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Understanding the impact of the Local Growth Fund and Enterprise Zone programmes on the North East economy

By Ray Browning, Programme Manager at the North East Local Enterprise Partnership


Central to the delivery of the North East Strategic Economic Plan is the region’s access to infrastructure funding, and importantly, how that funding is managed and invested across the region to create more and better jobs.

The Local Growth Fund and Enterprise Zone programmes represent two of the biggest funding schemes managed by the North East LEP. Since 2014, more than £270m has been invested through the Local Growth Fund and £69m through the Enterprise Zone programme.

To help us understand how effective both programmes have been in delivering their objectives, and those set out in the North East Strategic Economic Plan, we appointed Steer Economic Development (Steer-ED) to carry out an interim evaluation of both the Local Growth Fund and Enterprise Zone programme.

The resulting report highlights how two of the North East LEP’s biggest capital programmes are making a visible difference to key development zones  across the region, and how they are improving the economic prospects of the North East.

The interim evaluation demonstrates how both programmes’ alignment with the Strategic Economic Plan, and its areas of strategic importance –  Health & Life Sciences, Digital, Advanced Manufacturing and Energy & Low Carbon – have helped strengthen key employment sites across the region and attract significant public and private sector investment.

A good example of this is the performance of NETPark in County Durham, which received £25.2m from the Local Growth Fund. The investment helped create two new national research centres (CPI’s National Formulation Centre and National Healthcare Photonics Centre), the NETPark Explorer lab/office buildings, business incubation space, and opened up 26 acres of developable land through the creation of a 1km new highway, Rosalind Franklin Way.

Investment by the Local Growth Fund has helped Durham County Council and its partners firmly establish NETPark as one of the UK’s leading science, engineering and technology parks. It has also positioned the North East as one of the UK’s leading health and life science clusters, a key objective of the Strategic Economic Plan.

Another area of strategic importance that has seen significant growth due to investment from the Local Growth Fund and Enterprise Zones programme is in advanced manufacturing. No more so than on the 150ha International Advanced Manufacturing Park (IAMP) that has been taking shape since 2018, in a partnership development between Sunderland City Council and South Tyneside Council.

This nationally important employment site is supporting the region’s expanding advanced manufacturing and automotive sector, and is receiving  £41m from the Local Growth Fund and £33m from the Enterprise Zone programme. Phase 1 has so far attracted three major manufacturing investments by SNOP UK, Faltec Europe Ltd, and most recently, Envision AESC, which will build a £450m Gigafactory on IAMP as part of a £1bn partnership with Nissan UK to create an electric vehicle hub in the North East.

As well as looking in-depth at some of the projects funded by the Local Growth Fund and Enterprise Zone programmes, Steer-ED’s interim evaluation also highlights some of the more qualitative, strategic added value impacts of the programmes in the North East LEP area, including, driving the low carbon agenda and supporting community impact.

The North East has gained a reputation as one of the UK’s leading destinations for advancements in green, sustainable, low carbon energy. Investment from the Local Growth Fund and Enterprise Zone programmes in schemes like the District Energy Centre at Newcastle Helix and Northumberland Energy Park have been central to growing the sector and attracting business investment.

Similarly, both programmes have supported projects that deliver huge benefits to local communities in the North East. The iconic Beacon of Light in Sunderland, the Vertu Motors Arena in Newcastle (home to the Newcastle Eagles), and the Nexus Learning Centre in South Shields are all great examples of projects that help deliver real benefits to their local communities; be that through training, apprenticeships, Further Education, or access to employment.

To date, the Local Growth Fund programme is ahead of its original target of 4,752 jobs by March 2021, having helped attract 6,300 jobs – 33% above forecast by this stage. Whilst the programme is ahead of schedule on job creation, we recognise there is still work to do to meet our 18,500 jobs target by 2025/26.

The Enterprise Zone infrastructure investment programme continues to be being rolled out across 21 sites in the North East, with 1,805 jobs secured so far against a long-term target of 26,935. The investment decisions in 2021 by Equinor to locate its Dogger Bank Wind Farm Operations and Maintenance base at Tyne Dock, and JDR Cables Ltd announcement that it is to develop a £130m manufacturing facility on Northumberland Enterprise Park, are welcome commitments that give confidence to our belief that employment levels will begin to accelerate across several EZ sites over the next two-three years.

Overall, Steer-ED’s analysis of both the Local Growth Fund and Enterprise Zone programmes has positively assessed the long-term cost/benefit value, as well as the transformative impacts of both programmes through specific local case studies.

Enabling works on major employment sites, new office, laboratory, R&D facilities and industrial space, supported by investments to improve access to strategic transport corridors are benefitting local SMEs and attracting major private sector investment. At the same time new training facilities facilities are supporting local communities to acquire the necessary skills to secure employment in growth sectors.

It’s encouraging to see the impact both programmes are already having on the physical transformation and realisation of new regional economic clusters, in line with the aspirations set out in the North East Strategic Economic Plan to create more and better jobs in specific sectors.

The executive summary of the interim evaluation of the Local Growth Fund and Enterprise Zone programmes, and details of all the projects supported, can be found on the North East LEP’s Evidence Hub.

A copy of the full interim evaluation is available upon request. Please email [email protected].

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North East Coalition files world-class Freeport bid

North East England Freeport to create 60,000 jobs, over £3.4bn GVA and £2.7bn private sector investment.

A dynamic business and public sector partnership based in the UK’s leading export region has lodged an exciting and innovative bid for the North East England Freeport, which economic experts have predicted would generate a £2.1 billion boost to UK exports, plus many other significant benefits.

Government support for the proposal would see the North East England Freeport provide a uniquely ambitious and collaborative opportunity for the whole region to thrive, boosting the local economy by over £2.4 billion over 10 years and providing a gateway to long term global competitiveness. Through the North East England Freeport, over 30,000 new jobs are expected to be created for the region, of which 13,000 are highly paid ‘better jobs. A further 31,000 jobs will be generated in the construction industries.

The regional consortium formed to operate the North East England Freeport as a virtual free trade zone includes Nissan, the Ports of Tyne, Blyth and Sunderland, Newcastle Airport, seven local and two combined authorities, the North East Local Enterprise Partnership (LEP), plus leading north east universities and innovative organisations. The sites involved will be inter-connected and secured using a state of the art, cybersecure perimeter.

Economic analysis completed by consortium members and validated by an independent economic adviser demonstrates that the North East England Freeport would deliver outstanding economic benefits to the region. These include:

  • 61,458 new jobs across the construction, manufacturing, logistics, energy, innovation and business sectors
  • £3.4 billion GVA across the local region
  • Expected GVA of £110,000 per freeport worker, with median earnings of freeport workers 40-62% higher than current regional levels across all sectors
  • Total GVA uplift of £3,000 per capita within the North East LEP area
  • £2.7 billion in new regional private sector investment
  • £2.1 billion additional UK exports over 10 years

By generating tens of thousands more and better jobs, the North East England Freeport will become a national hub for global trade and investment, a hotbed for innovation, a catalyst for sustainable economic regeneration, while minimising barriers to trade. Each site and partner in the freeport bid consortium will contribute to realising a best-in-class offering that will drive investment and deliver a high impact, economic boost that fully exploits the North East’s unique abilities in advanced manufacturing, life sciences, digital, clean energy and business services.

Crucially, the North East England Freeport will provide a bold blueprint for growth, compromising of a multi-site, digitally connected and enabled cybersecure boundary area, with robust customs zones. This will enable the North East region’s clusters to manufacture goods cost efficiently and trade internationally, benefiting from tax advantaged policy to stimulate economic development. It will contribute to levelling up in one of the areas of the country where it is needed the most.

The North East England Freeport will include three significant tax sites totalling approximately 600 hectares on which businesses will be able to receive a range of special incentives to invest and grow. They are located in some of the most deprived communities in the region and will create new jobs and supporting skills and employability programmes to ensure jobs are accessible to local people. The activity from these businesses will generate benefits across the region.

The Freeport will be led by a collaborative Governance Board which will bring together leaders from business, local government, higher education and the ports to drive forward the North East England Freeport at pace. This demonstrates the regions determination to deliver long term transformation and commitment to level up the UK economy.

Matt Beeton, CEO at the Port of Tyne and Interim Chair of the North East England Freeport, said: “Our model offers an unrivalled, ‘best of all worlds’ approach, uniting the private and public sectors to provide the region with an exceptional opportunity to benefit from the levelling up potential of digitally enabled economic zones. Developing over 60,000 new jobs in the region and £3.4bn regional GVA is incredibly important and demonstrates that ports are a catalyst for future economic growth.”

Martin Lawlor, CEO at the Port of Blyth said: “This bid consortium offers unrivalled clean growth and manufacturing expertise, and we have the vision, ambition and experience to make this a flagship freeport the UK can truly be proud of. We are excited by both the innovation within our bid and the transformative impact our freeport will have on the region if we are successful.”

Nick Jones, Chief Executive Officer of Newcastle International Airport, said: “Fast and frequent connections to growth markets are key to the success of the freeport and the advancement of the North East’s key business sectors. Air connectivity will strengthen the North East England Freeport proposition and will help to drive productivity improvements through logistics supply chains, with the ultimate aim of supporting the growth sectors in the region – from pharmaceuticals and life sciences to technology and advanced manufacturing. The Airport is delighted to play a role in the across-region partnership that will deliver this project.”

Lucy Winskell, Chair of the North East LEP said: “The North East is a perfect candidate for a freeport given its trading pedigree, its capabilities in green industries and the challenges it faces.  Our model is deeply collaborative and highly innovative. Our seaports, airport, businesses, universities and political leaders are working together to deliver a cutting edge, digitally enabled freeport which brings new growth across our region and regenerates many of the communities that need it most.”

Jamie Driscoll, Mayor of North of Tyne said: “The North East has always been a strong manufacturing and exporting region.  We want to secure the future for our workers, our kids and our grandkids.  This means developing our low carbon industries and building a green future.”

Councillor Graeme Miller, Chair of North East Combined Authority said: “This is a highly collaborative and compelling bid with the ability to transform the whole of the North East. Crucially, it provides significant opportunities for Nissan and the International Advanced Manufacturing Park (IAMP).”

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North East Enterprise Zones leading the way to success

A PROJECT to drive business and investment in the North East has been hailed a success.

North East Enterprise Zones were created to support economic growth by developing sites with key attributes to help businesses start-up, grow and expand.

Since their initial launch in 2012, the sites have attracted businesses and investors keen to take advantage of the generous financial incentives on offer, as well as the strategic locations available for development.

Now five years on, the latest figures show the zones have already created 1318 jobs across the 46 businesses that located to them.

In total, the 12 Enterprise Zones brought over £36m of investment to the North East.

The North East Local Enterprise Partnership secured the Enterprise Zones for the region and supported infrastructure work, including roads and utilities, for the sites.

Executive director, Helen Golightly, said: “We are delighted with the success of the North East Enterprise Zones.

“All of our Enterprise Zones are in key locations, so whether it’s adjacent to a major trunk road like the A19 or A1 or whether it’s next to a major cluster of activity, they’re all strategically positioned.

“They’re clustered around our areas of opportunity, for example automotive or offshore. They’re next to the areas that we really feel are going to thrive.

“The zones are all at different stages but we have high hopes for the future. We have these fantastic sites and we’re investing a lot in them to get them ready.”

One such success is Neptune Yard in Newcastle, once a centre of shipbuilding on the River Tyne but now home to a new generation of thriving industry.

Part of the North Bank of the Tyne Enterprise Zone, the historic site is now leading the way in offshore wind and renewables.

The revitalised site has created 485 jobs and attracted over £40m of investment.

Businesses located at Neptune Yard include global companies Shepherd Offshore; GE Oil & Gas; Bridon International; IHC FHP; and JDR Cables.

Newcastle University has also established Tyne Subsea, a hub for hyperbaric research, test and certification.

Demand for the site is so high plans are in place to extend to create more space with the North Bank of the Tyne Extension project.

The North Bank of the Tyne Enterprise Zone includes the Port of Tyne, the former Swan Hunter ship yard and the former Neptune Shipyard.

The cluster of sites in the North Bank of the Tyne Zone is a primary location for the offshore, subsea and energy sectors.

The Enterprise Zones also offer simplified planning procedures, access to some of the best development land in the North East, as well as business-specific benefits.

Through Business Rate Discount, businesses can gain up to 100% discount against business rates worth up to £275,000 over a five year period from occupying the premises on the Enterprise Zone site. This is equivalent to £55,000 per year but does not need to be taken as an even annual split.

Alternatively, through the Enhanced Capital Allowance, business can receive up to 100% capital allowance for investment in plant and equipment on the Enterprise Zone site. This can represent tax relief worth up to £125m.

But it is the strategic locations of the zones that businesses can most benefit from.

Helen said: “All of the business in our Enterprise Zones benefit from being ideally positioned in a strategic location within a cluster of companies working in key areas of opportunity.

“Businesses can be part of the supply chain and work with each other. This approach has really worked very well.

“If you look at Neptune, they’ve now got global companies that have located there. It’s all about working with the investors and building links.

“We think the North East Enterprise Zones have huge potential. With over 1300 full-time jobs and £36m of investment already in our Enterprise Zones, the figures really do speak for themselves.”

 

 

ENDS

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Paul Woolston to stand down as LEP Chair

Paul Woolston, who has led the North East LEP since its formation nearly five years ago, is to leave his post together with several colleagues in a number of changes to the board.

Paul, a former senior partner at Price Waterhouse Coopers, has led the LEP board as chair since the organisation was created in 2011. He will formally leave his post as chair at the next LEP board meeting on January 28 when his replacement will be announced.

Under his successful leadership, the North East LEP has:

• Delivered the North East Independent Economic Review led by Lord Adonis. This allowed the LEP to formulate the Strategic Economic Plan setting out how to achieve the economic growth needed to deliver 100,000 new and better jobs over the next decade

• Secured £1.5bn in central Government and European funding to finance new economic growth

• Retained the crucial £120m JEREMIE 2 business support fund in the North East, to be invested exclusively into scores of new and growing North East companies

• Successfully bid for two Enterprise Zones covering a total of 20 sites across the region. The first zone has created more than 1,200 new jobs to date, with a lot more to come, and the second zone is anticipated to deliver a further 14,000 jobs.

• Appointed the North East’s first innovation director – acclaimed entrepreneur and business leader Hans Moller – to oversee the investment of £125m to support creativity and dynamism in the region’s growing business base

• Established effective public-private sector advisory boards to stimulate innovation, business growth and skills development

• Created the North East Growth Hub – the comprehensive online resource for business advice, funding information, networking, news and events.

Paul said now was the time to stand down from his post and make way for a new chair.

“The timing is right for a new chair to lead the North East LEP forward at an exciting time in its development and for the region,” said Paul.

“We are entering a new year with a devolution deal for the North East agreed with Government and the combined authority, which will mean a new role for the LEP.”

Three further business board members will also step down as part of the LEP’s plan to stagger its board member leaving and replacement process, keeping experienced members in place to support newcomers.

Businesswoman Gill Southern stepped down from the LEP board just before Christmas, while Michael Bellamy and Arnab Basu will also leave the board as soon as replacement members are recruited.

As part of a rotation of duties, Northumbria University Vice-Chancellor Andrew Wathey and Jon Vincent, Principal and Chief Executive of TyneMet College, have both recently been appointed to the board to replace Anne Isherwood and Peter Fidler.

Paul added: “I would like to thank our business board members who have all really made a difference to what the LEP does, as well as Edward Twiddy and Helen Golightly for their executive leadership.

“Their intellect, innovation and energy means we have been able to turn a great strategy into great decision-making for the North East economy.

“Strong business representation is crucial to the long-term success of the North East LEP and I would urge businesspeople to help shape the region’s future by applying for a place on the board.

“I am genuinely proud of what we have achieved. Initiating the Adonis Review enabled us to produce the Strategic Economic Plan for the region.

“It is absolutely transformational and it is being adopted and embedded in the region to drive future economic success.

“The North East LEP has attracted an enormous amount of funding, £1.5bn, which is being allocated now to implement the Strategic Economic Plan.

“Our challenge now as a region is to eliminate the persistent economic gap between ourselves and other regions of the UK.”

Andrew Hodgson, North East LEP Vice Chair, said: “Under Paul’s leadership, the North East LEP has secured significant funding from Europe and Government to underpin vital economic development.

“He has helped build and establish the LEP in a changing political landscape and worked hard with the most senior levels of Government to ensure the North East’s Strategic Economic Plan is understood and supported.”

Arnab Basu said “It has been a privilege to serve alongside Paul on the LEP board since its beginning. He has been a tireless champion of the north east and I wish him well in the future.

“After five years it is only right that we make way for others to carry the mantle forward. The North East has such a vibrant and thriving business community and I have no doubt the new members will have brighter, fresher ideas and contribute fully to the vital task carried out by the LEP. I will look forward to following their success with great interest.”

Gill said: “I will continue to be a strong advocate of the North East LEP’s activity and work hard to ensure North East business seizes the maximum benefits a new political landscape will present.”

Councillor Simon Henig, Chair of the North East Combined Authority and Leader of Durham County Council, said: “Paul has created a strong foundation for the North East to move into a new phase as we work towards proposed devolution and an elected Mayor.”

Businesspeople interested in applying for a board member post at the North East LEP should contact Jim Allcroft at NRG. Email: [email protected] or Tel: 0191 2604483.

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In Conversation with North East LEP Chairman, Paul Woolston

Firstly, this is the ideal platform from which to wish everyone in the North East business community a prosperous new year.

The festive break gives us all time to recharge our batteries, reflect on the past year and look ahead to the opportunities to be seized and challenges to be met in 2016.

Christmas and New Year present us with the rare opportunity to take our foot off the gas and properly assess the 12 months past.

To move forward with clarity and purpose, we need to take stock of achievements, progress made and outcomes.

It also gives the valuable thinking time to tackle the year ahead with fresh motivation and renewed vigour.

The North East economy showed a continued strengthening in 2015 with more people in work than ever before and a general, longer-term fall in those out of work.

Encouragingly, labour market statistics also revealed more people available and wanting to work in our region. The North East LEP’s goal is to help deliver 100,000 more and better jobs for local people over the next decade, and these key statistics clearly point to an economy growing in confidence.

The North East LEP has attracted £1.5bn in Government and EU funding into the region over the past five years. It is crucial that it continues to secure investment to underpin business growth, job creation and support capital investment in projects to transform the region.

In this vein, the LEP worked hard with Government to ensure that the £120m JEREMIE 2 business support fund will remain North East managed and exclusively invested into scores of North East firms.

The success of the first round of JEREMIE funding supporting 800 small companies in exciting, booming sectors with £140m in equity loans, made it imperative that its successor followed this template.

Keeping JEREMIE 2 in the North East was a major win for our region last year, one of the real highlights for the LEP team.

As was securing ten new Enterprise Zones from Government spread from Northumberland to County Durham.

Their benefits for new and growing companies will attract an estimated 14,000 new jobs in crucial sectors such as subsea and low carbon technologies.

It doesn’t need a crystal ball to look ahead into 2016 and see the impact the devolution agenda will have on our region.

The LEP and North East Combined Authority have signed up to the devolution of more autonomy for the region and to the principle of an elected mayor in 2017.

Devolution will undoubtedly mean a changed role for the LEP in future. While it isn’t exactly clear what that will be just yet, the LEP remains fully supportive of the devolution process because of the powers it will give the region to shape its own future.

The next 12 months will be a time of continued delivery for the LEP team. The new North East Growth Hub – bringing comprehensive business support information onto one online platform – is due to go live imminently.

Supporting innovation through £125m of funding and encouraging greater collaboration and networks across the North East will remain central to its activity.

Backing those leading new economic growth through product development and enhancement to market will give our regional economy the competitive edge it needs to help close the gap with the rest of the UK.

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North East LEP reveals ten locations for region’s second Enterprise Zone

Urban and rural areas around the region to be included in new EZ

The North East Local Enterprise Partnership (LEP) today unveiled the ten sites around the region that will be included in the new Enterprise Zone (EZ) confirmed for the North East this week.

The LEP’s successful bid for a second EZ to bring more and better jobs to the region was announced by Chancellor George Osborne in Wednesday’s Autumn Statement and Spending Review.

The new EZ, with sites stretching from Northumberland to County Durham, will focus on growing businesses, particularly working in the LEP’s four smart specialisation areas of health and life sciences, creative and digital, subsea, and low carbon industries.

The second EZ will cover 175 hectares and aims to deliver a further 14,000 jobs and 600,000sq m of employment opportunities over the 25-year lifetime of the project.

The ten sites, covering both urban and rural parts of the region, are located at:

• Hawthorn Business Park, County Durham
• Follingsby South, Gateshead
• North Bank of the Tyne, Newcastle
• Newcastle International Airport Business Park, Newcastle
• The A1, Morpeth, Northumberland
• Ashwood Business Park, Northumberland
• Ramparts Business Park, Northumberland
• Holborn Riverside, South Tyneside
• International Advanced Manufacturing Park, Sunderland and South Tyneside
• Port of Sunderland, Sunderland

The North East LEP worked with the seven local authorities and the North East Combined Authority on the successful proposal for a second EZ. The new sites are designed to complement existing sites and drive growth through making, trading and innovating.

Helen Golightly, North East LEP Chief Operating Officer, said: “We will now be working with the Government to refine the details of the new Enterprise Zone ahead of it being put into statute to go live in April 2017.

“The new Enterprise Zone will give us yet another offer to attract businesses to locate and expand in the region, and help us to deliver our strategic economic plan to deliver more and better jobs for the North East.”

Businesses located within EZs benefit from a number of key advantages designed to drive their growth. These include business rate discounts for up to five years or tax savings via enhanced capital allowances for businesses investing in plant and machinery.

The LEP’s first EZ has been offering benefits to business in the offshore, renewables and automotive sectors since 2012. Since its creation, the EZ has attracted over £100 million of new private sector investment and resulted in over 1,200 new jobs and 25 new businesses.

North East LEP Chairman, Paul Woolston, said: “I’m delighted about our successful bid for a second Enterprise Zone for the region, and we’re thrilled to reveal the locations of the ten sites that will be included.

“EZs exist to drive growth in the smart specialisation areas identified by the LEP. They will play a key role in supporting the creation of more high-quality jobs and attracting further private sector investment into the North East.”

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North East LEP secures second Enterprise Zone for the region

Multi-site EZ to boost manufacturing, export and innovation confirmed by Chancellor

The business-led North East Local Enterprise Partnership (LEP) has secured a new Enterprise Zone (EZ) for the region to fuel the creation of more and better jobs.

Chancellor George Osborne announced in the Spending Review that the North East LEP’s bid for a second EZ has been successful and that the multi-site Enterprise Zone is being supported by Government.

Businesses located within EZs benefit from a number of key advantages designed to drive their growth. These include business rate discounts for up to five years or tax savings via enhanced capital allowances for businesses investing in plant and machinery.

The LEP’s first EZ has been offering benefits to business in the offshore, renewables and automotive sectors since 2012. Since its creation, the EZ has attracted over £100 million of new private sector investment and resulted in over 1,200 new jobs and 25 new businesses.

This second EZ has been developed to complement and grow the region’s four key areas of strength, which are referred to as smart specialisation areas – Health and Life Science, Creative Digital, Automotive and Subsea and Offshore Renewables.

The new EZ will comprise ten sites across Northumberland, Durham, Sunderland, Gateshead, South Tyneside and Newcastle.

Helen Golightly, North East LEP Chief Operating Officer, said: “Enterprise Zones provide us with a strong offer to business to locate and develop in the North East.

“We are committed to supporting business to grow and are delighted to be given the opportunity to build on the success of our first Enterprise Zone. The second EZ will help us deliver the strategic economic plan and deliver more and better jobs for the region.”

North East LEP Chairman, Paul Woolston, said: “I’m delighted about our successful bid for a second Enterprise Zone for the region.

“EZs exist to drive growth in the smart specialisation areas identified by the LEP. They will play a key role in supporting the creation of more high-quality jobs and attracting further private sector investment into the North East.”