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EMC Technical Assistance Project Andrew Pritchard Director of Policy & Infrastructure

What is it all about? A technical assistance project led by East Midlands Councils to provide an evidence base for future EU funding To make sure that we maximise the potential of EU investment across the East Midlands Strong support from DCLG & Council Leaders for the project

Localisation of EU funding Establishment of a national ‘EU Growth Programme’ LEPs to develop EU investment strategies Each LEP to be given a ‘notional allocation’ of EU funding to prioritise Payments to be made centrally Notional allocations will be reviewed against performance from 2017 onwards

“Show me the money” D2N2: €249.7 million SCR: €203.4 million UK Local Growth Fund = £2 billion

UK Local Growth Fund New Homes Bonus£400m LA Major Transport Scheme £819m Local Sustainable Transport Fund£100m Integrated Transport Block£200m Further Education Capital Fund£330m ESF Skills Match Funding £170M

Emerging UK Priorities Innovation SME Competitiveness ICT 60% + of ERDF Employment Skills Social Inclusion 80% + of ESF Climate Change Environment Sustainable Transport No Minimum spend Low Carbon Economy 20% + of ERDF

Also… Minimum 20% of combined ESF/ERDF on ‘social inclusion’ Gender equality, equal opportunities & non- discrimination Sustainable development

Programme Timescales September 2013: Draft LEP EU Investment Strategies January 2014: finalise strategies March 2014: new EU Programme starts 2017 – first review of notional allocations

Current Experience Spend under the current ERDF Programme has been slow Too many small projects - difficult to see a strategic impact Original operational programme did not fully meet local needs - e.g. Broadband

Future Challenges 1 region replaced by 7 LEPs – 4 overlapping Pressure for early spend on projects that will deliver clear outcomes LEP notional allocations to be reviewed in under-performance could be penalised

Threats v Opportunities

What are we going to do? Facilitate a series of consultation events Develop an evidence base (or ‘socio- economic framework’) to inform both the UK Growth Programme and individual LEP Strategies – working with NTU. Highlight potential areas of collaborative activity that can maximise strategic impact and reduce ‘transaction costs’

Events Diary 1 st July: Greater Lincolnshire LEP 5 th July: Leicester & Leicestershire LEP 9 th July: Competitiveness Round Table 16 th July: NEP/SEMLEP 22 nd July: D2N2 25 th July: Green Economy Round Table

Project Timescales End of July 2013: Interim Report September 2013: draft Framework December 2013 – final Framework January - June 2014 Awareness raising

Key Outcomes “It’s the economy, stupid” More Jobs Less Worklessness

Your mission today… To think about how best EU funding could be used across D2N2 To highlight areas or issues where wider collaboration might be helpful. To ask if you do not understand.

East Midlands PA3 Project Socio-Economic Evidence – the future of European Funds in Derby, Derbyshire, Nottingham and Nottinghamshire 22 nd July, 2013 Chris Lawton Nottingham Business School

Project Rationale and Objectives The project aims to provide socio-economic evidence to help identify synergies, linkages and common challenges across LEPs within or overlapping the East Midlands To identify opportunities for collaboration across the themes identified in the ‘Europe 2020’ strategy The UK Government would: “like to see Local Enterprise Partnerships working with each other to deliver a bigger impact… and achieve economies of scale wherever possible” Source: HM Government, April ‘Technical Annex: Preliminary guidance to Local Enterprise Partnerships on development of Structural & Investment Fund Strategies.’ paragraph 2.8, p. 4.

Contains Ordnance Survey data © Crown copyright and database right, Local Enterprise Partnerships within or overlapping the East Midlands Region

Chart 1: Headline GVA per head indices (UK=100) NUTS2, 2011 Economic Context Source: ONS Crown Copyright, ‘Regional Gross Value Added, 2011’.

Economic Context Source: ONS Crown Copyright, ‘Annual Population Survey’, January-December 2008 and January-December From NOMIS [accessed 24 th June, 2013]. Chart 2:Employment rate (% working age residents), 2012

The SME environment remains difficult, but some signs of improvement: – Business death rates have fallen since 2009 and business birth rates have increased – Survival rates for new businesses have significantly decreased since pre-recession – Small businesses (<50 employees) have been more likely to retain staff but cut/freeze wages and investment, with resulting lost productivity – Large businesses (>250) more likely to cut staff whilst maintaining investment and productivity levels Lenders report that demand for credit remains low Despite some structural improvements, firms seeking credit continue to report difficulties in the supply of finance Exports have been growing moderately in recent months EU Thematic Objective: SME Competitiveness

Chart 3: Business Births and Deaths (as a % of end-of-year count of active enterprises), 2011 Source: ONS Crown Copyright, ‘Business Demography 2011 – Enterprise Births, Deaths and Survivals.’ EU Thematic Objective: SME Competitiveness

SME Competitiveness: Business Birth Rate (as a % of end- of-year count of active enterprises), 2011 Source: ONS Crown Copyright, ‘Business Demography 2011 – Enterprise Births, Deaths and Survivals.’ Contains Ordnance Survey data © Crown copyright and database right, 2013.

Chart 4: Two year business survival rate from year of birth (%) EU Thematic Objective: SME Competitiveness Source: ONS Crown Copyright, ‘Business Demography 2011 – Enterprise Births, Deaths and Survivals.’

Chart 5: Innovation inputs: Business Enterprise Investment in R&D (as a % of total workplace GVA), 1999 and 2009 EU Thematic Objective: Innovation Source: Department for Business, Innovation and Skills, ‘Regional Economic Performance Indicators – Live Tables’.

EU Thematic Objective: Innovation Chart 6: Employment in High and Medium-High Technology Industries (% work- based employment), 2011 Source: ONS Crown Copyright, ‘Business Register and Employment Survey, 2011.’ Data accessed from NOMIS [17 th June, 2013] and analysed under Chancellor’s Notice Ref NTCBRES11-P0537.

Innovation: Employment in High and Medium-High Technology Industries (%), 2011 Source: ONS Crown Copyright, ‘Business Register and Employment Survey, 2011.’ Data accessed from NOMIS [17 th June, 2013] and analysed under Chancellor’s Notice Ref NTCBRES11-P0537. Contains Ordnance Survey data © Crown copyright and database right, 2013.

EU Thematic Objectives: Employment, Social Inclusion and Skills Chart 7: Unemployment Rate (% 16+ resident population), 2012 Source: ONS Crown Copyright, ‘Annual Population Survey’, January-December From NOMIS [accessed 14 th June, 2013].

Employment, Social Inclusion and Skills: Unemployment – model-based estimates (%), 2012 Source: ONS Crown Copyright, ‘Model-based estimates of unemployment’, January-December From NOMIS [accessed 17 th June, 2013]. Contains Ordnance Survey data © Crown copyright and database right, 2013.

EU Thematic Objectives: Employment, Social Inclusion and Skills Chart 8: Trends in the Unemployment Rate (% 16+ resident population), Source: ONS Crown Copyright, ‘Annual Population Survey’, January-December 2007 to January-December From NOMIS [accessed 14 th June, 2013].

Employment, Social Inclusion and Skills: Resident Adults Qualified to a Level 4 (first degree) and above (%), 2012 Source: ONS Crown Copyright, ‘Annual Population Survey’, January-December From NOMIS [accessed 17 th June, 2013]. Contains Ordnance Survey data © Crown copyright and database right, 2013.

Key Points Some improvements (e.g. business births and deaths), but overall economic context remains challenging North-south or east-west divides (depending on topic) exacerbated by the recession: – Unemployment/Social Exclusion: north-south divide – Enterprise and Skills: north-south and east-west – Innovation: east-west (M1 corridor) Importance of manufacturing and large firms in regional innovation activity Enterprise, innovation and low-carbon themes will be explored further in x2 regional round-tables

Common Issues: D2N2 Local Enterprise Partnership SME CompetitivenessInnovationEmployment, Social Inclusion and Skills SCR, Greater Lincolnshire – common challenges related to the impact of recession on the SME environment : seen in falls in output and productivity, lower levels of enterprise, and lower business survival rates Construction – important employer across the East Midlands, as both an enabling sector and a key employer LLEP (and Coventry & Warwickshire)– high tech manufacturing in south Derbyshire/north Leicestershire (M1 corridor) – a range sub-sectors, including, but not restricted to, Transport Equipment, with supply chain and knowledge transfer relationships with HE Include links to low carbon agenda (including power generation) – Greater Lincolnshire SCR, Greater Lincolnshire – increased unemployment in urban and rural areas (and increased disparities with more resilient areas). Common drivers of worklessness amongst key groups (including young people), including skills supply and changing industrial and occupational structure (skills demand)

D2N2 Local Priorities

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Thank you for coming and have a safe journey home!