Older people are NOT unproductive

EDDC’s CEO (rapidly approaching retirement age) was once heard to call the district’s retired people “unproductive” …

“Countries could economically benefit from people living longer and should invest more in health to raise life expectancy, a think-tank has urged.

The International Longevity Centre said that as people live longer productivity also increases, in terms of ‘output’ per hour worked, per worker, boosting the economy.

Improving health and ensuring that people live longer should therefore be a key goal for governments, the analysis, based on OECD figures from 35 countries [see graph below], said.

According to the analysis, Iceland, which has one of the healthiest populations in the world, has an employment rate of 83% for 60 to 64-year-olds. This compares to the OECD average of 48.9%.

Ben Franklin, assistant director for research and policy at the think-tank, said that as raising life expectancy results in improved productivity, countries will also be able to collect more taxes from the people in work.

He said: “Public policy and economic forecasters should consider how best to take into account the potential fiscal benefit of better health and not neglect it in discussions of our long run sustainability.”

The report said that the findings are particularly important amid “many debates about long run government spending” where health spending is seen as a “drain on fiscal resources”. …”

https://www.publicfinanceinternational.org/news/2018/08/economic-benefits-people-living-longer-says-think-tank

Western East Devon profits from extra buses; eastern east devon gets nothing. Time to join West Dorset?

Yet again, the eastern side of our district loses out to the richer, Exeter commuter belt which now gets more buses to serve the “growth point” Exeter suburbs. We’ve lost our community hospitals to the west, now we’ve lost out on bus routes:

https://www.devonlive.com/news/devon-news/exeter-devon-stagecoach-bus-times-1846544

It seems we have no growth strategy for the towns and villages on the Dorset border. Is it time for the eastern side of the district perhaps to join West Dorset?

What does it have to lose?

Governance and transparency – How does our Local Enterprise Partnership measure up?

A long read, but if you worry about the unaccountability of our Local Enterprise Partnership (and you should) it is a “must read” – note the requirement for LEPs to be scrutinised by council scrutiny committees:

For good or ill the Government has chosen Local Enterprise Partnerships (LEPs) to play a key part in assisting in the delivery of government policies to support local economic growth.

There are 38 LEPs in England. Through the Local Growth Fund, the government has committed £12 billion to local areas between 2015 and 2021; £9.1 billion of this is through Growth Deals with LEPs. The government also sees LEPs as key to its new industrial strategy. But performance has varied as acknowledged in the government’s publication of July 2018 “Strengthened Local Enterprise Partnerships”.

Amongst other things this paper announced that all the recommendations of last year’s Mary Ney review (see below), and this year’s Public Accounts Committee (PAC) report on Governance and Departmental oversight of the Greater Cambridge Greater Peterborough (GCGP) LEP, would be accepted.

Now is the moment to review these three publications which, taken together, amount to a scathing criticism of the way LEP governance arrangements, and government oversight of them, have, to date, been working.

PUBLIC ACCOUNTS COMMITTEE

https://publications.parliament.uk/pa/cm201719/cmselect/cmpubacc/896/896.pd

In 2016 the PAC reported on the governance of LEPs and made clear recommendations for improvement which were accepted by the Ministry of Housing, Communities and Local Government. [Footnote: East Devon Alliance submitted evidence to this inquiry].

Despite this, things are going seriously wrong and, in the words of the PAC: “the Department needs to get its act together and assure taxpayers that it is monitoring how LEPs spend taxpayers’ money and how it evaluates results.

In the case of CGGP (Greater Cambridge Greater Peterborough Enterprise Partnership) the LEP could not respond satisfactorily to allegations of conflicts of interest, levelled by an MP. The governance arrangements were not up to standard. There were no comprehensive conflicts of interest policies nor an up to date register of interests for board members. In addition, the LEP was not acting transparently.

In March 2017, the Department applied the nuclear option and withheld the release of money to the LEP. Then, in December 2017, the LEP went into voluntary liquidation, following the Chair’s resignation the previous month.

Key findings by the PAC were that GCGP LEP did not comply with expected standards in public life, particularly in terms of accountability and transparency. Also that the Department’s oversight system failed to identify that GCGP LEP as one which should have raised concerns. Furthermore, that the Department has a long way to go before it can be sure that all LEPs have implemented Mary Ney’s review properly.

MARY NEY REVIEW

https://www.gov.uk/government/publications/review-of-local-enterprise-partnership-governance-and-transparency

Which leads us to: the “Review of Local Enterprise Partnership Governance and Transparency”, Led by Mary Ney, Non-Executive Director, DCLG Board, October 2017. This is an internal departmental review but nevertheless surprisingly thorough.

The review makes 17 recommendations (all now formally accepted) covering the following topics: Culture & Accountability; Structure & Decision-Making; Conflicts of Interest; Complaints; Section 151 [financial accounting] Officer Oversight; Transparency; Government Oversight & Enforcement. Just a few of these 17 recommendations of particular importance are highlighted out below.

Many LEPs have codes of conduct reflecting the requirements of company board directors and do not sufficiently embrace the dimension of public sector accountability. This is inadequate as it does not reflect the dual dimension (i.e. public and private) of the role of board members.

The code of conduct, which all board members and staff sign up to, should explicitly require the Nolan Principles of public life to be adopted as the basis for this code. E.g. the notion of integrity whereby holders of public office must avoid placing themselves under any obligation to people or organisations that might try inappropriately to influence them in their work. They should not act or take decisions in order to gain financial or other material benefits for themselves, their family, or their friends. They must declare and resolve any interests and relationships.

Key features of decision-making to ensure good governance and probity should include:

• a clear strategic vision and priorities set by the Board which has been subject to wide consultation against which all decisions must be judged;
• open advertising of funding opportunities;
• a sub-committee or panel with the task of assessing bids/decisions
• independent due diligence and assessment of the business case and value for money;
• specific arrangements for decisions to be signed off by a panel comprising board members from the local authority, in some cases including a power of veto;
• Section 151 officer line of sight on all decisions and ability to provide financial advice;
• use of scrutiny arrangements to monitor decision-making and the achievements of the LEP.

Conflict of Interest declarations must include employment, directorships, significant shareholdings, land and property, related party transactions, membership of organisations, gifts and hospitality, sponsorships. Interests of household members to also be considered.

LEPs to include in their local statements how scenarios of potential conflicts of interest of local councillors, private sector and other board members will be managed whilst ensuring input from their areas of expertise in developing strategies and decision-making, without impacting on good governance.

LEPs will need to publish a whistleblowing policy.

As part of transparency, in addition to the obvious things such as agendas and minutes, LEPs should maintain on their websites a published rolling schedule of the projects funded giving a brief description, names of key recipients of funds/ contractors and amounts by year.

GOVERNMENT RESPONSE – STRENGHTENED LEPs

Click to access Strengthened_Local_Enterprise_Partnerships.pdf

In accepting these recommendations the government in its “strengthened LEP” paper does add a few points of clarification which are worth noting.

Readers may recall our LEP, Heart of the South West (HotSW), proposing in its 2015 prospectus “towards a devolution deal” to deliver, amongst other things, a world-class integrated health and care system within our communities. A prospectus produced without any public consultation. Well, the government has taken on board a further PAC criticism that it has not been clear about the current role, function, and purpose of LEPs.

The government now says it will set all Local Enterprise Partnerships a single mission to deliver Local Industrial Strategies to promote productivity.

Each Local Enterprise Partnership’s overall performance will be held to account through measures agreed in their delivery plans. The Government will work with Local Enterprise Partnerships to ensure that they have these plans in place by April 2019.

In addition, Government will commission an annual economic outlook to measure and publish economic performance across all Local Enterprise Partnerships and benchmark performance of individual Local Enterprise Partnerships. In the light of HotSW aim of a 4% annual growth rate and record-breaking productivity growth, starting this year, this might prove to be an interesting exercise.

Other points on topics such as increasing diversity of board members are covered in the previous Watch blog:

https://eastdevonwatch.org/2018/07/27/government-proposes-shake-up-of-local-enterprise-partnerships/

MEANWHILE

The House of Commons Communities and Local Government Committee inquiry into Effectiveness of local authority overview and scrutiny committees was also investigating LEPs and made this recommendation in December 2017 [East Devon Alliance submitted evidence to this inquiry as well]:

“The Government to make clear how LEPs are to have democratic, and publicly visible, oversight. We recommend that upper tier councils, and combined authorities where appropriate, should be able to monitor the performance and effectiveness of LEPs through their scrutiny committees. In line with other public bodies, scrutiny committees should be able to require LEPs to provide information and attend committee meetings as required.”

Click to access 369.pdf

50, 60, 70? Get a job, or else …..

“… Falling numbers of immigrants – who tend to be younger – since the EU referendum means the UK population is ageing faster than expected, which poses profound challenges for the country. The Office for Budget Responsibility estimates that NHS spending will need to almost double from 8% of GDP in the early 2020s to 13.8% by the mid-2060s because of the demographic shift. Without policy changes, public debt relative to the size of the economy could rise to 283% by 2067 from around 80% today.

Debate about age and the economy has recently focused on the plight of millennials. However, older workers face rampant workplace discrimination, according to MPs on the women and equalities select committee, even though treating older people differently at work is illegal under the Equality Act 2010.

Ben Broadbent, deputy governor of the Bank of England, recently drew angry comments when he said the UK economy was in a “menopausal” phase – past its productive peak. Although he soon apologised, observers pointed out that women over 50 are the fastest-growing group of workers in the UK and are far from past their economic peak.

Changes to the state pension age for women, which is gradually rising to meet the male threshold of 65, are part of the reason for the increase. Meanwhile, there are now more than 10 million over-50s in work – double the 1990s number and accounting for almost a third of the overall UK workforce.

French says younger people might worry about large numbers of older workers making it harder for them to find a job, or about seeing their career progression blocked. But she argues that companies could always create more jobs: “They can put someone in my job with me – that’s never going to be a problem.”

Economists call this idea the lump of labour fallacy, arguing that there is not a fixed amount of work in the world, and that the more jobs are added to an economy, the bigger it can become. The same argument is applied to immigration, where economists agree migrant labour stands to boost host economies rather than steal domestic workers’ jobs.

There are, however, fears that growing numbers of older workers could hold back the growth of productivity and wages, as the older we get the slower we become and the more outdated our skills might be. According to the Oxford Economics thinktank, ageing societies with a bigger share of over-60s workers see lower wage growth. It found eurozone wage growth depressed by as much as 0.3% annually.

More funding for training in later life can help. Ben Franklin, economist at the International Longevity Centre, says: “It may well be that in 10 years’ time the peak age for productivity is 60 rather than 50. Age may be a drag on per capita growth at the moment, but it doesn’t have to be if you can translate health gains into productivity gains.”

The International Monetary Fund fears that if baby boomers continue retiring at 60-65, Britain and other advanced economies could be overwhelmed by pensioners. It reckons ageing societies have the potential to slow economic growth by as much as 3% by the middle of the century, while also increasing the strain on the welfare state.

Franklin says keeping people in the workforce is the most efficient thing to do. “We need older workers, even if they’re less productive. You may be less productive as a 70-year-old, but if you’re not in the workforce, your output is lost altogether.”

https://www.theguardian.com/business/2018/jul/28/older-workers-retirement-age-economic-growth-wages

We MUST stop embedding Local Enterprise Partnership growth figures into local strategies

Readers know Owl bangs on about our LEP promising to double growth in Devon and Somerset up to 2030. Their figures then go on to be embedded in many Devon and Somerset council growth strategies.

Now we read (Sunday Telegraph Business – paywall) that the Office of Budget Responsibility believes that “growth” will “flatline for [at least] a decade, reaching as little as 2% over that period.

Will the Greater Exeter Strategic Plan (public consultation about which is being postponed until after 2019 local elections – a very ominous sign) use LEP figures or more pessimistic government forecasts?

And then there’s the effect of Brexit ……!

Good luck with that delivering of doubled growth, Local Enterprise Partnership!

And recall about EDDC and Exeter City Council wanting to make the Cranbrook “Growth Point” a digital miracle!

“Research has found that Exeter is the worst digitally connected city in the UK.

New data from GoCompare compares and contrasts 57 major business hubs across the country, taking into account an array of digital infrastructure such as WiFi availability, broadband speed and mobile/4G coverage.

Exeter ranked 57 out of the 57 cities with just 6.31 per cent 4G coverage, an average internet download speed of 26.84mbps and 1,166 people per public WiFi hotspot.

Unsurprisingly, some of the biggest cities in the UK ranked as the most connected including London, Manchester and Birmingham.”

Local Enterprise Partnerships in north of England join forces

Owl says: “They have one task: to enrich all the peoples of the North of England …” – good luck with that – as each vested-interest Chair vies to outscrew the others!

“Local enterprise partnerships from across the North of England will come together to form a new body to support ambitions for the region.

A government-funded board called NP11 will be made up of chairs of the 11 northern LEPs and act as a modern-day version of the medieval Council for the North. It will advise central government on how to increase productivity and tackle the north-south divide.

Announcing the creation of the board in Newcastle today, Northern Powerhouse minister Jake Berry said: “As we approach leaving the European Union we need to ensure that every area of the UK continues to economically flourish.

“For the first time since 1472, we will bring together the business voices of the Northern Powerhouse in our Council for the North.

“They have one task: to enrich all the peoples of the North of England … we will shift the North’s economy into overdrive.”

NP11 will be chaired by Roger Marsh, chair of the Leeds City Region Enterprise Partnership.

“By bringing together the private and public sectors, local enterprise partnerships are in a unique position to unite northern business and civic leaders behind a common goal of building a true northern economic powerhouse that brings prosperity to everyone who lives and works in the North, while also competing for the country globally,” Marsh said.

“Our country’s success is built on northern industry, innovation, and determination.”

https://www.publicfinance.co.uk/news/2018/07/government-sets-new-council-north

Plan unveiled to achieve HotSW Local Enterprise Partnership productivity target!

No – it’s not a Heart of the South West plan. They are still searching for suitable levers of power to grasp.

It’s not a detailed plan following up the Government’s White Paper:“Industrial Strategy – Building a Britain fit for the future”, Nov 2017, with its five foundations of productivity (Ideas, People, Infrastructure, Business Environment and Places) either.

Last week John McDonnell, shadow chancellor, unveiled plans for an investment revolution. He proposed all new governments should be obliged to set productivity targets with a revamped Bank of England, and act on them.

McDonnell commissioned Graham Turner, a City economist who advises hedge funds and investment banks, to produce a report. In an interim report, published in December, Turner found our financial system was taking money from sectors such as manufacturing and lending it to invest in property.

Promising growth in new tech sectors was overwhelmingly concentrated in and around London. Politicians and regulators have not ensured that banks play their part in supporting the growth of new businesses. Instead, banks have entrenched their focus on unproductive lending. Turner’s team recommended fundamental transformation of our financial system. Alongside the Bank of England’s (BoE) existing inflation target it should set a 3% target for annual productivity growth, backed by new powers that steer the financial system towards investment to maximise productivity growth.

Most comment of this idea was critical. As David Smith, Sunday Times economic editor, pointed out: by decade, productivity growth averaged 2.2% in the 1970s, 2.4% in the 1980s, 2.3% in the 1990s, 1.4% in the 2000s, and just 0.5% since 2010. It is not impossible: there have been 11 years in the past 45 when productivity has grown by 3% or more, years of strong economic growth or falling employment.

Monetary policy and financial stability, the Bank’s responsibilities, have no direct links to productivity and adding to its targets merely makes it more likely that it will miss its central one, controlling inflation.
Last autumn, Mark Carney, BoE governor, criticised those who wanted the central bank to solve problems such as productivity. The BoE “cannot deliver lasting prosperity and it cannot solve broader societal challenges,” he said, adding that calls for it to solve poor UK productivity “confuse independence with omnipotence”.

Philip Aldrick, economics editor of The Times, however, took a different view:

“The thing is, though, the closer you look at the powers the central bank has, the more Mr Turner’s proposals seem like common sense. Since the 2008 crisis, the Bank has been given a vast array of tools. It can ration household or business lending, it can drain or flood an economy with finance, it can direct banks how to behave, it can deploy £750 billion of cheap liquidity to grease the financial system, it can inject billions of pounds into the economy through quantitative easing and it can change interest rates.”

“Despite Mr Carney’s claim, the Bank is almost omnipotent but chooses voluntary impotence because using its power would be to stray into politics. For Mr Turner, the Bank’s “deliberate passivity” is contemptible when “credit guidance” could help to fix the nation’s productivity woes. What’s the point of all that power if the Bank doesn’t use it, especially since 2013, when its mandate was updated to “support the economic policy objectives” of the government? If nothing else, his paper asks the question.”

When our Council Leaders accepted HotSW’s ambition, without any detailed action plan, to double economic growth in 18 years, primarily by elevating productivity growth to levels never before sustained, did they realise just how radical a plan might be needed? And will they now be backing Labour’s or something equally tranformative?

John McDonnell’s Guardian article:
https://www.theguardian.com/commentisfree/2018/jun/20/britain-investment-revolution-labour-party

Interim Report (good source of financial data):

Click to access Financing-Investment-Interim-Report.pdf

Final Report:

Click to access Financing-investment-final-report-combined.pdf

Greater Exeter – will city living take some of the pressure off East Devon?

It seems that, after years of decline, living in cities has become more and more popular for all age groups, but particularly you g professionals. Given the decline in rural services such as loss of transport, infrastructure, sixth forms, community hospitals and shops, this is not too surprising.

However, when it comes to living in Exeter it seems less popular with its city council (headed as CEO by former EDDC Head of Regeneration Karim Hassan) which appears to favour student housing and leisure centres and cinemas over homes.

And our developer-led Local Enterprise Partnership sees housing growth in areas which its developers favour for very high house prices – pretty towns and commutable rural villages, the coast – including AONBs.

There is no data for Exeter in the article but Plymouth’s city centre population has increased by 34%.

Here is what a BBC article has to say:

“The growth in city centre living is down to young people – older generations have not returned from the suburbs in significant numbers.
Some are students, whose numbers grew with the expansion of university education.

For example, the student population in Sheffield city centre grew by more than 300% between 2001 and 2011, according to census data. By 2011 there were 18,500 students, accounting for about half the population.
Similarly, Liverpool’s city centre student population grew by 208% (6,300 more people), and Leeds 151% (7,700 more people).

But the popularity of big city centres among young, single professionals is the main factor.

The number of 20 to 29-year-olds in the centre of large cities (those with 550,000 people or more) tripled in the first decade of the 21st Century, to a point where they made up half of the population. There is no reason to think that this trend has eased since the census.

Only one in five city centre residents were married or in a civil partnership, while three-quarters were renting flats and apartments.
More than a third had a degree, compared with 27% in the suburbs and outskirts of cities. …”

https://www.bbc.co.uk/news/uk-44482291

Will the Greater Exeter Strategic Plan (now held over until after local elections in May 2019] recognise this new trend? It would certainly take a lot of pressure off East(ern) East Devon.

Exeter or Cranbrook … Exeter or Honiton … hhhmmmm.

https://www.bbc.co.uk/news/uk-44482291

About our Local Enterprise Partnership’s promise to double growth …

“The weakest household spending for three years and falling levels of business investment dragged the economy to the worst quarter for five years, official statisticians have said.

The Office for National Statistics confirmed its previous estimate that GDP growth slumped to 0.1% in the first quarter, while sticking to its view that the “beast from the east” had little impact.

The latest figures will further stoke concerns over the strength of the UK economy, amid increasing signals for deteriorating growth as Britain prepares to leave the EU next year. Some economists, including officials at the Bank of England, thought the growth rate would be revised higher as more data became available. …”

https://www.theguardian.com/business/2018/may/25/uk-economy-posts-worst-quarterly-gdp-figures-for-five-years

And does our LEP have a plan B … er, apparently not.

Rural broadband still a second-class service

Owl says: it will drag down the “doubling of growth” our LEP promised us. But perhaps they mean in urban areas only.

“There has been a marked improvement in home broadband, according to an annual survey by the UK’s communications watchdog Ofcom.

It said that average fixed-line download speeds rose by 28% over the year to 46.2 megabits per second, while uploads gained by 44% to 6.2 Mbps.

It added that the typical household now consumed 190 gigabytes of data a month, in large part due to the use of Netflix and other streamed TV services.

But rural consumers still lag behind.

Ofcom said:

in urban areas, 59% of connections delivered average speeds topping 30 Mbps over the 20:00-22:00 peak-time period – meeting the watchdog’s definition of “superfast” – while 17% were under 10 Mbps.

but in rural areas, only 23% of connections surpassed 30 Mbps over the same hours, while 53% were under 10 Mbps.

The regulator said the primary reasons for the discrepancy were less availability and reduced take-up of cable and fibre services in the countryside.

Later this month, internet service providers will be obliged to quote average peak-time speeds in their adverts and other promotional materials, rather than the “up to” figures that have been more common.”

http://www.bbc.co.uk/news/technology-44056617

Dear Local Enterprise Partnership: about that promise to double growth … again

“California has overtaken Britain to become the fifth biggest economy in the world in its own right. …”

as opposed to:

“In comparison, Britain’s growth has slowed to a virtual standstill in the first three months of 2018, hitting just 0.1 per cent in the first quarter.

Chancellor Philip Hammond blamed the sluggish performance on bad weather but the Office for National Statistics said that had been only a minor factor.

A contraction in construction, weak manufacturing growth and a squeeze on consumer spending led to the weakest economic activity in the country for five years.”

https://www.mirror.co.uk/news/uk-news/california-overtakes-britain-become-fifth-12483939

To paraphrase Dorothy in The Wizard of Oz:

“Devon and Somerset ain’t California, Toto”!

Bad news for East Devon commuters: “Exeter rated one of the worst places to make a living in the UK”

So growth doesn’t equal wealth – who would have guessed!!!

“… TotallyMoney’s research into the best places to make a living ranked Exeter ninth from the bottom of 59 towns and cities in the UK.

Featuring 59 UK towns and cities, the company analysed median take-home salary, average monthly mortgage repayment, cost of living, employment rates and business closures.”

https://www.devonlive.com/news/devon-news/exeter-rated-one-worst-places-1494891

City faces corruption crackdown as IMF investigates wealthy countries

“The City of London will come under the spotlight of the International Monetary Fund as part of a crackdown on corruption that will investigate whether Britain and other rich countries are taking tough enough action against bribery and money laundering.

In a hardening of its approach, the IMF said it needed to look at those giving bribes and financial centres that laundered dirty money as well as improving the existing clampdown on wrongdoing in poor countries.

London has won the unenviable reputation of being the global centre for money laundering, partly as a result of cases such as the Global Laundromat, under which British-registered companies and banks helped move at least £20bn of money from criminal activities out of Russia.

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All members of the Group of Seven industrial nations – Britain, the US, Germany, Japan, France, Italy and Canada – together with Austria and the Czech Republic will be looked at by the IMF to see whether their legal systems criminalised bribery and have the right mechanism to prevent laundering of dirty money.

Christine Lagarde, managing director of the IMF, said: “The flip side of every bribe taken is a bribe given. And funds received through corruption are often funds concealed outside the country, often in the financial sectors of major capitals. It is quite possible for countries to have “clean hands” at home but “dirty hands” abroad.

“To truly fight corruption, therefore, we need to address the facilitation of corrupt practices by private actors. To do this, we will be encouraging our member countries to volunteer to have their legal and institutional frameworks assessed by the Fund – to see whether they criminalise and prosecute foreign bribery and have mechanisms to stop the laundering and concealment of dirty money.”

Lagarde said the willingness of the G7 plus Austria and the Czech Republic to allow their anticorruption regimes to be tested was a “a major vote of confidence in the new framework”.

The investigation will form part of the annual Article IV health check that the IMF conducts on every member country. Philip Hammond said in Washington that the size of the City of London meant he could not definitively say that there was no illicit money flowing through the UK financial system but that the government was working hard to reduce and eliminate illicit flows.

Lagarde said there was empirical evidence to show that high levels of corruption were linked to significantly lower growth, investment, foreign direct investment and tax revenues.

A country that slid down from halfway to three-quarters of the way down a league table of corruption and governance was likely to see growth of national income per head decline by half a percentage point or more.

“Our results also show that corruption and poor governance are associated with higher inequality and lower inclusive growth.” …”

https://www.theguardian.com/business/2018/apr/22/city-faces-corruption-crackdown-as-imf-investigates-wealthy-countries

Don’t count your (productivity) Unicorns before they hatch!

From David Daniel:

“The “Joint Committee” (representatives from 23 organisations across Devon and Somerset – political balance rules do not apply) has just endorsed the final version of the HotSW Productivity Strategy.

But would you buy the proverbial second-hand car from an organisation that takes such a cavalier attitude to presenting facts and figures? Would you trust it to invest hundreds of millions of pounds of your taxes wisely? And, if you did, would you have any faith in its ability subsequently to deliver the goods?

Let’s start with the press release statement: “The Productivity Strategy aims to double productivity in the area over 20 years”. It does no such thing. The maximum claimed productivity gain in the strategy is to jump from a currently “assumed” 1.7% local annual productivity growth (probably nearer 1.5%) to 2.2%. No doubling here even if you accumulate the change over 20 years. For interest, historic average UK productivity growth rate is 2.0% and in the league table of LEPs, HotSW ranks 32nd out of 37 (London and South East dominate).

The 20 year timescale is a bit fuzzy as well. The introduction to the adopted strategy says: “Our ambition is simple – to double the size of the economy over 20 years.” In the consultation draft, however, it said: “Our ambition is simple – to double the economy in 18 years.” So which is it? On page 36 the Productivity Strategy is clearly marked (as it was in the consultation draft) 2018 to 2036, and none of the other numbers has changed. In my book that is 18 years, not 20!

Anyhow, what is being doubled is not productivity but the size of the economy (a combination of growth in both productivity and employment). Except the economy won’t be doubled using any of the combinations of growth in productivity and employment mentioned in the strategy, in either 18 or 20 years. The best on offer is a 3% compound growth. If that started instantaneously this year, and it obviously won’t, it would yield 70% growth in 18 years or 80% in 20 years. To double the economy, a compound growth rate of 3.94% (4%) would be required. Long term average UK growth rate is 2.6%.

It is proposed to achieve this 3% economic growth by “holding” employment growth to 0.8% per annum (add 2.2% productivity growth to 0.8% employment growth = 3%). We are effectively at full employment now. The Office for National Statistic population projections do show the South West population as a whole growing over this period at around 0.8% (0.76%) per annum. However, we have an ageing population and the annual increase of those classified as of working age is only 0.16% (16 to 64 for all genders). This will leave a shortfall of around 83,000 workers by the end of 18 years. Pension age is increasing to 66 by 2020 and to 67 between 2028 and 2028. Even if all 65 to 69 year olds are added to the work force they would not make up the shortfall. They would probably not be at the cutting edge of productivity either. So the plan can only work with major inward migration. This could be difficult in the post Brexit world.

Having ambition is one thing; plucking numbers out of the air and throwing them around without regard to the real world is quite another. There is no discussion of how long the transition from the slow to fast lane might take, delivery considerations come later. The hype assumes instantaneous change. How can anyone take this seriously?

Perhaps the members of HotSW and the Joint Committee believe they will all be long gone in 18 or 20 years and can’t be held to account. But what they have signed up to is so dramatic that failure will very soon become apparent. Brexit, surprisingly, might herald a refocussing of minds as suggested by Philip Aldrick, economics editor The Times, 20 March:
“….One theory doing the rounds is that the Treasury wants to know if its business support schemes are working. A crunch is coming. England’s 39 local enterprise partnerships, designed to boost growth, are funded largely with EU grants. For 2014 to 2020, they secured €6.51 billion of European Structural and Investment funds. Of that, €2.5 billion was allocated to “enhancing the competitiveness of small and medium enterprises”, about a tenth of which went to less developed regions.”

“After Brexit, now formally delayed until 2021 after yesterday’s transition deal, the money will no longer make the round trip via Brussels. It will come directly from Westminster, bringing with it more political accountability. If the money is not driving productivity, which it patently isn’t, the Treasury may decide the financial medicine could be administered more effectively.”

“A Chief Executive to Lead the Heart of the South West LEP Towards Prosperity for All” ***

*** Prosperity for all LEP Board Members perhaps? !!!

“The Heart of the South West (HotSW) Local Enterprise Partnership is looking for a new chief executive to start in the summer following the retirement of Chris Garcia, who has led one of England’s most successful LEPs for five years.

The role demands a high calibre candidate for this increasingly pivotal role in the HotSW economy, which covers Devon, Plymouth, Somerset and Torbay.

Chair of the Heart of the South West LEP, Steve Hindley CBE DL [Chairman if the Midas construction empire], said: “We’re a strong business-led partnership between the private sector, social enterprises, local authorities, universities and colleges throughout Devon and Somerset and the unitary areas of Plymouth and Torbay, making us one of the largest LEPs in the country, so we’re looking for strong leadership and talent.

“Across the HotSW area, there’s a mix of urban and rural economies, stunning natural capital, rich heritage and a tremendously exciting range of business opportunities.

“We’ve established an impressive track record with a £750m investment programme to support our mission to see better productivity and better jobs; and we’re poised to launch a new delivery plan for a step change in productivity.

“The role of LEPs is increasing as we become firmly aligned with the delivery of the government’s Industrial Strategy, our funding is secured for at least another two years, and we’ll now have regular meetings with the Prime Minister.

“I look forward to meeting some exceptional applicants for this exciting role as HotSW LEP enters the next phase in its journey towards prosperity for all.”

Applications are open until 16 February and a candidate briefing pack is available at: http://www.heartofswlep.co.uk/news”

http://heartofswlep.co.uk/news/chief-executive-lead-heart-south-west-lep-towards-prosperity/

What if businesses and tourism turn right at the Severn bridge when tolls are removed this year?

“The government announced last July that tolls would end on the Severn bridges by end 2018.

What happens to our Local Enterprise Partnership and Greater Exeter Growth Plans if everyone turns right at Bristol?

As a current Guardian article says:

… “The abolition of the tolls on the Severn bridges will create a “once in a lifetime” chance to build an economic region to rival the northern powerhouse and challenge the south-east of England, politicians, business leaders and academics have said.

Making the crossings between the west of England and south Wales free could lead to a “western powerhouse” stretching from Bath and Bristol to Swansea, boosting prosperity and jobs, advocates believe.

A summit at the Celtic Manor resort, on the Welsh side of the border, yesterday discussed how regions on either side of the bridges could benefit from government plans to abolish the tolls by the end of the year……..”

The concept of a “Severnside” region has been around for decades. Welsh devolution is seen as one reason why the concept lost traction but Brexit has led to a reassessment.

Dylan Jones-Evans, the assistant pro-vice chancellor at the University of South Wales, said abolishing the tolls was a once in a lifetime opportunity. “Many businesses on both sides of the bridges felt [the tolls] formed a major psychological and financial barrier. Wales was seen as being separate from the rest of the UK economy.”

But he warned: “The current transport provision for road and rail between south Wales and the south west of England is not fit for purpose. … “

https://www.theguardian.com/uk-news/2018/jan/22/calls-to-abolish-tolls-on-severn-bridges-to-build-western-powerhouse