihull’s world class business, transport and leisure assets to deliver a unique proposition in a high value environment. At its core is the Hub, which is already home to Birmingham Airport, the National Exhibition Centre (NEC), Jaguar Land Rover and Birmingham Business Park. The international transport connectivity and existing growth drivers will be bolstered by the arrival of HS2 at Arden Cross, the redevelopment of Birmingham International Station and major housing and commercial growth over the next few years.

The scale of opportunity is unprecedented in the region: 775,000 m2 of new commercial and mixed use floor space; up to 5,000 new homes, up to 77,500 new jobs delivering up to £4.1bn additional GVA each year. Investment in the Hub across a range of programmes interact and is coming together to deliver new energy provision, multi modal transport innovation and large scale business growth opportunities - including in EV manufacture and new, digital, business services firms. New communities are planned based on a modern interpretation of garden town principles.

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communities are engaged in both the core creative industries, and in using creative and

design skills and techniques in the transformation of products, processes and services

as part of industry 4.0 and a wide range of future global markets. In Greater

Birmingham and Solihull alone, nearly 60% of design jobs are outside core creative

industries. Furthermore, while the area in and around Leamington is dubbed “Silicon

Spa” for the nationally significant concentration of gaming companies, there are

increasing cross-overs to other sectors, and wider digital technology sector in the area

are developing exciting collaborations in new market areas. All the following examples

are happening today in the West Midlands; they are a very distinctive hallmark of our

economy:

• Design-led thinking originating in the gaming industry is combined with virtual

reality (VR) and augmented reality (AR) to develop, prototype and test new vehicles

across automotive, aerospace, rail and last mile logistics as well as the wider digital

manufacturing sector.

• Creative techniques for visualising and manipulating large and complex data sets are

driving new approaches to healthcare, personal finance and insurance services,

mobility, tourism and culture, and retail environments.

• VR and superfast connectivity are being used to train the next generation of

paramedics, engineers and surgeons in environments that are as close to real life as

possible.

• Modular construction of high quality, low energy homes begins with design-led

solutions to components and build. Modular construction is estimated to be worth

£2-3bn per year in the UK, with modular build growing by 25% per year.

• Design-led production of new components and diversification into new markets,

often with cross-sector impacts.

• Increasing digitisation of services, and innovation within culture and media to

develop new ways of engaging “audiences of the future”.

3.34 In our core creative industries, we have strengths in next generation creative and

commercial content creation and as a production centre for higher budget content.

Demand is driving investment in new high value TV and film production capacity and a

proposed Media Campus at the NEC. Recent and projected economic and population

growth is driving increased demand from consumers for creative experiences, such as

theatre, performance and live music, which are stimulating the market for the region’s

cultural offer.

3.35 The Commonwealth Games and Coventry City of Culture will provide significant

opportunities to develop and showcase new, creative and digitally led, approaches to

resident and visitor services and experiences. Our 5G connectivity will unlock new

markets and platforms for content, information and services.

3.36 The distributed factory of the future will be constructed by designers, data analysis and

visualisation specialists, powered by 5G connectivity and involve the rapid design, build

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and deployment of virtual and physical components. These approaches will be

developed and adopted in the West Midlands, as our innovative manufacturing and

transport supply chains evolve for the future.

3.37 The West Midlands has the skills, firms, innovative supply chains and assets needed to

take advantage of global growth in this creative future for content, techniques and

technologies across all our sectors and sub sectors. With a core sector generating over

£4bn of GVA through 10,000 firms, 10% of the UK games industry based in Silicon Spa,

and universities including Birmingham City and Coventry that are nationally leading in

providing graduate and post graduate skills to a wide range of creative disciplines. We

have strong collaborations, clear sector specialisms, and a diverse creative ecosystem.

3.38 We have a creative economy that is far more than just our strengths in creative

industries. The evidence shows that Birmingham and Solihull alone have the potential

to add nearly 4,000 new creative enterprises and 30,000 new related jobs1 with

the opportunity to scale this across the West Midlands.

1 Creative Economy Mapping Study for GBSLEP https://gbslep.co.uk/resources/reports/creative-economy-mapping-study

https://gbslep.co.uk/resources/reports/creative-economy-mapping-study

17

4 The West Midlands Economy

4.1 This section summarises the distinctive characteristics of our economy – strengths that

will help us meet the strategic opportunities we have identified and the barriers that

remain. More detail can be found in the evidence pack and in the sections on each

foundation of productivity.

4.2 The West Midlands has always been the productive heart of Britain. We are home to

innovators, engineers, creators and designers; doers, learners and makers who do

things differently and lead the way. Over the last decade, the West Midlands economy

has experienced a renaissance – our £99bn economy has grown by 27% in the last five

years and over the last 12 months productivity growth has been twice the national rate.

A region full of youth, diversity and opportunity

4.3 We have the youngest population in the country outside of London, with more than one

in five people aged under 16 and 39.7% under the age of 302. Our population is highly

diverse. For many decades people from around the world have come to call the West

Midlands home and our communities and businesses are richer for this diversity of

faith and culture. We are place of many perspectives, communities and beliefs, each

with an important contribution to make to our business, economic and social life. This

also gives us powerful personal and businesses connections to the rest of the world.

And people who grow up here want to stay, more than 70% of graduates from the West

Midlands return here. We predict a population increase of half a million in the next 20

years. This is a region full of potential and opportunity.

International and outward looking

4.4 We are open, welcoming and ready for business. Investor sentiment is strong, and the

West Midlands is recognised as an excellent place to do business. Our business centres

are being transformed through the development of 2 million square feet of prime office

space.

4.5 We are the fastest-growing UK region for goods exports and experienced 27% growth

between 2015 and 2017. Outside London and the South East, we export the most by

value, over £33bn in 2017. Not only this, we had the greatest number of new jobs from

FDI projects outside London last year. Since 2011, the number of FDI projects has

tripled. There is significant capacity and potential for growth here. Our universities

have global presence and draw talented, highly skilled people at all stages of their

academic and business careers.

Continuing a history of creativity, innovation, design and making

2 3 LEP geography

18

4.6 We have a long history of creativity, innovation, design and making. The West Midlands

has been at the forefront of change and innovation throughout successive industrial

revolutions, driving technological development for the whole of the UK. We are the

home of the Lunar Society and the region that gave birth to the ‘city of a thousand

trades’. People, institutions and cities have put theory into practice, translated ideas

into action, solved problems and created great works that have made their mark across

the world.

4.7 This heritage and continuing strength in bringing creativity to the design of products

and processes is why the West Midlands is a centre of excellence and home to some of

the world’s most famous brands such as Land Rover, JCB, Cadbury’s and AGA. Our

cultural creativity has been recognised by Coventry being awarded the UK City of

Culture in 2021 and our people, businesses and universities continue to enhance that

reputation through their innovation, creativity and endeavour.

With globally competitive and adaptable supply chains

4.8 Our economy is distinctive for its deep network of supply chain firms operating across

a range of sectors, including automotive, aerospace and medical technology and playing

a crucial role in the value chains of goods and services traded across the world. Many

of these firms and the people that work in them have been highly successful in adapting

to past developments in supply chain requirements and are well placed to continue to

do so. Indeed, we have one of the world’s greatest concentrations of automotive

technology activity, driving the future of mobility.

4.9 Companies within the West Midlands are engaged in a wide range of supply chain

activities from the sourcing of inputs, including raw materials, production, distribution

and delivery of goods and services to downstream, consumer facing markets. Our

supply chain firms are critical to growth and productivity - integral to the core activity

of our sectors and through their potential to diffuse innovation into the wider economy.

4.10 The long-standing pattern of engineering and manufacturing supply chains is deeply

connected into our university innovation and research assets. The resultant pattern of

development is a polycentric supply chain economy with distinctive local but linked

specialisms. Our core urban centres each have their own economic linkages and travel

to work patterns. Figure 3 demonstrates the spatial distribution of activity in the

automotive supply chain as an illustrative example, showing activity across all areas of

the West Midlands, with a significant concentration in the Black Country.

19

Figure 3 Automotive supply chain jobs and businesses

Source: ONS Business Register and Employment Survey (2016) and BvD Fame (2018)

Located at the heart of the nation

4.11 We are a region built on social and commercial connections and collaboration. No other

region has more than 90% of the UK’s market within a four-hour drive. When HS2

arrives into UK Central and Birmingham Curzon Street, with journey times of just 38

minutes to London, it will bring the capital closer to the West Midlands than it is to

Cambridge. And as the hub of the HS2 network, connections to the northern cities of

Manchester (40mins) and Leeds (1 hour) will be less than half current times. We have

one of the UK’s fastest growing airports, carrying 13 million passengers a year on 50

airlines to 143 destinations. Birmingham Airport recently announced the UK’s first

direct flights between Birmingham and Amritsar and £500m of investment.

20

4.12 The West Midlands will also be the site of the UK’s first 5G rollout. The potential to

utilise early adoption of this technology across our industries and services is immense

and the West Midlands will trial implementation and application to communities and

industry for the UK.

Strong leadership and proven delivery

4.13 The West Midlands Mayor and Combined Authority leaders are committed to growth

that delivers a tangible change in people’s everyday lives. Investments over the course

of the coming decade to drive productivity will be integrated in communities, putting

people at the centre of what we are trying to achieve.

• 215,000 new homes by 2031, providing high quality places to live, with real choice.

• £69m to support development of new skills provided in ways that meet the needs of

how people live and work.

• Highest increase in workforce jobs outside London and rapid reductions in the

proportion of working age population with no qualifications.

• More than £50m to create the UK’s first multi-city 5G test bed across Birmingham,

Wolverhampton and Coventry.

• Home to the new UK Battery Industrialisation Centre

• Commonwealth Games 2022 – Athletes Village, investments to Alexander Stadium

and facilities across the region like the Olympic swimming pool in Sandwell.

• City of Culture 2021 – unlocking investments and productivity improvements in arts,

culture, visitor economy and a Year of Wellbeing and a 10-year Cultural Strategy.

• Six new suburban rail stations and over 31km of new track will provide 20,000 new

seats.

• HS2 –with a £4.4bn HS2 Growth Strategy, including the Curzon Masterplan and 20

transport schemes to fully connect HS2 stations to local transport networks and

communities.

• A new Metro system, including East-West Metro with extensions to Dudley/Brierley

Hill and through East Birmingham to North Solihull and the HS2 Interchange station.

• £15bn investment in distributed energy infrastructure to 2030.

• £10bn opportunities in identified investor-ready sites and a strategic programme to

identify and bring forward employment land.

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5 Productivity and Output 5.1 Low productivity growth is not unique to the West Midlands and the Government

recognises this as a UK-wide challenge in the Industrial Strategy, but the West Midlands

has some distinctive challenges alongside distinctive strengths.

5.2 GVA per employee varies significantly across sectors in the WMCA, with an average

figure of £42,897. This is below the national average of £47,783. At the individual level,

amongst all residents in the West Midlands, GVA per head is £4,886 lower than the UK

average. The productivity gap is significant and is reflected across most of our broad

sectors. Performing at full potential, our economy would be £15.1bn larger.3 This

gap is driven by three structural issues in our economy.

Insufficient skills levels Fewer residents in

employment

An economy lacking

dynamism

The proportion of the

WMCA population with

NVQ4+ is 31.1% compared

to the UK, at 38.4%.

Compared to the UK’s 74.7%

employment rate, the West

Midlands has 71% of people in

work.

There are 398 businesses per

10,000 population in the

region. This compares to 443

per 10,000 as the UK

average.

This amounts to 184,867

fewer people with this

higher-level qualification in

the WMCA compared to the

UK on the whole.

There are 95,422 fewer people

in work here than the UK

average

The result is 18,393 fewer

businesses in the WMCA vs.

the UK average.

5.3 These structural challenges cut across the foundations of productivity and manifest

differently across in different places as well as sectors. We explore these further in the

subsequent chapters. However, we know we have the potential to significantly grow

our productivity levels. The Coventry & Warwickshire LEP area within the WMCA has

seen the fastest economic growth of all LEP areas in the country since the end of the

3 The output gap figure has been updated to reflect 2017 GVA per head data

£3bn

Insufficient skills levels

£5.2bn

Fewer residents in employment

£6.9bn

Weaker performance in

competition, investment, enterprise & innovation

22

recession, including the greatest improvement in productivity levels with GVA per job

filled growing by over 28% since 2009.

Firm level productivity drives our productivity challenge

Regional productivity is influenced by both industrial mix, because different industries have

different average levels of productivity, and by the productivity of firms within individual

industries and the extent to which they outperform other regions.

The West Midlands’ industry composition index is the highest of all English regions. Meanwhile

our firm productivity index is 16% below the Great British average. This suggests that our lower

overall productivity is due to relatively lower firm productivity within industries rather than

our industrial structure.

If we were to keep the West Midlands’ industry structure but applied average UK productivity

to the firms within each industry, regional productivity would be higher than the Great Britain

average.

Like most of the UK, 99% of the West Midlands business structure is SMEs, but a higher

percentage of these are “lifestyle businesses”. These firms are set up primarily to maintain a

level of income for the owner and generally lack growth ambition. This affects productivity and

dynamism.

GVA per employee varies significantly across sectors in the West Midlands and the average GVA

per employee is below the national average. Four sectors exceed the regional benchmark on the

GVA per employee measure of productivity (£42,897): Low Carbon and Environmental

Technologies is by far the most productive sector (£134,638 GVA per employee), followed by

Digital and Creative (£65,151), Business, Professional & Financial Services (BPFS) (£60,212)

and Advanced Manufacturing and Engineering (£58,036). The other six broad sectors have

productivity below the WMCA average.4

The evidence tells us about the nature of the productivity challenge - this is an issue of firm level

productivity within and across industries. Actions to address the challenges firms face in

pursuit of growth and productivity gains are explored both within the context of specific

industries in section 7 and common elements of the supply side: ideas, people, business

environment and infrastructure in section 8.

5.4 Aspects of the productivity challenge are also spatially more concentrated in some

parts of the West Midlands. Variations in GVA per hour are shown below:

4 Sector data presented here is based on the 10 original WMCA sectors used in the 2016 SEP.

23

Figure 4 GVA per hour worked (£)

Source: ONS sub regional productivity (2018)

5.5 This spatial variance is reflected in patterns of employment and skills (explored in more

detail in the people chapter. Overall, 12 West Midlands’ local authorities have a higher

employment rate than the UK average (74.7%) with the highest rate in North

Warwickshire (85.4%). We see much lower employment rates in other areas: Sandwell

(64.3%), Birmingham (63.6%) and Wolverhampton (65.8%) in particular.

5.6 In the Black Country, 15.6% of people have no qualifications, almost double the national

rate of 8%. The median full-time weekly wage for Black Country residents is £499,

compared to £545 in GBS LEP and £589 in Coventry and Warwickshire.

5.7 We also see stubbornly poor performance on, for example, healthy life expectancy and

childhood obesity, with growing problems of housing affordability. We have low levels

of access to green space, local hotspots of poor air quality, 12% of our households in

fuel poverty, and high levels of carbon emissions.

5.8 We explore these issues in more detail in the sections on each of the foundations of

productivity below, and in the supporting evidence reports. In summary the major

issues for the West Midlands are:

• Recent growth has not been felt by all and too many miss out, with significant

variations between those areas where growth has been concentrated and skills and

earning power is highest, and those where it has not. Unlocking the potential of these

communities is core to improving lives and reducing the output gap.

• The strategic opportunities we have will drive the success of sectors that already

have higher than average productivity and those where our productivity is lower

than it could be, such as construction, retail and health. Securing the adoption of

new techniques and technologies, often across sectoral boundaries, is the other

major part of solving the productivity puzzle here.

0 5 10 15 20 25 30 35

Black Country LEP

Coventry and Warwickshire LEP

Greater Birmingham and Solihull LEP

West Midlands Combined Authority

United Kingdom

£ per hour

24

• We have the research and innovation capacity and the creative, young population

needed to make this change, but have more to do to drive business demand for new

skills, techniques and technologies.

Investing in resilience

5.9 Brexit will create a change in our relationships and interactions at a regional, national

and international level. But it does not mean that our outward looking perspective and

readiness to cooperate with neighbours will change too. The region’s success is built on

migration and immigration. Knowledge exchange and progress go hand in hand and

Leaders across the West Midlands are clear that leaving the EU does not correlate with

a withdrawal from open collaboration with cities and regions across Europe or the rest

of the world.

5.10 The West Midlands is still highly recognised both nationally and globally as a region

open to new ideas and new working practices. We have a strong track record of

bringing in major investment from European and other global partners which has

brought prosperity, growth and employment to the region and UK as a whole. This will

not change. Rather the West Midlands has the opportunity to be at the forefront of all

that is successful about the future UK.

5.11 Businesses have concerns in a number of areas. Smooth trading, particularly for our

advanced manufacturing base, is significant. There are implications for supply chains

and just-in-time impacts. Similarly, there are particular vulnerabilities around the

recruitment and retention of skilled workers - 1 in 10 nurses are EU nationals and the

need to maintain access to technical skills is important for many of our industries.

5.12 Funding is another aspect of change. The regional economy has benefitted from £566m

in ESIF funding (2014-2020). The UK Shared Prosperity Fund (UKSPF) must be

constructed and resourced so it funds our priorities around growth, productivity and

inclusion5. We expect parity between the previously separate EU and domestic local

growth funding and the UKSPF. The fund must be designed in a way which allows us to

invest this funding locally to achieve the shared ambitions in the WMIS and to address

the thematic and spatial barriers to improved productivity and inclusion.

6 Inclusive Growth

6.1 Growth and the benefits of growth are unevenly distributed, with pockets of

deprivation, low employment and a lack of access to opportunities. International

evidence shows that the concentration of creative and highly skilled people and firms

that drive growth in our urban areas can also further entrench inequalities, particularly

in suburban and rural areas close to centres of growth.

5 Further reading – https://www.birmingham.gov.uk/downloads/file/11144/brexit_impact_analysis_summary

https://www.birmingham.gov.uk/downloads/file/11144/brexit_impact_analysis_summary

25

6.2 There is a long-term opportunity to connect more of our people with our economic

opportunities. This will boost our productivity and benefit the UK economy. There is

strong evidence that we could be more productive overall and that firms face

recruitment challenges for entry level and higher skilled roles, as well as changing skills

needs. The priority for us now is to develop a West Midlands Inclusive Growth

roadmap / plan which pulls out the specific implications and targeted activities and

next steps for both the local industrial strategy and wider West Midlands workstreams.

6.3 Devolution, combined with an economy in renaissance, give us a unique opportunity to

make inclusive growth happen here, now. Local powers and flexibility mean that

interventions can be designed, tested and implemented based on the needs of local

people, businesses and places (including recognising the specific and different

challenges facing urban and rural areas of our geography). The commitments and

actions at the heart of this strategy set out what we believe a more inclusive West

Midlands can be.

6.4 Inclusive growth underpins all the actions in the strategy. For us this means that we

want to ensure that all our residents and communities can touch, taste and feel the

benefits of rising prosperity. And we know that we will be most successful if we benefit

from the creativity, talent and ideas in all our communities. Our strong local

partnership, together with the new powers and influence of the Mayoral Combined

Authority, gives us the chance to drive progress over the long term, make the case to

Government and make things change.

6.5 Our opportunity is to use our Industrial Strategy and the potential of a young and

growing population to act boldly where we have the levers to do so. We will seek to

pilot new initiatives designed to deliver more inclusive growth. These will build on our

existing projects and pilots such as Thrive West Midlands, which will improve

awareness of workplace mental health.

6.6 Raising the living standards of all our residents and addressing the low productivity,

low pay cycle that many of our residents experience will require an integrated response

across multi policy areas. The West Midlands has a unique opportunity to do things

differently and we will implement a West Midlands approach in piloting, experimenting

and evaluating what works here.

6.7 We have launched the Inclusive Growth Unit to blend analysis, policy advice and

practical action. The unit will support the development of the roadmap and promote

inclusive growth outcomes with our Industrial Strategy and Public Service Reform

programme across all activity. Its work will develop over the next year. We aim to make

this unit the leading example of devolved areas working towards inclusive growth

goals.

6.8 We have identified priority issues on which to develop and test new approaches:

• Low pay sectors such as social care, looking at labour supply and demand, locally

adapted and targeted training and skills, meeting local needs with local innovation

26

and creating/facilitating organisations to fill gaps or create linkages around the

sector.

• In work progression, increasing the support available to people to access in-work

progression opportunities, particularly for employers and residents working in

tourism, retail and prioritising historically lower paying sectors, where technological

change will open up new, higher skilled roles. This will require focus through business

support and skills provision.

• Commissioning and procurement, with an emphasis on maximising local value,

local supply chains, local skills development and local ownership in infrastructure

projects. This includes HS2, City of Culture and Commonwealth Games related

procurement.

• Diversity, the Combined Authority can lead by example to promote diversity by

implementing the Leadership Commission’s recommendations of organisational

culture change policies and policies to support individuals in the Combined Authority

and wider public sector.

• Inclusive Growth Corridors and town centres, implementing place-based

responses to integrate investment in specific sites and growth corridors bringing

together transport, housing, skills, Public Service Reform and wellbeing investment

to drive long-term change.

• Bespoke solutions for individuals, focusing on mental & physical health and

barriers to work alongside the wider determinants of wellbeing. Coventry and

Warwickshire will run a Year of Wellbeing in 2019 driven by the European City of

Sport and develop wellbeing and productivity.

• Youth unemployment, developing a fresh new approach to working with young

people through the Transition to Work scheme to create a sustainable pipeline of

young talent in the region.

• Social enterprises, to diversify the types of economic activity available to create

opportunities and improve wellbeing and productivity for people and communities.

The Social Economy Taskforce will report findings in the early spring. It is anticipated

to commit to a growth in the size of the social economy within the WM; a regional

and/or mayoral financing mechanism to support this (such as a regional SE bank, or

Mayor’s bond); and the drawing together of support mechanisms for SE start-up and

scaling.

• Vulnerability, mental health and complex needs – a number of interventions (both

via the WMCA and with partners) focused on the relationship between vulnerability,

wellbeing and work, such as our Individual Placement Support trial (developed with

DWP’s work and health unit), Thrive at Work, and partnerships with the West

Midlands Fire Service, West Midlands Police and the Office of the Police and Crime

Commissioner focused on prevention.

6.9 GVA helps us measure the pace of growth but not who is benefitting. We have developed

an Inclusive Growth Framework which seeks to capture the positive social and

environmental outcomes that the West Midlands would like to realise as a consequence

of its economic activity. The Combined Authority will ensure that the Inclusive Growth

Framework continues to be developed and refined and is used in monitoring the

27

delivery of our wider social and economic goals, including this local industrial strategy,

looking at who is benefiting from the actions and where more needs to be done to

ensure inclusive growth.

28

7 Sectors

7.1 This section sets out the strengths we have across our major sectors. Identifying the

specific dynamics of our industries, supply and value chains is an important factor in

ensuring that we prioritise the right actions to drive inclusive growth and productivity,

so our people and businesses can take advantage of the opportunities ahead. We have

worked closely with sector trade bodies and groups such as the Midlands Aerospace

Alliance and the UK Metals Council, as well as academic experts, to ensure we

understand both current and emerging sectoral trends and strengths. Ongoing activity

to implement sector-specific actions will be done via close working with trade bodies.

7.2 More detail about the productivity and growth of specific sectors can be found in our

detailed evidence report at DN [insert hyperlink].

Sector Productivity

7.3 Over the last 18 months, the West Midlands has undertaken a range of comprehensive,

independent studies to understand our clusters and sectors as well as the underpinning

drivers of our output and productivity. Both elements are important. We explore the

West Midlands economy in relation to the foundations of productivity in section 6. In

this section, we identify the specific sector specialisms that are driving growth.

7.4 The productivity gap is reflected across all broad sectors apart from Low Carbon &

Environmental Technologies (+£16,085). The region’s manufacturing strength is

displayed through its marginal productivity difference with the UK average in this

sector (-£423). Sectors with the highest productivity gap between the West Midlands

and the UK are BPFS (-£15,418), Digital and Creative (-£7,157) and Logistics &

Transport (-£6,643), which are also core to meeting our strategic objectives, creating

an important link between future growth and productivity improvements.

Sector Strengths and Specialisms

7.5 The West Midlands makes up around 10% of the UK aerospace industry. Clusters exist

in the engine supply chain around Rolls-Royce and electro-mechanical systems, like

UTC Aerospace Systems and Moog who are two of the world’s leading producers and

suppliers of aircraft actuation systems. Focused on civil aircraft, West Midlands

products and services from throughout the supply chain contribute to the latest

passenger planes made by Airbus, Boeing and BAE Systems.

7.6 The West Midlands has a significant rail supply chain, particularly in activities at the

higher end of rail design and engineering, and upcoming opportunities around digital

rail. The sector is underpinned by academic excellence and private sector leadership

through Birmingham Centre for Railway Research and Education which specialises in

digital rail technology and is the lead partner in a £92m industry-partnered investment

in research on digital train technology through the UK Rail Research and Innovation

Network (UKRRIN). The area is also home to the Quinton Rail Technology Centre and a

29

testing ground for Birmingham University’s hydrogen propulsion research; and a

cluster of transport design businesses - for example companies that designed of the

interior of the new Hitachi IEP 800 Series, Disneyland Europe amusement park rides

and Suncheon Bay light rail in Korea. Major planned investments, including HS2,

Midland Metro Extension and projects in Control Period 6, present significant

opportunities for growth and innovation locally. Our strategy is to integrate these

investments so the benefits are felt across the whole of the rail sector and communities.

7.7 The regional logistics sector is enjoying significant growth with a 66% increase in the

number of businesses in the past five years. Driving productivity gains through

investments in distribution centres and emerging technologies such as automated

guided vehicles (AGV) in warehousing, virtualisation technologies to monitor and

utilise capacity in vehicle fleets to smooth demand, connected and autonomous vehicles

and integrated delivery systems to increase transport efficiency. The sector is core to

the wider changes in mobility services and will significant change in skill requirements

and occupations going forward.

7.8 Key in underpinning these transport related industries are the cluster of foundation

industries within metals and materials. Their historic presence and current and

future expertise for advanced manufacturing plays an important role in the regional

economy, contributing 75,000 jobs and £4bn GVA. The supply chains are robust, and

their continued success is integral to the businesses they supply. Without the local

supply of quality material and products from both metals and materials many of the

area’s better-known industries (e.g. automotive, construction) would be less successful.

Metals and materials supply is the bedrock of the West Midlands’ manufacturing

economy.

7.9 The West Midlands has a significant automotive sector, producing one third of the

nearly two million vehicles manufactured in the UK. The region has 35 automotive OEM

brands, major R&D and headquarters operations, and over 20 vehicle manufacturing

sites. The cluster has attracted and retained global brands Jaguar Land Rover, Aston

Martin Lagonda and BMW (engine manufacture), Geeley London Electric Vehicle

Company and smaller, niche manufacturers. Both CWLEP and GBSLEP areas employ

more people in the sector than any other in the country. Many of those employed locally

are within SME supply chain firms; one fifth of the UK’s motor vehicle parts and

accessories businesses are located in the West Midlands region, reflecting that our

automotive expertise goes far beyond the presence of OEMs. The Black Country in

particular is home to a deep and diverse network of tier 1, 2, and 3 component and

engineering suppliers that extends out across the region.

7.10 There are significant existing strengths and innovative capacity in powertrain and

battery propulsion, connected and autonomous vehicles, and prototyping and product

development. Successfully delivering these high-level, high technology ambitions

requires a wholesale adjustment across all levels and particularly relies on the

innovative capabilities of our supply chains to respond and be fully integrated within

the development of new technologies and products.

30

7.11 Similarly, the region’s distinctive low carbon expertise makes the West Midlands an

attractive market for commercialising new energy and transport system technologies

in the UK. This sector is the most productive sector in the West Midlands, with GVA per

employee that outstrips the national average.

7.12 The advanced manufacturing economy also underpins a food and drink sector which

has seen the greatest long-term growth in food and drink manufacturing of all UK

regions. Smaller, artisan producers play an important and high value-added role linking

to both our wider tourism sector and our dynamic agricultural base.

7.13 Our growing creative sector includes important maker clusters, globally recognised

product and process design, and a globally significant concentration of firms in gaming,

innovative and immersive content and high-end production, centred on screen media

including film, TV and virtual reality (VR) and augmented reality (AR). The creative

sector underpins, supports and cross-cuts into many of our key sectors, and there are

huge opportunities to support and facilitate this further cross-fertilisation, building on

our strong digital creative business base.

7.14 Our thriving BPFS is the region’s largest GVA contributor and employer with the UK’s

largest regional full-service banking and professional services cluster, serving a global

client base. A strong and distinctive Birmingham city centre is complemented by a

range of other key options and locations (both in town and out of town) around the

West Midlands, including Coventry, Worcester, Leamington and Stratford-upon-Avon,

which provides a wide and varied choice for companies of all sizes. The sector brings

region-wide benefits through positive spill over effects via the access to capital and

providing for the growth of businesses in other industries. The cluster is supported by

world class business schools, including Aston, Birmingham and Warwick, resulting in

more business students than any location outside London.

7.15 New technologies and world class assets support a high value medical technology and

life sciences cluster. There are particular strengths in R&D, design and production of

high-tech medical devices (firms like Salts Healthcare and Kimal), diagnostics including

in-vitro (The Binding Site, Serascience, Perspectum) and software as a medical device

(Safe Patient Systems, Evolyst). The region’s strengths in med-tech include the

application of AI, digital and data analytics, with the West Midlands as an important

location for clinical trials. The region’s NHS Trusts and universities attract large

numbers of trials from global industry to an international centre of expertise in

accelerated trials models and a track record in health data collection.

7.16 Industrial know-how in advanced manufacturing is strongly related to major

construction activity and expected spending of £3.8bn per year for the next five years

in transport and housing investment. This is the third largest sector in the West

Midlands with companies across the supply chain operating locally. Offsite construction

and other modern methods of manufacturing (MMM) are a distinct opportunity for the

region to deliver its 215,000 homes and other large infrastructure commitments.

Offsite construction is already happening – evidenced by WM-based firms like LoCaL

31

Homes and Totally Modular – and there’s a key opportunity for the region to develop a

world-class capability in this activity going forward.

7.17 The West Midlands is the UK’s fastest growing region for international visitors –

attracting a record 2.3 million overseas visits in 2017, up by nearly 50% over the last

six years. We have an already world class tourism offer, building on the global draw of

Shakespeare’s England, the Black Country Living Museum, key heritage assets, and a

range of sporting and events based attractions. The City of Culture 2021 and

Commonwealth Games 2022 provide a unique platform to further raise the global

profile of our area and enable our tourism sector to capitalise on these opportunities

to expand the visitor economic and business tourism levels to drive economic growth

and leave lasting community legacies.

7.18 The related industries of retail and hospitality are significant at the local level. They

play a key role in the functioning of our city and town centres, which are undergoing

significant changes and challenges. The sectors also provide a route out of

unemployment and flexible working. The challenge is to build progression pathways

through these sectors to upskill workers, increase productivity, improve wage growth,

and to support the sector to change and evolve to meet new expectations and embrace

future technology.

The Black Country Living Museum and Castle Quarter case study

Across 26 acres of exploration, The Black Country Living Museum recreates the area’s

proud industrial heritage, attracting almost 300,000 visitors annually. An open-air

museum brought to life by costumed characters in original shops, houses and

workshops, the museum is a key visitor economy attraction in the region which

continues to invest and develop. ‘Forging Ahead’, the museum’s 40-year masterplan for

further developing the site, will create a world-class heritage attraction in the heart of

the Black Country. Phase 1 of the masterplan, part-funded (£9m) by Black Country LEP’s

Land and Property Investment Fund (LPIF), represents an investment of £23.7million in

a project to engage and inspire visitors of all ages to learn about the Black Country’s

heritage, its impact on the world, and its relevance today.

The Black Country Living Museum forms part of a thriving tourist attraction hotspot in

Dudley’s Castle Quarter. This area provides a wide range of attractions including Dudley

Zoological Gardens, Dudley Canal Trust and Limestone Mines. Further reflecting the

Black Country’s diverse industrial heritage and unique identify, the Black Country has

the ambition to become a Global Geopark, with parts of this also focused on the Castle

Quarter. The Black Country’s geological and industrial history has ensured it’s now an

amazing place to explore with many ‘hidden gems’ of world class natural and manmade

wonders to be found and explored. A Global Geopark status recognises an area’s

outstanding geological heritage and where there is considerable effort to conserve it and

increase the public understanding and enjoyment of it. UNESCO are responsible for

granting Geopark status’, and the Black Country has applied for this

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8 Actions to drive growth and productivity

8.1 In this section we set out the actions we are going to take. They are grouped by four

foundations of productivity, reflecting how they are targeted, based on the evidence,

with place being integrated into each. In each section we also summarise the inclusive

growth impacts.

Ideas

8.2 With a long history of commercial and academic research and business innovation,

the West Midlands has the potential to further increase both new to firm and new

to market innovation in products and services by further building capacity and

capability.

8.3 Ours is an innovative economy built on the development and commercialisation of new

ideas, processes and products. Our innovation is driven by the creativity of companies

and Universities in the West Midlands, founded in our history as the place where the

first industrial revolution was commercialised, driving growth across the UK.

8.4 The West Midlands has a long standing, sophisticated and thriving innovation

ecosystem, with a diverse mix of research and applied universities, commercially

engaged academics, science parks, incubators and the largest concentration of

accelerators in the country (NESTA, 2017). We are home to two of the UK’s strategically

important Catapults in High Value Manufacturing and Energy Systems. And our

universities are consistently ranked in the top 20 nationally for the quality of their

research.

8.5 Innovation in industry, academia and R&D is focused in our core economic and business

areas of advanced manufacturing and engineering, digital technologies, data and

systems integration with a particular strength across the whole West Midlands in next

generation transport systems, data-driven healthcare technologies, and energy

generation and storage.

8.6 The major opportunities are driven by rapid innovation in the way that firms use data

in the development of new products and implement data in the configuration of new

business growth. Cities, towns and local areas across the West Midlands will be the first

to benefit from cutting edge 5G capabilities.

8.7 Universities, developers and the public sector have invested substantially in incubator

space, science and technology parks and in the availability of finance and access to

university and business partnerships. Together with substantial business networks

and support for specific technologies and capabilities (such as battery manufacturing,

CAV vehicle design and testing, digital rail, energy generation and storage, and data for

future healthcare), these will continue to be the pillars of our innovation ecosystem

33

beyond the existing funding streams. The innovation infrastructure is widespread and

clusters around key institutions. The challenge is ensuring that this capability and

capacity percolates into the supply chains as well as frontier firms.

Figure 5 Innovation Assets

Source: ONS Business Register and Employment Survey (2016) and SQW (2017) A Science and

Innovation Audit for the West Midlands

8.8 Businesses across the region invested £2.3bn in R&D in 2016 and this is on the rise.

Since 2010 we have increased our share of all UK investment. We perform above

average in Innovate UK funding awards, though there are spatial variations, which is

primarily driven by the nature of our business base.

8.9 Innovation is concentrated around the clusters of OEMs, universities and medium,

small and micro firms in these major sectors, for example around Warwick

Manufacturing Group and the automotive and aerospace clusters in Solihull, Coventry

and Warwickshire, manufacturing supply chain firms in the Black Country and creative

industries in Birmingham. There is the opportunity to go further, to broaden the

smaller scale commercial research and process innovation undertaken by firms in our

34

supply chains who find it difficult to engage with the innovation ecosystem. There is a

key role for universities to broker the connection between national research and

innovation funding to deliver benefits for the region.

8.10 Our regional innovative capacity is not confined to any one sector, meaning that

capabilities in research and development, design, production and aftercare spans

multiple industries, putting firms at the forefront of innovation across as well as within

specific sectors.

Clear opportunities to strengthen business innovation

8.11 Around 46% the output gap between the West Midlands and the UK is caused by

weaker performance in competition, investment, enterprise and innovation.6

8.12 Levels of process innovation and commercialisation are lower than they could be. And

we need to increase business demand for new techniques and technologies. Our aim is

to drive up levels of business innovation by supporting improvements in business

capacity and subsequent demand.

6 Based on 2017 output gap analysis.

STEAMhouse case study

STEAMhouse is a co-working space for businesses, artists and academics designed to

enable small companies and artists to work together on new projects and business ideas.

There are facilities such as 3D printers, laser cutting machinery, virtual reality and

printing studios.

STEAMhouse will drive innovation and research to create business solutions that fuel

long-term economic growth through a combination of industry-led workshops, access to

product development facilities, partnership working and SME grant-making. The first

phase of STEAMhouse launched in spring 2018 and will engage with at least 200 SMEs in

the Greater Birmingham Solihull Local Enterprise Partnership (GBSLEP) area over a

three-year period. The second phase of STEAMhouse is already in development with

construction due to commence in spring 2019.

£3bn


£5.2bn


£6.9bn



35

8.13 Our academics and researches are at the forefront of global trends in the clean

movement of goods and people and the development of new products and services. We

know that these changes provide significant opportunities for our supply chain firms in

automotive, rail and aerospace who specialise in materials, metals and components,

alongside the need to continue to further innovate production processes and

techniques.

8.14 Our strategy therefore is to continue to ensure the availability of both space and finance

for innovation, whilst further developing the business led and peer to peer networks

and connections that the evidence shows are most effective in helping firms innovate.

We want to encourage our businesses of all sizes to ensure that innovation becomes

part of “business as usual”. We are committed to closer working between institutions

to maximise the West Midlands research contribution to national and local

opportunities and to making it easier for new and existing businesses to access our

world leading assets and new support programmes.

• Innovation networks and linkages: We will support business networks and

programmes to join-up assets and entrepreneurs, and help identify the

opportunities for collaboration across sectors, technologies and supply chains.

• Innovation investment programmes: We will create new support programmes

integrated with local supply chains, including through demonstrator projects,

supporting broad and accessible investment and access to a good supply of

appropriate finance products on attractive terms.

• Innovation talent: We will support high growth potential business with the skills

needed to innovate, through programmes in universities, Catapults, and technology

innovation networks.

• Innovation intelligence: We will create a West Midlands foresight programme to

generate new ideas and promote awareness of latest market demand from large

firms and the public sector for innovative SMEs as well as technology drivers of

change.

• Innovation culture: We will continue to create opportunities to showcase the

impact and importance of innovation across the West Midlands’ public and private

sectors.

8.15 In addition, we are working closely with Government to embed a number of initiatives

within the West Midlands innovation ecosystem, including:

• Driving innovation through planned procurement of capital investment in the West Midlands.

• An industry-focused regional grant scheme (for our innovators who have difficulty

securing Innovate UK monies) with a range of funding options.

• Wrap-around business support with innovation and R&D at its centre.

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• Integrating the approaches described above into a new Productivity Factory, acting

as an access point for peer-to-peer mentoring and repayable grants for project

design and implementation.

• Sharing and development of intellectual property (IP) for collaborative innovation

and consideration of where IP finance can improve the access to finance for

innovative companies

8.16 We are investing in innovative spaces and networks to enable cross discipline

intellectual property (IP) sharing and commercialisation, for example at the

STEAMhouse project with Birmingham City University. We are developing creative

sector specific financing opportunities and pathways and have put in place innovative

programmes to further enhance the transfer of skills and techniques between the core

industry and the potential it has to grow productivity in other sectors.

Innovation delivering inclusive growth

8.17 Innovation drives improvements in individual firms as well as across whole industries.

A more innovative West Midlands will be an environment with more productive and

competitive businesses that create and attract better paid and higher skilled jobs (for

instance in traditionally low paid, low skilled sectors such as retail, hospitality, logistics

and health & social care).

8.18 As well as continuing to support high tech innovations, our local industrial strategy

commits to encouraging a broader and more inclusive innovation policy that can help

supply chain SMEs across the West Midlands to contribute to the West Midlands

distinctive strengths by moving into new markets and supply chains.

Warwick Manufacturing Group (WMG) case study

WMG is one of the world’s leading research and innovation groups. Since its inception in

1980, WMG’s mission has been to improve the competitiveness of organisations through the

application of value adding innovation, new technologies and skills deployment, bringing

academic rigour to industrial and organisational practice.

WMG is a pioneer of innovative technology, leading major multi-partner projects to create

and develop new products and processes that can be adopted by organisations.

WMG’s new National Automotive Innovation Centre is the largest of its kind in Europe and

the product of partnership with Jaguar Land Rover and Tata Motors. The centre will focus

on automotive research, combining expertise from industry, university academics and

supply chain companies. It is intended to support advances in technology to reduce

dependency on fossil fuels and vehicle emissions whilst also developing the talent required

for the demands of emerging technology. This is in addition to the existing facilities.

37

People – Skills and Employment

8.19 The West Midlands has a young and diverse population, brimming with potential and

opportunity. There are 1.8 million people under 25 in the region (32.5% of the

population), making the West Midlands the youngest region in the country outside of

London7. Of the 52,000 graduates from eight West Midlands universities, 71% stay on

to work here. The employment rate is growing faster than the UK as a whole and we

have the lowest number of people out of work for ten years.

8.20 We have record levels of employment and things are improving. Since 2012, the

number of people with higher level skills increased by 113,000, faster than the national

average and the number of people with no qualifications is falling faster than the UK

average.

Manufacturing Technology College (MTC) Advanced Manufacturing Apprenticeship

Centre case study

A £36m Advanced Manufacturing Training Centre (AMTC) has been developed at MTC in Ansty

Park, Warwickshire to provide a flagship facility for advanced apprenticeship programmes.

Having been named as one of the UK’s top 100 apprentice employers, courses here are setting

the standard as the future of advanced manufacturing apprenticeships.

Apprentices learn the latest technology in areas such as intelligent automation, additive layer

manufacture, robotics, metrology, mechatronics, additive layer manufacture, computer aided

design (CAD) and computer aided machining (CAM). Apprentices will be able to test and

develop their skills in sponsored placements, including the opportunity to undertake

international assignments with MTC members and supporters.

With communities that miss out 8.21 The evidence points to concentrations of low employment and high levels of

unemployment and deprivation, where social mobility, wage growth and access to

opportunities have persistently lagged behind overall growth and act as a break on

productivity between the West Midlands and UK driven by challenges around our

population. However, these areas often sit alongside areas of strong employment

growth, high demand for labour, and businesses complaining of recruitment difficulties

and skills shortages. These equate to £3bn through lower skills levels and £5.2bn

through fewer residents in employment. Together they account for 54% of the output

gap.8

7 3 LEP geography 8 Based on 2017 updated output gap analysis.

38

8.22 We see concentrations of deprivation in close proximity to growth areas. To an extent,

this is an issue of connectivity, and the elements which relate to infrastructure

provision are set out below. But this challenge goes wider, so we also have targeted

labour market interventions, as set out in our Skills Plan and as agreed in a £69m

Skills Deal with Government to deliver on this plan.

8.23 The West Midlands has amongst the lowest employment rate of any mayoral combined

authority (71%) and an above average unemployment rate of 5.7%. There are

particular weak spots, including in parts of Sandwell, Birmingham and Wolverhampton.

Whilst annual wages are on the rise, one in four pay below the ‘real living wage’. Too

many of our communities don’t enjoy the access to jobs, skills and support for

enterprise that they should, and face entrenched structural issues resulting in poor

economic, social and health outcomes. Some communities face the challenges of an

ageing society and the associated pressures on health and social care.

8.24 Around 50% of five-year-old children in the West Midlands do not achieve a good level

of development compared to 34% nationally. Nearly a third of children in the region

grow up in poverty and by Year 6 almost a quarter are obese. Healthy life expectancy is

lower than the UK average. Black and minority ethnic (BAME) employment rates are

15% lower than for white groups. And for women from an ethnic minority background

the employment rate is much lower than white women. There are similar disparities

for those with disabilities and low or no qualifications.

£3bn


£5.2bn


£6.9bn



39

Figure 6 Employment rate (2016)

Source: ONS Annual Population Survey (2016)

8.25 The West Midlands also performs below the national average on educational

attainment. Spatial analysis highlights a general pattern of poorer outcomes in the West

of the Combined Authority area and a more positive picture in the East. On basic skills,

11.4% of West Midlands residents had no qualifications in 2017 compared to 8%

nationally. And parts of the Black Country have the highest proportion of the working

age population with no qualifications or NVQ1. There is a ‘missing middle’ of technical

skills at Levels 2 and 3. Less than a third of West Midlands residents are qualified to

NVQ Level 4+. Matching the national average will require a further 184,867 people to

be qualified to this level.

40

Figure 7 Proportion of residents with NVQ4+ (2016)

Source: Metro Dynamics estimates based on ONS Annual Population Survey (2016) and Census

(2011) data

Connecting Communities case study

The Connecting Communities Programme is an innovation pilot funded through the

Department of Work and Pensions as part of West Midlands Combined Authority’s first

devolution deal. The approach is based on providing employment support within the heart of

communities with a connection with that community being the only eligibility criteria.

An early example of how the project is making a real difference to people within the

communities from the perspective of one of the contracted providers is detailed below:

“K heard about the project running from the local library and approached the project

accompanied by his father. He was very reserved and reluctant to communicate without

support from his father. After building both rapport and trust, it was identified that K has autism

41

and finds it difficult to talk to new people. Through developing an action plan we were able to

support towards help make the next step into employment.”

An Inclusive Strategy

8.26 We will use devolved powers and funding to deliver a high quality and responsive

regional skills and education system, to provide people with the skills they and

businesses need for the future. We know that this alone will not be enough. So, we are

also acting to improve accessibility, through transport and digital infrastructure, and

through raising awareness of the jobs and opportunities that are available, particularly

for communities that have historically been disconnected from growth.

Actions

8.27 We will deliver 5 strategic interventions as outlined in the Regional Skills Plan, those

most directly targeting inclusive growth and productivity are summarised below:

1. Prepare our young people for future life and work

8.28 Our new approach to tackle youth unemployment identifies the need for individualised

support, across the existing silos in careers, health (mental and physical), travel,

housing, childcare, and others. This will include measures to prevent, as well as tackle,

youth unemployment and ensure that we are nurturing young talent.

• Create a West Midlands Career Learning Hub to enhance the impact of careers

education and advice.

• Celebrate and promote young talent across the region and extend the Mayor’s

Mentors programme to encourage more young people to access regional

opportunities.

• Work with the Department of Work and Pensions to support the testing of

‘progression coaches’ in Birmingham and Solihull. The coaches will support and

mentor unemployed and disadvantaged young people as they work towards gaining

and progressing in an apprenticeship or other job.

• The Apprenticeship Promise - a commitment to working with local employers to

make sure an apprenticeship or training place is available to every young person in

the region that wants one.

2. Create regional networks of specialist, technical education and training to drive

up skills and productivity and underpin economic growth

8.29 We will address shortages of specific skillsets like engineers by boosting the uptake of

vocational training through apprenticeships and preparing to deliver T-level routes

and better match skills provision to employee need.

• Seek full Government backing for two Institutes of Technology (IoTs) to deliver T-

levels. Dudley IoT will redevelop land to provide teaching facilities for higher level

skills programmes. The Greater Birmingham and Solihull IoT focuses on advanced

42

manufacturing and industry 4.0 through greater collaboration of Further and Higher

Education and creating clear pathways from level 3 to level 6 apprenticeships.

• Create employer-led taskforces and sector action plans for each of our priority

sectors, representing a cross section of businesses, to drive curriculum and skills

provision that meets employers’ needs.

• Launch the West Midlands new Digital Skills Partnership to link the region’s existing

and emerging digital offer with national and sector-based initiatives.

• Help workers in retail, logistics, hospitality and other low paying sectors to move up

the value chain through in-work progression and support retraining for those whose

jobs are at risk of automation.

• Through the devolved Adult Education Budget (AEB), increase the volume of

qualifications delivered at all levels in priority sectors and develop flexible models of

learning to support adults in work to upskill.

3. Accelerate the take up of good quality apprenticeships across the region –

double the number by 2030

8.30 Apprenticeships form a central plank of our strategy to grow the supply of skills that

employers in our region need to achieve growth. Our region is home to some of the

country’s best apprenticeship programmes, providing world class training and support

that enables businesses and our residents to compete globally – but we need to do

more. We will:

• Maximise Apprenticeship Levy investment for the West Midlands through a regional

campaign targeting employers, young people, employees and key stakeholders to

consider apprenticeships.

• Direct £40m Apprenticeship Levy funding to support more apprenticeships for SMEs,

targeting Science, Technology, Engineering and Mathematics (STEM) skills in our

priority sectors and supply chains.

• Establish a regional pre-apprenticeship and traineeship offer including piloting

Access to Apprenticeships in growth sectors.

• Provide a brokerage service to employers to promote apprenticeships as a key tool

for workforce development, supporting them to identify the best apprenticeship

programme and apprenticeship training provider to meet their business needs.

4. Deliver inclusive growth by giving more people the skills to get and sustain good

jobs and careers

8.31 Despite record employment levels, we need to get more people into work to tackle that

element of our output challenge. One of the most direct ways of improving inclusivity

is through good quality employment with the opportunity to progress.

43

8.32 We will tackle low employment and high unemployment in specific areas by:

• Supporting those out of work and on low incomes in targeted communities – this

starts with us delivering our £4.7m Employment Support Pilot – Connecting

Communities - to test and learn what works.

• Providing a new employment support service for people with a mental health and/or

physical health conditions in primary and community care through the Thrive into

Work project. The success of this project will shape the roll out of the Individual

Placement Support model for other cohorts.

8.33 Delivering £100m+ of investment in future training and skills provision through the

AEB and £10m worth of retraining funds and strengthening the upskilling of low paid

and low skilled residents to bolster their long-term career and income prospects.

5. Grow collaboration between partners to support achieving even more

collectively

8.34 The West Midlands is successful in engaging partners in the skills agenda. Close

working relationships are in place with the Further and Higher Education sector as well

as the three LEPs and local authorities. These relationships go beyond passive

engagement to all partners playing a meaningful and active role in developing and

delivering regional plans, with appropriate local flexibility to address local labour

market conditions.

8.35 Local partners are working together to develop an approach that will further integrate

investment in transport, skills and services to target specific communities or groups in

focused inclusive growth corridors or locations. The aim is to develop approaches

which improve the overall impact of investment, and accessibility to skills, jobs and

business opportunities for local people.

• Closer working with community based organisations to develop local access and

progression pathways.

• Development of local learning routeways from compulsory education, through

further, higher and career development learning.

44

Elite Centre for Manufacturing Skills (ECMS) case study

Funded through the Black Country Growth Deal, the flagship £12.4m Elite Centre for

Manufacturing Skills (ECMS) functions as an employer-led training facility, designed to

improve productivity and growth in advanced manufacturing through demand-led training

provision, delivering training that does not currently exist in the Black Country.

The ECMS follows a ‘hub and spoke’ model with equipment and facilities being installed across

four sites in the Black Country. The Hub will be an 800 sq m regeneration of an historic but

derelict building at the University of Wolverhampton’s new Springfield Brewery site, with

additional ‘spokes’ in foundry and patternmaking (Dudley Port), toolmaking (West

Bromwich), and metal joining and advanced machining (Dudley) in other parts of the Black

Country.

Skills provided by the ECMS partnership have been identified by businesses as current and

future barriers to business growth and are delivered through both apprenticeships and short

courses, for example at Dudley Advance, Dudley College’s Centre for Advanced Manufacturing

and Engineering Technology.

Skills Factory case study

The Black Country Skills Factory is an employer-led education and training collaboration

which aims to address the shortfall of skills in the Black Country and increase the pipeline of

suitably skilled staff to respond to growth. It has been a highly successful project in addressing

skills shortages in the advanced manufacturing sector.

The aspiration is to fundamentally shift the relationship between employers and education

providers to develop a networked approach to skills delivery that is needs-driven by industry

demand for skills whilst also meeting general “best practice” standards

Training and education courses are co- developed and co-delivered using shared facilities and

industry trainers. This results in the provision of “bite-sized” skills training courses which fit

the current and future needs of highly technical industries.

Construction Gateway

The Construction Gateway has been established by the Combine Authority in response to

major projected growth in the demand for construction jobs, of which HS2 is significant, but

so too is the £350m housing deal, delivering 250,000 new homes – both traditional and

systems-built. It is crucial we ensure that local people can access these opportunities, so that

employers looking for skills, or people looking for a job, an apprenticeship or a move up know

where to go for help and support.

The Combined Authority has £5m three-year programme to train over 2,000 new recruits

linked to specific major projects. The programme would also engage 300 schools and host a

number of careers events across the region. A partnership of the Further Education Skills and

Productivity Group network of colleges, training providers, Job Centres and local authorities

will work closely with developers to provide a supply of recruits across the whole range of

skills areas and levels.

Working through hubs in Coventry, Birmingham and the Black Country, the emphasis is on

providing the training and support needed to enable more unemployed and/or low-waged

entrants to develop the skills needed to enter and sustain employment in the construction

sector. This will include accreditation through the CSCS scheme.

45

Business Environment

Business dynamism is mixed

8.36 GVA per employee varies significantly across sectors in the West Midlands and the

average GVA per employee is below the national average.

8.37 Four sectors exceed the regional benchmark on the GVA per employee measure of

productivity (£42,897): Low Carbon and Environmental Technologies is by far the most

productive sector (£134,638 GVA per employee), followed by Digital and Creative

(£65,151), Business, Professional & Financial Services (BPFS) (£60,212) and Advanced

Manufacturing and Engineering (£58,036).

Figure 8 Business dynamism (2016)

Source: ONS Business Demography (2016)

46

8.38 Business dynamism and productivity is also impacted by low business stock9. Between

2016 and 2017, the number of businesses increased by 9.6%, compared to national

growth of 6.1%. Between 2013 and 2016, growth outstripped the UK too. This growth

has occurred primarily in Greater Birmingham and Solihull. Despite this recent

performance, the Combined Authority needs to increase its business stock by 17,133 in

order to reach the national average.

8.39 On start-up rates, CWLEP performs well against the English LEP average but BCLEP

lags the benchmark; in contrast BCLEP performs well on survival rates.

Global Supply Chains and Exports

8.40 We are the fastest growing UK region for goods exports and experienced 27% growth

between 2015 and 2017. Outside London and the South East, we export the most by

value, over £33bn in 2017. And between 2011 and 2018, 775 Foreign Direct Investment

(FDI) projects have created nearly 46,000 new jobs and the number of projects per

annum has more than doubled. Our supply chain firms are competitive in a range of

global markets for aerospace, materials, rail, automotive, healthcare devices and

marine, providing flexibility and quality design for a diverse range of sectors.

8.41 There is uneven direct distribution of inward investment jobs – most go to the GBSLEP

area (71%). One quarter are created in CWLEP, but only 5% in BCLEP. Our FDI success

has significant impact on supply chain firms and related jobs, many of which are

concentrated in the Black Country.

Supporting SME growth and productivity.

8.42 To successfully drive up productivity we will focus not just on those who already

innovate, trade and are growing. We will also provide support for those firms where

there is potential for further growth and productivity, where innovation could unlock

greater success and renewal. Many of our SMEs are well established manufacturing

firms whose future success will depend on new approaches. These will include the

mindset and growth orientation of individual business leaders/entrepreneurs, access

to, and effective use of, technologies, investment readiness and appetite and

management and entrepreneurial capacity.

8.43 Firms continue to report issues with finance from both the supply and demand side.

This is both about maximising uptake of existing loan and equity finance and attracting

more private investment. It also means working with our businesses to ensure that they

are investment ready through business planning, support and advice from

entrepreneurs. Better access to finance will allow more firms to start-up, scale-up and

pursue profitable lines of activity.

8.44 We know that management practices can play a central role in firm performance, both

within and across industries. By building on successful existing programmes, we can

9 Number of businesses per 10,000 population

47

maximise our management and leadership capabilities through peer-to-peer

mentoring.

8.45 We will improve competitiveness of our globally significant concentration of leading

advanced manufacturing and engineering businesses through supply chain SME

support led by businesses for businesses.

8.46 We will develop a virtual Productivity Factory, using expert industry benchmarking

and coaching, masterclasses on management processes, to cover accessing new

markets, supplier efficiency and sector-specific topics, targeted at SMEs.

8.47 We are investing with the Department of Culture, Media and Sport (DCMS), Aston

University and Creative England in small and medium enterprise (SME) growth and

support programmes, with creative industry specific pathways.

8.48 We will also launch a fund for new industry co-investment to provide wrap-around

support for businesses looking to grow into new sectors, supply chains and markets,

who need to invest in new technologies and capital to grow into those markets.

High growth SME support

8.49 We will develop further dedicated, segmented and locally appropriate business

support focused on our highest growth potential industries through dedicated

“cluster” support and expand scale up support for high potential companies that will

help position them to provide the good jobs of the future.

8.50 We will increase internationalisation by continuing to leverage national resources and

the Midlands Engine brand, focussing on both high value contracts and those new

exporters and securing first overseas orders. This will include identifying and

accessing new markets with a particular focus on smaller businesses, which may not

currently be supported.

8.51 We are establishing a business led Creative Innovation & Talent Hub to discover,

develop and showcase new creative content and diverse talent in broadcasting, arts,

games and social media and develop and implement an ambitious cultural investment

programme.

Maximising the business impact of unique events.

8.52 We will use the opportunity of the Commonwealth Games and City of Culture to

provide targeted support to drive productivity through the visitor economy,

developing bespoke qualifications for staff looking to step into management roles,

providing key underpinning skills and competencies together with the business

insights required, including through focussed support to extend the season and further

increase business tourism.

48

Infrastructure

Transport and Mobility

8.53 The West Midlands is a well-connected region with 90% of UK markets no more than a

four-hour drive away. We have one of the UK’s fastest growing airports, carrying 13m

passengers a year on 50 airlines to 143 destinations. HS2 will put the centre of

Birmingham and UK central within 40 minutes of central London. We are a major

location for logistics and the movement of goods as well as people. Our central location

means that all north west to south east or north east to south west national movement,

whether for freight or passengers, travels through or around our conurbations.

8.54 Recent growth has put our existing transport system under a great deal of pressure,

leading to poor air quality and costly congestion. We are over-reliant on the road

network and private transport, with only 41% of residents able to access three or more

strategic centres by public transport within 45 minutes during morning peak times.

Physical access to jobs and skills is still an issue for too many people in the West

Midlands. Many of our more rural areas continue to face transport challenges, and it is

important to ensure that they are “connected to the connectivity” that the West

Midlands has. We are committed to a long-term ambitious programme to address

infrastructure deficits, with early action in priority areas to ensure all areas have the

infrastructure needed. The focus is on alleviating congestion within the main urban

areas and the routes between metropolitan and neighbouring areas that people use to

travel between their place of work and residence.

8.55 Similarly, we recognise the pressure that our infrastructure system puts on the natural

environment, and that inequality of access to natural spaces has a significant

detrimental impact on our most disadvantaged communities. Our proposed investment

in natural capital strives for better connected, healthier and more productive

communities.

Inclusive Growth Corridors

8.56 We also see pockets of deprivation close to major growth corridors. We are therefore

focussed on integrating our actions in those parts of the West Midlands where the

evidence shows that communities are most disconnected and where relevant elements

of the output gap are most pronounced, using our investment to drive long term

opportunities for growth.

8.57 These “inclusive growth corridors” will enable us to work with local communities and

businesses, to ensure that the delivery of large-scale infrastructure investment is

integrated with other programmes locally to maximise impact on employment and

skills, high quality housing and development viability and improved public green space

and air quality. Local Authorities are testing this approach with the Wolverhampton to

Walsall rail corridor, with more to be identified as we develop the approach. We are

also keen to explore how this concept could be applied to our more rural areas.

49

8.58 Our strategy is to work with our globally recognised firms and universities to integrate

a number of factors into the next stage of our infrastructure development:

• Mobility innovation

• Improving our natural environment and access to it

• Modern methods of construction

• 5G connectivity, ultra-fast & full fibre broadband

• Local energy solutions

• Accessibility to jobs, skills and services

Deliver £3.4bn of investment over the next ten years in trams, road and rail

8.59 We will build a fully integrated and seamless multi-modal transport system across the

whole region. A new Metro system, including East-West Metro with extensions to

Dudley/Brierley Hill and through East Birmingham to North Solihull and the HS2

Interchange station. Overall, we will deliver six new rail stations, over 31km of new

track and provide 20,000 new seats.

8.60 Figure 9 demonstrates planned rapid transit, additional metro stops, extensions and

railway stations that will link areas of high jobs density to new and existing

communities.

Connect all communities of the West Midlands to HS2 and bring the journey time between Birmingham and London to under 40 minutes

8.61 We will implement the £4.4bn HS2 Growth Strategy, including the Curzon Masterplan,

Interchange station in Solihull and 20 transport schemes to fully connect HS2 stations

to local transport networks and communities. A new West Midlands integrated control

centre will deliver the smartest streets and best managed network during HS2

construction. It will also help to reduce congestion during major events such as the

Commonwealth Games as well as improving journey times, air quality and productivity.

We are also keen to enable greater ability for our rural areas to be better connected to

this enhanced connectivity across the urban environment.

Be the first 5G ready region

8.62 There are still significant variations in superfast broadband, full fibre and gigabit

capable broadband coverage. We will continue to work to ensure more consistent

superfast coverage.

8.63 More than £50m will be invested to create the UK’s first multi-city 5G test bed across

Birmingham, Wolverhampton and Coventry. The West Midlands will lead the way for

the UK through the Government backed national ‘Urban Connected Communities’ pilot

which will be supported by strong supporting digital infrastructure including a full fibre

network

50

Figure 9 Planned network – linking high employment density and housing sites

Source: ONS Business Register and Employment Survey (2016) and WMCA

51

We are committed to ensuring that all our investments improve the natural environment

8.64 We want to celebrate and protect the high-quality natural environment, public spaces

and biodiversity that makes us a great place to succeed. In line with world-leading

economies, we will seek to use innovative solutions to address urban challenges like air

quality, flood water management, overheating in urban areas, and climate change

adaptation. We will ‘green’ existing transport routes and improve access for walking

and cycling.

8.65 We are committed to developing a long-term plan for Natural Capital. We are

committed to the principle of an annual net gain for natural capital and will develop the

tools that enable us to work towards reversing the current trend in biodiversity loss.

8.66 We will improve air quality through a strategic action plan for the West Midlands to

improve health and wellbeing and unlock new clean growth opportunities. By working

with the private sector, we will accelerate charging infrastructure for zero emission

vehicles across the region, driven by demand.

Energy

8.67 We are committed to innovation and delivering successful new approaches to energy

generation, storage and distribution integrated within our transport system and major

employment sites. We will meet the forecast need of our manufacturing sector, new

transport system, increased use of electric vehicles and 215,000 additional houses in

new communities. Future mobility, and the industrial base that will be at the forefront

of this change, will require specific additional energy requirements that need to be

addressed and catered for.

8.68 West Midlands industry spends over £2bn each year on energy and £15bn additional

expenditure is planned between now and 2030. We also have innovation strengths in

energy systems and storage as recognised in our Science and Innovation Audit. We are

home to a range of major energy companies including National Grid, Eon, Baxi and

Cadent. Clean energy is fundamental to economic growth and quality of life, and there

are significant challenges in the region around the energy infrastructure that will

underpin housing, industry, electric vehicles etc., as well as the issues of clean air and

fuel poverty. We are committed to demand side management around vehicles and

buildings, and local authorities are exploring the implementation of clean air zones

where relevant to tackle air pollution.

8.69 Energy Capital will develop a West Midlands devolved governance framework for

energy infrastructure and markets to maximise economic opportunities for industry,

support the creation of new markets and address citizen inclusion by reducing fuel

poverty. This will be based around proposed Energy Innovation Zones (EIZs) across the

region.

8.70 EIZs create local partnerships which bring together the right stakeholders for each

locality and are thus collectively able to manage energy investment risk efficiently

52

(particularly when innovative technologies are being commercialised or require

strategic infrastructure investment). Development and use of EIZs will provide a

simple, flexible mechanism to support integrated local energy infrastructure transition,

investment and accelerated deployment of innovation. The West Midlands has led on

the development of the concept of EIZs nationally and four pilot EIZs have been

identified.

8.71 Work on regional energy strategy has been underway for several years, with the

Regional Energy Policy Commission reporting in 2017. We will use this opportunity to:

• Establish a £500M public-private investment fund to support targeted clean energy investments unlocking productivity and GVA growth.

• Work with industry partners, Government and regulators to develop and pilot a new institutional model for managing regional energy investment and markets (a regional energy infrastructure commissioning and market-making body), designed to de-risk investment in meeting future energy requirements and to improve our ability to meet the infrastructure elements of increasing business and consumer demand.

Changes in affordability and a lack of social housing risks holding back growth and impacting our communities

8.72 Housing costs are increasing faster than local salaries. Most areas in the West Midlands

are in the top fifth of house price increases nationally. The West Midlands median

increase is 6%, more than double the national average. This has been exacerbated by a

lack of supply, quality, choice and mix of affordable and social housing. Typically, only

10% affordable housing is being delivered as part of city and town centre housing

schemes. The rate of housing completions in the region is rising. With population set to

increase by over 400,000 by 2038, we are committed to ensuring housing meets the full

spectrum of housing need.

Delivering 215,000 homes and driving productivity in construction.

8.73 We will increase the rate of housing delivery by implementing the £350m housing plan,

investing £250m in land remediation and developing the skills required through the

National Brownfield Institute in Wolverhampton. We will work to re-set the housing

contract and are firmly committed to delivering a broader choice of tenures and styles.

We will deliver quality through a West Midlands-wide design standard for new

buildings. We will encourage diversity and new entrants to the market to support this

increased delivery, such as through modular build, and support the provision of new

skills as the industry changes.

8.74 The scale of construction activity in the West Midlands in the decades ahead gives us a

once in a generation opportunity to work with the sector to transform productivity,

methods and delivery of new long-term skilled careers. Emerging assets, such as the

53

University of Wolverhampton’s Springfield Campus – set to be the largest construction

and built environment campus in Europe – will critically support this sector drive.

8.75 We will work with the sector to accelerate the use of data and innovative processes and

products in the construction industry - enhancing process innovation via modern

methods of construction, including through the MTC Core Innovation Hub, building

information modelling and modular build. Incorporating innovation in houses as they

are being built, working with housing associations and other providers. Given the

significant housing and infrastructure investments coming into the region, and our

emerging cluster specialism, the West Midlands has a unique opportunity to boost

quality, sustainability and productivity through the utilisation of modern methods of

construction.

8.76 We will maximise the opportunity of HS2 to create regional supply chains and the skills

both to service HS2 (including through the national HS2 college) and wider

infrastructure projects to include a long-term rail/infrastructure strategy along with

dedicated support to address both supply and demand side challenges ensuring our

businesses benefit fully from HS2 opportunities.

8.77 Through a national Centre of Excellence for Commissioning we will drive

procurement excellence, social and environmental value and innovative behaviour

through contracts, particularly focussing on construction and digital infrastructure.

National Brownfield Institute and Springfield Campus case study

The development of strategic sites of employment and housing land is one of the key priorities identified within the West Midlands. In 2015 a feasibility study showed that the market would benefit from, and support, the development of a Centre of Excellence in brownfield development.

A crucial asset for tackling land availability shortages for housing and employment land is the National Brownfield Institute at the University of Wolverhampton. It’s home to a team of specialist researchers, consultants and industry experts who will advise on all aspects of brownfield development from dealing with contaminated land to repurposing buildings and sites.

The National Brownfield Institute will be a part of Wolverhampton’s developing Springfield Campus. The site of the former Springfield brewery is being transformed into Europe’s largest specialist construction and built environment campus, bringing together businesses and the education sector to maximise impact on the economy. As the home of the West Midlands Construction University Technical College, the University’s School of Architecture and Built Environment, and the Elite Centre for Manufacturing Skills, Springfield Campus is a central part of the region’s growth ambitions, particularly in the construction sector – this is further supplemented by Dudley Advance II, Dudley College’s new centre dedicated to advanced Building Technologies.

54

Employment Land

8.78 The West Midlands Land Commission (WMLC) concluded that the “shortfall of land for

employment space is at least as pressing as the shortage of land for new homes, and

possibly more so”. This is felt most strongly for strategic employment sites – those that

can bring net additional activity and jobs to the region. Similarly, there is a challenge

for incubation space as well as grow on space to support agile and mobile economic

activity. These issues are most severe in Coventry and Warwickshire, but across our

region there’s a significant gap in good quality employment land for our industries. The

Black Country Land and Property Investment Fund (LPIF) aims to provide a solution to

the shortfall through investment in projects which will support the re-use of brownfield

land and buildings and the delivery of supporting infrastructure. Through this

investment, the re-development of major employment land sites, such as Phoenix 10 in

Walsall and the proposed extension of i54 in Wolverhampton, can help underpin the

region’s industrial sectors, creating jobs and long-term prosperity.

8.79 As well as £10bn worth of existing opportunities in identified investor-ready sites, the

West Midlands will implement a strategic programme of employment land

development, based on up to date evidence of requirements in different parts of the

region. Further work is underway to scope out the need for employment land through

the West Midlands Strategic Employment Site Study 2019.

55

9 Commitments and Implementation 9.1 The impacts the actions outlined above are designed to achieve are not just

quantitative. The actions in this strategy are based on our commitments to an inclusive

and successful future West Midlands. This is the future of the West Midlands that we

are determined to deliver.

9.2 High employment with more good jobs and accessible opportunities, where more

people and communities benefit and leadership in business and public life is more

diverse. A net fiscal contributor to the UK, where wage growth has been driven by value

chain progression and productivity gains, including through improved health and

wellbeing, and with more home-grown high growth businesses. Our high quality and

responsive regional education and skills system will be recognised by individuals and

businesses as providing the opportunities, pathways, skills and retraining needed to

take advantage of future growth and a changing world.

9.3 We will have delivered the 2022 Commonwealth Games and City of Culture, using them

to further promote the strong West Midlands tourism offer, and to showcase

autonomous transport innovation, new 5G enabled services for visitors, businesses and

residents and with both leaving a lasting legacy of business and community benefits.

Infrastructure within these major events and elsewhere will be delivered through the

use of modern methods of construction by our innovative firms, and we will harness

our emerging expertise in brownfield land development to deliver world-class

employment land that will underpin sustainable industrial success.

9.4 The West Midlands will be renowned for the improvements we make to our natural

environment, with improved natural capital and biodiversity. Population growth will

be supported by new, connected communities, with a choice of high-quality housing

and access to high quality green space. We will have a network of prosperous and

vibrant town centres, supporting and addressing the changing consumer and leisure

activities of our residents and visitors. Our clean growth will be supported by

innovative and successful new approaches to energy generation, storage and

distribution, integrated with our transport system and major employment sites that

meet our energy needs.

9.5 As the home of mobility and transport innovation in the UK, we will be the national

centre for connected and autonomous vehicles, electric motor and battery manufacture

for the full range of electric vehicles, supported by successful supply chain adaptation,

and the highest electric vehicle adoption and Connected and Autonomous Vehicles

share of vehicle use anywhere in the UK.

9.6 Our expertise will have created a fully integrated, multi-modal and smart transport

network, enabling seamless travel across the West Midlands, dramatically reducing

congestion and journey times and ensuring that every part of the West Midlands is close

to local and national opportunities, and the rest of the world via air, road, rail and digital

56

at UK Central’s international gateway. We will have the best ultrafast and 5G networks

in the country, which will have led the way in developing new services and markets.

9.7 We will be a pre-eminent national centre of creative content, techniques and

technologies, helping firms locally, nationally and globally to continue to innovate

across disciplines, transferring skills and techniques generated in our gaming, content

production and design firms and anchored by institutions, world class facilities and

networks.

9.8 The UK centre for the innovation, translation and real-world evaluation of new

diagnostics, devices and healthcare technologies (including AI), enabled through a

partnership with our large, stable and diverse population. A global life sciences cluster

complementing and working in partnership with the London cluster centred around

Euston just 38 minutes away.

9.9 We will continue to be a renowned 21st century manufacturing and engineering centre,

as the UK’s leading exporting region with strong and successful supply chains. And our

firms across sectors will enjoy an easy to access competitive support system with

demand lead innovation where businesses and people come to develop new products,

processes and services, backed up by supportive investment in employment land

initiatives. Supported by the business, academic and public partnerships needed to

drive new ways of doing things and new products.

Implementation

9.10 Through the West Midlands Combined Authority the region has a proven governance

and delivery structure. This combines integrated investment planning against the

metrics we have set, with delivery structures designed to meet the specific

requirements of individual issues or programmes. Implementation will be coordinated

by the Strategic Economic Development Board, reporting to the CA Board, which will

continue to review operation as Government arrangements for future growth and

infrastructure funding are developed.

9.11 We will measure progress against the core metrics set out in Annex 1, which will

continue to evolve further as we develop new approaches measuring and prioritising

improvements in inclusive growth, natural capital and biodiversity.

9.12 In the months ahead the CA, its constituent and non-constituent members, LEPs,

Universities, business and community groups will work together to keep this strategy

up to date and drive implementation of both new programmes and established

priorities. This includes through the development of the inclusive growth roadmap.

9.13 Our emerging sector action plans will provide a focus for private sector led delivery of

aspects of this strategy within different areas of our economy and, in tandem with

businesses and industry trade bodies, we will further develop these A successful

industrial strategy will ultimately be driven by the private sector.. This strategy has

been developed in partnership with business and they will be essential to its

57

implementation across the region, working in partnership to deliver an inclusive and

successful future West Midlands

58

10 Annex 1

The WMCA Performance Management Framework10

Outcomes Measures of

Success Where we are now

Change over the last year

Direction of Travel

Relative to UK

average since 2013

Scale of the Challenge

Source

ECONOMIC GROWTH -

Improved GVA for the region in line with the UK

average

O1. GVA per Head

£22,443 +£671

+£2,308

+11.5% WMCA

+9.1% UK

GVA per head £26,621

+£4,178 GVA per head

ONS (2017) Balanced Gross Value Added (GVA) for Local Enterprise

Partnerships

O2. GVA per Hour11*

£28.90 +£1.10

+£2.10

+7.4% WMCA

+6.0% UK

GVA per hour £32.60

+£3.70 per Hour

ONS (2018): Sub regional Productivity: GVA per hour worked

by Local Enterprise Partnerships, 2004-2016

O3. GDHI per Person*

£16,295 +£115

+£1,287

+8.6% WMCA

+8.5% UK

£19,432 GDHI per Person

+£3,137 GDHI per Person

ONS (2017): Regional Gross Disposable Household Income

(GDHI) by Local Enterprise Partnerships, 1997 - 2016

BUSINESS - Improved the

productivity of our businesses

focussing on our growth sectors

FISCAL - Secure better for less

from our public services

B1. GVA per employee

£49,937 +£1,077

+£3,022

+6.4% WMCA

+4.5% Eng

GVA per employee =

£56,783

+£6,846 GVA per employee

ONS Balanced Gross Value Added (2017) for Local enterprise

Partnerships

ONS Business Register and Employment Survey for years 2009-

2016

B2. GVA in transformational sectors

£66bn +£2.6bn

+£9bn

£147bn WMCA SEP Ambition

+£80.8bn GVA

EIU have applied the proportion of GVA by sector from the Oxford

Economic Model and applied to the ONS GVA figures

10 The green shading illustrates indicators which have moved in a positive direction compared to the UK average or national (England)

where UK averages are not available. The red shading indicates the reverse and orange indicates a growth rate in the right direction but less than the UK or national average.

11 * New PMF Indicator for 2018

59




Direction of Travel

Relative to UK

average since 2013


Source

+15.9% WMCA

+11.8% UK

B3. No. of Business Births

27,550

business births

67 per

10,000

population

+5,120

business births

+8,745

business births

+46.5% WMCA

+19% UK

Ahead of UK

63 per 10k population

+1,618 births per annum

ONS UK Business Demography, 2017

B4. Five - year Business Survival Rate of businesses born in 2011*

43.8% -6.9pp -31.48pp WMCA

-31.5pp UK

44.1%

ONS UK Business Demography 2017

B5. Jobs in Transformational Sectors

1.2m +24,646 jobs

+106,979 jobs

+9.5% WMCA

+8.1% Eng

1.5m WMCA Transformational

SEP Ambition

+ 236,120 transformational

jobs

Oxford Economic Model

B6. Total Jobs

2m +36,178 jobs

+131,457 Jobs

+6.9% WMCA

+ 7% Eng

2.4m WMCA SEP Total Jobs Ambition

+364,165 Jobs

Oxford Economic Model

B7. Employment Rate

71% +2.2 pp

+3.7 pp WMCA

+3.5 pp UK

Employment rate = 74.7%

+3.7pp

Annual Population Survey (2018) January – December 2017

60




Direction of Travel

Relative to UK

average since 2013


Source

F1. Income & Exp. Balance

-£2.7bn

-0.5 bn N/A

To achieve no fiscal gap

+£2.7 bn

PEOPLE - Improved Life Chances for all

P1 – Reduce % of people in top 10% most deprived areas

20% +0.0007 pp +0.002 pp

WMCA 10% of people

Public Health England Profiles, 2017

P2. – Better employment, health and wider outcomes for people with complex needs

Under development

P3. (i) Annual average earnings of full-time working residents

£27,574 + £472

+£1,695

+6.55% WMCA

+6.47% Eng

+ £1,184

Nomis: ONS Annual Survey of Hours & Earnings, 2017

(ii) % of employees earning above UK living wage

75.7% NA NA +1.1pp

ONS user requested data - Annual Survey of Hours and Earnings

(ASHE) - Number and percentage of employee jobs with hourly pay

below the National Living Wage, by local authority, UK, April 2016

SKILLS - Improved skill levels at all

ages so that people have the

skills and qualifications to

access jobs. Ignite /Retune

/Accelerate

P4. % of Working Age Population (WAP) with No Qualifications

11.4% 289,300 people

- 1.7 pp - 40,500 people

- 3.2 pp - 73,900 people

- 1.6pp UK

- 3.4pp - 86,036 people

ONS Annual Population Survey, 2018

P5. % of WAP with NVQ1

11.4% 288,800 people

-0.6 pp - 14,200 people

- 1.1 pp - 22,900 people

- 1.2pp UK

Ahead of UK % by

+ 0.7pp + 16,934 people



16.9% 428,300 people

+ 0.1pp + 4,800 people

- 0.4 pp WMCA

- 2,300 people - 0.8pp UK

Ahead of UK % by

+ 0.9 pp + 21,772 people



17.5% 445,800 people

+ 1.3 pp + 34,600 people

+ 0.1 pp + 9,800 people

+No change UK

Ahead of UK % by + 0.5 pp

+ 13,864 people


P8. % of WAP with NVQ4+

31.1% 790,800 people

+ 0.4 pp + 14,600 people

+3.55 pp + 103,000

people +3.5pp UK

+ 7.3 pp + 184,867 people


61




Direction of Travel

Relative to UK

average since 2013


Source

P9. No. of Apprenticeships starts

42,470 + 400

+ 1%

+ 6,460

+ 17.9% WMCA

+12.5 % Eng.

84,000

+ 42,219 apprenticeships


P10. Progress 8 Score

- 0.12

(Below Average)

NA NA 0 (average score)

+ 0.12 points

Department for Education Main National Tables,2017

P11. NEETs aged 16-17

5,040

(7.8%)

(WM Met)

N/A N/A

6%

- 1,143 NEETs

Department for Education, 2017

P12. % of children achieving a good level of development at the end of reception*

67.0% +1.7%

+10.0% WM Met

+10.3% England

+3.7%

Public Health England Profiles, 2017

P13. Social Mobility Index*

Based on 326 Local

Authorities

Lowest Ranked: North

Warwickshire: 307

Highest Rank: Bromsgrove

48

All the West Midland Local Authorities in

the Top Quarter Ranking

GOV UK – Social Mobility Commission, 2018

HEALTH - Better quality of life for

all: improved health (inc.

Mental health) and well being

P12. Healthy Life Expectancy (HLE) at Births – Males & Females

Males (M) =

59.6 years + 0.32 years

- 0.3 years WM Met

+ 0.1 years Eng.

63.3 years

Public Health England, 2017

Females (F) = - 0.6 years - 0.9 years WM Met

63.9 years

62




Direction of Travel

Relative to UK

average since 2013


Source

60.3 years - 0.05 years Eng.


P13. Reduced Inequality in HLE for Males & Females

Under development

P14. Health inequality gap by years between the most and least deprived areas

M = 7.4 years

F = 9 years

(WM Met)

M = + 1.2

F = - 0.9

M = + 1.3

F = - 1.3

No gap

Reduce gap by 7.4 years for males and 9

years for females


P15. Gap in employment rate for those in contact with secondary mental health services and the overall employment rate

58.9 % - 0.6 pp

+ 1.5 pp WMCA

+ 5 pp Eng.

Ahead of England % by

+ 8.3pp (67.2%)

NHS Digital 2017 Dataset: 1F - Proportion of adults in contact with secondary mental health services in

paid employment October 2016

P16 – Rates of suicide (per 100,000)

9.8 - 0.3 + 1.5 WMCA

+ 0.3 Eng.

No suicides

- 401 suicides


P17 - % Physically Active Adults*

57.0% -23,400

-1.2% NA

61.8%

+ 156,701 active people12

Active Lives, Sport England, 2018

CRIME - Reduced offending and re-

offending

P18 – No. of offenders per year

32,008

7.9 offenders per 1,000

population

(2014)

- 1,364

- 4.1%

- 7,170

- 18.3%13

Below the national average


P19 - Re-offending rates (per 100,000)

24.9%

(2014) + 0.3 pp

- 0.1 pp WMCA

- 1.2 pp Eng.14

Ahead of England

- 0.5pp


P20 – No. of first time entrants to Youth Justice System

443 - 2.5%

- 10.4% WM Met

- 27% Eng.

-116 first-time entrants


12 First Active Lives Survey was issued in 2017, therefore baseline data is unavailable. 13 Baseline is 2011. 14 Baseline is 2011.

63




Direction of Travel

Relative to UK

average since 2013


Source

P21. Youth Claimants aged 18 - 24

16,265 +1,155

+7.6%

- 17,140

- 51.3% WMCA

- 55.1% UK

- 34%

- 5,499 youth claimants

Department of Work and Pensions, 2018

P22. Claimant Count aged 18 - 64

83,485 + 10,310

+ 14.1%

- 42,145

- 33.5% WMCA

- 39.5% UK

- 41%

- 34,018 claimants

Department of Work and Pensions, 2018

PLACE

ACCESSIBILITY- Improved the

connectivity of people to

businesses to jobs and markets

Pl1. Broadband Connectivity

95.6%

1.15m premises

+ 1.9 pp

+ 4.3pp WM Met

+ 16 pp UK15

100%

+53,339 premises

Ofcom Connected Nations, 2018

Pl2. % residents able to access 3 or more strategic centres including Birmingham City Centre, accessible by public transport within 45 mins travel time in the am peak

41%

(WM Met) - 0.4 pp - 3.6 pp

75%

+ 34pp

Transport for West Midlands 2017/18

Pl3. Journey time reliability

Under development16

INFRASTRUCTURE - Improved the quantity of high quality readily

available development

sites

Pl4. Mode Share of all Journeys:

i). Mode Share of all journeys by car, public transport, cycling & walking

i) Non-sustainable: Car (67%)

Sustainable:

Public Transport (10%)

Walk (20%)

NA

i) Non- Sustainable: Car +3% Sustainable:

Public Transport -1%

Walk – 2%

45% car mode share

Car (- 22%)

Transport for West Midlands, 2017/18

15 Baseline is 2014. 16 Transport for West Midlands is in the process of developing an effective monitoring approach for journey time reliability.

64




Direction of Travel

Relative to UK

average since 2013


Source

ii). Percentage of car journeys single occupancy

Cycle (1%)

Taxi (2%)

ii) 82% (2014-2016)

Cycle No change

Taxi No change

ii) No change

(2013 to 2015 – 2014 to 2016)

Pl5. Total Dwelling Stock Estimates*

1,704,600

(2017) +11,480

+42,200 WMCA

+215,000

(by 2031)

MHCLG Live Tables, 2017

Pl6. Total Additional Affordable Dwellings*

2,850

(2016/17)

+520

+15,550 WMCA

(2012/13 – 2016/17)


Pl7.Number of Additional Affordable Rented Dwellings*

1,590

(2016/17)

+320

+5,830 WMCA

(2014/15 – 2016/17)


PL8. Ratio of median house price to median gross annual residence-based earnings*

6.86

(2017)

+0.20

+1.00 WMCA

+1.15 England


SUSTAINABILITY - Resource efficient

economy to stimulate new

technology and business

E1. CO2 emitted within SEP area by transport, businesses and homes

21,696ktCO2 (2015)

-924ktCO2

-4.1%

-12.8% WMCA

-12.7% UK

WMCA target: 40% reduction in carbon by 2030

from 2010

-5,756 ktCO2

Sustainability for West Midlands, 2017

E2. No. of days poor air quality per year (rated 4 or higher on the Daily Air Quality Index)17

25 days

-15 days

-55.4% WMCA18

-38.1% UK

WMCA target: 1 day by 2030

-24 days

Sustainability for West Midlands, 2017

17 Number of days is measured by region 18 Baseline data is 2011

Greater Birmingham & Solihull Local Enterprise Partnership Programme Delivery Board

Programme Delivery Board Meeting

Thursday 8th November 2018, 09:00 – 11:30

Solihull Arts Complex, Homer Road, Touchwood, Solihull, B91 3RG

Decisions & Actions

1

Present: Chris Loughran – Deputy Chair for Delivery, GBSLEP (Chair) Mike Lyons – Connectivity Director, GBSLEP Alison Jarrett – Assistant Director, Finance and Governance, Birmingham City Council (Accountable Body Representative) Anne Brereton – Director of Managed Growth, Solihull Metropolitan Borough Council Tony McGovern – Managing Director, Cannock Chase District Council Michelle Nutt – Assistant Director, Cities and Local Growth Unit Nigel Greenwood – Finance Manager, Birmingham City Council Simon Marks – GBSLEP Board Member Patrick Hanlon – GBSLEP Board Member Phil Edwards – Assistant Director, Birmingham City Council Paul Faulkner – Chief Executive, Greater Birmingham Chambers of Commerce

Apologies: Neil Rami – Chief Executive, West Midlands Growth Company Ian Miller – Chief Executive, Wyre Forest District Council Roger Mendonca – Chief Operating Officer, West Midlands Growth Company

In attendance: Tom Fletcher – Acting Head of Delivery, GBSLEP Executive Rehana Watkinson – PMO Manager, GBSLEP Executive Jane Smith – Enterprise Zone Programme Manager, BCC Presenting: James Betjemann – Head of Enterprise Zone and Curzon Delivery, BCC item 4, 5,6 and 7 only Lada Zimina – LEP Project Champion

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Subject Decisions Actions Timescales Owner(s)

1 Welcome and apologies

The Chair welcomed everyone to the meeting of the Programme Delivery Board (PDB) and thanked Solihull Arts Centre for hosting the meeting.





Decisions & Actions

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Apologies were noted as above.

AB gave an overview of the current priorities in Solihull.

2 Declarations of Interest TMcG declared a non-personal interest in the Kingswood Lakeside project that is seeking approval of a change request. Staffordshire County Council is the applicant, but Cannock Chase District Council have been involved in the project.

CL and PF declared a non-pecuniary interest in the Symphony Hall project.

All other Declarations of Interests have already been logged.

3 Decisions and actions of the last meeting

The decisions and actions of the PDB meeting that took place on 6th September 2018 were agreed.

All actions were either completed or in progress.

There were no matters arising that were not addressed at this meeting.

4 Paradise update The PDB noted the update on the current progress with the

Paradise project and that an update will be provided to the LEP

Board on 22nd November.

5 Enterprise Zone Programme update report

The PDB:

Noted the programme income for 2018/19;

Presentation on EZ Financial Model at future

16th Jan 2019

NG





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a) Performance reports

b) Financial model update

c) Financial Model overview

Noted the financial outturn to September 2018;

Noted that based on the current business rate income

projections, annual deficits for 2018/19 and 2019/20

provide for an overall cumulative deficit of £2.7m as at

March 2020. This would necessitate using built up

contingency to leave an overall surplus position of £2,677m;

Noted the actions already in place and proposed options to

address the annual deficit position without using

contingency funds;

Noted the output outturn to September 2018;

Noted the performance of the programme against the Key

Project Indicators 2018/19;

Noted the RAG assessment of the EZ sites; and

Noted progress with the project heath-check commission.

meeting to include the impact on Smithfield. Snow Hill combined EZ/LGF Full Business Case currently being appraised to come to future meeting. Financial principles to be reviewed to increase robustness against programme losses Outcome of health check to be circulated to PDB on completion.

16th Jan 2019 16th Jan 2019 Dec 2018

TF NG TF





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6 Enterprise Zone Project Investment Decisions

a) Smithfield Development

b) HS2 Curzon Station Enhanced Public Realm Design

Smithfield Development

The PDB:

Noted that a report will be made to Birmingham City Council Cabinet on 11 December 2018 to inform of the outcome of the procurement process and selection of the preferred bidder for the Birmingham Smithfield Development.

Noted that an application for GBSLEP Enterprise Zone capital grant funds will be made in accordance with Assurance Framework process for the associated infrastructure costs of delivering the Birmingham Smithfield Development.

HS2 Curzon Station Enhanced Public Realm Design

The PDB:

Noted the conditional allocation of up to £600,046 Enterprise Zone funding as Project Development Funding to Birmingham City Council to progress the HS2 Curzon Station Enhanced Public Realm Design project to Full Business Case stage. This is following the independent appraisal of the funding application and is made in accordance with the GBSLEP Assurance Framework.





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Noted the offer of a presentation on the current scheme designs by the design team in advance of the FBC coming to PDB for approval in January.

PDB members interested in receiving a briefing on the scheme designs to contact TF and JB.

Nov All

7 Enterprise Zone project exceptions

a) Garrison Data Centre

The PDB:

Considered the change request for the Garrison Data Centre Project;

Agreed to proceed to due diligence being undertaken; and

Agreed that, subject to a satisfactory outcome of the due diligence, including the successful renegotiation of the lease between the business and landlord, the LEP Director would confirm approval of the change request.

8 Growth Programme Update Report

a) Programme issues and risks

b) Project overviews and exceptions

The PDB:

Noted the current programme status for forecast grant claims and outputs;

Noted the current status with project development and delivery;

Note the additions to the Growth Programme strategic pipeline;

Note the slippage being indicated by the Hydrogen Bus

Hydrogen Bus Project to be invited to next PDB meeting to present change request

30th Nov 18

RW





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project;

Noted the approval by the LEP Director of £2,300,000 of Local Growth Fund (LGF) capital grant to Staffordshire County Council for the delivery of the Lichfield Southern Bypass project at a total project cost of £17,347,000;

Noted the conditional approval by the PDB of £3,000,000 LGF capital grant to East Staffordshire Borough Council for the delivery of the Burton Town Centre Regeneration and Flood Defence project at a total project cost of £33,900,000;

Noted the slippage being reported by STEAMhouse and agreed this would be managed through the change control process;

Noted that the LGF programme has nearly allocated all available funding, but overprogramming of conditional funding allocations will continue in order to mitigate against project slippage; and

Noted the Accountable Body has agreed the capitalisation

of Programme Management Office costs and approve the

variation to the value of the capital recharge to the LGF

programme.

Project Sponsor to be made aware of PDB’s concern about the risk of slippage and how it was escalated.

30th Nov 18

TF





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9 Project investment

decisions:

a. Commonwealth

Games

b. Redditch

Eastern

Gateway

c. Lichfield

Southern

Bypass

a) Commonwealth Games

The PDB:

Noted the update on the progress with LGF funding

application for the Commonwealth Games project and

that the FBC will be submitted by March 2019; and

Considered the package of projects that have been

proposed by Birmingham City Council.

b) Redditch Eastern Gateway

The PDB:

Noted the submission of Outline Business Case (OBC)

for the Redditch Gateway project and its ongoing

technical appraisal; and

Agreed to delegate authority to a sub-group of PDB

members, consisting of CL, AJ, PH, TMcG, to consider

and conditionally approve the project prior to

ratification by PDB via written procedure.

c) Lichfield Southern Bypass

Working draft FBC to be circulated before

March 2019, if possible, to check suitability

prior to final submission.

Sub group to meet before December 2018.

21st Feb 2019 Nov / Dec 18

PE LZ





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The PDB:

Noted the approval of £2,300,000 of LGF capital grant

from the total project cost of £17,347,000 to

Staffordshire County Council for the delivery of the

Lichfield Southern Bypass project.

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Project Exceptions

a) Symphony Hall

b) Kingswood

Lakeside

a) Symphony Hall

The PDB:

Approved the change request for an additional

£1,500,000 of conditionally allocated Local Growth

Fund capital grant towards the delivery of the

Symphony Hall Extension project. This increases the

total conditional funding allocation to the project to

£6,000,000;

Agreed this this approval is subject to:

o the increased conditional funding allocation will

be for pre-agreed contingency related costs

only;

o confirmation of all match funding being in place





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as a condition precedent within the grant

agreement, should the project receive full

approval;

o confirmation in the FBC of acceptable

arrangements for how cost overruns will be

handled;

o to the availability of Local Growth Funding; and

o a satisfactory Full Business Case.

b) Kingswood Lakeside

The PDB:

Approved the change request relating to financial

slippage and invited the project sponsor to attend the

next Programme Delivery Board meeting.

Invite Kingswood Lakeside Project Sponsor

to next meeting.

16th Jan 19

RW

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Any Other Business

a. RIF Review

b. Growth Deal

quarterly

a) RIF Review

The PDB

Noted the review of the Revolving Investment Fund

(RIF);





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monitoring

report to

Government

Approved the return of funds to the Local Growth Fund

(LGF) programme to support project delivery over

2018/19 and 2019/20;

Approved the continued offer of loan funding to

suitable projects; and

Noted targeted loan funds should be considered as part

of future funding rounds, post-LGF.

b) Growth Deal quarterly monitoring report to

Government

The PDB:

Noted the Quarter 1 2018/19 Growth Deal Monitoring

Report to Government; and

Approved the submission of the Monitoring Report.

Future meeting dates of the Programme Delivery Board for 2018: Thursday 16th January 2019 – 9.30- 11am - Smith and Williamson, 9 Colmore Row, Birmingham B3 2BJ Thursday 21st February 2019 – 9.30-11am (venue tbc – Cannock Chase location) Thursday 9th May 2019 – 9.30-11am - Sense, Touchbase Pears, 750 Bristol Road, Birmingham, B29 6NA Thursday 12th September 2019 – 9.30-11am - Committee Room 3. Redditch Town Hall, Walter Stranz Square, Redditch, B98 8AH Thursday 14th November 2019 – 9.30-11am – (venue tbc Solihull location)





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Thursday 13th February 2020 – 9.30-11am - Birmingham Hippodrome, Hurst St, Southside, Birmingham B5 4TB

KEY:

CR PH TMcG

Chris Loughran Phil Edwards Tony McGovern

IM MN PF

Ian Miller Michelle Nutt Paul Faulkner

AB NR AJ

Anne Brereton Neil Rami Alison Jarett

PH SM

Patrick Hanlon Simon Marks

TF JS

Tom Fletcher Jane Smith

RW ML

Rehana Watkinson Mike Lyons

RM Roger Mendonça PDT Programme Delivery Team PBD Programme Delivery Board CLoG EZ

Cities and Local Growth Enterprise Zone

BEIS Business, Energy & Industrial Strategy

DCLG PMO

Dept. Communities & Local Government Programme Management Office

LGF Local Growth Fund RIF Revolving Investment Fund

greater birmingham and solihull local enterprise ......5 9.18 lep executive director’s report...

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