Policy and Resources Cabinet Panel Wednesday 15 September 2010 at 2.00Pm Item 6 - Economic

HERTFORDSHIRE COUNTY COUNCIL

POLICY AND RESOURCES CABINET PANEL

WEDNESDAY 15 SEPTEMBER 2010 AT 2.00PM

ECONOMIC DEVELOPMENT UPDATE

Report of the Director of Strategy and Partnerships

Author: Neil Hayes, Head of Economic Development

Tel: 01992 588019

Executive Member: David Lloyd (Resources and Economic Wellbeing)

1. Purpose of report

1.1To update Members on plans for a Local Enterprise Partnership for Hertfordshire, the current state of the Hertfordshire economy, the Economic Participation programme and other related economic matters.

1. Summary

2.1 Hertfordshire has submitted plans to form a Local Enterprise Partnership which is currently being considered by Government.

2.2The claimant count for Hertfordshire decreased slightly in July 2010, by 186 compared with June, and now stands at 17,445(2.5% of the working age population).

3. Recommendations

3.1The Panel is invited tonote the current position with regard to economic development issues and to agree to continue to receive regular briefings at future Panel meetings.

4.Claimant Count

4.1The claimant count (i.e. the number of people claiming Jobseekers Allowance or N.I credits) for Hertfordshire decreased slightly in July 2010, by 186 compared with June, and now stands at 17,445. The claimant count proportion is now 2.5% of the working age population.

4.2The decrease in the claimant count since June was reflected across the majority of districts in the county. Dacorum had the largest decrease of 99 (4.1%).

4.3The Stevenage proportion, 3.9%, is above the UK rate of 3.6%. Other claimant count proportions were 2.9% for the East of England, 4.0% for London and 2.4% for the South East. In all of these regions the claimant count and proportion decreased from June.

4.4From August 2010 there has been a change to the definition of working age population to include females aged 60 to 64. This means that female and total claimant count proportions will have been adjusted downwards.

4.5There were 3,723 Jobcentre Plus live unfilled vacancies in July 2010. This is 771 less than June. This compares to 3,554 vacancies in July 2009. There are currently 4.7 claimants to every Jobcentre Plus vacancy.

5. Local Enterprise Partnership

5.1The proposal for a Hertfordshire Local Enterprise Partnership (LEP) was submitted to Government for consideration on 16 August, ahead of the 6 September deadline, and was one of the first in the country to be submitted (appended to this report).

5.2The proposal made a strong case for a LEP on the basis of the size, complexity, and diversity of the Hertfordshire economy and that Hertfordshire has an existing partnership in Hertfordshire Works in which to build an effective LEP quickly. It also indicated how a Hertfordshire LEP would work with neighbouring areas on common economic issues.

5.3The proposal had the support of all local authorities in the county, as well as academic institutions, business representatives, and major businesses such as Tesco, T-Mobile and GSK.

5.4Feedback on the proposal is expected at the end of September. LEP proposals will need to be signed off by the Business Innovation and Skills (BIS) and Communities and Local Government (CLG) Secretaries of State. At the moment a civil service officer group including CLG; BIS; HMTreasury; Department for Transport; Department of Energy and Climate Change; Department for Environment, Food and Rural Affairs; and Department for Culture, Media and Sport are meeting to consider how to take LEP policy forward. Members of the group will also look at the proposals as they come through. It is likely that following the September 6 deadline some partnerships will be given the green light to work up a full LEP whilst others will need more time.

5.5Subject to Government approval of a Hertfordshire LEP, work will need to begin with partners on the detail of the LEP and future funding and governance arrangements. It is proposed to bring together prospective LEP partners to discuss the way forward in September.

6.Regional Growth Fund

6.1On 23July 2010 the Government launched a consultation on the proposed objectives and design of the Regional Growth Fund (RGF).

6.2The fund has two main objectives:

(i)to encourage private sector enterprise by providing support for projects with significant potential for economic growth and creating sustainable private sector employment;

(ii)to support in particular those areas and communities that are currently dependent on the public sector to make the transition to sustainable private sector led growth and prosperity.

6.3The Government announced that it would allocate £1bn over the course of 2011/12 and 2012/13 and the first bidding round is expected in December, although this could possibly be brought forward. It is expected that any bids should be of at least £1million. There is no prescription on the applicant organisation, but LEPs are suggested as the preferred model of public-private organisation to lead on applying for funds.

6.4In terms of Hertfordshire, it is likely that the first objective will yield the greatest chance of success in terms of large, capital-based infrastructure projects.

6.5A draft Hertfordshire County Council (HCC) response to the consultation is being prepared which will look to put forward the case for the need for the RGF to prioritise support for projects which create additional private sector investment and employment and not just those areas (outside the greater South East) that are more dependent on public sector investment and employment.

6.6The closing date for the consultation is 6 September – the same date by which proposals for LEPs are to be submitted.

6.7HCC has begun a dialogue with district councils to determine the potential for a Hertfordshire RGF bid based on the following criteria:

• demonstrate a clear strategic need for investment
• are able to deliver over 2011/12
• can secure significant private sector investment
• are likely to generate significant job creation.

Again, subject to LEP approval Hertfordshire County Council will also need to engage with other partners on any future Hertfordshire RGF bid.

6.8There will be one White Paper, which is likely to be issued by the end of September/early October - near to the Comprehensive Spending Review (CSR) 2011-15 announcement. It will cover Local Enterprise Partnerships, the transition from RDAs to LEPs, growth incentives, planning issues and RGF.

7Economic Participation 2010-11 Programme

7.1Following the Coalition Government’s decision to review the funding available to Regional Development Agencies, the East of England Development Agency (EEDA) has now reduced the amount available to Hertfordshire under the 2010-11 ‘Ready for Enterprise’ programme. The original grant of £761,767 plus £22,000 additional management element to reflect EEDA’s request that the programme be run as an ESF pilot) has been reduced to £721,272 plus £22,000 as before.

7.2This reduction, together with the delay in EEDA announcing the final funding has meant that the outputs from the programme have had to be reduced and re-profiled, with some work taking place in the 2011-12 financial year. A contract for the delivery of the programme has now been signed with YTKO, who are delivering a number of similar programmes across the region.

8Hertfordshire Strategic Employment Sites Study

8.1One of the five key objectives within the new Hertfordshire Economic Development Strategy (HEDS) is ‘Providing quality locations and infrastructure’. This is central to the strategy’s aim to grow the Hertfordshire economy by attracting new, knowledge-based jobs particularly through foreign direct investment and links to the Invest Hertfordshire website which promotes the county as a good place in which to do business. Priority 1 within the HEDS Action Plan commits the Hertfordshire Works partnership to work with local planning authorities and EEDA to identify and bring forward a small number of strategic employment sites in high profile prestigious locations and served by sustainable transport options.

8.2To take forward this priority, a study, part funded by EEDA, Hertfordshire Works and eight of the ten district councils, will be commissioned to look at the county’s existing employment sites; the extent to which they could fulfil the role of strategic employment sites; and the need to identify and bring forward a small number of new sites linked to Hertfordshire’s main sectors and clusters. It is anticipated that this work will take place in the autumn, with the results available in the New Year.

9Employment and Skills Board

9.1HCCI (the Chamber of Commerce and Industry), on behalf of the Skills and Economic Participation Group, submitted to EEDA an Expression of Interest with regard to the feasibility of establishing an Employment and Skills Board (ESB) for Hertfordshire.

9.2EEDA offered some consultancy time to help explore the options available. The Training and Employment Research Unit (TERU) of the University of Glasgow has facilitated the work. Professor Alan McGregor of TERU has facilitated three workshops with employers and partners at the Chamber.

9.3The workshops have explored the options around establishing an employer led ESB, scoped current developments - e.g. local economic assessments, worklessness assessments and Work and Skills Plans - and discussed skills issues and priorities for Hertfordshire. Potential areas for action could include: enhancing information, advice and guidance; promoting apprenticeships; enhancing, integrating and communicating the employer offer; matching more effectively the demand for and supply of skills, and creating a flexible and innovative employment and skills system.

9.4A meeting has been arranged, hosted by MBDA, for 1 October, which will focus on the issue of Apprenticeships. MBDA has successfully run an apprenticeship programme for 7 years, focusing on local recruitment.

9.5Moving forward, it is anticipated that any plans for an ESB would ultimately fall within the wider LEP proposals outlined above.

10Regional Skills Priority Statement

10.1Hertfordshire County Council has been contributing to the drafting of the EEDA Regional Skills Priority Statement (RPS). The County Council has hosted two meetings of the East of England Local Government Association Employment and Skills Panel to discuss the Skills Priority Statement, andheld a workshop for county partners including the Skills and Economic Participation Group of Hertfordshire Works on the 23 July.

10.2Key points raised at the Workshop included:

• Importance of supporting skills and development of volunteers as part of Big Society;

• Need for a wider range of provision for young people to bridge the transition between education and work (e.g. pre-apprenticeships);

• Need for a wider choice of apprenticeships with a focus on higher level and technical skills with clear progression pathways into Higher Education;

• Importance of encouraging and supporting employers (including Small and Medium-sized Enterprises) to take on apprentices or provide work opportunities for young people and unemployed individuals;

• Need for businesses to be supported in identifying and addressing skills needs as part of business planning.

10.3Subsequently a Priority Skills Template for Hertfordshire and a one page Area Profile for the county were submitted to EEDA (these were based on priorities from the Economic Strategy and input from partners on the Skills and Economic Participation Group and from the Workshop).

10.4EEDA submitted the draft RPS to BIS in early August. Additional comments on the draft, if wished, can be made over September. EEDA, the Skills Funding Agency, and Jobcentreplus are planning a series of meetings in the region to discuss how skills and employment issues will be taken forward under the new arrangements.

11Financial Implications

11.1All current economic development activity is met from within existing budget resources.

11.2Hertfordshire Forward has allocated approximately £4m of LAA Performance Reward Grant to a ‘Recession to Recovery Programme’, to support Hertfordshire businesses, places, and people through the recession and getting Hertfordshire well placed for economic upturn.

11.3Given the 50% reduction in performance reward grant funding, Hertfordshire Forward is currently determining where reductions will be made based on halting activity not yet underway, reducing the size of some projects, and securing funding from other sources where possible.

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100915 Policy and Resources Cabinet Panel

Item 7 – Economic Development Update