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How will rural areas fare post-Brexit? The signs are mixed, says LEP CEO Glenn Caplin

Three months in to the role of LEP CEO, and the best part of the job so far has been the opportunity to meet so many of the great businesses here in Cornwall and the Isles of Scilly. 

Whether it’s members of the Islands’ Partnership on Scilly, businesses at Wheal Jane (mining), A&P (marine), Triangular Pixels (creative), Goonhilly Earth Station (space), or the dozens of businesses at the GrowthFest conference in September, the ambition and enthusiasm of the business community is inspiring.

This is reflected in data recently published by the Scale-Up Institute which showed Cornwall and the Isles of Scilly as the best performing region in the country. It shows that we now have 310 scale-up businesses employing almost 15,000 people with a combined turnover of £1.2 billion. This is the result of the region’s growing ambition.

In order to accelerate this growth and turn that ambition in to better economic performance and increased jobs, productivity and earnings, Cornwall and the Isles of Scilly needs the tools, post-Brexit, to support skills development, business support and infrastructure improvements.

One of those tools will undoubtedly be the Government’s Shared Prosperity Fund, and before the end of the year we are expecting further details and consultation about how much it might be and how it will work.
Glenn Caplin is Chief Executive of the Cornwall & Isles of Scilly Local Enterprise Partnership.

Ministers have said the fund will tackle inequalities between communities by raising productivity, “especially in those parts of the country whose economies are furthest behind”, once we have left the EU and no longer qualify for EU funding.

For Cornwall and the Isles of Scilly this is hugely significant. Our economy has received around £1 billion of EU investment since the turn of the millennium, based on proven economic need. That’s why we are the only part of England classified by the EU as ‘less developed area’, and with that designation has come extra investment.

But after 2020 when the current EU investment programmes end (and they will be underwritten until then, even if we end up with a no deal Brexit), it remains to be seen how rural areas like ours will fare.

For decades UK economic growth policy has been urban-centric and it is EU investment has helped rural regions invest in superfast broadband, Higher Education provision, skills development and business support. But if Brexit’s effect is to remove that crutch, will the Shared Prosperity Fund fill the gap in rural areas, and will it be based on need, or purely competitive with other parts of the UK?

So far the signs are mixed. Take the Creative Industries Clusters programme, part of the Government’s Industrial Strategy Challenge Fund. Its aim is to grow the creative economy around the UK by establishing research and development partnerships between universities and businesses to design and develop new creative products and services.

Bids were invited last year. From a shortlist of 22 (out of 65 submissions nationally), Cornwall made the final 12 with a collaborative project designed to position ourselves as the UK’s leading rural creative industries cluster. It brought together virtual, mixed and augmented reality with artificial intelligence, manufacturing and product design.

The bid stressed that Cornwall has a density of creative businesses normally found in cities – in fact the number of creative businesses in Cornwall and the Isles of Scilly has gone up 41% between 2011 and 2018 from 990 to 1,400.

Sadly the bid was not successful, with one of the reasons being given as a lack of ‘critical mass’. It is perhaps telling that all nine of the successful bids were in UK cities and none from rural areas. They will now share £80m of investment.

Another recent example was a proposed bid to the Government’s Cultural Development Fund, which is aimed at cities and towns “to invest in creative, cultural and heritage initiatives that lead to culture-led economic growth and prosperity.” The cultural and creative industries are one of our strengths and we intended to submit a project in Penzance, which is gaining national recognition for its creative economy, only to be told that we were not eligible because we were deemed to be a rural area.

It was a similar story with Channel 4’s criteria to relocate some staff outside of London following pressure from Government to be less focused on the capital. It was stipulated that any new regional HQ had to be in a city with a working population of more than 200,000, lowering to 75,000 for the location of two creative ‘hubs’, which should also be close to a well-developed TV and digital production community.

There are 155 film, TV and video companies in Cornwall, up 55% since 2011, and we have one of the best film and TV schools in the country at Falmouth University. But because we don’t have bigger population centres we couldn’t bid for any of Channel 4. Leeds will now be home to Channel 4’s regional HQ, with creative hubs being set up in Glasgow and Bristol, employing a total of 300 staff.

All of this might sound like sour grapes but that’s not the intention. What it highlights is a decision-making process which – either consciously or subconsciously – discriminates against rural parts of the UK because it’s driven by old fashioned urban-centric policymaking.

And it fails, crucially, to take account of how technology in particular has broken down barriers to collaboration and doing business. Cornwall and the Isles of Scilly has one of the best digital networks of any rural part of Europe – one reason why our digital and creative businesses are trading all over the world. And our physical connectivity is improving all the time, with new links to Heathrow and a twice-hourly rail service from next year.

Rural areas like Cornwall and the Isles of Scilly have a massive contribution to make to the UK’s economic growth and productivity. And one of the key tenets of the Government’s Industrial Strategy published a year ago is to make sure that ‘every part’ of the country realises its full potential in a country that ‘truly works for everyone’.

We’re more than ready to play our part in that, and are already developing new systems, technologies and skills that can change the way we work, live and do business for the benefit of UK Plc.

In the coming week and months we will be invited by Government to comment on its Shared Prosperity Fund proposals. We’ll be making the point that it should not solely be a competitive programme, as this would not support its objective of rebalancing the economy and achieving inclusive growth. It must to do what it says on the tin - be shared, and contribute to the prosperity of Cornwall and Scilly. We know we have to earn that investment through the quality of our projects and ideas, and that’s fine. But what we won’t accept is being treated as a geographical postscript just because we are a rural area.

The ambition of our businesses deserves better.

Glenn Caplin is Chief Executive of the Cornwall & Isles of Scilly Local Enterprise Partnership.

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Cornwall and Isles of Scilly Local Enterprise Partnership, PO Box 723, Pydar House, Pydar Street, Truro, TR1 1XU
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