Great South West pitches to yesterday’s man. A week is a long time in politics.

In a recent post Owl touched on the complexity surrounding the way that devolution is evolving and explained that the Great South West wasn’t another rail franchise but yet another added layer.

We have the formal devolution body, the Local Enterprise Partnership (LEP), Heart of the South West (HotSW). This has been pitching to government for funds since 2014. Then we have the Joint Committee with a single representative councillor from each of the 17 local authorities from Devon and Somerset. This started out in 2018 as a way for elected councillors to oversee and agree policy e.g. the HotSW Productivity Strategy, but has apparently rapidly evolved into developing relationships with key local partnerships and in overseeing delivery of the Strategy alongside the LEP. Owl is not sure how effective a large committee is at doing this.

The briefing papers for last week’s cabinet justified EDDC putting more resources into the Joint Committee suggested something quite different:

“Changes in Government policy away from large devolution ‘deals’ to a more targeted dialogue on key themes of relevance to the local authorities and partners, e.g housing. The Joint Committee’s influencing role has become increasingly important as recognised by Ministers, local MPs and Government officials. The ambition remains to draw down additional functions, powers and funding from Government.” I.e. EDDC anticipate that most funding will by-pass HotSW.

Obviously EDDC has an insight into the way the wind is blowing which has not yet dawned on the Great South West (GSW). The GSW website explains that on Wednesday, January 22, a delegation comprising business leaders, Local Enterprise Partnerships (LEPs), MPs and local authorities (Including DCC Leader John Hart) presented Minister for Local Growth, Rt Hon Jake Berry MP, with the GSW growth prospectus and briefed him on ambitions to deliver £45 billion of economic benefit and 190,000 new jobs over the next 15 years.

Last week devonlive reported that the Great South West had made a similar pitch to yesterday’s man Sajid Javid:

Owl wants to see increased investment and prosperity in the South West but these approaches look fragmented and muddled. Owl isn’t convinced that the best way to influence Ministers is by handing them glossy brochures and demanding £45M. (And £2M on account – see below).

Steve Hindley, Chairman of Midas Group, a construction company, stepped down as Chair of HotSW in 2019 and has now popped up as Chair of GSW.

GSW is the latest business led growth alliance proposed to rebalance the UK economy, alongside the Northern Powerhouse, the Midlands Engine and the Western Gateway. GSW covers Cornwall & Scilly Isles, Devon, Somerset and Dorset. The GSW prospectus seeks £2million over three years from government, and a dedicated liaison Minister, to move forward “at pace” and enable full business cases to be developed across a range of topics. [£2M and 3 years before anything really happens – is this “at pace” – Owl]

It seeks support for an enhanced export and investment hub; recognition of a Great South West Tourism Zone and an agreement to create a rural productivity deal.

At HotSW, Hindley oversaw an unrealistic and undeliverable strategy for regional growth aimed at doubling the local economy in 20 years, way ahead of any national performance forecasts, with no clear strategy or feedback mechanism to measure success. At GSW the proposal is more modest. If the Great South West economy reaches the UK average, it would be worth £84.1 billion today and would be worth £121.7 billion by 2035. Even just closing the gap to 90% of the UK average would see the local economy worth between £103 billion and £110 billion by 2035. Where does this leave the HotSW “ambition”?

Initial governance arrangements for GSW are, apparently, already in place with a business led Partnership Group representing the leading strategic public and private sector organisations from across the region (just look at the logos on the devonlive page). This is supported by a small Executive Board to ensure clear leadership and focused delivery. The work to date has been supported both financially and ‘in-kind’ by the three Local Enterprise Partnerships that form the backbone of the Great South West. The private sector provided the catalyst for this initiative, with the #backthesouthwest campaign and the public sector and academic institutions have made significant contributions to its progression.

Government support is now required to help realise these “shared” ambitions.

So, once again, we have an unelected, unaccountable, group putting forward a growth strategy on our behalves. Adding a further layer of overarching bureaucracy to the already complex hierarchical relationship explained above. Along the line it is worth recalling that in autumn 2015 another group, independent from our local LEP, was formed under the surprising leadership of the Pennon Group, owners of the utility company South West Water. This group drafted a “South West Group Charter” within in days, following an invitation from Sajid Javid when visiting Exeter as Secretary of State for Housing, Communities and Local Government (he is an alumnus of Exeter Uni). This was sent to the Government ahead of the Chancellor’s Autumn Statement. However, it sunk without trace. Pennon is now a backer of GSW.

Owl agrees that the current division of the sub-region into three LEPs is a hotchpot arrangement and something like the GSW would be more a more sensible geographic area on which to base a regional strategy. Owl also thinks that the prospectus, whilst lacking any depth (it’s just a glossy brochure), is more sensible than anything produced by HotSW. For example it recognises, as problems: poor wages; poor productivity; the above average age distribution and the need for major changes to agriculture post-Brexit. As mentioned above it also has a more realistic approach to growth. There remain some dubious ideas: eg that the ageing population presents an opportunity to trial new approaches to wellbeing, care and employment with older people which will offer learning for the rest of the UK (so oldies become a marketing opportunity). Also, examples of exploitable opportunities taken from each county seem to be of very questionable value: Hinkley Point in Somerset, Europe’s first horizontal launch spaceport in Cornwall; the largest naval base in Western Europe at Devonport; and Dorset is one the country’s leading centres for financial services (Owl didn’t know that Dorset was the place to leave your nest egg).

None of this seems to relate to solving the problems of rural isolation and deprivation featured in recent East Devon Watch posts. Nor does it address the need for something like a national regional investment bank to support firms such as Flybe or Axminster Carpets.

With Sajid Javid’s departure Steve Hindley and his marketing team will have now to swivel rapidly to make their pitch to Dominic Cummings. The people who seem to impress him are: super-talented weirdos with genuine cognitive diversity, true wild cards. So no problem then.

GSW Prospectus

Click to access GSW%20Prospectus%20published%20final%20version%20100120.pdf

Will Javid’s departure lead to boom or bust?

Owl recommends this analysis of what Sajid David’s resignation might mean for the economy – Larry Elliot, economic editor of the Guardian:

It was billed as just a limited shuffling of the pack, but Boris Johnson’s reshuffle proved to be the moment when the simmering conflict between 10 Downing Street and the Treasury burst out into the open.

The departure of Sajid Javid and his replacement as chancellor by the inexperienced Rishi Sunak means that first blood has gone to the prime minister or, more accurately, his chief adviser Dominic Cummings.

Javid is out and Sunak is in – but not because of a Whitehall disagreement over the activities of the former chancellor’s special advisers. Nor is it simply about the shape of next month’s budget, important though the disagreements were between a prime minister bent on an expansionary package and a distinctly more cautious Javid.

Ultimately, this is about power and whether the Treasury should continue to exert its stranglehold over the totality of economic policy – or be relegated to the role of a finance ministry, as it is in so many other countries.

Britain has been here before. Maynard Keynes argued in the 1920s and 1930s that the Treasury’s obsession with balancing the budget was the wrong response to a demand-deficient and high unemployment economy.

In the 1960s, Harold Wilson hived off a large chunk of the Treasury’s responsibilities to a new Department of Economic Affairs. John Major’s answer to the Treasury’s dominance was to beef up the industry department and put Michael Heseltine in charge. Tony Blair regularly chafed at being kept in the dark about key economic decisions when Gordon Brown was running the Treasury.

The power grab attempt by Johnson and Cummings is somewhat different. Instead of setting up a brand new ministry, they have decided to make 10 Downing Street the hub of economic policy.
This approach has both strengths and weaknesses. Its strength is that there are many economists who think that a successful industrial strategy for Britain has to involve limiting the power of the Treasury to keep vetoing things on budgetary grounds.

As an institution, the Treasury is hard-wired to be conservative and has often been wrong as a result. It was, for example, fully behind George Osborne’s austerity programme in 2010 on the grounds that running big budget deficits risked losing the confidence of the financial markets and would result in much higher interest rates.

A better solution – and the one Johnson and Cummings are trying after 10 years that have seen the weakest wage and productivity growth since the 19th century – would have been to take advantage of low interest rates to borrow for public infrastructure projects that would have produced faster growth, higher tax receipts and a lower deficit.

The weakness of the Johnson-Cummings approach is that Downing Street really doesn’t have the resources to run economic policy itself and will have to import resources from elsewhere.
Unless, of course, Cummings thinks he is so smart he can run the show on his own. Even Keynes, a man famed for his arrogance, did not think that.

History suggests that the Treasury will play a long game. It will sit tight for a while, and work on the more expansionary package that the new chancellor is having prepared for him in Downing Street.
It will assume that after a while Sunak will go native as most chancellors do eventually. And it will wait – as it did when Wilson tried to clip its wings – for something to go wrong, knowing that in a financial crisis it will be fully back in business.

The boost provided by the budget will mean stronger short-term growth, but this war is not over by a long chalk.

Sidmouth prepares residents for flash flooding as Storm Dennis moves in

Sidmouth Town Council said flood advice is to be prepared and not wait until it is too late.

The empty sandbags, for people to fill themselves, are available from the town council offices from 9am until 1pm Monday to Friday.

During the weekend they can be collected from the yard of the council building in Woolcombe Lane.

Weather information, weather warnings, river levels and flood warnings for the Sidmouth area can be viewed here.