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EMC Technical Assistance Project

Andrew PritchardDirector of Policy & Infrastructure

What is it all about?

A technical assistance project led by East Midlands Councils to provide an evidence base for future EU funding

To make sure that we maximise the potential of EU investment across the East Midlands

Strong support from DCLG & Council Leaders for the project

Localisation of EU funding

Establishment of a national ‘EU Growth Programme’

LEPs to develop EU investment strategies Each LEP to be given a ‘notional

allocation’ of EU funding to prioritise Payments to be made centrally Notional allocations will be reviewed

against performance from 2017 onwards

“Show me the money”

D2N2: €249.7 million SCR: €203.4 million UK Local Growth Fund = £2 billion

UK Local Growth Fund

New Homes Bonus £400m

LA Major Transport Scheme £819m

Local Sustainable Transport Fund £100m

Integrated Transport Block £200m

Further Education Capital Fund £330m

ESF Skills Match Funding £170M

Emerging UK Priorities

•Innovation•SME Competitiveness•ICT 60% + of ERDF

•Employment•Skills•Social Inclusion 80% + of ESF

•Climate Change•Environment•Sustainable Transport No Minimum spend

•Low Carbon Economy 20% + of ERDF

Also…

Minimum 20% of combined ESF/ERDF on ‘social inclusion’

Gender equality, equal opportunities & non-discrimination

Sustainable development

Programme Timescales

September 2013: Draft LEP EU Investment Strategies

January 2014: finalise strategies

March 2014: new EU Programme starts

2017 – first review of notional allocations

Current Experience

Spend under the current ERDF Programme has been slow

Too many small projects - difficult to see a strategic impact

Original operational programme did not fully meet local needs - e.g. Broadband

Future Challenges

1 region replaced by 7 LEPs – 4 overlapping

Pressure for early spend on projects that will deliver clear outcomes

LEP notional allocations to be reviewed in 2017- under-performance could be penalised

Threats v Opportunities

What are we going to do?

Facilitate a series of consultation events Develop an evidence base (or ‘socio-

economic framework’) to inform both the UK Growth Programme and individual LEP Strategies – working with NTU.

Highlight potential areas of collaborative activity that can maximise strategic impact and reduce ‘transaction costs’

Events Diary

1st July: Greater Lincolnshire LEP 5th July: Leicester & Leicestershire LEP 9th July: Competitiveness Round Table 16th July: NEP/SEMLEP 22nd July: D2N2 25th July: Green Economy Round Table

Project Timescales

End of July 2013: Interim Report

September 2013: draft Framework

December 2013 – final Framework

January - June 2014 Awareness raising

Key Outcomes

“It’s the economy, stupid”

More Jobs Less Worklessness

Your mission today…

To think about how best EU funding could be used across D2N2

To highlight areas or issues where wider collaboration might be helpful.

To ask if you do not understand.

East Midlands PA3 ProjectSocio-Economic Evidence – the future of European

Funds in Derby, Derbyshire, Nottingham and Nottinghamshire

22nd July, 2013

Chris LawtonNottingham Business School

Project Rationale and Objectives• The project aims to provide socio-economic evidence

to help identify synergies, linkages and common challenges across LEPs within or overlapping the East Midlands

• To identify opportunities for collaboration across the themes identified in the ‘Europe 2020’ strategy

• The UK Government would: “like to see Local Enterprise Partnerships working with each other to deliver a bigger impact… and achieve economies of scale wherever possible”

Source: HM Government, April 2013. ‘Technical Annex: Preliminary guidance to Local Enterprise Partnerships on development of Structural & Investment Fund Strategies.’ paragraph 2.8, p. 4.

Contains Ordnance Survey data © Crown copyright and database right, 2013.

Local Enterprise Partnerships within or overlapping the East Midlands Region

Chart 1: Headline GVA per head indices (UK=100) NUTS2, 2011

Economic Context

Source: ONS Crown Copyright, 2012. ‘Regional Gross Value Added, 2011’.

Economic Context

Source: ONS Crown Copyright, 2013. ‘Annual Population Survey’, January-December 2008 and January-December 2012. From NOMIS [accessed 24th June, 2013].

Chart 2:Employment rate (% working age residents), 2012

• The SME environment remains difficult, but some signs of improvement: – Business death rates have fallen since 2009 and business birth

rates have increased– Survival rates for new businesses have significantly decreased

since pre-recession– Small businesses (<50 employees) have been more likely to

retain staff but cut/freeze wages and investment, with resulting lost productivity

– Large businesses (>250) more likely to cut staff whilst maintaining investment and productivity levels

• Lenders report that demand for credit remains low• Despite some structural improvements, firms seeking credit

continue to report difficulties in the supply of finance• Exports have been growing moderately in recent months

EU Thematic Objective: SME Competitiveness

Chart 3: Business Births and Deaths (as a % of end-of-year count of active enterprises), 2011

Source: ONS Crown Copyright, 2012. ‘Business Demography 2011 – Enterprise Births, Deaths and Survivals.’

EU Thematic Objective: SME Competitiveness

SME Competitiveness: Business Birth Rate (as a % of end-of-year count of active enterprises), 2011

Source: ONS Crown Copyright, 2012. ‘Business Demography 2011 – Enterprise Births, Deaths and Survivals.’Contains Ordnance Survey data © Crown copyright and database right, 2013.

Chart 4: Two year business survival rate from year of birth (%)

EU Thematic Objective: SME Competitiveness

Source: ONS Crown Copyright, 2012. ‘Business Demography 2011 – Enterprise Births, Deaths and Survivals.’

Chart 5: Innovation inputs: Business Enterprise Investment in R&D (as a % of total workplace GVA), 1999 and 2009

EU Thematic Objective: Innovation

Source: Department for Business, Innovation and Skills, 2012. ‘Regional Economic Performance Indicators – Live Tables’.

EU Thematic Objective: InnovationChart 6: Employment in High and Medium-High Technology Industries (% work-based employment), 2011

Source: ONS Crown Copyright, 2012. ‘Business Register and Employment Survey, 2011.’ Data accessed from NOMIS [17th June, 2013] and analysed under Chancellor’s Notice Ref NTCBRES11-P0537.

Innovation: Employment in High and Medium-High Technology Industries (%), 2011

Source: ONS Crown Copyright, 2012. ‘Business Register and Employment Survey, 2011.’ Data accessed from NOMIS [17th June, 2013] and analysed under Chancellor’s Notice Ref NTCBRES11-P0537. Contains Ordnance Survey data © Crown copyright and database right, 2013.

EU Thematic Objectives: Employment, Social Inclusion and Skills

Chart 7: Unemployment Rate (% 16+ resident population), 2012

Source: ONS Crown Copyright, 2013. ‘Annual Population Survey’, January-December 2012. From NOMIS [accessed 14 th June, 2013].

Employment, Social Inclusion and Skills: Unemployment – model-based estimates (%), 2012

Source: ONS Crown Copyright, 2012. ‘Model-based estimates of unemployment’, January-December 2012. From NOMIS [accessed 17th June, 2013].Contains Ordnance Survey data © Crown copyright and database right, 2013.

EU Thematic Objectives: Employment, Social Inclusion and Skills

Chart 8: Trends in the Unemployment Rate (% 16+ resident population), 2007-2012

Source: ONS Crown Copyright, 2013. ‘Annual Population Survey’, January-December 2007 to January-December 2012. From NOMIS [accessed 14th June, 2013].

Employment, Social Inclusion and Skills: Resident Adults Qualified to a Level 4 (first degree) and above (%), 2012

Source: ONS Crown Copyright, 2012. ‘Annual Population Survey’, January-December 2012. From NOMIS [accessed 17th June, 2013].Contains Ordnance Survey data © Crown copyright and database right, 2013.

Key Points• Some improvements (e.g. business births and deaths),

but overall economic context remains challenging• North-south or east-west divides (depending on topic)

exacerbated by the recession:– Unemployment/Social Exclusion: north-south divide– Enterprise and Skills: north-south and east-west– Innovation: east-west (M1 corridor)

• Importance of manufacturing and large firms in regional innovation activity

• Enterprise, innovation and low-carbon themes will be explored further in x2 regional round-tables

Common Issues: D2N2 Local Enterprise Partnership

SME Competitiveness Innovation Employment, Social Inclusion and Skills

SCR, Greater Lincolnshire – common challenges related to the impact of recession on the SME environment : seen in falls in output and productivity, lower levels of enterprise, and lower business survival rates

Construction – important employer across the East Midlands, as both an enabling sector and a key employer

LLEP (and Coventry & Warwickshire)– high tech manufacturing in south Derbyshire/north Leicestershire (M1 corridor) – a range sub-sectors, including, but not restricted to, Transport Equipment, with supply chain and knowledge transfer relationships with HE

Include links to low carbon agenda (including power generation) – Greater Lincolnshire

SCR, Greater Lincolnshire – increased unemployment in urban and rural areas (and increased disparities with more resilient areas).

Common drivers of worklessness amongst key groups (including young people), including skills supply and changing industrial and occupational structure (skills demand)

D2N2 Local Priorities

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Thank you for coming and have a safe journey home!