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MIDDLESBROUGH COUNCIL

ECONOMIC DEVELOPMENT STRATEGY 2006

CONTENTS

1.  Introduction Middlesbrough Renaissance page 2

…. Moving Forward

2.  Vision and Key Indicators of Success page 4

3.  Hierarchy of Strategies page 9

4.  Our Plans for Achieving Success

Middlesbrough Regeneration Strategy page 15

Building the Enterprising City-Regeneration page 23

Middlesbrough Employment Strategy page 29

Cross-Cutting Issues page 35

5.  Delivering the Strategy page 43

ECONOMIC DEVELOPMENT STRATEGY DRAFT

1. Middlesbrough Renaissance…Moving Forward

1.1 Middlesbrough is in the middle of a dynamic urban renaissance. The town is

moving forward, led by a vision created with our partners in The Middlesbrough

Partnership, Tees Valley Regeneration, private sector partners and public sector bodies, and a community that wants to see Middlesbrough change for the better through sustainable regeneration activities and by creating a more aspirational and enterprising culture. The Mayor of Middlesbrough’s vision is to create a ‘designer label’ town through broadening the base of the economy and enabling local businesses and residents to become engaged in the regeneration opportunities and to prosper. Central to this vision is the encouragement of enterprise and the promotion of employment opportunities, the blueprint for which is to be set out in this the Council’s first Economic Development Strategy.

1.2  Middlesbrough is currently at a pivotal point in achieving an improvement in its

economic fortunes. Our traditionally higher than average unemployment rate has been steadily falling and we are moving towards convergence with the rates for the rest of the North East. However there is still much to be done, in particular the challenge of ensuring that the remainder of our population that are not working are given the opportunity to gain employment.

1.3 The latest annual business inquiry figures show that in 2004 the number of

businesses in the town grew by over 3%. Property rental returns have been

rising and so has the value of business and commercial property throughout

the town.

1.4 From a fragile base, business confidence is improving, underpinned by the

major regeneration projects that are underway in the town centre and at

Middlehaven, and in the exciting developing business sectors of new

technology and digital media.

1.5 The improving economy is also having an impact on residential values,

particularly in the suburbs and there are the first signs of a revival in demand for town centre living.

1.6 Clearly much is being achieved, but many challenges remain.

The purpose of this document is to set out an economic vision for

Middlesbrough in 2021 and to articulate how enterprise is to be

encouraged and employment generated to meet that vision.

2. Vision and Key Indicators of success

2.1 ‘By 2021 The Middlesbrough Economy will be fulfilling a key role at the heart of the Tees Valley City Region and matching the average of North East local authorities in terms of enterprise and employment’

Success will be measured against the basket of key indicators and targets set out below. In broad terms our aim is to achieve parity with regional performance in 2021, and with national performance in 2031. This assumes that current levels of investment are broadly maintained (set out in section 5 ‘The Resource Plan’). Any significant losses of programmes/investment will result in a slowing in the projected timescale for meeting the targets, whilst additional programmes/investment will result in a hastening of the projected timescale. In particular, the securing of Local Enterprise Growth Initiative funding will have a significant impact on our ability to achieve our objectives in a shorter timescale.

·  Baseline- Middlesbrough has a population of 137,000 people and has been for

some time suffering de-population. 61.8% (82,500) of the population is of working

age. The population of the Borough has been in decline for many years and is

projected on current trends to fall to 130,000 by 2021.

●Target 1- A reversal of the trend of de-population through successful regeneration

and economic development programmes to achieve a population for Middlesbough

of 140,000 by 2021.

● Baseline- There are 57,100 economically active people in Middlesbrough which

equates to 71.1% of the working population. This is below both the regional (74.8%)

and national (78.3%) average. 75.1% of males and 67% of females of working age

are economically active.

●Target 2 - By 2021 to increase the percentage of economically active to the

regional average and to ensure that the number of females of working age that are

economically active has converged to within 5% of males.

● Baseline- The employment rate amongst people of working age in the Borough

(65.1%) is significantly below both the regional (70.3%) and national (74.5%) figures

●Target 3 – There is a national target to achieve an employment rate of 80%

(timescale not specified by government). We will contribute to this by meeting

regional parity by 2021 and parity with the national employment rate by 2031.

● Baseline- In December 2005, Middlesbrough had an ILO 1 unemployment rate of

8.4% and a JSA 2 claimant count rate of 4.4%, the highest in the Tees

Valley (Tees Valley average 3.5%;North East 3.0%) and approaching twice the GB average of 2.4%. 39.2% of JSA claimants in Middlesbrough had been claiming for 26 weeks or more.

● Target 4 – By 2021 achieve an ILO rate and a JSA claimant count rate converging

with the regional average. Reduce the long term unemployment rate to 33% of JSA

claimants claiming for 26 weeks or more.

● Baseline-There are almost five times more IB/IS ³ claimants (19,765) than JSA

claimants (4,034) and numbers of IB/IS claimants have been fairly static in recent

years.

1 - ILO – International Labour Organisation is now widely the accepted as the most appropriate measurement of unemployment measurement.

2. - JSA Job Seekers Allowance

3. - IB/IS Incapacity Benefit/Income Support

●Target 5 – Middlesbrough will have an IB/IS claimant rate that falls in line

with that for JSA claimants and achieves parity with regional levels by 2021.

·  Baseline-The Working Age Population of Middlesbrough have 39% (2004/5

Labour force Survey) of adults not qualified to Level 2 compared to 36% across the

North East region and 34% nationally.

·  Target 6 By 2021 to decrease the number of adults in Middlesbrough not

qualified to Level 2 to the regional average.

● Baseline – In January 2006, Middlesbrough had the highest percentage of 16-18

year olds not in education, employment and training (NEET) in the Tees Valley with

13.5% (744) of young people aged 16-18 NEET and a further 9.5%(454) whose

status was not known.

● Target 7 - By 2021 the number of NEETS will be reduced to reflect the GB average

of 10.2%. The numbers of 16-18 years old where the status is unknown will also

reflect the GB average of 6.8%. (Note: Middlesbrough Learning Partnership is currently reviewing its NEET strategy and this target may be revised).

● Baseline- Middlesbrough has a limited tradition of entrepreneurship and this is

reflected in low business formation rates and a poor GVA per head. The GVA per

head for South Tees (Middlesbrough/Redcar & Cleveland municipal areas) is

£11,078 compared with £12,805 across the Tees Valley and £16,485 in the UK

Target 8 – The South Tees GVA per head will increase to the Tees Valley average

by 2016.

● Baseline The business rate (measured through VAT registration rates) is failing to

thrive. The VAT stock per 1000 residents in 2005 was only 13.2 in Middlesbrough

compared with 15.6 for the Tees Valley 23.4 in the North East and 30.3 in the UK.

De-registrations have exceeded the national average.

● Target 9 -The VAT stock per 1000 residents in Middlesbrough will increase to the

regional average by 2021 and the UK average by 2031.

● Baseline Self employment rates in Middlesbrough are currently only 59% of

national rates and in the most disadvantaged wards rates are only 44% of national

rates. Middlesbrough Neighbourhood Survey 2005 determined that only 8% of

residents have considered starting their own business.

● Target 10 - The number of residents considering self employment as an option

doubles to 16% by 2021 (needs further refinement).

● Baseline- There is currently an inadequate range of quality accommodation for

the number and variety of businesses in Middlesbrough, thereby acting as an

inhibitor to the regeneration of the town. There is a need to better understand the

property needs of business to be measured by a ‘property satisfaction index’.

·  Target 11 – Ensure there is sufficient high quality sustainable accommodation

across the town and in the designated industrial areas that meets the needs of

business and incorporates environmentally friendly building practices. This will be

measured through improvements in the performance of a property satisfaction

index(target to be developed) undertaken every two years

● Baseline- Few businesses are aware of business focused environmental initiatives

in Middlesbrough. Only 12% of small businesses in the north east are aware of the

Government’s organisation Envirowise and only 25% are aware of Netregs- the

Environment Agency’s website based legislation service. Only 29% of North East

businesses recycle paper and packaging waste compared to 35% across the UK

●Target 13 - to increase awareness of Envirowise amongst Middlesbrough’s SMEs

to 50% and of Netregs to 25% by 2016, and increase the recycling rate to the UK

average

● Baseline There is a lack of understanding about certain aspects of the local

economy due to key measurements and appropriate data, such as the rate of growth

of the Middlesbrough economy, not being accessible, together with a need for more

robust mapping of activity and initiatives.

●Target 14 - To better understand the local economy and to access all appropriate

data to ensure that the impact of the strategy can be properly measured and

evaluated, and to undertake ongoing mapping of activity and initiatives to recognise

gaps, to prevent duplication, and to ensure added value is achieved in moving

towards our targets.

3. Hierarchy of strategies

3.1  The Council’s Economic Development Strategy is one of a suite of policies and strategies in place to move forward the regeneration of Middlesbrough. The strategy sits within the broad framework of national and regional policies that endeavour to encourage enterprise and tackle unemployment and

worklessness.

3.2 National Policies/Strategies

Key national policies/strategies include: -

·  DTI Business Plan to encourage business and promote enterprise

·  Small Business Service policies

·  The Department for Work and Pensions (DWP) Five Year Strategy (2005)

·  The new Gambling Act which creates the potential for significant regeneration based on the new proposed casinos

·  Moving forward: The Northern Way -Middlesbrough lies at the core of the Tees Valley City Region the focus of the Northern Way, the growth strategy for the north of England which aims to narrow the gap in economic performance between the north and the south east

In addition, emerging policy has been signalled in the green paper A New Deal for Welfare: Empowering People to Work (2006), The Department of Education and Skills white paper Getting On In Business; Getting On At Work (2005); and the 14-19 Education and Skills white paper (2005).

This Economic Development Strategy reflects this existing and emerging national policy framework.

3.3 Regional and Sub-Regional Policies

The Economic Development Strategy is linked to regional and sub regional policy initiatives, in particular the work of the Government Office for the North East, One North East (ONE), the Stockton-Middlesbrough Initiative and the Tees Valley Partnership.

The strategy is in accord with the Regional Economic Strategy (RES) which sets

out how the region is going to deliver greater and sustainable prosperity to all people

of the North East over the period to 2016. The Economic Development Strategy also

complements and contributes towards a number of other regional strategies,

including The Regional Spatial Strategy, the land use-planning framework for the

North East to 2016. We will work through the RSS to concentrate development In

sustainable locations, continue the renaissance of our inner urban areas, contribute

to wider sustainable development objectives and to promote policies and

programmes which will develop and promote Middlesbrough’s role at the heart of

the Tees Valley City Region.

ONE with partners is devising a Strategic Action Plan (SAP) for Enterprise and Business Support, which will be published once the Regional Economic Strategy (RES) has been finalised. The SAP will set out how the creation of a dynamic enterprise culture and an accessible business support network will be delivered through one clear model. The aim of the SAP is to generate growth in business start-up rates, particularly among currently under-represented groups, such as young people and women, reflecting an increasingly entrepreneurial and creative culture.

The Economic Development Strategy also complements and adds value to policies

to enhance the Tees Valley City-Region.

The Tees Valley City Region Development Framework builds on the work of the

Tees Valley Vision, a long-term economic strategy for the Tees Valley, which is

designed to raise the economic performance of the Tees Valley, promote economic

and social inclusion and create sustainable communities. The City Region

Development Framework sets out the challenges and an agenda for action that

builds on and utilises the key assets of the City Region, including the two

Universities, evolving cultural and creative sector and the major regeneration

opportunities across the sub region including Middlehaven

Priorities to improve economic performance include:

·  Building a strong and diversified economy based on key economic assets;

·  Developing sustainable communities;

·  Removing barriers to growth, through increasing the business stock;

·  Developing UK levels of economic activity, improved skills and reduced levels

of worklessness;

·  Developing high quality public transport.

The Stockton Middlesbrough Initiative (SMI) is intended to transform the urban

core of the city-region. A new spirit of co-operation and collaboration between Stockton and Middlesbrough Councils will ensure that the economic prospects of the urban core will be transformed to provide an exciting and thriving working and living environment for generations to come.