Regeneration and Economic Development?

The Watch has already blogged (26 Dec) “East Devon Economy Booming? Not according to cabinet agenda data.” But we now have had time to explore the latest “Regeneration” proposals in greater depth.

A special item in the pack of papers for the 6 Jan 2016 EDDC Cabinet Meeting (page 107) proposes an additional £287,000 be spent in 2016/17 (with similar costs for 3 years) to add three more staff to the three full time and three part time members of the Regeneration and Economic Development Team.

Context – Central government grants are being cut severely and will disappear completely by the end of the current parliament in 2019/20. The Council core funding will then come from business rates, council tax and fee income (eg car parking). The Institute for Fiscal Studies (IFS) predicts the 30% loss from central government funding will be made up from an increase in retained business rates, from the current level of around 25% to around 55% in 2019/20, rather than by other measures such as efficiency savings.

The £287,000 pa will be used directly to promote economic growth and increased business rate income outside the Growth Point and across the district.

The East Devon Growth Point is set to become an Enterprise Zone, where businesses can get up to 100% business rate discount worth up to £275,000 per business over 5 years but we gather that ALL business rates in enterprise zones go direct to the (you guessed it) Local Enterprise Partnership.

So what chance has this team got in succeeding? Aren’t businesses simply going to transfer to the growth point?

We are sure everyone wants to see a vibrant local economy, especially one attracting high value jobs. But why are we so underwhelmed by this proposal that we think this money could be spent in better ways?

It all gets off to a bad start. The proposal itself spells out the lacklustre performance to date of the three full time and three part time Regeneration and Economic Development Team. The economic profile for East Devon (Grant Thornton, Feb 2015) highlights:

•The average gross weekly earnings in East Devon are low at £409 compared with £503 nationally.

•The knowledge economy in East Devon accounted for just 13.5% of total employment in 2013, compared with 18.13% for the SW and 21.75% nationally.

•The self employment rate in East Devon is high and stable by national standards but new business formation rate is very low, ranking in the bottom 20%.

According to the Economics page of the EDDC web site the services industry accounts for 85.7% of the employment in East Devon with a large section of this being in the retail, hospitality and health sectors, all of which it admits are predominantly lower-paid sectors.

The South West Regional Tourist Board data (2011) shows a fall in visitors to East Devon from 800,000 visitor trips per annum in 2005 to 472,000 visitor trips in 2011. The income from overnight stays also fell from £3.7m to £1.8m in the same period. Tourism, according to EDDC’s Cabinet proposal is a key driver!

(The Watch has repeatedly drawn attention to the way EDDC has ignored Tourism and to its deficiencies in rolling out high speed broadband.)

In the proposal the Council claims it is adept at using its assets to “de-risk locations” and attract private sector interest. Two examples cited: the delivery of the new Premier Inn in Exmouth and the commercial success around Exmouth Strand, where the Council has used its land and property assets to achieve this aim.

But none of this is really relevant to realising the stated aim that: “our ambitions lie in high tech growth and an improved knowledge economy, exploiting the opportunities now emerging through our Growth Point and Enterprise Zone”. (It should be noted here that the growth Point was not successful in making Exeter the “Internet of Things” lead demonstrator city – which Manchester won).

According to the proposal, the draft local plan retains a target of 1 job per new house and predicts 18,500 new homes over the 18 year Plan period i.e. delivery of the plan requires the creation of 1,000 jobs every year. The only quantified successes claimed in job creation by the Regeneration and Economic Development Team, 44 jobs at the Exmouth Premier Inn and a projected 45 next year from Seaton Jurassic, represent only 4.5% of what is needed annually. Not much of an achievement is it? It begs the question of whether 1,000 jobs per year are remotely achievable.

The demographic trend in East Devon requires the creation of between 160 and 190 jobs per year. This should be achievable as it assumes average economic growth. In EDDC’s chosen metric this equates to delivering four Premier Inns across the district every year (not just the one held up as an example of success). However, to this total, in their wisdom, EDDC has added in the draft Plan a “policy on” job led growth scenario with a target of an additional 549 jobs a year.

The actual annual target in the draft Plan is still a large figure, and one that is clearly way beyond the Team’s ability to deliver, but is only about 70% of the astronomical 1,000 quoted to the Cabinet. So this is another example of EDDC playing fast and loose with numbers, ratcheting up the growth agenda at every opportunity.

Job creation on this scale should be easy to spot. We are already 2 years into the new Plan period so it should now be possible to review the Team’s progress to date in creating 2,000 jobs. Such a review would form a much better basis for judging the success of past measures and on deciding the direction of future expenditure on the best way to promote growth.

The “aims and objectives moving forward” of EDDC’s proposal contains nothing but platitudes such as: “delivering an economy which stimulates start ups and new businesses to grow to bring better paid jobs and increased wealth into East Devon”. There is no concrete plan, no: how to do it. It is an example of the poverty of ideas that results from Cabinet decisions made in secret.

The people of East Devon are not bereft of ideas or talent but they are never consulted. So here’s a radical idea. Consult the people of East Devon. They are the potential customers for these businesses, and isn’t the customer is always right?

Here’s another: with regions across the country all putting forward their own enterprise plans for devolution the priority might be to put more emphasis on winning the publicity war, though that might be difficult with the whole district a giant building site.

Finally, how does the Regeneration and Economic Development Team reconcile the conflicts between maximising fee income from car parking, and saving the High Street and encouraging Tourism?