Productivity Plan for the Heart of the South West Thursday 15 December 2016 Alastair Higton, Somerset County Council ARHigton@somerset.gov.uk

Where are we now Productivity Plan Since last time New Government, new approaches Less interest in devolution? Same interest in Mayors! Industrial Strategy Brexit = the focus is elsewhere We’re ready to negotiate: that’s the next step So in the meantime…. Productivity Plan Our ambition for devolution doesn’t stop…

“the amount of goods and services that a person produces per hour” What is productivity? “the amount of goods and services that a person produces per hour” …the more that is produced, the higher the ‘productivity’. Why does it matter? Productivity growth does things that jobs growth can’t: Higher wages; More full time jobs instead of part-time, low paid ones; A more vibrant economy; Better living standards; and Lower demand for our hard-pressed public services. Growth by creating more jobs is harder now…

Employment Rate, 20 to 64 year olds Close to full employment? Employment Rate, 20 to 64 year olds

GVA per Full Time Employee, 2015 (est.) Productivity varies across HotSW GVA per Full Time Employee, 2015 (est.)

We’re behind… HotSW and UK UK and G7

What makes productivity go up? Skills Innovation Enterprise Investment in physical capital Competition

We want everybody to support and ‘own’ the Plan Creating the Productivity Plan Timetable – ambitious Green Paper in January White paper consulted on either before or after County elections Draft and final document follow – sign-off early Autumn Research and advice from universities, FE etc Very big focus on engagement and consultation Led by local authorities We want everybody to support and ‘own’ the Plan

Working with SALC and local councils Initial thoughts Devolution Productivity: a sensible objective? What are your priorities in a Productivity Plan? What else matters? Role of Neighbourhood plans Comments on the process and timetable? An offer: SALC reps for a local council focus group Getting the local council voice into the Plan

Thank you

Skills – the Challenge Good early performance tailing off by A level and beyond GCSE attainment - higher than the national average in all parts of the LEP apart from Plymouth. By age eighteen performance slips to slightly below the England average 44% of students from state-funded schools and colleges went on to an HEI 14 percentage points below the England average of 58%. HotSW ranks 15th out of 39 LEPs for volume of graduates. Of these, 36% graduated with STEM qualifications, a figure slightly higher than the national average (34%). 71.1% of graduates remain in the area Only 15% of University of Exeter students remain

Enterprise – the Challenge Relatively poor enterprise performance In 2015, there were 7,000 new business ‘births’ in the HotSW LEP area, and 5,500 ‘deaths’, resulting an additional 1,500 active businesses. Business births as a proportion of the business stock in HotSW (11%) is considerably below the England average (15%) or London (19%) Fewer than average large and medium sized companies New businesses in HotSW have higher than average five years survival rate. There are around 204 Scale ups in HotSW High rates of business survival – linked to being insulated from competition.

Innovation – the Challenge One of the lowest ranked LEP areas Firms spend on innovation as proportion of turnover 32nd of 39 LEPs Business Expenditure on R&D (BERD) per full-time employee (FTE) 31st of 39 LEP areas Proportion of firms engaged in product or process innovation- 33rd of 39 LEP areas Strength of publicly funded R&D assets. 19th of 39 LEP Exeter now in top 20 digital clusters (Tech Nation 2016)

– the Challenge Peripheral region, lacking resilience Investment in physical capital – the Challenge Peripheral region, lacking resilience Devon & Torbay are almost at the periphery of national road and rail networks. Lack of resilience to Rail network Two main routes from London into HotSW: the M4/M5 and the A30/ A303. Prone to disruption Only two LEP areas (Marches and Cumbria) had slower average download speeds than those found in HotSW. Rich in natural capital