HOTSW Growth Strategy: stymied by exodus of young from small towns

Devon: 47 towns, 2 cities (Exeter and Plymouth)
Somerset: 29 towns, no cities

http://www.ft.com
2 mins read:

“The emptying out of young people from Britain’s small towns has accelerated over the past two decades, as the gap widens between the country’s cities and university towns and everywhere else.

New research shows that, since 1981, Britain’s towns and villages have lost more than a million people aged under 25, while gaining more than 2m over-65s.

By contrast, main cities have seen net inflows of more than 300,000 under-25s and net outflows of 200,000 over-65s.

Centre for Towns, a new think-tank set up to draw attention to the plight of smaller communities, whose millions of residents are frequently ignored in policy debates, said the trend has accelerated sharply since the millenium.

In 1981, the proportion of over-65s was similar across communities of all sizes, ranging from a low of 23 over-65s for every 100 working-age residents to a high of 26.3 in villages.

By 2001, the signs of demographic sorting had begun to emerge, with an old-age ratio of 22.5 in large cities, and 29.1 in villages; in 2011, there were 35.6 over-65s for every 100 people of working age in Britain’s villages — double the figure of 19 in large cities.

The changing demographics of small towns have seen their labour markets become less dynamic, while a growing elderly population puts strains on health and social care.

The divide was evident in the voting for the 2016 EU referendum. Centre for Towns calculated what share of the vote went to Leave and Remain in different sizes and types of towns and cities, and a clear gradient runs through from the large cities, university towns and commuter towns which delivered the strongest Remain votes, to smaller towns — especially those still suffering from post-industrial decline, and stagnating coastal towns such as Blackpool.

New polling carried out by Centre for Towns also provides a quantitative measure of the quality of life being left behind. Britain’s town-dwellers feel more socially, economically and politically peripheral than those who live in cities, and are more pessimistic about whether their areas’ fortunes will be reversed soon.

Among town-dwellers, 69 per cent feel their towns are being left-behind, believing the area they live in is less central to British society than other areas. Similarly, 68 per cent believe politicians do not care about their town. In cities, the corresponding figures are much lower, at 56 and 54 per cent.

A similar gap is evident in perceptions of communities’ economic strength. Of town-dwellers, 53 per cent feel their area is less well-off than other parts of the country, compared to just 36 per cent in cities.”

DCC Corporate Infrastructure and Regulatory Services Scrutiny Committee savages HOTSW Growth Strategy

NOW THAT’S HOW YOU DO SCRUTINY!
(Thanks to Independent East Devon Alliance DCC Councillor Martin Shaw for bringing to the committee 10 of the 11 points and Budleigh resident David Daniel for his succinct 3 minute take-down of the original document)
at:
https://eastdevonwatch.org/2017/11/30/watch-eda-councillor-shaw-and-budleigh-resident-david-daniel-make-most-sense-on-lep-strategy/

Heart of the South West Joint Committee and Draft Productivity Strategy (Cabinet Minute 77/8 November 2017)

Minute 31:

“The Committee received the Joint Report of the Head of Economy, Enterprise and Skills and the Head of Organisational Development (EES/17/5) providing information on the Heart of the South West Joint Committee and the draft Productivity Strategy, which was currently being consulted on and which highlighted a number of challenges facing the Heart of the South West area.

The consultation period had been extended to 14 December 2017 and an Action Plan would be shared with the Committee at a future meeting.

RESOLVED that

the Committee note the work to develop a Joint Committee and that, to enable a bid for devolved powers and funds to be successful, revisions were suggested to be made to the Heart of the South West Productivity Strategy, taking the following comments into account, namely:-

(a) the ambition to double the size of the economy in 18 years, involving an annual growth rate of 3.94%, was unrealistic given that the regional annual rate over the last 18 years had been 1.5% and the national growth rate, which had not exceeded 3% in a single year during that period, was now forecast to average less than 1.5% per annum in the next five years;

(b) the early ambitious aim of moving from less than average to above average productivity was not credible since the Strategy lacked the wide range of specific proposals needed to raise productivity across the board and contained little detail on how gaps in higher skills level would be filled;

(c) the Strategy did not adequately address the obstacles to higher than average productivity in sectors with endemic low pay and casual working, like social care and hospitality, which were disproportionately represented in the local economy, by our older than average population, and by under-employment;

(d) the Strategy said little about rural Devon and needed to include the key recommendations of the South West Rural Productivity Commission;

(e) the Strategy did not emphasise sufficiently the shortfall in broadband provision and the radical investment needed if Devon were not to fall further behind other regions;

(f) the Strategy did not provide details of the opportunities of Brexit, which it mentioned, nor did it take account of risks such as a decline in investment due to uncertainty, issues for firms exporting to Europe if the UK was not part of a customs union, and threats to the knowledge element of our economy due to universities losing EU staff and research opportunities;

(g) the Strategy needed to show how Devon would respond to automation and Artificial Intelligence;

(h) the Strategy needed to indicate clear performance indicators through which success could be measured;

(i) the Strategy needed to align more explicitly with the Government’s new Industrial Strategy and ‘Sector deals’ which may provide funding;

(j) the Strategy needed to explain what kind of devolution would help meet aspirations and articulate clear, realistic selling points and questions of Government; and

(k) the Strategy needed to include proposals to bring forward all forms of transport, including rail, which improved accessibility to the Peninsular.”

http://democracy.devon.gov.uk/documents/g2578/Printed%20minutes%2028th-Nov-2017%2014.15%20Corporate%20Infrastructure%20and%20Regulatory%20Services%20Scrutiny%20Comm.pdf?T=1

Watch EDA councillor Shaw and Budleigh resident David Daniel make most sense on LEP “strategy”

Jump to 2 hours into the meeting to see these two local people talk total sense to a bunch of mostly Tory councillors most of whom seem to understand beggar-all about why they are there!

Mr Daniel – a former government strategic analyst is at around 15 minutes into the meeting and speaks persuasively about why the Heart of the South West LEP strategy is totally unachievable. Independent East Devon Alliance DCC Councillor Martin Shaw (whose forensic report was totally accepted with one additional point added) is at around 2 hours into the meeting speaking on why the report before the councillors is style over substance and dangerous to go along with in its current form.

In Owl’s opinion, they run rings around the rest of the committee!

Although one councillor did make a point (Owl is paraphrasing here!} that this is an 18 year “strategy” and could well be redundant in a few years – when some other crazy idea might replace it!

https://devoncc.public-i.tv/core/portal/webcast_interactive/303464

More bad news for ineffective Local Enterprise Partnerships!

The Industrial Strategy is also offering what it calls “Sector Deals”. Partnerships between Government and groups of industries and businesses focussed on specific industrial sectors such as Nuclear Power.

To unlock Government money here are the sort of things Government will require (page 210):

“Deal proposals should have a demonstrable and analytically rigorous impact on the productivity and earning power of the sector.

We expect credible analysis of the impact of any proposals to accompany each specific proposal showing expected increase in GVA, employment or increases in skilled workers, exports or specific investments (including foreign direct investment) resulting from the deal. Tangible commitments are likely to be the most convincing.

Sector Deal proposals need to be realistic and achievable. We are looking for evidence that industry commitments can be delivered and that clear governance arrangements will be set up. Any arrangements should be proportionate to the scale of ambition of the deal itself and designed to ensure commitments will endure. To be credible, deal proposals should include specific delivery plans covering each component of the proposal.”

Click to access industrial-strategy-white-paper.pdf

Demonstrable and analytically rigorous impact on productivity; credible analysis; tangible commitments; realistic and achievable proposals; clear governance: specific delivery plans …

HotSW, our LEP, is going to have to up its game or we shall lose out on each and every one of these.

Government industrial strategy: Local Enterprise Partnerships have to pull up their socks

Unfortunately, we have heard this all before – words do not seem to get translated into actions:

Page 223:

“… We remain firmly committed to Local Enterprise Partnerships. From next year, the Prime Minister will chair a biannual ‘Council of Local Enterprise Partnership Chairs’. This will provide an opportunity for Local Enterprise Partnership leaders to inform national policy decisions.

While Local Enterprise Partnerships across the country have played an important role in supporting local growth, feedback suggests that their performance has varied.

We are reviewing the roles and responsibilities of Local Enterprise Partnerships and will bring forward reforms to leadership, governance, accountability, financial reporting and geographical boundaries. We will work with Local Enterprise Partnerships to set out a more clearly defined set of activities and objectives in early 2018. These will be driven by influential local leaders, acting as figureheads for their area’s economic success, and a clear strategy for local and national partnership.

We will agree and implement appropriate structures for holding Local Enterprise Partnerships to account. We will work with Local Enterprise Partnerships to review overlapping geographies and ensure people are clear as to who is responsible for driving growth in their area. We recognise that in order to deliver their role effectively, Local Enterprise Partnerships need financial support. We will make additional financial resources available to Local Enterprise Partnerships that demonstrate ambitious levels of reform following the review. …”

Click to access industrial-strategy-white-paper.pdf

“Devon and Cornwall shunted onto the slow track?”

Owl says: But, of course, there WILL be a railway to Hinkley C!

Transport secretary Chris Grayling ready to break up railways

Transport secretary Chris Grayling is this week set to unveil a blueprint for overhauling the railways — including splitting two of the biggest routes.

It is part of a fightback against Labour’s popular policy of renationalisation.

His strategy is expected to advocate splitting the Great Western franchise, which runs from London to south Wales and the southwest.

The route could be split into an inter-city franchise and a separate Devon and Cornwall business.

The mammoth Thameslink, Southern and Great Northern franchise is also likely to be split, with the strike-hit Southern route between London and the south coast set to be carved out.

Grayling is also keen to reform state-backed Network Rail, which owns and maintains the 20,000 miles of track, 40,000 bridges and most of the big stations. He has advocated closer union between Network Rail and the private companies that operate routes to crack the problems of divided loyalties and poor co-ordination.

The strategy comes ahead of a huge increase in some rail fares from January, with the rise tied to July’s 3.6% retail prices index inflation rate.”

https://www.thetimes.co.uk/article/transport-secretary-chris-grayling-ready-to-break-up-railways-f9c8h38mk

At least one person hasn’t had a stagnant wage!

Paul Diviani has helped at least one “hard working person” to beat the trend – Chris Garcia, CEO of our Local Enterprise Partnership who got a whacking 26% increase in his salary last year as reportd here:

https://eastdevonwatch.org/2017/01/17/17562/

and here:

http://www.bbc.co.uk/news/uk-england-somerset-38648435

and here:

http://www.yeovilexpress.co.uk/news/15035937.Somerset_County_Council_leader_hits_out_at_proposed_pay_rise_for_quango_chief/

Nice work if you can get it (unless of course you happen to have a university vice-chancellorship in your back pocket!).

“Growth” – shrinking fast!

Never mind OUR Local Enterprise Partnership appears to think that Devon and Cornwall (in spite of getting no budget goodies) will RACE ahead and do FAR better than any other area, not only in England, not only in the UK, not only in Europe but in the WHOLE world!

What busy bees we are in the south-west – or maybe just at Hinkley C!

“… Paul Johnson, director of the Institute for Fiscal Studies, added that the economic forecasts published in the Budget made for “pretty grim reading”.

He highlighted that since 2014 growth in earnings has been “choked off”.
“We are in danger of losing not just one but getting on for two decades of earnings growth,” he said.

“Let’s hope this forecast turns out to be too pessimistic.”

https://www.electoral-reform.org.uk/latest-news-and-research/publications/the-high-cost-of-small-change/

South West and our LEP snubbed in budget

Lots of “talking up” by LEP members tonight – but nothing to talk up except competitive access to general “funds” that rarely seem to materialise.

Not the brightest buttons in the budget box then …!

“The Westcountry has been snubbed in major funding pledges for the UK regions.

In his budget statement yesterday, Chancellor Philip Hammond gave special mention to the Northern Power House, Midlands Engine, and high speed rail HS2 with half of a £1.7bn transforming cities pots pledged to six elected metro mayor regions.

Tim Jones, chairman of the Devon and Cornwall Business Council, said: “We have been snubbed and I’m afraid to say it, but it’s the Cinderella South West yet again.” …

… Chris Garcia, Chief Executive of the HoSW LEP said that region is primed with potential to help create the “global Britain” that the Chancellor referred to in his speech.

“However, we were disappointed not to be name checked in the speech or the budget, and that the focus is very much on specific cities with particular emphasis on those that have opted for an elected Mayor.

“It’s our aim, along with our partners in business, the local authorities and the other south west LEPs, to demonstrate the immense contribution that can be delivered from our potentially thriving region: The Great South West – which can rival the economies of the Northern Powerhouse and Midlands Engine. We need to drive this message home to the front benches of Westminster and show the country what we’re worth.”

http://www.devonlive.com/news/business/how-westcountry-been-left-hanging-818747

Hinkley Point – the case against grows stronger – part 2

MOwl’s view: meanwhile, all those board members (and former board members) of our LEP with nuclear interests are very happy – those providing the roads to the site, those building houses near the site, those recruiting staff for the site, those building new facilities for site workers and extending their colleges and universities on the back of nuclear training courses they will run. It really doesn’t matter if it is a Somerset white elephant.

AND they are using OUR money for this.

”The government has saddled families with inflated household bills for decades because of the poor deal it negotiated over the Hinkley Point nuclear plant in Somerset, MPs have said.

The Public Accounts Committee (PAC) criticised a contract awarded to EDF to build the first new nuclear station in Britain since 1995 as too expensive, with the burden falling most heavily on poorer households.

Meg Hillier, the committee’s chairwoman, accused the government of “grave strategic errors” in crafting the deal, which will leave consumers paying £30 billion in subsidies over 35 years — five times more than expected.

“Bill-payers have been dealt a bad hand by the government in its approach to this project,” she said. “Its blinkered determination to agree the Hinkley deal, regardless of changing circumstances, means that for years to come energy consumers will face costs running to many times the original estimate.”

The government signed a preliminary deal in 2013 with EDF, the French state-owned nuclear generator, to pay a fixed price of £92.50 per megawatt hour for the electricity produced by the Hinkley station for 35 years, indexed to inflation. The costs are to be met via a levy on consumer bills once the station enters service, expected to add £10 to £15 a year to the average household bill.

But when wholesale energy prices plunged sharply in 2014, amid growing doubts over the French reactor technology earmarked for use at Hinkley, following delays and cost overruns at other plants, the government failed to revisit the terms.

The PAC accused ministers of pressing ahead and locking consumers into an expensive deal.

“The economics of nuclear power in the UK have deteriorated since the government last formally considered its strategic case for nuclear in 2008,” the report said. “Estimated construction costs have increased while alternative low-carbon technologies have become cheaper. At the same time, fossil-fuel price projections have fallen.”

A spokesperson for the Department for Business, Energy and Industrial Strategy said that it was a “competitive deal”.

EDF Energy said: “The cost of Hinkley Point C for customers has not changed and they will pay nothing for its reliable, low carbon electricity until the station is completed . . . Construction is fully under way and is already delivering a huge benefit to British jobs, skills and industrial strategy.”

Hannah Martin, head of energy at Greenpeace UK, said the PAC report showed that the government should revisit the project because it “makes absolutely no financial sense”.

Source: The Times (pay wall)

Hinkley Point – the case against grows stronger – part 1

See part 2 (above) for Owl’s cynical view. Things MUST be bad if The Times and The Guardian agree!

MPs have accused the government of failing to protect consumers over the price it has promised to pay for power from the Hinkley Point C nuclear plant.

The Commons public accounts committee said the subsidy contract for Hinkley Point C, agreed in 2016 after years of delays, would hit poorest households hardest.

The power station is expected to cost billpayers £30bn over the lengthy of the 35-year contract, adding £10-£15 to the average household energy bill.

Hinkley nuclear site radioactive mud to be dumped near Cardiff
But an assessment by the committee concluded that no one in Whitehall was championing consumers’ interests during negotiations with French company EDF Energy.

The final bill for consumers was exacerbated by government not renegotiating the guaranteed power price for fear that EDF and its Chinese partner CGN would walk away from the project, which the MPs said was a questionable assumption.

Officials agreed a price of £92.50 per megawatt hour in 2013 but fossil fuel price projections fell between then and the contract being signed in 2016, pushing the cost to consumers up fivefold from £6bn to £30bn.

At the time the Department of Energy and Climate Change – now the Department for Business, Energy and Industrial Strategy – did not consider a ceiling on the guaranteed price, the MPs were told.

Meg Hillier, chair of the group of MPs, said: “Billpayers have been dealt a bad hand by the government in its approach to this project.”

The criticism from the committee follows a damning report by the UK’s spending watchdog, the NAO, which found the contract for Hinkley had locked consumers into a “risky and expensive project”.

The NAO attacked the government for failing to explore alternative financing models, such as taking stake in the project, a criticism that the MPs echoed.

The public accounts committee said it was also disappointed that the government appeared to have no plan in place to maximise the wider benefits of the project, beyond the clean power it will provide.

“The department does not know to what extent UK workers and companies will benefit from Hinkley Point C and the wider follow-on new nuclear programme, and has no plan in place to show how it will maximise the wider benefits of the project,” the report said.

A BEIS spokeswoman said: “The government negotiated a competitive deal for the construction of the first new nuclear power station in a generation as part of our energy mix, which ensures consumers won’t pay a penny for any construction overruns and until the station generates electricity in 2025.”

The MPs urged the government to publish a plan B for keeping the lights on, in the event the power station does not come online in 2025 as planned. EDF has already warned that the plant could be completed 15 months late.

French, Japanese and Chinese developers hope to secure financial incentives from the UK to build other new nuclear power plants, but the MPs said the government should re-evaluate the strategic case before going ahead with more projects.

“The government made some grave strategic errors here and must now explain what it will do to ensure these are not repeated,” said Hillier of the Hinkley contract.

EDF defended the deal and said Hinkley would help cut costs for other future nuclear power stations, such as the one it hopes to build at Sizewell in Suffolk.

A spokesman said: “The agreed price is lower than 80% of other low carbon capacity contracted so far and the project has restarted UK nuclear construction after a quarter century. Construction is fully under way and is already delivering a huge benefit to British jobs, skills and industrial strategy.”

https://www.theguardian.com/uk-news/2017/nov/22/hinkley-point-c-subsidy-consumers-mps-contract

LEP take note: productivity is going to be measured very differently from now on

Our LEP has an open meeting on its “productivity strategy” tomorrow at 11 am at

Regency Suite, Devon Hotel
Exeter EX2 8XU

https://eastdevonwatch.org/2017/11/18/lep-needs-help-on-productivity-strategy-public-meeting-21-november-11am-exeter/

However, it may find itself in some difficulty as the way productivity is measured will change drastically next month when, instead of measuring productivity only in large firms, for the first time 600,000 businesses employing less than 100 people will be included. Our LEP has not based its strategy on these new measurements.

The Office for National Statistics is overhauling the way in which it measures the UK economy by including vast amounts of VAT data from small firms for the first time.

Previously, GDP estimates have been generated from a survey of the turnover at 45,000 companies – including all of the country’s largest businesses.

From December, information from a third of the UK’s 1.8m VAT returns will also be added to turnover data and included in official GDP figures.

This will dramatically change how the country’s economic growth is measured, providing far more insight into specific industries and locations. The greater proportion of VAT returns will also encompass more small companies, which make up 98pc of UK businesses.

For instance, in past GDP estimates, sectors such as restaurants and pubs were reported on, but only at a high level of “food and beverage service activities” based on 172 monthly surveys and 28,000 tax returns.

Having access to much more data will allow for a detailed view on the performance of pubs, takeaways and restaurants in different parts of the country, the ONS said.

For this first new estimate, only VAT returns from small and medium firms with headcounts of 100 or fewer will be included. Surveys of large firms will continue to be part of the ONS’s data gathering and reporting.

While smaller firms account for most of UK businesses, they only constitute 20pc of the economy. That means the data gathered and analysed by the ONS will be more detailed, but the impact on the GDP headline figure might not be altered by its inclusion, as larger company responses have greater sway.

Economist John Hawksworth of PwC said that it would be good if the ONS published “GDP estimates with and without use of the new VAT data”, so users could clearly see the difference made by its inclusion.

“It should also allow a more timely and detailed breakdown of economic activity by industry sub-sector and region to be produced than is possible at present,” Mr Hawksworth said.

Nick Vaughan, chief economist for the ONS, said the process of incorporating the additional data would be gradual.

“We are phasing these data in gradually and will ramp up the number of VAT returns we use over the coming years,” he said. He added that the new approach should lessen the administrative burden on small firms of completing surveys and help cut costs at the ONS.”

http://www.telegraph.co.uk/business/2017/11/20/uk-use-small-firms-vat-returns-calculate-economic-growth/

LEP needs help on productivity strategy – public meeting 21 November, 11am, Exeter

Tue 21 November 2017
11:00 – 12:30

Regency Suite, Devon Hotel
Exeter EX2 8XU

“You are invited to our joint consultation event to seek your views on the Heart of the South West Partnership Productivity Strategy.

Our morning event will provide you with an understanding of the main drivers and objectives of the Productivity Strategy and an opportunity to comment and give feedback. We are very interested in the views of our stakeholders and the business community.

Our partnership consists of 2 County Councils, 2 Unitary Authorities, 13 District Councils, 2 National Parks, 3 Clinical Commissioning Groups and 1 Local Enterprise Partnership covering Devon and Somerset.

We have joined together to produce the HotSW Partnership Productivity Strategy which outlines our vision for driving productivity and prosperity for all in the Heart of the South West.

We are looking forward to your views and feedback on the current draft strategy.”

https://www.eventbrite.co.uk/e/heart-of-the-south-west-draft-productivity-strategy-tickets-39834875184

“ Abolish Devon district and borough councils to create super authority’ “

BUT, BUT, BUT – it’s already happening – EXCEPT we are keeping district councillors on the payroll!

Why does Owl say this?

Currently we have (at least) these new bureaucratic (and non-accountable) quangos in our area:

The Heart of the South West Local Enterprise Council
The “Greater Sourh West” group of LEPs
The “Joint Committee” of councils, NHS quangos and others in Devon and Somerset
“Greater Exeter”

and others working in the shadows.

In the middle of all this East Devon District Council is paying millions to build a new HQ and has not reduced its staff numbers throughout the period of austerity.

Questions … questions … but none of these groups are answerable to us and all choose how much (or more likely, how little) scrutiny they wish to have.

“The Government could deliver a £31 billion boost to the economy over five years by abolishing 201 district and borough councils in England and handing over their powers to county halls, a new report has said.

The report from think tank ResPublica calls for the abolition of the historic two-tier system of local government, which sees most rural areas of England covered by both a county council and a smaller district or borough authority with sometimes overlapping responsibilities.

ResPublica director Phillip Blond said the system is causing “needless confusion”, as businesses and developers find their plans frustrated by “parochial” decision-making on strategic issues.

Ditching the two-tier system and following the example of unitary councils adopted by most cities would help iron out wide variations in productivity which see workers in Cornwall take five days to produce the same value that can be delivered in three days in Surrey, he said.

With uncertain economic conditions after Brexit, the report said it was “vital” for counties to be prepared to weather the possible storm, particularly as those which voted most strongly to leave the EU are thought to be most vulnerable to any decline in trade resulting from it.

“The needless confusion that frustrates the ambitions of business and government alike in our county areas must end now,” Mr Blond said.

“With Brexit on the horizon and our city-regions already benefiting from devolution, we can’t afford the waste and complication that the current system creates.

“Single councils at the county scale are the future and we call on the Government to move rapidly to encourage them.”

Baroness Jane Scott, the leader of Wiltshire Council, said the move to a unitary authority in the county in 2009 had been a “great success” and warned that counties which fail to follow its lead face “the real risk of … being left behind”.

“Streamlining counties will contribute billions to the national economy and will be good for business,” said Lady Scott, the County Councils Network’s spokeswoman on reform.

“But the real winners are local residents who will benefit from improved public services, less bureaucracy, and access to more housing and facilities that meet local need and demand.”

The report will be launched at the County Council Network’s annual conference on November 20.

A spokesman for the Department for Communities and Local Government said: “Moving to a single tier large unitary authority can often give residents a better deal for their local taxes, improved local services, less bureaucracy and stronger and more accountable local leadership.

“However, we are clear that any such move must be both locally led and have support from the community.”

http://www.devonlive.com/news/devon-news/abolish-devon-district-borough-councils-790015

Our local LEPs: do they know something nobody else in western Europe knows?

The plan to double our regional economy in 18 years is indeed very ambitious.

Not a single OECD country out of 35 is predicted, by the OECD, to double its economy in 20 years, let alone 18 years, so Devon and Somerset will be doing remarkably well!

The UK is not predicted to double its economy in FORTY years, nor is the United States or the Eurozone.

The basis for Great South West predicting we will comfortably outperform the rest of the Western world appears to be the cleverness of the people at Great South West…

Weren’t they the ones who can’t even spell?

More pain for our LEP’s “productivity strategy”

Office for Budget Responsibility downgrades its productivity growth targets.

Will our councillors on the “Joint Committee” with our LEP show similar responsibility?

“… The Office for National Statistics reported last week that the UK’s level of productivity fell 0.3 per cent in the three months to June, meaning that the national output per hour worked is below where it was in the final quarter of 2007, almost a decade ago.

The OBR said that the recent productivity fall was “almost certainly” exacerbated by the impact of the 2016 Brexit vote, but it added that the weakness in productivity since the financial crisis was a global phenomenon too.

The OBR had projected in March that UK productivity would grow by 1.6 per cent in 2017, by1.5 per cent in 2018, by 1.7 per cent in 2019, and 1.8 per cent in 2020.

“It no longer seems central to assume that productivity growth will recover to the 1.8 per cent we assumed in March 2017 within five years,” the OBR said on Tuesday.

“We expect to lower our forecast for cumulative potential productivity growth significantly over the next five years, without going so far as to assume that there is no recovery at all from the very weak performance of recent years.”

http://www.independent.co.uk/news/business/news/uk-productivity-growth-latest-treasury-watchdog-forecaster-november-budget-public-finances-philip-a7992326.html

Can productivity and growth be increased outside the South East except for Hinkley C?

Our Local Enterprise Partnership’s draft economic strategy is making enormous claims about how much it will increase productivity in Devon and Somerset – its predictions outstripping those of historic precedent and some of the most productive areas of the UK. This in spite of our ageing population and the effects of austerity on skills and training (our LEP’s investment in this sector appears to be limited to training only for Hinkley C nuclear plant).

Our councillors might well examine our LEPs claims with some disquiet:

“… Cities such as Stoke, Blackburn, Mansfield and Doncaster had productivity 25% below the national average, the Centre for Cities said. Raising all parts of the UK to the national productivity average would increase the size of the economy by £203bn – equivalent to Birmingham’s output four times over.

The report showed that cities outside the greater south-east had weaker productivity because they were failing to secure the higher-skilled work of productive sectors and firms.

“Firms choose to locate their high-skilled operations in cities which can offer them access to a high-skilled workforce and other relevant businesses, and will base lower value components in places where land and labour is cheaper,” the thinktank said.

“Barclays bases its high-value banking activities in London and its low-skilled call centre in Sunderland. Similarly, clothing company Asos has a large distribution centre with low-skilled jobs in Barnsley, but its headquarters is located [in London].”

The report said another factor explaining the regional divide was that highly productive sectors and firms made up a larger shares of jobs in cities in the greater south-east than in urban areas in other regions.

On average, cities in the region had a larger proportion of workers in sectors and firms that contributed most to national productivity – in 2015, the information and communications sector made up 7% of jobs in cities in the greater south-east, compared with just 3% in other cities. The financial services industry accounted for 6% of jobs in cities in the region compared with 4% of jobs in cities elsewhere in the country. …”

https://www.theguardian.com/business/2017/nov/16/poor-productivity-outside-south-east-hurting-uk-economy

EDA Councillor Shaw: “Pursuit of elusive ‘devolution’ deal is leading to a new layer of bureaucracy: an unelected, one-party ‘Heart of the South West’ combined authority”

This week’s DCC Cabinet meeting approved a Conservative proposal to set up a formal Joint Committee with Somerset (report at item 7 of the agenda). Objections were raised to aspects of the proposal by the leaders of the Liberal Democrat and Labour groups, and I spoke on behalf of the Non-Aligned Group (which comprises the three Independents and one Green councillor). You can watch the debate, and read my speech below:

“I think we know what is going with devolution. We have a government which is ripping the heart out of local government spending, pushing services to the border of viability; this is causing enormous difficulties for this council but also driving down local incomes and so weakening our regional economy. But at the same time it is holding out the carrot of giving us limited extra powers and returning a modest bit of the lost funding, if we jump through its ‘devolution’ hoops. The government barely seems to know what it’s doing over ‘devolution’ and the hoops keep changing, but we still have to guess what they are and do our best to jump.

And so we end up with the papers in front of us today. We are asked to endorse a ‘vision’ of higher productivity and economic growth and create an extra layer of bureaucracy to support it. The problem is that the vision bears little relation to reality. The ambition is to double the regional economy in 18 years, i.e. to increase its size by 100% – this requires a compound growth rate of 3.94%. In the real world, the actual growth rate in the SW over the last 18 years has been 30% and the annual rate 1.47%. Nationally, the UK economy has never grown by more than 3% p.a. in any of the last 18 years, and is currently veering downwards below 1.5%.

So we are asked to believe that we can increase local productivity growth from below the national average to well above it, and thereby buck not only regional but also national growth trends. How are we going to that? By waving the wand of the Hinkley nuclear white elephant and hoping that it somehow spreads some stardust over Devon? I can tell you that so far the LEP has produced almost nothing which offers help to the economy in the rural, small-town, coastal Devon which most of us represent.

Let’s take a reality check – if I come to the budget meeting and tell you, ‘the economy will grow by 4%, business rate receipts will shoot up, so spend, spend, spend’, you are going to look on me as a madman, and rightly so. So why should Devon County Council buy this phoney prospectus? And why should we embark on radical constitutional change to support it?

I know this is only a proposal for a Joint Committee, with limited financial implications. But it is clearly presented as enabling us to ‘move relatively quickly to establish a Combined Authority’ if that is deemed necessary. We already have 3 tiers of local government. This is the beginning of creating a fourth tier, without a mandate, without elections, and without balanced political representation.

95% of the people of Devon don’t even know they’re living in something called the ‘Heart of the South West’. It says everything about the lack of democracy in this so-called devolution that we are using this PR-speak rather than the county names which people understand. I know the Government prefers cross-boundary devolution projects, but Cornwall got a stand-alone deal, and we are much bigger in both population and area.

Apart from Hinkley there is no strong reason for us to tie ourselves to Somerset rather than Cornwall or Dorset. Our local government is being distorted to support an anachronistic nuclear project – for the benefit of companies owned by the French and Chinese states – instead of developing renewable energy for which we have a good basis in the SW.

I have this Cabinet down as a group of a level-headed people. But here we have fantasy economics, making claims which are about as credible as the figures on Boris’s battlebus, and constitutional change which means that Devon people and their councillors are asked to start handing over democratic control to a one-party quango in conjunction with unelected business people.

Since the Government is always changing its mind about devolution, there is no reason why we shouldn’t change our minds too. I ask you to

go back to the Government with a realistic agenda for Devon, that addresses the needs of all areas of the county and all sectors of our economy and society
back off from this unnecessary proposal for a joint committee.

Pursuit of elusive ‘devolution’ deal is leading to a new layer of bureaucracy: an unelected, one-party ‘Heart of the South West’ combined authority

Local campaigner’s brilliant analysis of “development” in Devon

Georgina Allen is a local campaigner based in Totnes – suffering similar problems to East Devon. This has been published by the Campaign for Rural England (CPRE). For further information, see the South Devon Watch Facebook page

“The papers at the moment are full of grim warnings about the Green Belt. It is anticipated that seventy percent of new builds will be built within the Green Belt, very few of which are going to be affordable, none of which, I suspect are going to be well built or add anything to the landscape or to the lives of people who live there.

Our countryside is under threat is the general theme, but it is more than under threat, it is under attack. Already thousands of acres have been swallowed up by new mass developments. Little towns are consumed under the weight of great new estates, so often built without thought or reason other than to make money for distant shareholders.

This government has removed, as it loves to do, much of the restraint and red tape around the building industry. A few well placed lobbyists, the understanding that the ‘conservative’ part of the Conservative Party was on its way out and the housing plan was hatched. It’s all been very cleverly done.

The housing crisis was basically used as a smokescreen to hide the fact that the building industry was going to be used to prop up the economy. It’s a short term solution of course, not much of a solution at all really. It’s been used in so many other places and at the end fails, not until a lot of land has been ruined of course, but at least a few people make a lot of money.

We don’t have a shortage of homes, of course. What we have is a shortage of houses that people can actually buy. I was 35 when I bought my first house. The mortgage was three times that of my teacher’s salary. It was a stretch, but I coped and then, of course, house prices soared; my little house became a valuable asset and when I sold it, the price was above the reach of a similar teacher in my area.

This is the problem.

If the government actually wanted to solve the housing crisis, they would put money into social housing, control land value tax and limit the amount of housing that investors from overseas can buy. But of course they don’t. Osborne was caught on tape saying that he had no interest in social housing, – it only bred Labour supporters. At least that was honest. What isn’t honest is the way they’ve gone about building the myth of housing need to cover up the fact that they are lobbing enormous amounts of our money to the building industry.

I went to look at Canary Wharf recently. It’s still an impressive sight, all jostling, shiny towers, cranes everywhere, but a little investigation revealed that many of the new skyscrapers, the residential ones at least, are left empty. Investors come in right at the beginning, when the ink on the architectural drawings is still wet and buy the whole build, neglecting often to rent the new flats out – and why should they? If they are allowed to use our buildings as gold bricks, then it seems reasonable that they should keep the value of their investment high.

It makes sense to ensure that demand continues to outstrip supply and that the number of houses available to the public is limited. Thousands of new-builds are breaking the skyline in East London and yet this huge amount of building is yet to bring prices down. People move out of the centre because they can’t afford to live there and migrate to the outskirts, the outskirts get more expensive, so they move further out, dislodging the inhabitants there, who are moved even further out and so on and so on, the ripples continuing across the country. Our major cities are hollowed out and people live in areas they don’t necessarily want to be in, finding themselves dependent on their cars and transport to get them back to the place where they have a job.

By the time the ripples get to Devon, they’ve changed slightly.

These ripples are the people who have decided they no longer need to commute to the city. They discover they can buy two houses in Devon for the price of their one in the South East and realise that they can fund their retirement/break through a buy-to-let. This has been the pattern of movement around us in South Devon recently.

The new-builds, which were of course spun to seem as if they would solve our local housing issues, have often gone to people moving into the area. These builds come with all sorts of assurances as to improvements in infrastructure – anything over 14 houses is supposed to trigger money for healthcare, transport, leisure, – all sorts of things are promised. Local councillors talk grandly of new parks, new hospitals, but of course that doesn’t feed into the ultimate aim of all this building, which is to make money, so the government has cleverly inserted all sorts of get-out-of-jail free cards, which the developers are only too happy to take on.

Viability studies are the worst of these.

S106 monies are promised before the build at planning stage. The local council pauses, – they know that this new build on the edge of AONB will severely impact local roads, local services, destroy a farmer’s land, restrict access to a town, but they might well run the risk of being sued if they say no and at least afterwards they can point to all the lovely benefits – all that money coming in to improve the swimming pool, health care etc.

Planning permission is granted, work starts, ancient hedges are ripped up, protected trees are undermined, the wildlife disappears. Then a viability study is done. Ah, it appears that we won’t make enough profit if we build more than 10% of these houses as affordable, so here are our new plans. Also, sorry, but we have no money for S106s, as it proved a little more expensive than we realised to flatten this hill, so that money has gone too.

The council, hamstrung by the more than 40% overall cut to its budget and short of legal expertise and planners, has to agree. For example, we’re getting 1,200 houses around our little town of 8,000 and are yet to see the great improvements, any improvements in fact to our town’s infrastructure. There’s a need for housing we keep getting told. There’s a need for actual affordable housing and improvements to roads, we reply and are greeted by silence.

But the worst spin of all is the calculation of need. We need houses and to deny this is selfish and this is said across the political spectrum. So how is local need calculated?

Here in Devon, during devolution at least; local need was worked out by a group called the Local Enterprise Partnership, the LEP. These groups have evolved out of the old rural business development model and are in place across the country. Their primary role is to support business and investment in their region. and they are paid vast sums of money by the government to invest locally. So far, so good.

Just a quick look at their board. Our one at least seems to be made up almost entirely of property developers, arms manufacturers and the CEOs of major construction companies; almost all of the construction companies at work in the South West seem to be represented. Their conflict of interest declarations cover many pages. So these are the people who came up with the figures of housing need. The fact that they could benefit personally from having high figures here, does not seem to have been challenged in any meaningful way.

How did they come by the figures? They do not need to say, they are not an accountable organisation and the calculations behind these figures are not accessible to the general populace. There are three or so councillors on the board [our own Paul Diviani is one and he’s responsible for housing!]; they represent the democratic will of the people, the rest of their work is none of your business. The LEPs are not democratically elected, their meetings are held in secret, their minutes are concealed, their work is surrounded in mystery and yet they spend our money. They are funded with public money.

The audit office has criticised them, our councillors have criticised them, everyone does, but they are the creation of government and can take the criticism. The people on the board benefit directly from much of the building they do with the public purse. Their companies build the roads that lead to the new developments, their companies finance the new developments, their companies profit from the new business parks set up around the new developments. The conflicts of interest are so huge they seem to be forgotten about.

Newton Abbot is a case in point. Despite the fact that the population of Newton Abbot has hardly grown at all in the last five years, it was calculated by the LEP that the town housing stock would need to double in the next ten years.

I asked the head of Teignbridge planning – Why? The answer – Housing need. How was this calculated? Ah well, its a very complex process, which I personally do not fully understand. Ok, can you point me in the direction of someone who can explain? No. And that’s the typical response you get for any of this type of questioning.

The LEP was given a multi-million growth fund payment from the government. It’s widely understood by local councillors here that the 40% cut to council budgets has reappeared as payments to the LEP. Our council’s money has in part gone into financing a group we have no say over. £46 million of the growth fund money is going into the Newton Abbot expansion, despite the rejection of this plan by local residents. The money is going into widening the roads and building further access. Who is building the roads? Galliford Try. The CEO of Galliford Try is on the board of the LEP. Who made the decision to spend this money in Newton Abbot? The LEP. Who gave planning permission for this huge expansion into the green belt around Newton Abbot? The leader of the council led the decision. The leader of the council is on the board of the LEP.

I am not of course, saying that this is corrupt. It is not illegal, – it is happening the way it was intended by central government. These are the sweeteners to keep the building going. The government can say they’ve built new houses, – they point to these spurious housing need figures. The building industry is delighted of course, – they can build cut-price housing in the most desirable areas for the greatest returns. Local councils have been so starved of cash that the promise of new homes bonuses keep them pliable and if they complain, if doesn’t matter, they have no money to mount any type of challenge to development anyway.

The building trade and certain powerful councillors have formed alliances through the LEP, where they all profit through the public purse and can talk happily of growth and building. The only people left out of this equation are the people who actually need houses, local people, who are completely sidelined and ignored. Their wishes and needs are irrelevant.

The biggest loser though, of course, is our countryside, our most valuable resource. In survey after survey, the British people cite the NHS and the countryside as the most precious and valuable assets we have. Our countryside is invaluable really and to see it treated the way it is at the moment, for the profit of shareholders and government is sickening.”

Source: CPRE magazine

“Councils embracing commercialisation, says survey”

Do you agree that your council tax should fund EDDC as a “commercial enterprise”?

Bear in mind as you think about this and read below, its HQ move has gone up from “cost neutral” to the most recent estimate of around £10 million.

And ask yourself: how many of our councillors (town, district and county) would you trust to run your local sweet shop? And is this all academic anyway when increasingly the purse strings are being controlled by our Local Enterprise Partnership?

“Commercialisation has become the most talked about topic in councils this year, with some seeing turnover equivalent to a FTSE 250 company, according to research gathered by Zurich Municipal.

The insurer conducted in-depth interviews with 22 council chiefs across England and Scotland gathering findings into the Why are we here? The 2017 Senior Managers’ Risk Report (link below).

This revealed that many councils are embracing the opportunity to become commercial entities with one council chief interviewed by Zurich admitted to turnover of £1.5bn.

“Commercial income generating projects are the new norm for local government, with some competing against one another to buy and build hotels, harbours, piers, cinemas, university campuses, and science and research parks,” the report – released at the Solace Summit in Manchester yesterday – stated.

Many see the potential for commercially generated revenue to be re-invested in local communities, however, some spoke of the need not to stray to much into private sector disciplines, while others said it should not be pursued at any cost.

However, austerity is still seen as an ongoing challenge, with some councils saying that services cannot be cut any further.

Funding issues are also harming relations with central government, the research revealed.

One council chief executive said: “We need a frank discussion with government. We can’t carry on doing everything we do.”

Rod Penman, head of public services at Zurich Municipal said: “Councils are facing challenges from all sides, and many are employing commercial ventures to mitigate some of the lasting effects of austerity.

“This approach is not without its challenges, however. There is the growing potential for moral and commercial dilemmas at almost every turn, and it is clear that council chiefs are concerned about the long-term relationship between national and local government.”

Another theme to emerge from the study is the perception of councils following the Grenfell fire.

Council chiefs said they felt the tragedy marked a watershed in how local government’s purpose and remit is viewed.

One commented: “The Grenfell Tower disaster means we will take more consideration of community discussions.”

Penman added that councils needed to “improve the narrative” about the choices they take, especially in a more commercial environment.

“Framing decisions in a purely commercial light simply isn’t an option when the social value of public bodies and services has to be factored in,” he said.”

The full report is here:
http://newsandviews.zurich.co.uk/expert-lab/balancing-priorities-are-councils-facing-an-identity-crisis/