Mr Frost introduced the report by summarising the work and ambitions of the Stoke on Trent and Staffordshire LEP (LEP) over the last year. The Appendix to the report highlighted some of the successes during the year. He welcomed the opportunity to meet with Stoke on Trent City Council and Staffordshire County Council Councillors as they were key partners in the LEP which was a public:private partnership responsible to central government, and to a wide range of partners, for allocating public funds. It was therefore important for local authorities to have the opportunity to question the LEP about its performance to ensure public accountability. The sole focus of the LEP was improving the economic performance in the local area by providing direct financial assistance to businesses and local authorities to get the infrastructure started and ultimately provide employment with businesses in the area. The LEP was in the process of building a buoyant economy, but significant challenges remained in the future. He ended by saying that a national review of LEPs was almost complete.
Mr Atkins stated that from Staffordshire County Council’s perspective he embraced the opportunity to work with Stoke on Trent for the benefit of Staffordshire and Stoke on Trent. He acknowledged that there were pockets of deprivation in the area and the City Deal had been successful in partly addressing these. He highlighted the City Deal, Local Growth Deals and the ESIF as successes. In regard to the ESIF, Stoke on Trent and Staffordshire had been a transition area and had received an allocation of £152m. Additional funding had been allocated to areas of deprivation. The LEP had also been successful in allocating funding that led to jobs. He referred to the two Enterprise Zones in the area, of which i54 is a joint one with the Black Country LEP, which is outside the enterprise zone but would bring more jobs into the area. In summary a great deal of good work had been completed, but there was no room for complacency. Going forward, Stoke on Trent and Staffordshire were playing a key part in the Midlands Engine and Midlands Connects; another vehicle for bringing in additional funding to the area. He added that he was a strong supporter of the Stoke on Trent/Staffordshire footprint for the LEP and in his view adding other areas into other LEPs could weaken the position (for the Stoke on Trent and Staffordshire LEP).
Councillor A Brown, Deputy Leader of Stoke on Trent City Council and Cabinet Member for Finance and Partnerships, supported Philip Atkins’ comments and added that she strongly supported the relationship between the two Councils and the steady, stable leadership of David Frost. In particular she pointed out the examples of the i54 and the Ceramic Valley Enterprise Zone where Executive Boards had worked together successfully. Boards had been of the right scale and size to continue after the LEP review. She acknowledged that what was good for Stoke on Trent was also good for Staffordshire and vice versa.
Members asked Stoke on Trent and Staffordshire what the best three achievements of the LEP were since 2011, that without the LEP might not have been achieved.
Mr Frost quoted Gestamp, a major European Tier One manufacturer of car components that had outgrown its existing facilities in Cannock and had drawn on LEP funding to relocate to a new facility and secure its future and employment at Bericote, Four Ashes, against competition from other parts of Europe.
Councillor Brown quoted the Ceramic Valley Enterprise Zone. This was a LEP led project, but she stressed the achievement was in bringing together a number of partners to work together across six sites in north Staffordshire and political boundaries to deliver jobs on the ground. The benefit had been in the reputational good that had been achieved. In her view this would not have been achieved without LEP involvement. She also quoted the District Heat Network development around Staffordshire University. Work had taken place with local educational establishments, primarily Stoke College, to upskill local people within the area to provide the pipeline in the area which required a high level of skill. The DHN is one of the foremost Heat Networks in the UK.
Mr Atkins added that there was a great deal of evidence to show where the LEP had supported local projects e.g. Stafford Western Access Route, A50 and Gestamp. He alluded to some of the difficulties around funding in areas where districts had dual LEP rationality. He added that the UK Shared Prosperity Fund will take over from the European Structural and Investment Funds in 2021 and local authorities will have to be clear about what they want in terms of infrastructure for Stoke on Trent and Staffordshire going forward. He firmly supported the SSLEP on a county footprint going forward.
The Chairman asked what dialogue there was with East Staffordshire Borough Council who were not currently a part of the Stoke on Trent and Staffordshire LEP, and where one of the major manufacturers, JCB, was sited.
David Frost responded that it was absolutely essential that the LEP was not inward looking and the narrative should not be restricted to the boundaries of Stoke on Trent and Staffordshire. He added that it was important to have open, wide-ranging, formal and informal briefings with other LEPs and noted his LEP’s very strong working relationships with Greater Birmingham & Solihull, Black Country, Cheshire and Warrington and D2N2 LEPs which enhanced cross boundary opportunities. The government produced a national Industrial Strategy in 2017. Locally, this is being translated into an Industrial Strategy for Stoke on Trent and Staffordshire. This will be used as a mechanism to determine what the local economy will look like in the future He cited the automotive industry and logistics sectors who are undergoing profound changes. He added that it was important that the LEP review was concluded as soon as possible.
Members asked about the relationship with the Staffordshire Business Innovation Centre (BIC).
The Cabinet Member for Economic Growth stated that the Growth Hub worked closely with the BIC to advise on inward investment and external exporting to signpost businesses.
With reference to the LEP review, Councillor Platt asked if the LEP would be robust enough to cope if local borough and district councils were able to choose who they aligned with.
Mr Frost responded that government had allowed local authorities to be members of more than one LEP. However, the LEP review clearly stated that there will be no overlaps going forward. A decision on the economic geography will decide on the membership of LEPs going forward. The government has stated that it wishes to see LEPs based on county boundaries and combined authority boundaries, but a decision was expected in a few days’ time.
Councillor Platt asked if the LEP was likely to see a greater allocation from the UK Shared Prosperity Fund to reflect that there are significant areas of deprivation in the area.
Mr Frost responded that the final details of the UK Shared Prosperity Fund had not yet been agreed but would be aligned to national and local industrial strategies. Mr Frost added that in his view there would be less money than there is now.
Reflecting on recent reports in the local media that stated that Stoke on Trent was the insolvency capital in the country, Councillor Platt asked if this was true, and if so, what the SSLEP was going to do to address this.
Mr Frost responded that the SSLEP wanted to create an economy where businesses could thrive and if this was achieved insolvency from existing businesses would be curtailed.
Councillor Platt asked what steps were being taken to in regard to alleviate flood risk in Stoke City Council’s area.
Councillor Brown responded that specifically regarding the Spode site a bid had been put forward to the Environment Agency for the Growth Deal 3 monies. Mr Frost added that from a LEP point of view, once bids had been received by the LEP they were evaluated, scored and funded, as appropriate.
Mrs Atkins asked what the LEP was doing to ensure that a greater proportion of public sector procurement money was being spent locally to boost to the local economy.
Mr Frost responded that whilst he understood the sentiment of the question, practically the LEP could do very little and he was personally agnostic about promoting local authority procurement within local authority boundaries. Mrs Atkins responded that in the example of Preston, Lancashire, it had been proved over a short period of time they could triple the local procurement that goes to local companies without giving local companies any preferential treatment but ensuring that procurement contracts are done in such a way that local businesses can access those contracts, and this could benefit the local economy. Mr Frost stated that the LEP may have a role, but perhaps it was the local authority rather than the LEP that should examine this role, and we should bear in mind that it is not just local authorities but also the NHS, which is even more centralised (in its approach to procurement).
Mrs Atkins argued that she understood that it was the role of the LEP to bring together partners.
Mr Frost argued that it was not the LEP was procuring but local authorities.
Mr Winnington stated that Staffordshire had done some work to procure locally e.g. school milk, and in regard to the A50 and the Stafford Western Access Route, where possible, local labour had been used. However, he added that restricting procurement to local businesses could impact on cost and quality. Mr Atkins stated that post-Brexit there more opportunities for example, to influence how goods and services are procured, for example, scope to offer sites with work opportunities for skilled local people in developing them.
Mrs Atkins asked what the LEP was doing to look to the future regarding low level skilled jobs that were more prone to displacement by technological change and globalisation.
Mr Frost agreed and stated that the Local Industrial Strategy will address what sort of economy we want locally and how we get there and skills would be a key component. He added that it was important to plan for the skill needs and reduction in jobs that will be affected by the impact of artificial intelligence on public administration, manufacturing and engineering sectors. Mrs Atkins added that there was some urgency and asked if the LEP was sufficiently progressed to deal with this. Mr Frost stated that he considered that the LEP would be ready, and he acknowledged that the LEP needed to not only look at what was happening now, but what could be happening in the future.
Mr Oates asked if, when reviewing the membership of the LEP, local authorities would have more representation on the LEP Board. He also referred to the impact that the business rate retention for Staffordshire had on Tamworth’s position with the Greater Birmingham LEP.
Mr Frost responded that the structure of LEPs would change post the Review. The LEP Board composition was currently 50:50 public:private sector and the government-prescribed proposal was that it would be one third public sector:two thirds private sector i.e. on a board of 18 members, 12 members from the private sector and 6 from the public sector. The public sector would include universities, and the NHS, as the most significant local employer. When the group of LEP Chairs met the Prime Minister last year she had indicated that she wished to see more females on LEP boards, moving to a 50:50 gender balance in the LEP. He added that LEPs would need to have their own legal entity as a company limited by guarantee. It was vital that local authority involvement was retained at the highest level. The Board would be restructured along the above lines and the geography. Mr Atkins added that he had a concern about board size and effectiveness and wished to see enough members on the Board to reflect a representative democracy.
Councillor Shotton stated that the requirements for the evidence as part of the application process for funding from the LEP could be too onerous for small businesses. He asked if there was any mechanism for favouring small or medium sized enterprises.
Mr Frost stated that he had heard the criticism regarding the time taken to apply for grants previously, however, the LEP was bound by government requirements. He hoped that post Brexit the process would be less onerous. In response to the second point made by Councillor Shotton, grant funding had benefitted several mid-sized enterprises (who were not necessarily household names). The Growth Hub was aware of this and it was important that small businesses had a fair opportunity to apply for funding. Mr Atkins added that there may be an opportunity going forward for colleges or a community interest company to assist small businesses to access the apprenticeship levy. Mr Winnington added that it was important to put in place a mechanism that would support small businesses such as the Growth Hub or the BIC, but the onus was on small/medium sized businesses to ask for help. The Growth Fund was able to offer all businesses assistance. He added that the Industrial Strategy needed to address skills and productivity.
Councillor Wanger asked what the reasons behind low GVA were and what was being done to address it.
Mr Frost responded that the challenge for the LEP going forward had changed since the LEP was set up. Following the financial crash in 2008, the challenge was moving job creation forward rapidly. This had been achieved. The Industrial Strategy would now seek to address creating higher skilled jobs and better wages. There are two Universities in Staffordshire and we needed to ensure that graduates were offered an environment where they were retained.jobs on higher wages. The challenge was also getting businesses to understand the benefits of investing in technology and creating an environment where business can invest and bring in new businesses that are creating higher value jobs. There are no easy solutions to this, but it is the fundamental direction that the LEP will be taking going forward. Going forward there may be fewer jobs but those jobs will be of higher value. A review of the weekly wage gradient in Staffordshire showed that the highest wages were in Lichfield and the lowest wages in the north of the county. The challenge was to flatten this out and to ensure that the wages in the urban core are able to be significantly improved.
Councillor Wanger stated that all new jobs were welcomed but sought confirmation that 1,880 local businesses had benefitted from the City Deal projects but added that regarding the statement “that the ambition was to reduce CO2 emissions by 16.3kt per annum” he considered that income generation should be an aim.
Mr Frost confirmed that 1,880 local businesses had benefitted and stated that when the government announced the Industrial Strategy it had the concept of Place built into it. The ceramics sector in North Staffordshire is of national and global importance and the idea was to work with government to create a sector deal for ceramics that would allow local companies to see what the future could look like and the benefits of investing in new technologies. Councillor Brown added that several stakeholders had been brought together and were working well together. They had received early indication from government of significant support. It was one of the asks around the Midlands Engine. One of the key benefits was bringing people from the City together and this created a good narrative for the City and its unique selling point. Mr Atkins added that technical ceramics was the way forward to creating high value jobs in the City.
Following on from Councillor Wanger’s question regarding the number of local businesses that had been helped by the LEP, the Chairman asked if figures could be obtained on the number of Staffordshire businesses that had benefitted from the GBLEP.
Mr Greatorex quoted an example in his area where a new business development and housing developments in his area had shown poor regard for whether the new development could be accommodated by the existing local infrastructure, including health services, and asked what influence the LEP had on discussions with local borough and district councils who make planning decisions.
Mr Winnington responded that the County Council must work closely with all local councils to ensure the infrastructure is put in place wherever possible, and that local plans are developed, and that monies are received (from developers). The County received no funding from government for infrastructure. He added that a key issue was transport and stressed that borough and districts should ensure that the ducting was put in place for Superfast broadband. Mr Atkins stated that the LEP and Midlands Engine could have an impact on planning decisions but planning delays could be caused by the duality of LEP membership.
Councillor Shotton added that high value jobs were critical to the area and asked if, in considering applications for LEP funding, there was any weighting applied to the hourly rate that an employer may pay to an employee and when considering new developments, potential land developers should be tied into this equation.
Mr Frost stated that the question was how limited funding could be best utilised to generate the best return. Work was underway to ask companies when they are applying for funding to evaluate the value added from their proposal(s) and to enable the LEP to decide how they can best allocate funds. Staffordshire was geographically a natural focus for logistics and this would not change. However, the LEP should seek to ensure that money is best directed to where it generates the best return for our local community. Work is already underway in this regard.
Mr Francis asked what was the LEP doing regarding HS2. Mr Frost stated that a representative of HS2 was attending the LEP Annual Conference next week and would be asked questions regarding procurement.
Mr Frost stated that the advantage of the economy in Staffordshire is that it was well-balanced with the two major global anchors of JLR and JCB, as well as a broad range of SMEs. There was public administration in Stafford and Stoke on Trent. The Signals Regiment had located in Stafford. There was the Ceramics deal, 35,000 jobs in engineering, including GE in Stafford. In addition, there was the rural economy. There was no one dominant sector and the LEP must build on this to meet the challenges of the future.
The Chairman proposed an annual review of the LEP and asked Stoke on Trent City Council to consider this. Mr Wanger stated that he welcomed the dialogue with Staffordshire County Council and agreed to host the next meeting.
Members and officers were thanked for their attendance.
RESOLVED: a) That the report be noted. b) that an annual review of the LEP be added to the Work Programme.