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Greater Birmingham left trailing as Osborne bets on ‘powerhouse northern cities’ to rival London’s economic clout

Greater Birmingham left trailing as Osborne bets on ‘powerhouse northern cities’ to rival London’s economic clout

🕔23.Jun 2014

It was probably a coincidence that the Greater Birmingham and Solihull Local Enterprise Partnership’s annual conference fell a day before Chancellor George Osborne began to shed light on the Government’s latest plan to regenerate the English regions.

What Mr Osborne had to say would have been something of a disappointment, although no great surprise, to anyone with more than a passing interest in the West Midlands’s long-standing economic problems.

The Chancellor aims to create a “super city” linking up Liverpool Manchester, Leeds and Sheffield – a vast area of the North of England to be bolstered by further extensions to high speed rail and millions of pounds of direct investment to create infrastructure and jobs.

Mr Osborne told the Financial Times he wanted to join up “the great Northern cities” to achieve the kind of scale offered by London. He added: “You have to create the conditions where smart, entrepreneurial people want to work and make their lives.”

In a speech in Manchester, he is expected to say: “We need a northern powerhouse too. Not one city, but a collection of northern cities – sufficiently close to each other that combined they can take on the world. Able to provide jobs and opportunities and security to the many, many people who live here, and for whom this is all about.”

He went on to drop a hint about the “strong case” for elected metro mayors in places like Greater Manchester “to make sure they have the same powers and the same clout as the Mayor of London does in our capital”.

Well, it’s good news for the North, obviously. And possibly good news for the Tories, whose dwindling support anywhere north of Birmingham is an acute embarrassment to the party and will, if not reversed, make it impossible for David Cameron to win a majority at next year’s General Election.

Osborne’s speech may also indicate a fresh attempt by the Conservatives to return to the elected mayors issue, although probably not this side of the General Election.

But coming back to GBSLEP, when on earth did anyone in that organisation or its effective predecessor, Advantage West Midlands, hear a Chancellor of any political party stand up and declare the English Midlands the target of a transformational scheme for smart people?

Mr Osborne could have directed his largesse at the Black Country, Birmingham, Solihull, Coventry and Leicester, pledging to turn “the great Midland cities” into a hub for entrepreneurs and the businesses of tomorrow led by the dynamism of a greater Birmingham mayor, but of course he did not.

Goodness knows, the West Midlands is a region that requires a helping hand. Not that you would necessarily know that from GBSLEP’s gathering, where the emphasis was on happy talk. This is entirely understandable, for the whole point of such a conference is to send the punters away happy, if that is possible.

And to be fair, there are signs of economic improvement, albeit from a low starting point.

  • The GBSLEP area is the top region from inward investment, a 68 per cent increase last year
  • Exports were up by 18 per cent, the fastest rate of growth in the country
  • Jobs created or safeguarded up by 68 per cent.

GBSLEP chair Andy Street commented: “More businesses are born in Greater Birmingham than in any region outside of London. There are lots of reasons to be cheerful.”

However, even a consummate salesman such as Mr Street couldn’t gloss over the shadow of GBSLEP’s Key Performance Indicators which are mostly stuck in the red. Not only are targets to increase GVA and cut unemployment not being met, the rates are worsening compared to the national average.

An important target to improve the skills base by bringing the percentage of the working age population with NVQ3+ to the Core City average is also being missed. The gap has widened slightly since 2010, when GBSLP came into existence.

Mr Street managed a brave face: “At every board meeting we start by looking at how we are doing against these KPIs. The red ones are really challenging. They are all about getting up to the national average.

“That’s a tough ambition because the performance of Greater London pulls the average up. No shame that after three years they are still up. We are taking the right steps to close the gaps.”

Street and most of his fellow board members were at pains to stress the unity and purpose of GBSLEP. Describing the journey as “a positive one”, Mr Street referred to Team Greater Birmingham, adding: “The support from all politicians has been outstanding. We have created a sense of teamwork and that teamwork has momentum.”

It fell to a new board member to bring the conference thudding back to reality. Dame Julia King, Vice-Chancellor at Aston University, spoke of her shock at finding 40 people attending a board meeting and wondered how on earth decisions would ever be taken effectively.

Dame Julia clearly doesn’t rate LEPs as efficient organisations for overseeing regeneration, although she conceded that GBSLEP somehow works “when it ought not to”.

She said: “No one elected us, we don’t formally represent anyone, yet we are part of a decision making body that affects the public. You certainly wouldn’t invent this as a way to regenerate economic growth.”

Interference in GBSLEP’s affairs from Whitehall was “frankly insulting” and posed questions about Government commitment to localism.

Dame Julia’s wasn’t quite as optimistic as Mr Street’s. She noted: “We are seeing small business growth but it is slightly below the average, we are seeing businesses start up but not seeing a strong survival rate. We have some issues.

“We have a below average number of fast growing firms and a gap in terms of the competency of management in those firms.

“We need the ambition to be growing much bigger businesses than the ones we are growing at the moment.”

The next 12 months will be a make or break period for GBSLEP. The organisation is moving from a poorly funded body run chiefly through the goodwill of local business leaders, to an organisation which potentially could have upwards of £500 million in its coffers and is now much more closely aligned to political will through a supervisory board of council leaders.

It is already guaranteed about £220 million from the European Strategic Investment Fund for the period 2014 to 2020, and has submitted a bid for £508 million to the Local Growth Fund to match the five-year period of GBSLEP’s Strategic Economic Plan (SEP).

The SEP sets out what Mr Street and his colleagues insist are “game changing opportunities” and promises to create 41,000 new jobs by 2022, provide 14,000 new homes, two million square feet of commercial floor space and lever in £1 billion of private sector funding.

It is based largely around investment opportunities flowing from the arrival of HS2 in Birmingham and the subsequent development of UK Central – land around Birmingham Airport, the NEC, the HS2 interchange station and the M42 Corridor.

Steve Hollis, GBSLEP’s deputy chair, had a speech oiled with superlatives when he addressed the annual conference on the subject of the SEP.

He said: “We are in competition with 38 other LEPs so you have to put something forward that is going to be exciting, visionary capturing some real enthusiasm. Our challenge was to come up with a transformational strategy and a number of game changers.

“We are in very good shape. We really are preaching the power of one voice. That’s what gives this some real legs in the corridors of Whitehall.”

A planned Growth Hub would be a “world class support system for business, particularly those businesses starting out on their journey”, while HS2 “is the biggest thing that has happened in this part of the world for 100 years”, Mr Hollis claimed, although surely the M6 and M42 would be candidates for that particular accolade.

And in the latest iteration of a fast-changing numbers game, he predicted: “Potentially it could create 100,000 new jobs over the next 20 years. It is truly game changing.”

GBSLEP’s cultural credentials have been boosted by the arrival on the board of former BBC executive Anita Bhalla. She told the conference that Birmingham has the potential to develop as the most significant centre outside of London for creative industries, but warned that much had to be done to overcome a “fragmented” and little publicised area.

There was also more than a hint for her fellow board members about the importance of a sector that has in the past suffered in the shadow of Birmingham’s traditional heavy industry.

Reminding her audience that a quarter of the UK’s computer gaming industry is in Birmingham, Bhalla said: “Creativity is a strategic issue. We are not a bit of icing on the cake. We are all about outcomes around skills and jobs.”

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