1. Productivity Plan for the Heart of the South West
Thursday 15 December 2016
Alastair Higton, Somerset County Council

2. 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…

3. “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…

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

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

6. We’re behind…
HotSW and UK
UK and G7

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

8. 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

9. 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

10. Thank you

11. 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

12. 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.

13. 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)

14. – 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