Collective team effort must happen to defy headwinds
28 Nov 2017
Avid readers of this column will know me as relentlessly positive when it comes to the Leeds City Region economy and the role it has to play in supporting the UK’s prosperity.
But, despite the many great things that are happening here, it is clear from the figures released alongside the Budget last week that the UK is facing significant economic headwinds in the coming years. As a region, we need to make sure we’re up to this challenge.
The revising down of expectations on growth, productivity and business investment should be a moment for both the Government and the private sector to consider again what we can do together to stimulate the growth we need if we are to achieve the stronger economy, better jobs and higher standards of living we all want.
I was pleased to hear the Chancellor express his desire to see “all parts of the UK firing on all cylinders” and underline the Government’s continued support for the Northern Powerhouse concept.
Our ambition is to unleash the full economic potential of the Leeds City Region both for the benefit of local people and to contribute to a stronger and more balanced UK economy overall. This will require a collective team effort, across both the public and private sector and in partnership with the rest of Yorkshire.
We are already making great strides towards our goals through our £1bn Growth Deal with the Government and our £1bn transport fund.
Just this month a £20m proposal was approved for the Leeds Aire Valley and M62 Corridor enterprise zones which is forecast to create more than 15,000 jobs and add £5bn to the City Region’s economic output by 2025.
Three new rail stations, extensive investment in improved college facilities, the Wakefield Eastern Relief Road and Skipton Flood Relief project are just some of the 75 schemes together worth more than £200m to have received support so far – with many more in the pipeline.
All this activity is part of our comprehensive strategic economic plan to remove obstacles to growth, to prepare the Leeds City Region for the opportunities that lie ahead and to do so in an inclusive way so that all parts of our communities enjoy the benefits.
Alongside the warnings of the economic challenges to come, the Budget was also a reminder, as if one was necessary, of the continued challenges to the public finances.
Mr Hammond set out a number of targeted measures, including the new Transforming Cities Fund to better connect towns and cities to which we will be submitting a compelling bid, and his focus on the digital economy is welcome for this City Region given it is a sector in which we have a strong and growing global reputation.
But it is clear that while the Government has modified its approach to balancing the public finances there will be no rush to dramatically increase spending overall. More than ever, we must focus on the need to extract maximum value for every pound of taxpayers’ money we spend.
It is essential that attitude applies to all our spending, whether on infrastructure projects or the broader work we do to spread the positive message we have about the Leeds City Region and its exciting future.
And in this regard it is important to remember the LEP is a partnership between the public and private sectors, not only through the membership of its board but in its actions. Through partnership working, we are leveraging in private sector money which is funding essential work.
As a Chartered Accountant by profession, I’ve noticed an interesting formula emerge in relation to the work we do and the positive impact it is having on the City Region economy. Roughly every £1 of taxpayer’s money that we invest is matched by £4 of private sector funding, which together generates around £10 in economic benefits for our region.
This impact is most keenly felt in our work supporting local small and medium-sized businesses, of which we have helped around 6,000 to date, creating thousands of new job opportunities for local people. It is also evident in the efforts we have made to attract more businesses to Yorkshire.
It is thanks to private sector financial support, for example, that the LEP is able to ensure the City Region is represented at MIPIM, showcasing opportunities to inward investors from around the world.
This investment is reaping dividends, having generated 430 inward investment inquiries to date and contributing to our sustained rise in the attractiveness rankings. It is no coincidence that the Leeds City Region last year enjoyed its strongest year to date for foreign direct investment (FDI) and is now the top FDI destination in the North, having been near the bottom of national league tables some six years ago.
Businesses have praised our approach to inward investment and I hope they will continue to support our drive to make our region the most attractive place for foreign investors looking to invest in the UK.
On this and all other aspects of our work, it is right that the LEP (and our accountable body, the West Yorkshire Combined Authority, on which I also sit) is subject to public scrutiny. We are open and transparent about what we do, indeed I am proud of the work we have already undertaken and optimistic about what we can achieve in the years to come.
We are already playing a central role in the drive to rebalance the UK economy and we stand ready to work with the Chancellor and the rest of the Government to do even more to accelerate growth in the Leeds City Region.
Our ambition is to deliver an extra 36,000 jobs to the 115,000 already forecast by 2036, bringing the total to 151,000 and increase economic output by an additional £3.7bn by 2036.
In the context of the economic headwinds we are facing, the question is not why should that ambition be supported but how can we afford not to?
Yorkshire’s elevation to top destination in the North for foreign direct investment is fuelled in large part by Leeds City Region. 70% of the region’s inward investment successes in 2017 were attributable to the City Region (source: EY), supported by MIPIM attendance. David Aspin, MIPIM attendee and founder of White Rose Office Park developer, Munroe K, said: “Since attendance at MIPIM has been organised at a City Region level, we are seeing a significant increase in interest from both businesses looking to locate to the region… and from international investors who are keen to make investments in a location they see as the ‘next exciting opportunity’.”