1. Economics and Business Exchange Supported by Deloitte.
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2. UK Regional Economic Productivity
David Silk
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3. Regional growth target
PSA target:
“to make sustainable improvements in the economic performance of all the English regions by 2008 and over the long term reduce the persistent gap in growth rates between the regions, demonstrating progress by 2006.”
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4. Rationale
Growth constrained if overheating in some regions but excess capacity in others
Result of large-scale market & coordination failures
Disparities have persisted for years
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5. Disparities: persistent but not inevitable
Some evidence that current disparities were established in 1920s, reversing the previous picture:
Regional Rates of Unemployment as a Percentage of the UK rate (Source: Matthews, Feinstean and Odling-Smee. (a) South East & East Anglia; (b) North East; (c) North West & North East
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6. Scale of challenge Regional and sub regional disparities:
Inter-regional:
Region GVA/head R&D spend/head Start-ups/1,000 people
North East £10, £
South East £15, £
Intra-regional:
Region GVA/head Start-ups/1,000 people
Darlington in NE £11,
East Sussex in SE £8,
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7. Economic growth Economic Prosperity GVA Productivity Employment Skills
Innovation
Enterprise
Investment
Competition
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8. Employment
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9. Productivity
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10. Skills
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11. Innovation
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12. Enterprise
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13. Investment
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14. Modern regional agenda
Flexible institutions
Innovative and responsive policy design to tackle market failure
Robust evidence base
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15. Flexible institutions
RDA £2.3bn single pot;
Additional responsibilities for:
business support
business-university collaboration
rural socio-economic objectives
inward investment
Improved performance management
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16. Innovative policy design: Regional Economic Strategies
RESs sought to improve policy design based on:
robust analytical framework
a clear set of priorities
realistic levels of future funding
good use of evidence-base
consistency with other regional strategies
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17. Northern Way
Pan-regional growth strategy focused on skills, enterprise and employment
Goal is closing £30bn Northern output gap
3 year costed business plan for £100m Growth Fund
City-regions at core of approach
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18. Cities
Cities play an important role in promoting regional economic development
90% of economic activity in the North concentrated in 8 city-regions
But outside London, cities under-perform relative to international competitors
CSR07 provides an opportunity to look at economic development interventions at regional, city and local levels
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19. Local Authorities
Local authorities have a key role in improving productivity at the local (and hence regional) level.
Existing initiatives- LABGI, BIDs.
Fourth block of LAAs- key opportunity to establish economic development role of LAs.
Already have LEGI - now thinking about how to bring other initiatives/funding streams together.
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20. Robust evidence base
Improving evidence base and regional statistics is key
RDAs building evidence base for RESs
ONS committed to delivering full regional statistical presence with RDA support
Improved regional spending data
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21. Devolved Administrations
All have lower than the UK average GVA per head
Economic policy is part devolved -partnership working is essential
Growing the economy the top objective for the Scottish Executive
Welsh prioritise increasing employment and increasing average earnings
NI economic strategy is being drawn up be consortium of local partners
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22. Key messages addressing regional disparities is extremely challenging
Govt believes focus should be on driving policy from the bottom up
continuing developing agenda – RDAs, Northern Way, cities
strengthening evidence base is key
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23. Questions / comments? David Silk Regional Policy HM Treasury
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24. Economics and Business Exchange Supported by Deloitte.
15/01/2019