Speech to the Westminster Social Policy Forum
The following text is a speech given by Cornwall and Isles of Scilly LEP Chair Mark Duddridge to the Westminster Social Policy Forum on 10 March at a seminar on Local Enterprise Partnerships and regional growth.
'Levelling up’
is not a new concept for Cornwall and the Isles of Scilly and we are on a long
journey to close the large productivity gap with the UK as a whole, and support
those neighbourhoods which continue to show the symptoms of that low productivity:
low wages, poor health, deprivation, and low aspiration.
In Cornwall and
the Isles of Scilly we have 17 neighbourhoods in the top 10% of most deprived
areas in England, according to the Index of Multiple Deprivation.
It shows that
out of the 38 Local Enterprise Partnership (LEP) areas in England, Cornwall
& Isles of Scilly ranks as the eighth most deprived.
The rest of
the top 10 are all North of Birmingham, so it’s not hard to see why commentators
use the north/south divide as shorthand for an economically divided Country.
But it’s not helpful for an area like Cornwall with persistent, demonstrable,
social and economic needs.
That’s why
our Local Industrial Strategy is so important to us. It represents a clear
opportunity to evaluate what’s worked in the past, what hasn’t worked and where
market opportunities exist to build on our unique regional strengths. It’s a chance to do things differently and our
LEP, backed by the wider private sector, has embraced the opportunity to put
forward a different approach which is captured in our vision.
In Cornwall
and the Isles of Scilly we’ve always understood that everything is shaped by
our environment, whether that is the wealth of resources under our feet, or the
natural forces that have sculpted the peninsula and our islands and which we
are now harnessing for renewable technologies.
We plan to
measure the success of this strategy differently. The relentless pursuit of GDP
has led us to the brink of climate catastrophe without enriching our poorest
communities or closing the prosperity gap. So, we will set a different course
and measure environmental growth, renewable energy production, quality of life
and wellbeing, and take a more rounded view of prosperity. Carbon neutrality is
fundamental to this vision.
But it’s not
all doom and gloom and progress has been made. Our economy has grown by over £5bn
(in terms of GVA) over the past 20 years. There are 53 thousand more jobs. Over
30% of our energy needs are produced by renewables. We have built, from
scratch, a unique University campus and research partnership that combines the
research expertise of the University of Exeter, the creative spirit of Falmouth
University and the applied science of Plymouth University. This will be vital
in delivering on the unique opportunities set out in our emerging Local
Industrial Strategy, which embraces clean energy, geo-resources, data and space,
agri-food and tourism.
Some of these economic priorities will be familiar to people and are clearly part of the Cornish brand, in particular agri-food and tourism. But our focus is very specific. In terms of tourism, for example, we want to be a leader in sustainable tourism.
Our interest
in agri-food is very much about how we adapt to a post EU farming framework and
increase the quality and value of Cornish agriculture and food production with
a focus on the environment and productivity.
What people
may not be so familiar with is some of the other unique regional strengths that
we have and I want to take a moment to talk about data and space, and
geo-resources.
Firstly, Data
and space.
As a region
we are well placed to take a leading role in the new ‘space race’ which is
driven by the commercial demand for the launch of smaller and more powerful
satellites, which support the ever growing market for communications, big data
and earth observation. As a LEP we’ve already invested over £8m in the future
of Goonhilly Earth Station and have worked closely with Cornwall Council and
the UK Space Agency to secure Virgin Orbit as an operator of the UK’s first
horizontal launch spaceport in Newquay.
Our aim is to
use the assets we have to not only drive the launch sector, but also the supply
chain and downstream applications of satellite derived data.
This sector
has seen a 164% growth rate in Cornwall since 2010, with employee numbers in
the sector rising by 234% during that time. Goonhilly Earth Station has
employed 100, new, full time staff and average salaries in the sector are over twice
the Cornish average.
And then
there are geo-resources. In Cornwall we are taking a fresh look at the
resources beneath our feet. In the last 12 months we’ve seen Geothermal
Engineering Limited drill a 5,000 metre deep well to use geothermal heat to
power a 3MW energy plant. Another drill is due to start at the Eden Project
this year.
But I also
want to talk about Lithium, the metal of the future. Lithium was first
discovered in Cornwall in the 1860’s but now global demand for technology
metals such as tin, copper and lithium has opened up a potential global market
for companies, like Cornish Lithium, to exploit.
The use of
modern digital computer technology has enabled the company to combine large
historical datasets with satellite and other geophysical data to allow the
reinterpretation of mineral potential in the light of modern extraction
technologies. A secure domestic supply of such metals is considered vital to
the industrial strategy of the UK as it moves towards the production of
electric vehicles. And the potential global market - £70bn - for both the metal
and the research capability to acquire it, is huge.
Both of these sectors (space and geo-resources) are examples of how we are using our Local Industrial Strategy to match regional assets to global markets to drive productivity. But productivity has to have a purpose and ours is inclusive growth.
We need to
improve skills, increase opportunity and raise aspiration by investing in our
people and the infrastructure required to allow them to develop higher paid
careers, in Cornwall. We don’t have an unemployment problem in Cornwall but we
do have a poverty problem caused by the legacy of post-industrial decline and
low pay sectors exacerbated by high housing costs.
Increasingly,
we are looking to deliver our Local Industrial Strategy through a focus on
priority places. For example, those towns dealing with the worst impacts of a
retail sector in decline, or those already challenged by high levels of
deprivation.
In Cornwall
and Scilly we’ve had large amounts of EU programme investment and while we’ve
done many brilliant things, we’ve not yet significantly impacted on all of
those estates, neighbourhoods and communities who have been most left behind.
But neither
has the UK closed that gap, and the level of regional disparity within the UK
is one of the biggest in Europe.
This is
driven both by the extraordinary levels of growth in London and the South East
and exacerbated by a lack of investment in rural and peripheral areas across
the country. Not only that, but the lack of meaningful devolution is also a
factor in slowing down investment and making regions less agile.
We face a
huge challenge of levelling-up the regions and areas of the UK where
productivity is persistently low and deprivation is stubbornly holding back
communities. And what’s more, regional inequality in the UK is growing. The
OECD singles out the UK as the most centralised country in the Western world,
while the UK2070 Commission and OECD point to regional inequality in the UK
being significantly larger than comparative countries.
This
centralisation simply hasn’t worked.
Regional
inequality in the UK is a more complex issue than a simple north/south divide.
The immense productivity gap that currently exists between the prosperous South
East of England on the one hand and the rest of the country on the other must
be levelled-up by investing in the LEP areas and regions that are currently
lagging behind through the UK Shared Prosperity Fund (SPF).
The future
prosperity of the UK depends on unlocking the potential of all its regions. The
key to this is devolution. That is why Cornwall and the Isles of Scilly have
put forward a proposal for a delivery model for how a fully developed Shared
Prosperity Fund could operate in our area. We are asking for a £700 million
investment over 10 years devolved to us as a single pot with local
decision-making and accountability at the heart of this model.
In developing
a CIoS delivery model we are making a clear offer to the UK government and
outlining a strong vision for the future of our region.
Our
commitment is that a £700m Cornwall and Isles of Scilly SPF programme will
leverage £345m additional private and public sector co-funding over the 10 year
delivery period.
In order for
our delivery model to succeed for the people of Cornwall and the Isles of
Scilly we also have some concrete asks of the Government.
We want to
see a strong UK regional policy with the aim of rebalancing the UK economy at
its heart. We want a fair and transparent national allocation mechanism for the
UK SPF that is based on need as well as opportunity. Furthermore, the UK SPF must be a dedicated
fund designed to address regional inequalities rather than a re-badging of
other Government funding.
We want
government to come through on its promises that Cornwall and Isles of Scilly
won’t be worse off because of Brexit. For us this means a single pot of £100
million a year devolved to our area. We are asking for a locally driven and
locally accountable SPF with strategic and delivery control of the SPF
programme fully devolved to us locally.
We want to
see a simplified compliance, audit and state aid regime as this will enable the
UK SPF to be less bureaucratic and cheaper to administer.
Having
studied previous programmes in detail we think we can deliver more, quicker,
with a clear Local Industrial Strategy, backed by a devolved Shared Prosperity
Fund.
In Cornwall
and Isles of Scilly we have learned many lessons from more than 20 years of
implementing EU programmes. Both what works and what doesn’t.
Our proposed delivery
model is based on three key principles.
Firstly, we are committed to an efficient programme design phase and a
SPF programme up and running within a year. Past EU programmes have been
slow in getting out of the starting blocks. It took three years to make the
first EU investment in the last programme. We will have a local SPF programme
up and running within one year.
Secondly, we
are committed to measuring what matters, not what is easy to count. We will
monitor delivery against our Local Industrial Strategy and adopt KPIs that
focuses investment and project behaviour on desired outcomes, rather than
simplistic outputs.
Lastly, we are keen to put in place a responsive model
which applies a flexible approach to delivery. We would have ‘open
calls’ for projects and direct commissioning alongside national partners.
Loans, grants, equity and community led development should all be in the mix.
But to do all
that we need the government to back up its levelling up rhetoric with both
investment and regional devolution.
Hopefully, we will see the beginning of that commitment in tomorrow’s budget….