Document

The Advice of the Northwest Region

February 2009

Regional FundingAdvice

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FOREWORD

The Northwest’s Regional Funding Advice is submitted to Government during the most testing economic conditionsfor many years and in a fast changing national policy environment. Of particular importance is the Government’sconfirmation that regions will be asked to set out their long term priorities in a single Regional Strategy.

The Northwest has agreed to move to this approach before other regions and has already begun the process of strategydevelopment. A Regional Leaders Forum – 4NW - has already been established and it will work with the Northwest RegionalDevelopment Agency (NWDA) on the development of the single Regional Strategy during 2009. This will ensure that our longterm goals and priorities support sustainable economic growth and successful communities over the long term.

This Regional Strategy development process has therefore informed this response. For example, the region has agreed that it willuse this new Regional Strategy to set out its investment priorities from 2011/12 onwards.

This Advice also builds upon the first round of Regional Funding Advice (2006) when the Northwest agreed a very strong set ofregional priorities, put in place strong partnership working and, working with Government, made good progress on delivery,demonstrating a strong track record across all RFA themes. In view of this, and particularly given the current economicconditions, it is imperative that planned levels of investment by Government are maintained or increased safe in the knowledgethat we will deliver.

Consequently it reaffirms those existing priorities, such as transport schemes, that are already in the process of being delivered.Indeed our RFA advice emphasises the importance of maintaining delivery of existing priorities during 2009/10 and 2010/11.

However, priorities already agreed in the Regional Economic Strategy, the Regional Housing Strategy and the Regional SpatialStrategy have been reviewed against the impact of current economic conditions. Although we do not propose significantchanges to future priorities at this point, the single Regional Strategy will enable the region to carry out a more in depth reviewof future priorities during 2009.

This single Regional Strategy will set out a clear vision for the region, building on the approach already agreed in the existingEconomic, Spatial and Housing Strategies. We have begun consultation on a Principles and Issues paper as the first stage ofthis work. Our aim is to develop a strategy that will bring together environmental, social, economic, housing and transportpriorities and reflect the Northwest’s long term commitment to sustainable growth where:

• Our success is based on our competitive Sectors, our Higher Education and Science Base as drivers of economic growth, connectivity through Ports/Airports, motorway and rail networks, and our Natural Environment and rural economy

• We are a flourishing lower carbon economy, recognised as an important contributor of renewable energy and sustainable approaches to transport and economic development

• Productivity and Enterprise levels are high, driven by innovation, leadership excellence and high skills

• Opportunities to participate in the regional economy are available to our diverse communities

• Employment rates are high and concentrations of low employment are reduced

• Everyone has access to appropriate good quality, affordable and sustainable housing in sustainable, mixed and vibrant communities

• Manchester and Liverpool are vibrant European Cities and, with Preston, are key drivers of City Regional economic growth

• Growth opportunities around Crewe, Chester, Warrington, Lancaster and Carlisle are fully developed, and

• The economies of Pennine Lancashire, Blackpool, Barrow and West Cumbria are regenerated.

However, the region continues to face major challenges to the delivery of its ambitions and potential:

• The short term impact of the economic downturn and its longer term implications for the regional economy

• Structural weaknesses in the housing market typified by the lack of appropriate housing to support economic growth; too much poor quality housing and too few affordable homes

• The highest levels of Motorway congestion outside the South East, poor quality of many regional and local rail services and infrastructure, and congestion on rail routes serving the regional centres of Manchester and Liverpool

• Attraction and retention of highly skilled and talented people

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• Ongoing high levels of worklessness and concentrations of low productivity and enterprise levels leading to inequalities in particular communities that require effective activity to support people into work.

• Changing the way we live, work and travel in order to ensure growth is environmentally and socially sustainable and our carbon emissions are reduced.

This RFA advice sets out the region’s priorities for addressing these challenges under each of the funding areasrequested by Government. Each section also contains specific suggestions for further action by Government Departmentswhere the region has felt this is important to ensure delivery. It explains how they combine to support delivery of oureconomic, environmental and social objectives. They reinforce priorities set out in the NWDA’s Corporate Plan up to 2011, theERDF Programme 2007 to 2013 Investment Frameworks, the revised Regional Housing Strategy and Regional Housing Potcommitments and transport priorities detailed in RFA 2006 and the jointly agreed Regional Skills and Employment Priorities2007-10.

The region has agreed that this is a prudent approach to ensure delivery continues during tougher economic times and whilstit reviews its long term priorities during 2009.

This Advice also reflects the short term actions which the region has agreed to help support businesses and individualsmanage the impact of the global economic downturn. The region has established a Joint Economic Commission, chaired bythe Regional Minister and RDA Chair to guide the Northwest’s response and ensure Government’s response reflects theneeds of the region. The Commission is also looking to the longer term to ensure that short term action supports the futuresuccess of the region’s major assets and opportunities for long term recovery.

This Advice has been produced following an extensive consultation process across the region. This has been led by aninclusive steering group involving 4NW, the NWDA, GONW and other key public sector agencies. The input of the Northwest’sdeveloping MAAs as well as all its sub regions has been critical to the process of developing this Advice, which has alsobeen guided by detailed sustainability and equality assessments. These are available at Annexes A and B and will be used toguide further more detailed assessments of priority proposals.

We commend this Advice to you in difficult times both for the region and the country but with a firm commitment from theNorthwest to focus its efforts on using its unique assets and strengths to drive long term sustainable growth. We look forwardto discussing the issues it raises and will continue to work closely with Government to deliver the region’s ambitions.

Steven Broomhead Phil RobinsonChief Executive Chief ExecutiveNorthwest Regional Development Agency 4NW

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1. OVERVIEW 11.1 The Northwest 1

1.2 Progress since RFA1 2

1.3 Approach to RFA2 3

1.4 NW Response to Economic Challenges 5

1.5 Alignment of Transport, Housing and Regeneration, Economic Development and Skills Spending Plans to achieve the Region’s Priorities 7

1.7 Future working within the SNR Framework 10

2. TRANSPORT SPENDING PRIORITIES 132.1 Key Objectives 13

2.2 Transport Investment Programme Strategic Review 13

2.3 Recommended Transport Investment Programme 2009/10 to 2018/19 14

2.4 Integrated Transport and Highway Maintenance Block Allocations 14

2.5 Additional Advice 15

2.6 Carbon Dioxide Emissions 15

3. HOUSING AND REGENERATION SPENDING PRIORITIES 183.1 Introduction 18

3.2 Regional Objectives 18

3.3 Evidence base 19

3.4 Commitment to existing and new programmes 20

3.5 Sub-regional housing and regeneration priorities 20

3.6 Spending Priorities 22

3.7 Other issues for wider consideration and influence 22

4. ECONOMIC DEVELOPMENT SPENDING PRIORITIES 234.1 Strategic Priorities for the Northwest. 23

4.2 Responding to Current Economic Conditions 24

4.3 Methodology for determining Economic Development Priorities 24

4.4 Priority Economic Development Interventions 24

5. SKILLS PRIORITIES 265.1 Overview of Skills RFA 26

5.2 Principles 26

5.3 Economic downturn 27

5.4 Supply and Demand for skills 27

5.5 Northwest Skills Priorities 2007-2010 28

5.6 Current action 28

5.7 Future challenges 29

5.9 Key skills investment 29

5.10 Other issues 30

6. HOW THIS ADVICE WAS PRODUCED 30

ANNEX A: SUSTAINABILITY APPRAISALANNNX B: EQUALITY AND DIVERSITY IMPACT ASSESSMENTANNEX C: TRANSPORT INVESTMENT PROGRAMME STRATEGIC REVIEW

Regional Funding AdviceThe Advice of the Northwest Region

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England’s NorthwestSub-Regions and City-Regions

Motorways

Main Rail Routes

Sub Regional Boundaries

City Regions

Central Lancashire

Manchester

Liverpool

Source: Ordnance Survey, Crown Copyright 2005, All Rights Reserved, GD 021102

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1. OVERVIEW

1.1 Introduction

The Northwest is the UK’s third largest regional economy. It is home to 7 million people and in 2007 GVA was £119.7 billion.However, a long period of industrial restructuring at the end of the 20th century resulted in economic underperformance and anoutput gap of £20 billion compared to the English average. The region ranks seventh out of the nine English regions in terms ofGVA per capita. There is also considerable variation within the region, with the Cheshire sub-region above the England average,and Cumbria and Liverpool City Region1 significantly below it.

The Northwest is a diverse region, with significant natural environment assets with 18% of its land designated as National Park.Nearly 8% of the population are from ethnic minority communities and people from more than 150 of the world’s countriesreside here. It has globally important cities, the UK’s second biggest hub for creative and digital businesses outside London anda strong visitor economy worth £11 bn.

The Northwest lies at the intersection of two internationally important transport corridors, one running from north to south, theother from west to east. The north-south corridor links the region with mainland Europe via the Channel Tunnel and ports in theeast and south-east of England, and includes the West Coast Main Line and the M6 motorway. The west-east corridor extendsfrom Liverpool and other Irish Sea ports across the Pennines from Manchester to Leeds and the East Coast, and includes theM56 and M62 motorways, together with the main North and South Trans-Pennine rail lines. The region’s key internationalgateways (Manchester Airport, the Port of Liverpool and Liverpool John Lennon Airport) lie within these corridors. Collectively,they provide excellent connectivity with the rest of the UK, Ireland, mainland Europe and the rest of the world.

The Northwest’s transport networks are responsible for moving large numbers of people to and from work and for ensuring theefficient distribution of goods and services throughout the region, the wider UK and exported overseas. Because of substantialinvestment over the last 50 years, the region has one of the most extensive motorway networks in the UK, yet it suffers from thehighest trunk road congestion outside the South East. Worsening journey time reliability is a major problem, particularly forbusiness and industry. In urban areas, congestion affects the reliability of buses, and in rural areas, there is increasing concernabout the environmental and social impacts of traffic in towns, villages and the wider countryside. Road traffic is a major sourceof carbon dioxide emissions, with increasing car use contributing towards global warming and climate change.

Much of the Northwest now benefits from significantly improved rail services to the rest of the country, helped by thecompletion of the West Coast Main Line route modernisation in December 2008 and the provision of a new fleet of trains forTrans-Pennine Express services. The region has one of the most intensive local rail networks outside London and the SouthEast, yet the quality of many local services and infrastructure is poor. Congestion both in terms of the number of trains andpassengers is now of concern, in particular, routes serving the regional centres of Manchester and Liverpool

The Northwest has approximately 3.1 million homes. At the end of 2008 the average house price in the region was £129,166;however, at its peak in mid 2007 the regional average reached £137,8082. Since the Housing Green Paper ‘Quality and Choice:a Decent Home for All’ in 2000 significant strides have been made to improve the living conditions of residents in the socialhousing sector. Although the Government extended these ambitions to include private sector dwellings in 2002, 38%(approximately 900,000)3 of the dwellings still fall short of the decent homes standard. Of particular concern is the fact that 50%of dwellings in the region’s Private Rented Sector (PRS) fail to meet the decency standard.

The Northwest has had steady employment growth over the past decade with employment levels up more than 100,000 tonearly 3.1million in 2007 and 3.5% growth, slightly behind the national rate of 4.1%. Much of this growth was in PublicAdministration, Education and Health and Banking, Finance and Insurance, accounting for 44% of the region’s employment. Bycontrast, manufacturing has seen a 5% decline in employment over the past decade. But productivity and competitiveness inthe Northwest’s advanced manufacturing sector are high and energy and environmental technologies in particular are importantlong terms strengths for the region.

The number of employees in the Northwest in the first half of 2008 was lower than a year earlier. The outlook is for employmentto fall through to 2011. Overall, employment in the Northwest is expected to fall by 0.6% in 2008, by 1.7% in 2009, 1.1% in 2010and by a further 0.2% in 2011. The strongest falls in employment by sector are expected to be in construction, financial &business services, and manufacturing.

1 Throughout this document Liverpool City Region means the six local authority areas of Knowsley, Liverpool, Sefton, St Helens, Wirral and Halton. References to the Manchester City Region mean the 10 local authorities of Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside, Trafford and Wigan

2 http://www.nwrpb.org.uk/downloads/documents/feb_09/nwra_1233913488_North_West_Housing_Market_Tren.pdf

3 http://www.nwrpb.org.uk/downloads/documents/sep_08/nwra_1220519588_Decency_Baseline_Final_-_28_Au.pdf

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Worklessness remains a significant issue in the region with economic inactivity higher than the England average. There are over4.1 million people of working age and of these, 72.4% are employed compared with 74.1% nationally. Almost 10% of theworking age population in the Northwest claims Incapacity Benefit, higher than most other English regions, and the economicactivity rate of people with disabilities is much lower. The region, therefore, faces major challenges in tackling worklessness withconcentrations in urban areas both close to and distant from growth and amongst particular groups.

This indicates the significant challenge for the economy ahead, both regionally and nationally. In the light of these conditions itwill be important for the region and Government to continue to listen closely to businesses, keep track of changing economiccircumstances, and take appropriate targeted actions over the short term.

1.2 Progress since RFA1

Set out below is a summary of key achievements since submission of RFA1 in 2006.

Transport

Housing

EconomicDevelopment

Completion of A590 High and Low Newton Bypass, A66 Temple Sowerby Bypass, Freckleton StBridge Blackburn, A58 Blackbrook Diversion St Helens, and Blackpool and Fleetwood TramwayEmergency Works. A595 Parton to Lillyhall opened to traffic in February 2009. Work has startedon GM UTC, South East Manchester MMS QBC, Metrolink Phases 1 and 2 Renewal and Phase3a, and A34 Alderley Edge and Nether Alderley Bypass. Funding approval for preparation coststowards Carlisle Northern Development Route and planning approval for the M6 to Heysham Link.A556 preferred route announced. Mersey Gateway has received funding for development costs.Bidston Moss Viaduct has received conditional approval.

Over the past 2 years, the region has cleared 8,092 dwellings (4,218 in 06/07; 3,874 in 07/08)and have seen almost 49,000 net additions to the housing stock (22,666 in 06/07; 26,052 in07/08).

Since RFA1 the region has been preparing for a period of sustained long term housing growth tomeet demand and support wider economic growth, which is consistent with the Government'sown agenda, insofar as RSS has now been adopted with a revised set of housing figures thatrelate closely to the region’s growth aspirations and spatial distribution. Similarly, we havereviewed the Regional Housing Strategy to support these growth ambitions, supported by arobust evidence base that provides a framework which relates well to future development of boththe Regional Strategy and HCA and provides local and sub-regional partners with a strong steerin how to develop their housing and community strategies. To this end the Regional HousingBoard has been working with the sub-regions to enable them to develop their capacity, expertiseand strategies.

The Housing Market Renewal programme is now well established in four pathfinder areas -Pennine Lancashire (Elevate), Manchester/ Salford, Oldham/ Rochdale and Liverpool City Region(NewHeartlands), as well as the low demand initiative in West Cumbria and Furness. And thereare now six Growth Points identified by Government with emerging programmes of development.In addition, the Regional Housing Board has been supporting partnerships to take forward keywork around vulnerable people through the recently published Regional Homelessness Strategyand is well advanced in developing a framework for housing support services.

Start on site of MediaCityUK at Salford Quays to accommodate BBC’s major relocation to theregion; launch of Business Link Northwest; Opening of the National Bio manufacturing Centre atSpeke; Daresbury Science and Innovation Campus and launch of the Cockcroft Institute;Liverpool School of Tropical Medicine’s new Centre for Tropical and Infectious Diseases; Openingof the University of Cumbria, Energus (formerly known as the Nuclear Academy), and a newUniversity Centre for Burnley; completion of One Central Park in New East Manchester; Openingof the new Liverpool Cruise Liner Facility and the new Liverpool Echo Arena as part of the KingsWaterfront development in Liverpool; implementing the Natural Economy Northwest programmeto develop the economic benefit of the region’s natural environment; launch of the region’sClimate Change Action Plan and Liverpool’s successful year as European Capital of Culture 2008.


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1.3 Approach to RFA2

The Northwest’s Regional Funding Advice is submitted to Government during the most testing economic conditions for manyyears and in a fast changing national policy environment. Of particular importance is the Government’s confirmation that regionswill be asked to set out their long term priorities in a single Regional Strategy. The Northwest has agreed to move to thisapproach before other regions and has already begun the process of strategy development. A Regional Leaders Forum, 4NW,has already been established and it will work with NWDA on the development of a single strategy during 2009 which will ensurethat our long term goals and priorities support sustainable economic growth4 and successful communities over the long term.

The Regional Strategy will set out a clear vision for the region, building on the approach already agreed in the existingEconomic, Spatial and Housing Strategies. The Region is already consulting on the first stage of this work. The region’s aim is todevelop a strategy that will bring together environmental, social, economic and transport priorities and reflect the Northwest’slong term commitment to sustainable growth where:

• Our success is based on our competitive Sectors, our Higher Education and Science Base, connectivity through Ports/Airports, and motorway and rail networks, and our Natural Environment and rural economy;

• We are a flourishing lower carbon economy5, recognised as an important contributor of renewable energy and sustainable approaches to transport and economic development

• Productivity and Enterprise levels are high, driven by innovation, leadership excellence and high skills;

• Opportunities to participate in the regional economy are available to our diverse communities;

• Employment rates are high and concentrations of low employment are reduced;

• Everyone has access to appropriate good quality, affordable housing in sustainable mixed and vibrant communities;

• Everyone has access to high quality education and training which enables them to participate in society and in work;

• Manchester and Liverpool are vibrant European City Regions and, with Preston, are key drivers of economic growth;

• Growth opportunities around Crewe, Chester, Warrington, Lancaster and Carlisle are fully developed;

• The economies of Pennine Lancashire, Blackpool, Barrow and West Cumbria are regenerated;

• A sense of community is created, where people feel they belong and in which people feel safe and proud;

• We achieve a rich, bio-diverse natural and marine environment;

• We have good quality, accessible green infrastructure; and

• We are adapting to changing climate conditions.

The region has agreed that it will use this new strategy to set out its investment priorities from 2011/12 onwards. This will alsoreaffirm those existing priorities, such as transport schemes, that are already in the process of being delivered. Our RFA advice,therefore, emphasises the importance of maintaining delivery of existing priorities during 2009/10 and 2010/11. It reflectspriorities already agreed in the Regional Economic Strategy, the Regional Housing Strategy, and the Regional Spatial Strategy.However, these have been reviewed against the impact of current economic conditions. The region’s RFA advice emphasisesthe importance of maintaining delivery of existing priorities during 2009/10 and 2010/11. It does not propose changes to futurepriorities at this point, because the single strategy will enable the region to carry out a more in depth review of future prioritiesduring 2009.

The first round of Regional Funding Advice was used in the Northwest to set a very strong set of regional priorities. TheNorthwest has a strong partnership in place and we have made good progress on delivery.

The region continues to face major challenges to the delivery of its ambitions and potential:

• The short term impact of the economic downturn and its longer term implications for the regional economy;

• Structural weaknesses in the housing market typified by the lack of appropriate housing to support economic growth; too much poor quality housing and too few affordable homes. Implementation of the Code for Sustainable Homes and other initiatives in achieving projected levels of housing growth will help carbon reduction and mitigate against climate change;

• Ongoing high levels of worklessness and concentrations of low productivity and enterprise levels leading to inequalities in particular communities that require effective activity to complement activity to support people into work.

• Relatively low education and skills levels, including leadership, in parts of the region

• Attraction and retention of highly skilled and talented people to meet the increasing demand for higher level skills in the region

4 “growth that can be sustained and is within environmental limits, but also enhances the environment and social welfare, and avoids greater extremes in future economic cycles”. (Local Democracy, Economic Development and Construction Bill: Policy Document on Regional Strategies January 2009)

5 “low carbon economy” in the Northwest aims to reduce the carbon outputs from all aspects of our manufacturing, agriculture, transportation and power-generation. We will support technologies that produce energy and materials with little GHG emission; and encourage building design and operations which use these energies to have a minimal output of GHGs.


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• The highest levels of Motorway congestion outside the South East, poor quality of many regional and local rail services and infrastructure, and congestion on rail routes serving the regional centres of Manchester and Liverpool City Regions. Road congestion is expected to worsen, with a need for better management and shifting people onto more sustainable forms of transport, which could in turn present challenges for rail capacity in the Liverpool, Manchester, Preston and Chester areas. Transport emissions (carbon, air pollution, noise) will need to be managed particularly between Manchester and Liverpool.

• The potential of the strategic east-west connection between our two major cities for future growth will present particular challenges for environmental sustainability;

• The changing climate will increase the regularity of flooding on the one hand, and drought conditions on the other, both of which will present challenges for infrastructure (especially energy and water supply and quality) provision/maintenance as well as the location of new housing;

• The regional economy is already “decarbonising” as a result of the continuing shift from manufacturing to services, and the focus needs to be on transport and mobility in securing future carbon reductions;

• Energy is an increasingly important issue for the region, in terms of generation, use and carbon reduction, with potential supply challenges in the Manchester and Liverpool City Regions and Lancashire but significant opportunities for renewables and nuclear;

• There is a high proportion of derelict land across the Northwest (11,606ha) – the highest of all the English Regions – which offers a significant opportunity to regenerate land for commercial and residential use and thus improve overall sustainability, while creating economic value.

To secure economic growth to match the rest of the UK as well as to ride out the current recession, while achieving asubstantial change in how we achieve environmentally and socially sustainable economic growth, we must ask ourselvesfundamental questions about how our economy and society work. We will need to address what sustainable models ofbusiness look like post recession, where the jobs of the future will come from and any fundamental long term changes in theworld economy. For example, future models of growth may rely less on consumerism and credit and be based on more efficientuse of natural resources. Critical to this is the need to:

• Reduce carbon emissions from the economy, transport and housing to meet the demanding targets set by government;

• Spread the benefits of economic growth more widely so that the inequalities that persist in places can be reduced and people can make a full contribution to society;

• Tackle worklessness and low enterprise levels;

• Increase the resource efficiency of the industrial/commercial and domestic sectors so that growth can be accommodated while reducing the pressure on natural resources and the environment and staying within environmental limits;

• Attract and retain highly skilled and talented people;

• Improve the quality of the environment and living conditions within towns and cities to make them desirable and sustainable places to live; and

• Address the energy gap, maximising the use of renewables and new nuclear power6

This RFA advice sets out the region’s priorities for addressing these challenges under each of the funding areas requested byGovernment. Each section also contains specific suggestions for further action by Government Departments where the regionhas felt this is important to ensure delivery. It explains how they combine to support delivery of our economic, environmentaland social objectives. They reinforce priorities set out in the NWDA’s Corporate Plan up to 2011, the ERDF Programme 2007 to2013 Investment Frameworks, the revised Regional Housing Strategy and Regional Housing Pot commitments and transportpriorities detailed in RFA 2006 and the jointly agreed Regional Skills and Employment Priorities 2007-10

The region has agreed that this is a prudent approach to ensure delivery continues during tougher economic times and whilst itreviews its long term priorities during 2009 in preparing for the Regional Strategy. This process began in February 2009 with aPrinciples and Issues paper for regional consultation.

This advice has been produced through joint work between a wide range of partners in the region and consultation with a widerange of organisations, including a partners consultation event on 9th January 2009. Key to this has been use of 4NW’sHousing, Transport, Economic Groups as well as the Regional Skills and Employment Board and the 50 stakeholder strongRegional Strategy Advisory Group to act as sounding boards for development of this advice. The input of the Northwest’semerging MAA areas and its sub-regions has been critical to the progress of developing this advice.

This builds on the very strong and inclusive partnership approach taken in developing both RFA1 and the Regional EconomicStrategy. These same mechanisms and consultation processes will be used to develop the Regional Strategy to ensureconsistency between strategic planning and investment planning. We have considered the high level sustainability and equalityand diversity impacts of our advice and attach assessments which have been developed as an integral part of joint workingand the consultation process. This will be used to guide more detailed sustainability and equality and diversity assessments ofpriority projects and activity within priority themes.

6 The Office for Nuclear Development has recently written to all UK local authorities to start consultation on its Strategic Assessment for new nuclear power station sites


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1.4 NW Response to Economic Challenges

The Northwest economy has grown continuously for the last 15 years alongside major restructuring in the economy and majorprogress in the renewal and regeneration of our communities. However, the impact on the Northwest of changing globaleconomic conditions will involve major short term challenges. Our response has been based on meeting the immediate needsof business and individuals, whilst maintaining our focus and investment on the long term priorities and assets that will ensurelong term sustainable recovery and growth.

As well as the downturn in the housing market and severe reduction in speculative commercial and residential building,investment in business assets and development has also been affected. Surveys show that investment in capital infrastructure,plant, machinery, and training is declining leading to reduced business confidence about the economic outlook. Regionalgrowth forecasts have been revised down in the short term.

Projections from the Northwest Regional Economic Forecasting Panel suggest that although growth in the Northwest will notslow as much as the UK average, recovery will begin later and more slowly.

This is a consequence of the nature of the region’s businesses and some resilience in its economy as a leading region forforeign direct investments and strong sectors such as energy, defence, advanced manufacturing, engineering, science andinnovation. Job growth is expected to reverse significantly in 2009 but skills required by the region’s competitive sectors willcontinue to be in high demand.

Growth in the Northwest economy is expected to decline from 3% in 2007 to less than 1% in 2008. Following the expected UKeconomic cycle profile, we expect the region’s economy to shrink by 0.5% in 2009 before stabilising in 2010. Growth isexpected to remain modest at 1.5% in 2011.

Growth in manufacturing is expected to have fallen by 1% in 2008, a sharper decline than is forecast for the UK. Nationally andin the region, output in the sector is not expected to recover until into 2010. Year-on-year, Northwest manufacturing output isforecast to fall by 2.7% in 2009 and by a further 0.7% in 2010 before recovering to grow by 0.7% in 2011 as global demandpicks up.

The performance of financial & business services continues to have a major impact on the performance of the Northwesteconomy as a whole. Jobs data for the sector shows relatively weak employment performance in 2008.

Growth in the Northwest distribution, hotels & catering sector is expected to slow sharply from 3% in 2007 to just 0.5% in 2008as consumers in the region respond to the continued weakening in the housing market, tighter credit conditions, current levelsof debt and falling employment. With consumer confidence expected to weaken further as these features persist, output in thissector is forecast to fall by around 1.5% in 2009, a slightly worse outcome than is expected in the UK as a whole.

All sectors are expected to see output fall in 2009, with the exception of transport & communications and the public sector.Although Northwest growth in 2008 is likely to have been weaker than the UK as a whole, the loss of output in 2009 isexpected to be less because the immediate implications of the financial crises are expected to be felt more in London.

The region, working with Government, will continue to listen closely to businesses, keep track of changing economiccircumstances and take appropriate action over the short term. The newly formed Northwest Joint Economic Commission (JEC)will oversee implementation of measures announced in October 2008 and regularly review the need for further action.

The region has acted quickly to put in place additional support for businesses and individuals, working closely with Governmentto ensure that national policies meet Northwest needs.

Major actions to help businesses include:

• £140m Venture Capital Loan Fund. This is a priority project for the ERDF 2007-13 programme and will be ready to take applications early in 2009. The fund will make a difference in plugging the finance gap, helping businesses to gain access to finance to innovate, invest and grow in the region;

• £40m package of support to stimulate investment in priority skills development. The tough trading conditions will inevitably force businesses to cut-back on operational costs and skills training. This initiative will be developed to meet business needs in the coming months;

• New £35m Business Start Up programme for the Northwest funding to help entrepreneurs in the region to get new enterprises to support bioscience, green technology, precision engineering and the creative industries.

• £10m High-Growth business support. This initiative will help 1,000 high-growth, new and established businesses in the Northwest. High growth companies are defined as either new businesses that have the scope to grow to £0.5M in 3 years or established SMEs that have the ambition and capability of achieving a minimum of 20% per annum growth

• £4m Innovation Voucher Scheme. Helping 1,000 businesses to work with the regions Knowledge Base, i.e. universities, on collaborative projects.

• Dedicated Access to Finance support within Business Link NW. NWDA has set up a new, enhanced, Access to Finance service for businesses which is available via Business Link Northwest to diagnose business needs for finance, provide SMEswith skills/expertise to secure private funding and assist in brokering direct to the relevant finance provider.


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Action to support the housing market and individuals affected by redundancies includes:

• Stimulate building by investing in target areas to improve the quality of existing stock and secure the right mix of tenure;

• Identify opportunities to protect and stimulate the housing market and improve home buyer confidence through a focus on growth and regeneration areas with associated skills development and employment, financial and housing advice.

• Develop new models for investment surety with a focus on underwriting asset value and examine new investor opportunities. Access to finance proposals should recognise the changed lending conditions which are likely to remain;

• Tackling the economic and social effects of large scale redundancies and lower levels of recruitment; and

• Helping employers to plan and provide for current and future skills needs.

• Coordinated regional response to support individuals to up skill and retrain to meet current and future needs.

The prevailing economic and housing market conditions are already impacting on our ambitions for housing growth andregeneration. These severe short and medium term effects do not, however, undermine the rationale behind the Region’s long-term strategic approach. If anything the downturn heightens the need to provide more housing, to improve the quality of theexisting stock and to improve access to homes people can afford.

The short-medium term policy measures we are developing will be flexible and dynamic and in line with long term objectivesand ambitions in anticipation of market upturn. The region has moved swiftly on these issues by establishing a Housing SubGroup of the Joint Economic Commission. This task and finish group has developed a comprehensive action plan that focuseson 4 key sets of activity – enabling demand, protecting supply, helping people and retaining skills. This action plan will beintegrated into that now emerging for the RHS to ensure actions are sustainable and mainstreamed.

One early action from the Sub-group has been the recognition of the importance of providing high quality money and financialadvice to those at risk of repossession and to press for enhancements and regional co-ordination of services in this field.

A review of over 450 sites affected by the downturn submitted by all of the regions’ 43 Local Authorities has been completed byHomes and Communities Agency (HCA) for the JEC. This work has greatly widened understanding of the scale of the impact onthe region’s markets and is now shaping policy and investment decisions. The key issues emerging from this work are the needto establish mechanisms to enhance the viability options of stalled sites, to review masterplans to reflect future demand, toimprove access to mortgage finance and to ensure resources are brought to improve infrastructure and address remediationissues.

These distressed sites are being prioritised in line with the development of a comprehensive optional appraisal process. Theoutcome of this work and any investment requirements will be in line with RHS, RSS and RES.

Northwest Local Authorities are working hard to respond to the current economic downturn. We highlight below some of theaction taken and being considered:

• Applying a 10 day rule for prompt payment of invoices;

• More effective use of public sector procurement to support local economies;

• Support for local businesses to complement provision through Business Link within Business Support Simplification framework;

• Exploring flexibilities in resources and powers to address both short and long term implications of the recession, particularly in relation to measures within the Sustainable Communities Act and the Power of Wellbeing;

• Housing schemes to purchase empty property for social housing, provide mortgages and loans for arrears payment;

• Mitigating the impact on business of the Port Rating Tax; and

• Increasing the role of volunteering in helping people back into employment and/or training.

The JEC will review existing priorities and determine further actions and initiatives to help minimise the impact of the changingeconomic conditions. Through monthly reports by NWDA, GONW and regional stakeholders, we will continue to consult withregional partners, particularly businesses and business intermediaries to review the regional priorities to ensure that the regionfeeds back the trends in the local, sub regional and regional economies. There is a particular opportunity to bring forwardinvestment in infrastructure, especially sustainable transport, which would provide much needed jobs and businessopportunities in the short term, but also make the region better placed for the recovery. Conversely, the region would sufferparticularly badly from any cuts in public sector investment. This is reinforced by our view of the impact of a 10% funding cutscenario for RFA2, described later in this advice.


7

1.5 Alignment of Transport, Housing and Regeneration, Economic Development and Skills Spending Plans to achieve the Region’s Priorities

Spending priorities on transport, housing and regeneration, economic development and skills are shown in detail in latersections together with supporting information about the evidence base, risk management, value for money where practical andfit with existing national, regional and sub-regional strategies and plans. The table below shows, in summary form, how thesespending priorities individually and collectively are aligned spatially to support the agreed strategic regional priorities. Some ofthese linkages are described in more detail in the Manchester City Region, Liverpool City Region and Pennine Lancashire Multi-Area Agreements signed by Government in 2008 and 2009, and the Fylde Coast MAA currently in development. Furtherexplanation of the rationale for spending priorities is provided in the NWDA Corporate Plan and ERDF Investment Frameworks.

Of course, this table only lists those actions which are funded through the RFA2 investment streams although we do highlightthe region’s perspective on rail and skills priorities. These are the priorities that the region will pursue in relation to strategicpriorities over the next 3 years. After that, priorities will be determined by the new Regional Strategy. However, there is a farwider range of actions that the region will pursue which is outlined in the current RES, funding for which is not included withinthe RFA process. This is particularly so in relation to Economic Development, which is limited to NWDA and ERDF resources,and to Skills.

The priorities outlined below set out Housing Market Renewal areas as spatial priorities for tackling need. However, the regionalso recognises the opportunity that the 6 new Growth Point areas of Manchester City Region; Carlisle; Central Lancashire andBlackpool; West Cheshire; Halton, St Helens and Warrington; and Liverpool City Region Heartlands present for supportingeconomic growth both in past centres of regional growth and those areas more remote from such growth. In this way, economicdevelopment priorities align with the key spatial areas for housing intervention.

The key transport priorities below and in the RES/RSS, are aimed at maximising the potential of the City Regions, growthopportunities in other major towns and cities, including areas seen as remote from growth, and connecting areas of opportunityand need. The economic development priorities deliver the same objectives as well as encouraging economic development inlocations which better use the existing transport infrastructure.

Maintain existing transport infrastructurein good order; improve journey timereliability, safety and tackle congestionin key transport corridors within andbetween the three cities; and improvesurface access to internationalgateways.

Metrolink Extensions Phase 3a

Metrolink Phases 1 & 2 Renewals

Greater Manchester UTC

Ashton Northern Bypass Stage 2

Leigh Salford Manchester QBC

Rochdale Interchange

M60 JETTS QBC

A556 (M6 to M56) Improvement

South East Manchester MMS ReliefRoads

Bolton Town Centre Public TransportStrategy

GM Highway Retaining WallsMaintenance

GM Yellow School Buses

Focus renewal investment at the coreof the conurbations of Manchesterand Liverpool to ensure that marketrestructuring widens housingopportunities to attract and retainstrong and mixed communities

Provide additional appropriate newhousing to support economicdevelopment to better meet theaspirations of those living, or lookingto live, in the three cities. Regionally,the majority of new housing will belocated in the three city regions

Cluster programmes in prioritysectors

Exploiting opportunities fromMediaCityUK and BBC relocation

Liverpool Capital of Culture legacy tomaximise the full economic benefit

Supporting major researchconcentrations

Delivering skills required to maximisethe economic impact of key growthopportunities

Supporting people back intoemployment via employability and jobbrokerage activities

Encouraging employment creation inor near deprived areas

Setting Housing Market Renewal in astrong economic context

Investment in quality public realm inthe cities

Transport Housing and Regeneration Economic Development & Skills

MAXIMISE THE GROWTH OPPORTUNITIES PRESENTED BY MANCHESTER, LIVERPOOL ANDPRESTON, AS KEY DRIVERS OF CITY REGIONAL ECONOMIC GROWTH


8

Delivering the Regional Equality &Diversity Strategy


Bidston Moss Viaduct Maintenance

Edge Lane / Eastern Approaches, Liverpool

Hall Lane Strategic Gateway, Liverpool

Mersey Gateway

Thornton to Switch Island Link

A5036 Access to the Port of LiverpoolImprovement

Silver Jubilee Bridge Maintenance

Improve access to regional gatewaysand deliver designated strategic regionalsites.

Crewe Rail Gateway

Crewe Green Link Road SouthernSection

Completion of Heysham to M6 LinkRoad

Carlisle Northern Development Route

Ensure existing stock, places andnew housing supports regenerationor knowledge based sustainableeconomic development in thesefive important key regional townsand cities including support for the3 Growth Points

Deliver average annual rate ofhousing provision as set out in RSSfor Crewe and Nantwich, Chester,Warrington, Lancaster and Carlisle

Cluster programmes in priority sectors

Helping businesses to implementprocess and product/service innovation

Supporting major research concentrations

Job brokerage linkages between thesegrowth areas and workless people nearby

Delivering Strategic Regional Sites


Deliver improvements to the public realm


FULLY DEVELOP GROWTH OPPORTUNITIES AROUND KEY REGIONAL TOWNS AND CITIES OFCREWE, CHESTER, WARRINGTON, LANCASTER AND CARLISLE

Improve accessibility to link people andjobs and improve connectivity toperipheral areas to encourage economicdevelopment.

East Lancashire Rapid Transit

Blackpool and Fleetwood TramwayUpgrade

A595 Parton to Lillyhall Improvement

Deliver average annual rate ofhousing provision as set out in theRSS for Pennine Lancashire,Blackpool, West Cumbria andBarrow

Maximise the positive economicimpact of the housing marketrestructuring work in West Cumbriaand Furness.

Supporting people back into employmentvia employability and job brokerageactivities

Encouraging employment creation in ornear deprived areas

Delivering skills required to maximise theeconomic impact of key growthopportunities

Setting Housing Market Renewal in astrong economic context

Investment in quality public realm in towns

Implement West Cumbria Energy CoastStrategy including support for nucleardecommissioning


REGENERATE PENNINE LANCASHIRE, BLACKPOOL, BARROW AND WEST CUMBRIA


9

Ensure that renewal and growthactivity to tackle the inappropriatesupply of housing in Blackpool andthe Fylde Coast is driven by astrong and inclusive economicstrategy.

Maximise the positive impact ofHMR activity in Pennine Lancashirewithin its broader economic market

Develop and implement the BarrowMaster Plan, including support for marineand leisure developments

Implement the Blackpool Masterplan

Implement the integrated economic planin support of the Pennine LancashireMAA, including support for advancedmanufacturing



Reduce the adverse impacts oftransport in terms of safety and theenvironmental and social degradation ofrural communities.

A34 Alderley Edge and Nether AlderleyBypass A57/A628 Mottram, Hollingworth& Tintwistle Bypass & A57 Glossop Spur

Delivery of a range of transportimprovements to improve accessibility inurban and rural areas and connectivitywithin and between city regions willsupport economic activity in ruralhinterlands.

Ensure a sufficient supply ofaffordable housing within ruralareas including parts of Cheshire,Cumbria and Lancashire

Deliver average annual rate ofhousing provision as set out inRSS for Eden, South Lakeland andLake District National Park

Helping businesses to implementprocess and product/service innovation

Improving business resource efficiencyand waste minimisation support

Developing world class management /leadership skills

Investment in quality public realm in keyrural service centres

Develop the economic benefit of theregion’s natural environment



ENSURE ONGOING GROWTH IN THE RURAL ECONOMY

The Northwest Regional Skills and Employment Board priorities for 2007-10 are set out below:

• Tackle worklessness by linking people, jobs and training;

• Increase the participation of 16-19 year olds in education and/or work based learning, thereby securing increases in Level 2 and Level 3 attainment and progression into higher education;

• Increase the proportion of adults with the skills and qualifications needed for employment, with a focus on Skills for Life and Level 2 attainment;

• Support adults to progress beyond Level 2 and to attain skills and qualifications at Level 3 and above, with a focus on key sectors;

• Stimulate employers to invest more in workforce development which meets business needs including innovation, management, leadership and intermediate and higher level technical and professional skills;

• Stimulate demand for, and investment in entrepreneurial, intermediate and higher level skills from individuals;

• Support providers to respond to the needs of individuals and employers through delivery of high quality provision.

These priorities are underpinned by the requirement for consistently high quality of skills provision, and the need to ensure thatall activity addresses issues of equality and diversity. The Skills Annex provides more detail about key skills issues in the regionand priorities beyond 2010.


10

1.6 How the Region would Maximise the Impact of any Increase in Funding and would Minimise the Impact of any Decrease

An overall funding increase of 10% per annum would give the Northwest an estimated additional £1,522m over the period2008/9 to 2018/19. Such monies would be invaluable to enable the region to address short term economic conditions anddeliver much needed economic development plans and housing and transport infrastructure improvements to support longerterm objectives.

This could be used to offset the now significant additional cost of the current transport programme; build, refurbish and/or clearmany more hundreds of houses; enhance infrastructure improvements to support Growth Point initiatives and/or speed upimplementation of economic development plans. The opportunity such increased funding would afford to act as a catalyst foreven higher levels of investment through “match funding” with European Structural Funds is highly significant.

The region is committed to working together to ensure any increased funding would be properly appraised and allocated in linewith the vision and priorities set out in section 1.3.

A 10% reduction in funding would have substantial negative impacts on the region. The Northwest continues to fareunfavourably when compared with southern English regions for public sector investment, particularly research and developmentand transport infrastructure. Although the South East may be particularly hard hit by shrinkage of the financial services sector, itsadvantages in terms of infrastructure and ability to compete globally, make it much better placed to recover from recession. Areduction in funding for the Northwest would negatively impact on our ability to respond to the short term conditions and laystrong foundations for future sustained recovery and to support GVA growth; hinder the regeneration of key areas and impactbadly on vulnerable groups. The net impact would be greater than 10% due to consequential reductions in levered fundsincluding those from the private sector and ability to access European Structural Funds. Similarly any reduction in the otherpublic funding streams outside of the RFA process would be of great concern to the region. These currently provide more than£56.9 billion of public resource each year,7 of which the Regional Funding Allocation is less than 2.5%. However, theeffectiveness of all of this public investment will be maximised if it is deployed to further the vision and priorities agreed in theregion and set out within the existing regional strategies and this advice.

The region would also strongly recommend that it has the opportunity to consider how to apply such reduction across fundingstreams. This should be a joint process with Government to ensure that any requirement to reduce spending is informed by aregional assessment of the impacts on achievement of strategic objectives within and across RFA2 investment themes.

1.7 Future working within the SNR Framework

The Government’s review of Sub National Economic Development and Regeneration reported in July 2007. It set out somespecific policy changes with consultation proposed on others. The Government’s response to this consultation was published inNovember 2008 and taken together reflects the direction that Regional partners have taken over the past 18 months. This buildson a strong partnership and sub-regional approach that is further strengthened in places by the advent of Multi-AreaAgreements (MAAs).

Key elements of this approach are:

• Close partnership working between 4NW and NWDA to deliver the joint responsibility to develop a single Regional Strategy covering economic, transport, housing, planning, social and environmental objectives bringing together the RES, RSS and RHS;

• HCA’s role as a key local delivery partner;

• Delegation of decisions to local and sub-regional level with more emphasis on programmes, joint investment planning and commissioning between Regional agencies and their partners;

• Growing account taken of sub-regional strategies and plans and MAA and LAA delivery plans that are consistent with regional priorities; and

• Greater scrutiny and accountability at regional level through 4NW, the role of the Regional Minister and the new Parliamentary Select Committees for the Regions.

This strengthens strategic decision making at regional level and makes it better aligned to meet economic, environmental andsocial objectives while allowing for more local decision making on activity.

7 Total identifiable expenditure on services by country and region, Public Expenditure Statistical Analyses 2008, HMT


2

3

45

6

1

1

15

3

2

9

7

2029

8

11

15

25

24

21

22

23

16

10

26

4

17

12

18

6

14

27

1928

13

Wrexham

Deeside

Guide to locationsRegional Funding Advice

Source: Ordnance Survey, Crown Copyright, All Rights Reserved. GD 021102.

11


12

KEY

Regional ParksEast Lancashire

Ribble Estuary

Wigan Greenheart

Mersey Waterfront

Weaver Valley

Northwest Coastal Trail

Strategic Regional SitesAshton Moss, TamesideBasford, CreweCuerden Regional Business Park,Preston/LeylandDaresbury Park, HaltonKingmoor, CarlisleKings Business Park, KnowsleyKingsway, RochdaleOmega South, WarringtonRoyal Ordnance Factory, ChorleyThe Estuary, Speke/GarstonWirral International Business ParkBarton, SalfordTwelve Quays, BirkenheadWhitebirk, LancashireCarrington, TraffordChester Business ParkDavenport Green, TraffordDitton, WidnesLancaster University/BailriggLiverpool University EdgeCentral Park, ManchesterParkside Former Colliery, St HelensLiverpool Science Park (Edge Lane)Westlakes, WhitehavenAlderley Park (AstraZeneca),Macclesfield

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Transport Priorities

1. Cheshire East 2. Cheshire West & Chester3. Copeland4. Carlisle5. South Lakeland 6. Allerdale7. Eden8. Barrow-in-Furness 9. West Lancashire 10. Lancaster11. Chorley12. South Ribble 13. Rossendale 14. Fylde15. Preston16. Wyre17. Pendle 18. Ribble Valley 19. Hyndburn 20. Burnley

21. Bolton22. Bury 23. Knowsley 24. Liverpool25. Manchester26. Oldham27. Rochdale28. Salford29. Sefton30. Stockport31. St. Helens 32. Tameside33. Trafford34. Wigan35. Wirral36. Blackburn with

Darwen37. Blackpool38. Halton39. Warrington

Northwest Region boundary

New Heartlands HMR

East Lancashire HMR

Oldham Rochdale HMR

Manchester Salford HMR Urban Regeneration Companies (URC) /Economic Development Companies (EDC) Areas

HMR and URC/EDC AreasHousing Growth Points:

Northwest Motorways

Airports

Key Ports

Key Towns and Cities

Lake District National Park

Hadrian’s Wall

1

2

3

4

5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

A58 Blackbrook Diversion, St HelensA595 Parton - Lillyhall ImprovementA555 Manchester Airport Eastern Link RoadGreater Manchester Urban TrafficControl (GMUTC)Metrolink Phase 1&2 RenewalsMetrolink Extensions Phase 3aA34 Alderley Edge and NetherAlderley BypassBidston Moss Viaduct (Jn.1 M53)A57/A628 Mottram - Tintwistle BypassA57 Glossop SpurAshton Northern Bypass Stage 2Leigh-Salford-Manchester QBCM60 JETTS QBCRochdale InterchangeBlackpool and Fleetwood TramwayUpgrade Phase 1Edge Lane/Eastern ApproachesHall Lane Strategic Gateway, LiverpoolMersey Gateway (Second MerseyCrossing)Thornton to Switch Island Link, SeftonA556 (M6 to M56) ImprovementCrewe Green Link Road SouthernSectionCrewe Rail GatewayEast Lancashire Rapid TransitCompletion of Heysham to M6 linkBolton Town Centre Public TransportStrategyGreater Manchester AuthoritiesHighway Retaining WallsStrengthening SchemeYellow School BusesA5036T Access to port of LiverpoolImprovementSilver Jubilee Bridge Mantenance

Local Authority Areas

Multi Area Agreement

Note: Locations are indicative only

Manchester MAA

Liverpool City Region MAA

Pennine Lancashire MAA

Fylde Coast MAA

Note: Strategic Regional Sites currently under review

1 Carlisle2 Central Lancashire & Blackpool3 Greater Manchester4 Merseyside Heartlands5 Halton, St Helens, Warrington6 West Cheshire


13

8 North West of England Plan: Regional Spatial Strategy to 2021, CLG / GONW, September 20089 Northwest Regional Economic Strategy 2006, Northwest Regional Development Agency10 Moving Forward: The Northern Way – Short Medium and Long Term Transport Priorities, Steer Davies Gleave, September 200711 Review of Highways Agency’s Major Roads Programme, Report to the Secretary of State for Transport, the Nichols Group,

March 200712 Delivering a Sustainable Transport System: Main Report, Department for Transport, November 2008

2. TRANSPORT SPENDING PRIORITIES

2.1 Key Objectives

Local authorities, the Highways Agency the rail industry and other transport providers need to work together to ensure that theNorthwest’s transport networks are planned, managed, operated and improved in an integrated context. The suite of transportpolicies in the Regional Spatial Strategy8 (RSS) concentrate on the development of better links within the region, and betweenthe region and other parts of the UK, Ireland, mainland Europe and beyond. RSS aims to improve significantly the quality andprovision of public transport together with promoting a more structured approach to managing and selectively improving theregion’s highway network. In doing so, policies align with the objectives of the 2006 Regional Economic Strategy9 to developthe Northwest’s strategic transport, communications and economic infrastructure, and with the policy priorities of the NorthernWay Growth Strategy10, particularly in terms of improving access to the North of England’s major ports and airports and creatingbetter public transport services within and between city regions. On the other hand, RSS reflects the need to manage traveldemand, reduce the need to travel and increase accessibility.

2.2 Transport Investment Programme Strategic Review

Following the decision on 19th December 2008 by the Association of Greater Manchester Authorities (AGMA) to no longerpursue its Transport Innovation Fund (TIF) bid, it is essential that the Northwest make the most effective use of the limitedfinancial resources for major transport schemes available to it. Since submission of RFA1 advice in January 2006, localauthorities and the Highways Agency have made considerable progress with a number of schemes completed, several underconstruction and others at various stages in the Department for Transport’s (DfT) approvals process. However, the cost ofdelivering the agreed investment programme has now risen by over £450m. Three trunk road schemes (the A57/A628Mottram, Hollingworth and Tintwistle Bypass, the A556 (M6 to M56) Environmental Improvement and the A5036 Access to Portof Liverpool Improvement) account for over 70%, primarily because of the new cost forecasting methodology introducedfollowing the Nichols Review11.

The transport investment programme is now 36% over-programmed for the RFA1 period 2006/07 to 2015/16, significantly abovethe DfT ceiling of 20%. It has therefore not been possible to add any new schemes; furthermore, the region has undertaken astrategic review of the programme to determine which schemes to defer in order to comply with the over-programmingparameters for both RFA1 and RFA2 periods.

DfT expects regions to align their advice with regional spatial, transport and other strategies, hence the review has focused on thecompatibility of schemes with the policy framework set out in the Regional Spatial Strategy and the Regional Economic Strategy.It has also taken into account the transport priorities of the Northern Way Growth Strategy and designated Housing Growth Pointsin the region. The Government’s recently published ‘Delivering a Sustainable Transport System (DaSTS)’12 informed the work froma national policy perspective. There remains a strong consistency with the policies and priorities of pan-northern and Northwestregional strategies. The review is available in full as Annex C.

The review started from the premise that the transport investment programme is no longer affordable within the over-programming parameters, with the region needing to defer some £195m of expenditure to beyond 2015/16. This has increasedfollowing the recent decision by DfT to address short-term cash flow requirements for the Metrolink Extensions Phase 3ascheme through the RFA process. DfT has also advised that the £3.6m allocated to costs related to the decision to withdrawfunding approval for the original Metrolink Extensions scheme is incorrect, and should be £10.7m.

The four largest road schemes (the three trunk road schemes referred to above and Completion of the Heysham to M6 LinkRoad) account for around 80% of the increased cost. There is a clear regional policy steer against sacrificing sustainabletransport and essential maintenance schemes in favour of funding increased costs of major road schemes, an approachreinforced by responses to the RFA2 consultation and at the RFA2 consultation event held on 9th January 2009. The reviewtherefore focused on these four highway schemes, concluding that the region can effectively no longer afford all four within theRFA1 period. We also assessed those schemes that DfT has not yet approved and concluded that they all remain broadlyconsistent with wider regional strategy and policy.

In terms of their strategic justification, the A556 and A5036 Access to Port of Liverpool Improvement schemes are the strongest,with the Mottram, Hollingworth and Tintwistle Bypass the weakest. Completion of the Heysham to M6 Link Road is the mostadvanced in terms of DfT’s approvals process following the granting of Programme Entry in January 2009. This scheme alreadyhas planning permission, and subject to successful completion of the remaining statutory processes, construction could startearly in 2010.


14

Deferring the Mottram, Hollingworth and Tintwistle Bypass (and associated Glossop Spur) to a start of works beyond 2015/16reduces the current over-programming to within a level acceptable to the DfT for both RFA1 and RFA2 periods. The regionacknowledges that this will increase outturn costs due to inflation, and will continue current uncertainties arising from theadjournment of the public inquiry in December 2007.

2.3 Recommended Transport Investment Programme 2009/10 to 2018/19

The region’s recommended transport investment programme is set out in Tables 1 and 2 for the RFA1 and RFA2 periods. Wehave updated information on costs and spend profiles for local authority schemes to 2008/09 Quarter 3. For those schemesthat DfT has not yet approved, scheme promoters have assured us that they are deliverable within the claimed timelines.Where we recommend modified spend profiles, these have been inflation-adjusted using the inflation assumptions supplied inDfT’s RFA Transport Advice Supplementary Note. The funding profiles meet the over-programming parameters for both RFA1and RFA2 ten year periods. Our advice on specific schemes is as follows.

• A57/A628 Mottram, Hollingworth and Tintwistle Bypass: We recommend deferring this scheme by four years to a start of works in 2016/17. The revised spend profile includes a nominal £100,000 per annum to cover ongoing Highways Agency administrative costs during the deferral period.

• A57 Glossop Spur: This scheme is intrinsically linked to the Mottram, Hollingworth and Tintwistle Bypass, which we have recommended be deferred for four years. The same deferral should therefore apply, with a revised start of works in 2017/18.

In its RFA2 consultation response, AGMA set out its intention to undertake an early and thorough review of all non-committedschemes in the sub-region, and requested the region caveat any advice submitted in February 2009 on the basis that theregion submit supplementary advice following that review. The region has agreed to this request, hence, advice on non-committed schemes in Greater Manchester is provisional. We will provide further advice once Greater Manchester’s work hasconcluded, which we expect to be by the end of April 2009. Any reprioritisation will affect schemes in the Greater Manchestersub-region alone.

• A555 Manchester Airport Eastern Link Road (MAELR) Completion: The latest outturn estimate available to the region prices the scheme at circa £325m, based on a start of works in summer 2011. This is optimistic both in terms of time required to complete the necessary statutory procedures and DfT’s approvals process. The outturn cost will therefore be higher once it is inflation-adjusted to take account of deferral. There is currently no headroom in the RFA to contribute towards its construction, even with the recommended deferral of the Mottram, Hollingworth and Tintwistle Bypass. Furthermore, the region will need assurances from the three local authorities (Manchester City Council, Stockport MBC and the new Cheshire East unitary authority) that they are willing and able to provide sufficient funding to cover the local contribution.

A number of uncertainties remain with regard to the deliverability of this scheme, notwithstanding the DfT’s £165m contribution.The region will respond to the DfT’s offer in the supplementary advice we will submit following Greater Manchester’s review ofits sub-regional priorities. This is a significant challenge given DfT’s requirement that the region fully match fund its offer. In theinterim, we recommend continuing with but modifying the spend profile of the current allocation of £17m to 2015/16 aspotential contribution towards preparation costs and the cost of acquiring the Highways Agency’s land and property portfolio forthe MAELR scheme, which we understand to be around £3m.

2.4 Integrated Transport and Highway Maintenance Block Allocations

The region does not consider that sufficient evidence is available to it to make informed recommendations on changes to thedistribution of either of the block allocations between authorities, nor to alter the balance of spend between major schemes, theintegrated transport block and the maintenance block. We are concerned that to do so without such evidence could adverselyaffect the ability of local authorities to deliver local transport plans, and/or impact on the structural condition of the region’s roadnetwork.

There is concern in the Northwest that sub-£5m schemes that do not meet the DfT criteria for consideration as major schemesare unaffordable to some local authorities, particularly unitary authorities. The region acknowledges that it could create a fundthrough which to finance such schemes either by top slicing the integrated transport and/or maintenance block allocations orpump priming a fund with money from the major schemes allocation, and that such an approach could offer greater flexibility.We therefore intend to undertake some research work to evaluate advantages and disadvantages, including how much moneysuch a fund might require and how to allocate it.


15

2.5 Additional Advice

DfT has asked the region to advise on priorities for study work by the Highways Agency and priorities for rail optiondevelopment. We believe that the following principles should shape these priorities: tackling climate change and mitigating itseffects, strengthening agglomeration economies, supporting freight and logistics, development of the region’s housing growthpoints and regeneration areas, strengthening international connectivity and improving accessibility for all. Tackling climatechange must be central to all the region’s plans and strategies.

Transport investment, even when planned on a multi-modal basis, is a means to an end, not an end in itself. It is thereforeessential that transport priorities for all modes emerge from and support the Regional Strategy. The Regional Strategy will playthe central role in identifying these priorities that in turn will inform the city and regional networks work we undertake as part ofDaSTS. The following suggestions for Highways Agency study work and rail option development are therefore provisionalpending the region’s submission in June 2009 of evidence-based suggestions for joint studies through DaSTS.

Regional Priorities for Study Work by the Highways Agency

The key challenge facing the Northwest is the need for capacity enhancements and/or demand management measures onmotorways such as the M60 that also perform a vital regional function. The Eddington Transport Study forecasts seriouscongestion on the region’s motorway network by 2025, second only to that predicted in the South East. Our key inter-urbanroads are also important enablers of economic prosperity, and increasing congestion will have a direct cost on people andbusinesses. We wish to see increased investment in the Northwest’s motorway network, in particular, the Greater Manchesterand Cheshire / Warrington areas where we consider the introduction of techniques such as hard shoulder running to be acritical priority. Other issues for consideration include:

• Strategic Park and Ride;

• Behavioural change;

• Access to inter-modal freight terminals; and

• Access to designated housing growth points.

Regional Priorities for Rail Option Development

One of the Northwest’s key assets and opportunities lies in the scale and breadth of labour markets in the Liverpool andManchester city regions. Improving transport links between and within the major urban areas, particularly by rail, has thepotential to generate significant critical mass and agglomeration economies. The region will wish to determine key priorities forfuture rail investment as part of the development of the Regional Strategy, and therefore the following issues may needconsideration:

• Strategic Park and Ride;

• Train lengthening;

• Core City station expansion;

• Metrolink extensions and interchanges;

• Enhancements between Pennine Lancashire and Manchester; and

• Enhancement of rail routes between Liverpool and Manchester potentially involving electrification proposals.

The region is fully committed to the Manchester Rail Hub study and will help to move forward priorities identified through thisand the city and regional networks work the region will undertake as part of DaSTS.

2.6 Carbon Dioxide Emissions

The region has attempted to estimate the impact of the proposed transport investment programme on carbon dioxideemissions. However, due to a lack of available data, this has not proved possible. Where information is available, we haveconsidered it as part of our strategic review.


16

Scheme

RFA1: All costs refer to £m and areoutturn prices.

Table 1

Current Status 2006/07

2007/08

2008/09

2009/10

2010/11

2011/12

2012/13

2013/14

2014/15

2015/16

RFA Funding (millions)

A66 Temple Sowerby Bypass

A590 High and Low Newton Bypass


Manchester / Salford Inner Relief Road

Metrolink Phase 3 Committed Costs

Northern Orbital QBC

A58 Blackbrook Diversion, St Helens

Blackpool & Fleetwood Tramway Emergency Works

Freckleton Street Bridge, Blackburn

Greater Manchester Urban Traffic Control (UTC)

South East Manchester MMS QBC



A34 Alderley Edge and Nether Alderley Bypass

Carlisle Northern Development Route

Bidston Moss Viaduct (M53 J1) Maintenance


Blackpool & Fleetwood Tramway Upgrade

Completion of Heysham to M6 Link Road

A57/A628 Mottram-Tintwistle Bypass

A57 Glossop Spur


Leigh-Salford-Manchester QBC

M60 JETTS QBC




Mersey Gateway (Second Mersey Crossing)

Thornton to Switch Island Link, Sefton

Crewe Green Link Southern Section

Crewe Rail Gateway


Bolton Town Centre Public Transport Strategy

GM Highway Retaining Walls Maintenance

A555 Manchester Airport Eastern Link Road

Yellow School Buses

A5036 Access to Port of Liverpool Improvement


Completed/Under Construction

Full/Conditional Approval

Programme Entry

Sub Total

Not Yet Approved

Total Spend

RFA (indicative from 2011/12 onwards)

Annual spend as % of annual RFA allocation

Difference (-ve denotes overspend)

Aggregate difference

Completed

Completed

Completed

Completed

Completed

Completed

Completed

Completed

Completed

Under Construction

Under Construction

Under Construction

Under Construction

Under Construction

Conditional Approval


Development Phase

Programme Entry

Programme Entry

Development Phase

Programme Entry

Programme Entry

Programme Entry

Programme Entry

Programme Entry

Programme Entry

Programme Entry

Programme Entry

Programme Entry

Not Yet Approved

Not Yet Approved

Not Yet Approved

Not Yet Approved

Not Yet Approved

Not Yet Approved

Not Yet Approved

Pre Options Phase

Not Yet Approved

17.6

12.0

4.8

0.9

3.3

5.8

3.6

4.6

4.1

6.2

0.4

8.9

62.9

0

9.3

72.2

0

72.2

115

63%

43

43

11.6

18.0

14.6

7.0

2.0

2.2

34.7

0.4

4.2

90.1

0

4.6

94.7

0

94.7

117

81%

22

65

1.7

18.2

10.7

0.1

2.7

3.0

2.9

10.9

86.5

10.0

4.2

0.2

0.3

3.9

3.0

0.3

1.2

0.9

146.7

4.4

7.5

158.6

2.1

160.7

119

135%

-42

23

0.1

0.9

3.0

6.2

72.1

18.4

2.1

1.8

28.6

11.0

0.1

3.1

12.0

1.2

9.2

10.5

5.4

0.1

8.6

0.4

100.7

2.1

83.0

185.8

9.0

194.8

121

161%

-74

-50

3.0

75.7

12.2

17.9

2.6

31.7

31.0

0.1

4.7

16.0

6.5

14.5

6.2

2.0

0.6

0.2

4.5

7.7

0.4

90.9

17.9

115.9

224.7

12.8

237.5

123

193%

-115

-165

2.6

29.7

0.1

18.1

15.7

32.4

0.1

2.5

16.7

2.3

0.6

0.6

6.0

7.4

5.2

13.5

9.9

7.0

0.5

7.3

32.4

18.1

84.3

134.8

43.4

178.2

125

143%

-53

-218

5.0

3.2

2.3

52.3

27.4

0.1

0.1

1.0

9.3

7.2

10.2

13.5

6.0

8.4

5.0

6.5

7.0

8.2

2.3

97.4

107.9

56.6

164.5

128

129%

-37

-255

4.3

2.6

35.4

24.5

0.1

2.0

33.2

3.1

10.0

13.5

7.0

7.1

5.0

1.5

9.8

6.9

0

95.2

102.1

57.0

159.1

131.9

121%

-27

-282

1.7

44.7

6.8

0.1

2.0

23.7

17.0

10.8

13.1

7.6

1.7

0

77.3

79.0

48.5

127.5

138.8

92%

11

-270

20.7

0.5

2.1

3.4

10.0

5.0

35.2

5.7

0

0

26.7

26.7

55.9

82.6

141.8

58%

59

-211

29.2

31.7

37.7

0.9

10.7

3.3

6.8

10.6

7.3

13.6

9.2

58.0

273.3

48.2

4.2

40.6

174.3

60.3

133.1

18.1

0

10.4

44.7

7.1

10.0

24.3

17.3

86.0

15.6

18.7

37.0

45.0

23.8

42.9

17.0

5.0

58.5

37.4

540.5

44.8

601.2

1186.5

285.3

1471.8

1260.5

117%

Mottram - Tintwistle Bypass & Glossop Spur deferred / A555 MAELR Preparation Costs onlyOnly the amount required from RFA shown.

Updated to 2008/09 Quarter 3


17

Scheme

RFA2: All costs refer to £m and areoutturn prices.

Current Status 2011/12

2012/13

2013/14

2014/15

2015/16

2016/17

2017/18

2018/19

RFA Funding(millions)


A58 Blackbrook Diversion, St Helens

Greater Manchester Urban Traffic Control (UTC)



A34 Alderley Edge and Nether Alderley Bypass

Bidston Moss Viaduct (M53 J1) Maintenance


Blackpool & Fleetwood Tramway Upgrade

Completion of Heysham to M6 Link Road

A57/A628 Mottram-Tintwistle Bypass

A57 Glossop Spur


Leigh-Salford-Manchester QBC

M60 JETTS QBC




Mersey Gateway (Second Mersey Crossing)

Thornton to Switch Island Link, Sefton

Crewe Green Link Southern Section

Crewe Rail Gateway


Bolton Town Centre Public Transport Strategy

GM Highway Retaining Walls Maintenance

A555 Manchester Airport Eastern Link Road

Yellow School Buses

A5036 Access to Port of Liverpool Improvement


Completed/Under Construction

Full/Conditional Approval

Programme Entry / Development Phase

Sub Total

Not Yet Approved

Total Spend

RFA (indicative from 2011/12 onwards)

Annual spend as % of annual RFA allocation

Difference (-ve denotes overspend)

Carry Forward / Cumulative Aggregate difference

Completed

Completed

Under Construction

Under Construction

Under Construction

Under Construction


Development Phase

Programme Entry

Programme Entry

Development Phase

Programme Entry

Programme Entry

Programme Entry

Programme Entry

Programme Entry

Programme Entry

Programme Entry

Programme Entry

Programme Entry

Not Yet Approved

Not Yet Approved

Not Yet Approved

Not Yet Approved

Not Yet Approved

Not Yet Approved

Not Yet Approved

Pre Options Phase

Not Yet Approved

3.0

75.7

12.2

17.9

2.6

31.7

31.0

0.1

4.7

16.0

6.5

14.5

6.2

2.0

0.6

0.2

4.5

7.7

0.4

90.9

17.9

115.9

224.7

12.8

237.5

123

193%

-115

-165

2.6

29.7

0.1

18.1

15.7

32.4

0.1

2.5

16.7

2.3

0.6

0.6

6.0

7.4

5.2

13.5

9.9

7.0

0.5

7.3

32.4

18.1

84.3

134.8

43.4

178.2

125

143%

-53

-218

5.0

3.2

2.3

52.3

27.4

0.1

0.1

1.0

9.3

7.2

10.2

13.5

6.0

8.4

5.0

6.5

7.0

8.2

2.3

97.4

107.9

56.6

164.5

128

129%

-37

-255

4.3

2.6

35.4

24.5

0.1

2.0

33.2

3.1

10.0

13.5

7.0

7.1

5.0

1.5

9.8

6.9

0

95.2

102.1

57.0

159.1

131.9

121%

-27

-282

1.7

44.7

6.8

0.1

2.0

23.7

17.0

10.8

13.1

7.6

1.7

0

77.3

79.0

48.5

127.5

138.8

92%

11

-270

20.7

0.5

2.1

3.4

10.0

5.0

35.2

5.7

0

0

26.7

26.7

55.9

82.6

141.8

58%

59

-211

76.8

15.9

10.0

69.5

5.4

0

0

92.7

92.7

84.9

177.6

143.8

124%

-34

-245

110.5

10.3

2.4

10.7

37.8

0

0

123.2

123.2

48.5

171.7

146.7

114%

-25

-270

99.0

2.4

0.9

0

0

102.3

102.3

0

102.3

143

72%

41

-229

0.1

0.9

8.6

6.2

186.8

38.2

40.4

173.2

60.3

133.1

287.4

12.7

10.4

44.7

26.3

10.0

24.3

17.3

83.0

15.3

18.7

37.0

45.0

23.8

41.7

17.0

25.7

164.9

42.8

240.8

40.4

898.0

1179.2

416.6

1595.8

1343

119%

Mottram - Tintwistle Bypass & Glossop Spur deferred / A555 MAELR Preparation Costs onlyOnly the amount required from RFA shown.

Updated to 2008/09 Quarter 3

2009/10

2010/11

0.1

0.9

3.0

6.2

72.1

18.4

2.1

1.8

28.6

11.0

0.1

3.1

12.0

1.2

9.2

10.5

5.4

0.1

8.6

0.4

100.7

2.1

83.0

185.8

9.0

194.8

121

161%

-74

-5023

Table 2


3. HOUSING AND REGENERATION SPENDING PRIORITIES

3.1 IntroductionIn January 2009, the Regional Housing Board signed off a new and revised Regional Housing Strategy (RHS). This nowprovides an up to date thematic framework to steer spatial investment in housing regionally and sub-regionally in support of theRSS. This is now shaping the regional activity of the Homes and Communities Agency (HCA) and will form a key integratedelement of the emerging Regional Strategy to ensure further alignment with wider regeneration activity. For clarity thefollowing funding programmes are now the responsibility of HCA, not all of these are addressed through the RFA process whenperhaps they should, but include: National Affordable Housing Programme, Housing Market Renewal, Gypsy and Traveller,Decent Homes, PFI (credits), Growth Funding, the former EP Programmes and Places for Change.

The key concern of the Regional Housing Board is to ensure that investment in housing supports and delivers sustainableeconomic growth and inclusion. This goal and the long term objectives that sit beneath it in the RHS are supported by adetailed evidence base, this underpins the case for continued investment in housing to achieve the North West’s economicambitions. In doing so, we will seek to ensure effective and appropriate investment in housing interventions, new supply andsupport those most vulnerable in local neighbourhoods. Throughout the Board maintains its long term commitment to thedelivery of RSS housing targets and to the excellent progress that the North West has made in delivery of its social decencyprogrammes.

The Northwest has a good track record in delivering value for money through its housing programmes. In 2007/08 the £122mresources provided through the region to Local Authorities attracted or supported an additional £685m housing investment and£550m in private sector leverage. This delivered: 1,784 new affordable homes for rent and 892 for low cost home ownership; theclearance of 2,341 obsolete properties; over 3,500 homes in the private sector made decent with almost 22,000 had energyefficiency measures installed; and the awarding of 12,338 Disabled Facilities Grants (DFGs).

Despite the great achievements in providing new homes, restructuring vulnerable markets and raising the quality of our stocksince the first RFA, significant areas of deprivation and poor housing still remain. Comprehensive and integrated marketintervention is still needed to tackle exclusion, poor social mobility detachment from the opportunities provided by improvedeconomic well being.

The region recognises the impact a reduction in projected levels of housing funding will make to these economic ambitions.The case is made here to protect and prioritise these vital resources to ensure the region can meet both RSS targets forhousing growth and to deliver the continued restructuring of vulnerable, unbalanced markets across the Northwest.

3.2 Regional ObjectivesThe overall ambition of the North West RHS is to create balanced housing markets across the region that support economicgrowth, strengthen economic and social inclusion and ensure that everyone has access to appropriate, good quality, affordablehousing in sustainable, mixed and vibrant communities.

To achieve this there are three connected long-term, high level objectives for the region against which shorter term priorities foraction will need to be established at district and sub-regional level. Delivery will not be achieved overnight but these objectivesdo need to become progressively embedded in housing strategies at all levels. These are:

• Achieving the right quantity of housing

By enhancing the RSS through establishing a framework for sub-regional and district housing strategies, the RHS will help ensure that new supply is appropriate to local markets, by getting the location, type, design, size and tenure right; and that existing stock is used effectively, including bringing empty properties back into use.

• Continuing to raise the quality of the existing housing stock

Although great improvements have been made in recent years through the Decent Homes programme, Housing Market Renewal and the RHS, too much of the region’s existing stock is not fit for purpose nor sustainable. The RHS will provide a further drive to ensure that our existing homes are of a high standard, play a full role in raising the quality and sustainability of places and become part of neighbourhoods where people choose to live, work and invest.

• Connecting people to the improved housing offer

The RHS will look to ensure that people have the opportunity to access good sustainable housing and housing support choices to meet demands, needs and aspirations, that a wide range of tools and products are available to do this and that housing plays a central role in incentivising economic activity over the longer term.

Strengthened housing markets and improvements in the quality of housing resulted from the economic success of recent yearsand have led to important increases in the quality of life for the majority of residents in the Northwest. Despite good progressacross the region’s housing markets in recent years, significant areas of deprivation and poor housing remain. Structuredinterventions are now needed to address the growing risk of exclusion from our housing markets, reduced social mobility and insome cases, further detachment from the opportunity of economic growth.

18


19

3.3 Evidence base

Key elements of analysis from the evidence base and monitoring that now supports the RHS13 are set out below.

The Regional Strategic Housing Market Assessment work estimated the level of affordable housing need across the region, andfor each of the 27 Housing Market Areas. This estimated that there is a net affordable housing need of around 38,000 dwellingsin the Northwest over the next 20 years, driven primarily by natural demographic change and an ageing population.

The Assessment also estimated that 22- 27% of new housing provision per annum will need to be provided as affordablehousing across the region. Of this, it is considered that 78% should be social housing and 22% intermediate housing but thatwill vary across the region to reflect local circumstances and markets. The 2008-11 NAHP programme (£526m) set an averageannual output target of 2300 units for social rent and 1000 low cost home ownership units. This would deliver 14% of the23,100 annual RSS growth target - clearly the impact of the economic downturn has made both targets even more challenging.

Source: P2m/P2Q returns from local authorities National House-Building Council (NHBC)

Stock condition in parts of the private sector, however, remains a cause of considerable concern. The Northwest has thegreatest numbers of low value and non-decent private properties in the country, with almost 900,00014 in the region falling intothis category. This impacts on health, fuel poverty, carbon reduction targets and on the sustainability of stock andneighbourhoods, With a target standard for this is Ecohomes XB, the total cost to make decent all the non-decent privatehousing in the region was estimated (with VAT and other costs) to be £7.375 billion in 2008.

13 RHS Evidence Base:Housing Market Areas http://www.nwrpb.org.uk/downloads/documents/apr_08/nwra_1208352307_HMA_Final_report_31-03-08.pdfRegional Strategic Housing Market Assessments (SHMAs)http://www.nwrpb.org.uk/documents/?page_id=4&category_id=249NW Needs Assessment Modelhttp://www.nwrpb.org.uk/whatwedo/issues/housing/?page_id=412Establishing a Decency Baseline for the Private Sector in the Northwesthttp://www.nwrpb.org.uk/downloads/documents/sep_08/nwra_1220519588_Decency_Baseline_Final_-_28_Au.pdfReview of demand for Disabled Facilities Grant (DFG) In the North Westhttp://www.nwrpb.org.uk/downloads/documents/jan_08/nwra_1199984538_A_Review_of_Demand_for_Disable.pdfNW Housing Market Review - Q2 2007http://www.nwrpb.org.uk/downloads/documents/jun_08/nwra_1214217875_North_West_Housing_Market_Tren.pdf

14 Establishing a Decency Baseline for the Private Sector in the Northwest, August 2008 -http://www.nwrpb.org.uk/downloads/documents/sep_08/nwra_1220519588_Decency_Baseline_Final_-_28_Au.pdf


3.4 Commitment to existing and new programmes

There remains a very strong commitment to and continuation of the Housing Market Renewal initiative across theNorthwest. The indicative allocations for this from 2008-11 identified by CLG are set out below and are critical insupporting efforts to rebalance markets to meet wider economic and social wellbeing ambitions:

The work around restructuring housing markets is evolving and is being constantly reviewed to ensure it is fully integrated withlocal and regional strategic objectives:

• The HMR programme meets all the priorities of the new Regional Housing Strategy in that it is key to supporting housing growth in our urban cores, transforming the quality of the housing offer and addressing the living circumstances of some of our most vulnerable neighbourhoods to support the achievement of the region’s economic ambitions. As an example the Liverpool City Region Housing Strategy makes the continuation of the Pathfinder the unambiguous number one priority.

• The original programme was put in place to address long-term weaknesses in vulnerable housing markets. This transformational process will take at least 15 years and requires strong leadership and sustained support. To date this has been forthcoming and rewarded, but the work is not yet finished. Strong commitments have been made to these communities to progress CPO and acquisition programmes and to develop a new housing offer in sustainable communities.

• The markets in HMR areas are by their nature more exposed to the risk of the credit crunch and therefore non-completion of their agenda will leave these areas at high risk of slipping back into the circumstances that provoked their establishment in the first place.

• Of particular importance is the continuation of site assembly to ensure the delivery of additional homes in the future. There are likely to be opportunities to accelerate and scale this up to help deliver a greater volume of new provision. In turn this will support the creation of more transformative developments that are able to attract sustainable and mixed income communities.

Six New Growth Points have recently been identified by Government in the Northwest – West Cheshire; Liverpool City RegionHeartlands (Liverpool/Wirral); Mid Mersey (St. Helens/ Warrington/ Halton); Manchester City Region (Manchester/ Salford/Trafford/ Bolton); Central Lancashire and Blackpool; and Carlisle. All of the New Growth Points have agreed partnershiparrangements and programmes of development setting out their ambitions and expectations for delivery of additional housingover the long term. This includes infrastructure, as well as re-shaping and regenerating places for sustainable growth andproviding the opportunity to align economic development opportunities with key spatial areas for housing intervention.

Initially £100m had been identified to support the development of 21 new Growth Points nationally The region will ensure thatits share of this resource is used effectively to deliver maximum possible growth numbers and that these are aligned with thewider objectives of the RHS. To take this work forward HCA are developing new place focussed business models that will alignand integrate public and private investment as well as ensuring high standards of design and sustainability.

3.5 Sub-regional housing and regeneration priorities

CHESHIRE AND WARRINGTON

The objectives of the Cheshire Housing Strategy are to increase the supply of affordable housing to support economic growthand development while making the best use of the sub-region’s existing housing stock. As well as addressing the housing andaccommodation-related support needs of the sub-region’s most vulnerable residents and increasing the supply of markethousing to support continued economic growth and regeneration and to meet local housing needs.

East Lancashire

Manchester/Salford

Merseyside (NewHeartlands)

Oldham/Rochdale

West Cumbria

HMR Area

52

52

54

32

3

2008-09

50

46

51

30

2

2009-10

48

42

47

28

1

2010-11

150

140

152

90

6

Total allocation 08/11

Table 1: HMR Funding Allocation 2008-2011

20


21

The delivery of more housing in Cheshire West and Chester and Warrington will be supported by the New Growth Point statusfor both areas. Key to this will be the identification of several key strategic sites to kick-start housing-led regeneration byproviding high quality, sustainable housing and infrastructure to support wider regeneration and economic growth.

CUMBRIA

Housing and spatial priorities for Cumbria continue to focus on redressing housing imbalances across the Sub-region throughthe provision of affordable and local-needs housing. Key to this is support for the restructuring of housing markets in westCumbria and Furness; delivering growth through Carlisle as a New Growth Point; and targeted provision of affordable housingwithin South and East Cumbria.

In addition a key focus will be support for vulnerable people through prioritised interventions for fuel poverty and disabledfacilities grants.

LANCASHIRE

Delivery of existing Housing Market Renewal commitments in Pennine Lancashire remain a key priority for the Lancashire sub-region. These will be taken forward through the Market Progression Model of the emerging Pennine Lancashire DevelopmentCompany and closely aligned with activity to strengthen economic well being.

The scale of the market weaknesses in Blackpool is a cause of major concern. Ensuring a strategic approach to housinginvestment that is driven by a clear economic rationale is central to addressing these weaknesses.

The planning and delivery of housing and infrastructure investment to support of the regeneration of Central Blackpool and EastPreston, together with the Central Lancashire Growth Point, and the former new town of Skelmersdale also requires significantattention.

At the same there is a need to ensure that affordable housing issues in rural communities are addressed; not lost through thedelivery of generic affordable housing in urban settings.

LIVERPOOL CITY REGION

RSS (LCR1) promotes a significant proportion of new housing development and renewal (and related social and environmentalinfrastructure) to the inner areas of the city-region to meet the objectives of the emerging sub-regional economic and housingstrategies.

Housing market restructuring in the conurbation core requires long term support and investment. This will ensure that priorityneighbourhoods have appropriate intervention, redevelopment and refurbishment to provide long term confidence forcommunities, the private sector developer and RSL partners. The regeneration of the NewHeartlands area is a core element ofthe Liverpool City Region Housing Strategy.

Improving energy efficiency and tackling fuel poverty in the most deprived communities in the Liverpool City Region would notonly have a significant effect on health and wellbeing but would also link directly to meeting future sustainability targets (40% ofnational energy use is within domestic buildings).

Spatial prioritisation of vulnerable areas – including the core of the city region covered by NewHeartlands and a number ofoutlying (mainly former council) estates – is supported by evidence in Liverpool City Region Housing Strategy and by policy inthe Regional Spatial Strategy. Work in these areas would also improve links to employment and training opportunities so wouldgo much further than simply ‘bricks and mortar’.

Four of the six Liverpool City Region districts now have New Growth Point status. Liverpool/Wirral is linked to the regenerationof inner core areas (Birkenhead docks, North Liverpool) and offers potential for transformational change at the heart of theconurbation. Halton/ St Helens (with Warrington) is linked to the development of key investment sites as well as supportingurban renaissance and the development of affordable housing in St Helens, Runcorn, Widnes and Warrington.

Affordability remains a problem in parts of the sub-region. In particular in west Wirral and north Sefton affordability problems arelinked largely to the desirability of those areas, but the house price rises over the last 10 years or so have made it an issueacross most districts, and this is unlikely to change in the near future.

MANCHESTER CITY REGION

The long term goals for the Manchester City Region remain growth in both the economy and in housing numbers. Key renewalpriorities continue to be the two HMR Pathfinders, Manchester/ Salford and Oldham/Rochdale, with the New Growth Pointstatus adding to collaborative approaches to increase long-term supply through the RSS.

In the short term addressing the issue of distressed stock and stalled sites is critical, requiring innovative solutions aroundshort-term leasing, rents to mortgage and tying allocations into employment related priorities as well as some social rents.Greater Manchester authorities are already piloting some of these innovative solutions.


22

Allocations &commitment

2008/09

29m

Cheshire

24m

Cumbria

220m

ManchesterCity Region

Lancashire

147m

LiverpoolCity Region

551m*

(* variation from the figure in the RFA Guidance reflects built in commitments from NAHP and rounding of figures.)

Both the RHS and HCA will ensure that focus in future years will be to identify integrated impact assessed, place basedsolutions. As HCA’s regional Business Plan develops and is rolled out through the single conversation process, funding streamswill be progressively aligned with local, sub-regional and regional strategic priorities. Driven by the RHS, the residual RHP will beclosely aligned to this process.

3.7 Other issues for wider consideration and influence

The region will be looking to ensure investment flows into improving the quality of existing stock and as part of this will lookingto establish a special purpose vehicle to support a regional equity loan scheme. Developmental work is needed now so that ascheme is ready for when the housing market recovers.

The region will also look to deliver interventions to improve housing conditions, management issues associated with the lowerend of the market, housing benefit supported/ low income households in the private rented sector which will be followed upwith a separate response to Government on the Rugg Review. Linking physical investment to landlords and tenants committedto particular initiatives that help tackle worklessness – for example, investment in private rented properties that are linked totenancies supporting people getting back into work highlighted in the Government’s Enhanced Housing Options trailblazerscheme should be mainstreamed across the Northwest and taken forward in parallel with the HCA investment programmes.

HCA and the regional agencies will provide clarification on how on wider programmes and funding for supported housing,including housing and ageing population15, hostels (Places for Change), Gypsy & Travellers (G&T) funding and DFGs will fit withthe delivery of growth and renewal. A more co-ordinated approach regionally and locally will align Supported Peopleprogrammes with capital programmes. Great strides have been made in the region to come to terms with this through thehousing needs assessment model and this will now need a wider understanding of the Joint Strategic Needs Assessment(JSNA) work and to closely integrate with health investment.

Through our recent work to develop the region’s evidence base and in developing strategies for homelessness and supportedhousing (and housing support services), as well as the ongoing partial Review of RSS for the allocation of G&T provision acrossthe region we work with Government and HCA to support our objectives with targeted resources to meet priority need.

We will also address issues related to improving the use and efficiency of resources as well as make progress on wider issuessuch as the mitigation of climate change, linked to the reduction of carbon emissions and fuel poverty. In doing so, we willalign these with national, regional and sub-regional programmes and provide clear signals for Government and HCA. We willalso look to take advantage of the recent proposed changes to ERDF rules to support energy efficiency measures in theexisting housing stock and welcome Governments early endorsement of this approach.

15 The region has developed the Regional Framework on Ageing which identifies the key challenges for demographic change and an ageing population. The Framework has been developed through 5050vision on behalf of NWDA, 4NW, GONW, Regional Public Health Team, CSIP, NHS NW, Age Concern NW and Help The Aged - details can be found at www.5050vision.com

NW total

131m

In preparation for the upturn and to meet increasing demand, strategic site assembly and investment in site preparation such asplanning approvals, site investigations and where appropriate site remediation works are essential. These are expected to befocussed on areas with well advanced integrated investment plans such as the Pathfinders, New Growth Points and others.

The quality of some of the existing private sector stock and in particular the private rented sector stock continues to be a majorissue within the Manchester City Region.

HCA will be working with the local authorities through the single conversation to progress the ambitions of the Strategic Plan.This will consider how best to establish joint investment planning to maximise the impact of both public and private investment.

3.6 Spending Priorities

The table below provides an estimate of the resources allocated and committed by sub-region from all housing andregeneration funding streams and agencies in 2008/09 that are consider through this RFA process.


4. ECONOMIC DEVELOPMENT SPENDING PRIORITIES4.1 Strategic Priorities for the Northwest

This sets out advice to Government on the economic development strand of the RFA2. It covers the budget of the NorthwestRegional Development Agency (NWDA) and the European Regional Development Fund (ERDF). Sustainable economicdevelopment remains a major priority for the region and this is reflected in the current RES. RFA2 provides an opportunity toflag up the key economic issues and priorities that will inform development of the new integrated Regional Strategy

At £119.7 billion GVA (2007), the Northwest is the UK’s third largest regional economy but has historically underperformed.Compared to the English average, it has an output gap of approximately £20 billion with £14 billion due to lower productivityand £6 billion due to demography and employment rates.

Other key gaps within the England average (based on size of population) include:

• 88,000 fewer people working;• 85,000 more people with no qualifications;• 124,000 fewer people with degree level qualifications;• 120,900 fewer people in the knowledge economy;• 39,000 fewer companies

However, it is not clear how the current downturn will affect the absolute and relative level of these output measures in thefuture. The Northwest economy has performed well over the last few years but with the downturn beginning to bite all theevidence suggests that returning to growth in the next few years is going to be tougher for the region. The longer-term impactof the international credit crisis nationally and its impacts regionally; uncertainty about energy and foodstuffs prices, and theirdisproportionate effect on the Northwest due to the size and nature of our manufacturing sector are all factors.

Tighter controls on central government spending nationally could also have a greater impact on the Northwest due to theimportance of public sector employment. The demographics of an ageing population, reduction of the working age populationand the role of international migration will also have major effects on the economy.

The priorities for NWDA and ERDF spending plans over the next 3 years reflect these objectives and these are explained inmore detail in 4.4. However, early work on development of the single Regional Strategy has identified some emerging issues:

• Much Northwest growth will be concentrated in the Manchester and Liverpool City Regions and the linking “corridor” including the Warrington and Chester “nodes” but with consequences for infrastructure, the environment and sustainability and high level skills;

• Delivery of the quantity and quality of housing stock in and near these areas to support this growth;

• Manchester will remain a multi-functional cosmopolitan City Region and the regional financial and business services and digital and creative industries centre in the region that will, with appropriate connectivity, benefit the whole region;

• Improving sustainable connectivity from Pennine Lancashire and from north of the Manchester City Region into the city centre not just to improve access to jobs but to increase attractiveness of outlying business locations;

• Liverpool will remain a multi-functional cosmopolitan City Region with a key asset around the Port/Airport (Super-Port concept) and consequential sector strengths in logistics, but also in the bio-medical sector and tourism sectors – Liverpool 08 has proved the potential for the latter;

• Preston has potential for further growth that would also benefit Blackpool and Pennine Lancashire with appropriate improvements in East-West connectivity;

• Developing other growth “nodes” in the region - Crewe (linked to the potential for a new station only 1.5 hrs from London by train), Lancaster (as an historic city with a University centre of excellence in research in regional growth business sectors) and Carlisle as a University city and focus for a sub-region extending into Scotland;

• A challenge for parts of the region to re-invent themselves for a new economic future and for other parts of the region currently dependent on one traditional industry - this is a particular issue for Blackpool and the nuclear industry in West Cumbria;

• Scale of Level 4 skills and Leadership and Management skills is holding back productivity;

• Reducing size of the workforce due to ageing population and outward migration;

• Poor skills levels and concentrations of deprivation still keeping people out of the labour market and insufficient impact on the concentrations of worklessness;

• Creating sustainable rural communities with appropriate and enabling communication links, both physically and technologically.

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There are some specific opportunities developing and emerging:

• Advanced manufacturing (engineering & materials), bio-medical and creative sectors provide Northwest competitive advantage together with other sub-regionally important sectors;

• Role of HEI’s in driving the economy and the science base in the region including Daresbury, Manchester Knowledge Capital, Liverpool Science Park and Lancaster Science Park linked to HEI and as significant businesses in their own right, through their broad and diverse interactions with business and through the development of the regional skills base;

• Role of Lifelong Learning Networks (LLNs) in creating seamless progression opportunities which provide skills pathways to meet the needs of regional employers;

• Innovation in new technologies and future technologies, services, business practice, management and leadership;

• West Cumbria Energy Coast and nuclear potential in Lancashire (Heysham and Springfield);

• Developing Ports and Airports to maintain international connectivity, with proximity to London, improving skill levels and relatively low costs, makes the Northwest a good international business location and a centre for “mid level support services”;

• Protect and exploit natural assets and build on a potentially vibrant rural economy;

• Exploiting the assets and environment of both growth areas and areas remote from growth, particularly in relation to housing growth and key growth business sectors.

4.2 Responding to current economic conditions

The Northwest economy has grown continuously for the last 15 years. This growth has been underpinned by majorrestructuring in the economy and has enabled the renewal and regeneration of our communities. But the impact on oureconomy of current global shocks poses challenges to continued progress - we are now seeing the effects in increasingnumbers of job losses across a number of sectors. Section 1.4 shows in detail how the region has been affected by the currentrecession and the actions put in place to help businesses and individuals.

4.3 Methodology for determining Economic Development Priorities

The economic development funding priorities below have been determined by reference to:

a) the existing NWDA Corporate Plan (2008/09 - 2010/11) signed off by Government early in 2008;

b) the ERDF Programme 2007-13 Investment Frameworks agreed by the region early in 2008; and

c) reference to the RES and those transformational actions which are appropriate for NWDA for the period up to 2010/11.

The priorities for funding outlined are all designed to support the transformation of the Northwest economy and the achievementof the overall RES vision and the six transformational outcomes described in 1.1. However, the balance of funding priorities up to2010/11 may change to reflect action necessary to address current economic conditions as determined by JEC review. The newintegrated Regional Strategy (expected to be in place by April 2010) will determine funding priorities after 2010/11.

4.4 Priority Economic Development Interventions

A fundamental aim of Northwest RFA2 will be to provide a strong economic context and demonstrate how the three RFA2investment themes and skills investment priorities link and are mutually supportive in delivering regional economic objectivesand priorities. This will contribute to building a Regional Strategy over the next 12 months which will provide the definitiveregional view of how best to integrate regional economic, transport and housing planning in support of the sustainable growthof the Northwest’s economy.

NWDA leads the sustainable economic growth of the region through supporting delivery of the Regional Economic Strategy(RES) which sets out an agreed strategic vision, clear priorities and targets. The RES provides the overarching context for allAgency activity and use of its investment programme and that of the new ERDF programme. It is proposed thereforethat the Agency’s Corporate Plan for 2008-11 and ERDF Investment Frameworks provide the basis for Regional FundingAdvice during that period. However, it is suggested that due to limited availability of funding and the early stages indevelopment of the Regional Strategy that will determine post 2011 regional funding priorities, future RDA/ERDFinvestment plans reflect that and the next Comprehensive Spending Review.

A summary of the expected total income and expenditure over the 2008-11 period is given overleaf.

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The NWDA will enhance its strategic and commissioning, delegating delivery and project decision making to sub-regional andlocal organisations where appropriate. This anticipates the changes announced by Government in the 2007 ComprehensiveSpending Review (CSR) and Sub National Review on Economic Development and Regeneration (SNR).

The NWDA will work with partners to ensure that delivery resources and capacity are located within the most appropriateorganisation at the point of delivery. This delegation of project decision making will occur within agreed strategic programmes setout in this plan and may involve a range of delivery organisations, including Universities, Special Purpose Vehicles as well asLocal Authorities and Sub-Regions where appropriate. Delivery may continue to be regional where the evidence shows this ismost effective (e.g. Business Support), with appropriate sub-regional and local level involvement in the design and commissioningof such interventions.

The RES 2006 aim to grow GVA above the England average is challenging given the economic downturn and the region willneed to review the balance of funding to address this in the short term as outlined in 1.3 above. However, the Agency’sCorporate Plan covering the period 2008/09 to 2010/11 and the ERDF Investment Frameworks sets out justifiable objectives andinvestments to achieve priorities and ambitions agreed in the RES; contribute to delivery of the regional growth objective andRegional Economic Performance Public Service Agreement (REP PSA2); and deliver new responsibilities and duties arising fromthe CSR and SNR.

Government will monitor the progress of regional economies against the GVA / head objective and five outcome focusedindicators – GVA/hour worked; employment rates; basic, intermediate and higher level skills rates; R&D as a percentage of GDP;and business start-up rates. The NWDA Corporate Plan and ERDF Investment Framework pick up how they will contribute to thisgrowth objective as well as to the principles of Sustainable Development and Economic Opportunity for All.

NWDA has set out 11 corporate objectives based on the RES and designed to improve competitiveness and productivity acrossthe region’s Business, People and Places. They reflect the totality of NWDA’s responsibilities, and focus on delivery of the specificactions in the RES on which NWDA leads delivery. These are summarised below with indicative NWDA investment.

Financial Year 2008/09 £m 2009/10 £m 2010/11 £m

Competitive Business £M

Grant in Aid

EU Programme

Other

391.6

212.2

60.4

386.5

86.5

29.8

377.4

72.3

20.4

Total Income

Expenditure

EU Programme

NWDA Programme

Overheads

Irrecoverable VAT

Total Expenditure

664.2

211.0

392.1

55.8

5.3

664.2

502.7

85.3

359.1

52.8

5.5

502.7

470.1

71.1

339.5

52.8

6.7

470.1

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1 Support the development of internationally competitive sectors 172.3

2 Improve the formation, survival and growth rates of enterprises 180.8

3 Develop higher added value activity through innovation 89.3

4 Realise opportunities from globalisation 20.3

Competitive People5 Develop leadership and management skills in the current workforce 20.0

6 Stimulate demand for higher level skills in the current workforce 60.0

7 Grow the size of the workforce 15.3

Competitive Places

8 Support the development of major employment sites and premises 90.7

9 Improve the physical conditions for private sector investment 331.5

10 Adapting to climate change and increasing sustainable resource use 33.5

11 Improve the image of the region to businesses and visitors 27.5

Other 49.5

Total 1,090.7


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Against each objective, the Corporate Plan sets out the specific rationale for NWDA investment and the main outcomes, alongwith high level details of the activity that will be delivered to meet these objectives. Important sub-regional variations and asummary of the main outcomes and activities pursued in each sub-region is set out below.

CHESHIRE AND WARRINGTON

Strengthen Cheshire and Warrington’s position as a strongly performing sub-region and contributor to regional GVA, focusing ongrowth opportunities in Chester, Crewe and Warrington through maximising the economic potential of Chester, Crewe andWarrington; addressing key employability and skills priorities; improving business competitiveness and enterprise in high growthvalue added sectors and in deprived areas; strengthening Cheshire and Warrington’s quality of place to attract more visitors andprivate sector investment.

CUMBRIA

To help the Cumbrian GVA growth to at least a regional average by focusing on activity aimed at growing the energy sector andbuilding on Cumbria’s strengths as a destination as well as supporting the expanding role of the University of Cumbria as anagent for economic, cultural and educational transformation; reducing the gap in performance between the West Coast and therest of Cumbria; building on the growth of Carlisle as a University City of the sub-region; supporting the development of thetourism offer of the Lake District National Park and across the wider county; and support the continued growth of Barrow.

LANCASHIRE

Strengthen Lancashire’s position as a strongly performing sub-region and contributor to regional GVA by developing Preston asa growth driver and maximise economic benefits of Lancaster’s heritage, environment and University assets; increasingeconomic activity in areas of low growth in Blackpool and Pennine Lancashire; increasing the scale of higher value businessand improve productivity; building a skilled workforce; and addressing transport and communications barriers.

Work with partners across the region to develop the new Regional Strategy will review and re-assess these sub-regionalstrategic objectives. The Regional Strategy Principles and Issues Paper currently out to regional consultation has begun thisprocess setting out matters for discussion, review and development.

LIVERPOOL CITY REGION

Support the economic renaissance of Liverpool City Region and ensure the benefits are captured effectively throughstrengthening business productivity and enterprise; strengthen Liverpool’s position as a European visitor destination; exploit thecity region’s knowledge assets; reduce worklessness and build more sustainable communities; create conditions for continuedinvestment; and build the Capital of Culture legacy.

MANCHESTER CITY REGION

To ensure that Manchester City Region growth trends make an increased and sustainable contribution to the economic growthof the region through ensuring that Northern Districts have maximum opportunities to benefit from growth at the regional;building on the key economic assets of the sub-region; improving connectivity between Manchester and the rest of the North;driving the sub-region as a global knowledge capital; creating conditions for continued investment.

5. SKILLS PRIORITIES

5.1 Overview of Skills RFA

The Government has requested advice on the Northwest region’s skills priorities as part of the overall package of RFA2. Whilstrecognising that the adult skills budget is not included in the RFA funding envelope, the North West Regional Skills andEmployment Board (RSEB), formerly the Regional Skills Partnership, has clearly outlined its joint priorities for 2007-10. Thesepriorities provide the basis for RSEB members to align with, and contribute to the wider economic and social objectives of theNorthwest. This paper includes the 2007-10 skills priorities and outlines the emerging thinking on refinement and revision of thepriorities for the period from 2010 onwards.

5.2 Principles

Since 2005 the Northwest has recognised that the skills agenda should be seen not only as the function of the LSC but also ofother partners and budgets including JobCentrePlus (JCP), Higher Education and the NWDA. It has also ensured, through itspartnership work in the RSEB, that the skills and employment agenda meets and contributes to the wider needs of the regionaleconomy through its leadership and ownership of the Skills and Employment element of the Regional RES. The Skills RFAoutlined below reflects these key principles and proposes reinforcement of the agreed priorities.


5.3 Economic downturn

Following a period of relatively strong growth and a continued shift in sectoral mix towards services, the Northwest now faces aperiod of economic contraction and falling employment in the short term. Recent data shows that employment is already fallingin construction, manufacturing and private sector services, and we may anticipate further sizeable reductions in labour demandin the next 12 months.

This is being felt across all skill levels, including the higher skilled. It is also likely disproportionately to affect younger workers,women with need for flexibility, and older workers. A reduction in entry level and low-skill employment opportunities is alsoanticipated making it harder to tackle long term worklessness and the Not in Education, Employment or Training (NEET) group,since the downturn is likely to be concentrated in sectors which would otherwise have provided opportunities for these groups.

Joint actions are being put in place through mechanisms such as the regional JEC and the RSEB. Through these bodies all thekey government agencies such as Job Centre Plus, LSC, NWDA and local authorities are working together to ensure a flexible,rapid and coherent response to redundancies. This is now a key priority for the region.

5.4 Supply and demand for skills

Whilst it is necessary to address the immediate skills issues arising from the economic recession, it is just as important that theregion is not deflected from its longer term skills and employment priorities. The anticipated changes across the Northwest inthe demand for skills will continue with a further shift towards a demand for higher level skills. Continued growth is expected atLevel 3, Level 4 or above, combined with a strong decline in demand for elementary skills.

Forecasts16 indicate that almost 1.2 million new employees will be required in the Northwest over the period 2004-14 as a resultof expansion and replacement demand, with the greatest demand for new employees in established large employment sectorssuch as Retail, Health and Social Care, Education, Logistics, and Construction. An increasing proportion of these newemployees will be required in higher skilled occupations whereas demand for labour requiring elementary skills, is projected todecline.

The region is increasing its qualification profile, although it is not managing to significantly close the gap with the UK

At Level 4, the Northwest is trailing behind England. In 2008 the proportion of working age people with Level 4 or higherstood at 26.3% in comparison to 29.9% in England. Northwest employment in higher skilled occupations – managers andsenior officials, professionals and associate professionals – is 1.5 percentage points lower than in England, meaning thenumber of people within these occupations is 43,300 fewer than would be the case if employment levels matched the Englandaverage.

The number of people with Level 2 and 3 skills is comparable with the rest of England but the challenge is to continue toupskill the existing workforce at all levels. By 2014, it is estimated that 85% of the workforce required by employers in theNorthwest will need to be qualified to at least Level 2. This is a significant improvement on the 72% at this level in 2004.Over the same period, 63% of labour demand in the region is projected to be at Level 3.

In the Northwest there is a larger proportion of people with no qualifications (120,000 “extra” people of working age with noqualifications compared to the England average). Of the economically active population in the Northwest, 29% do not have aLevel 2, but for the inactive population, this increases to 54%. The employment rate of people with no qualifications ismarkedly lower than those skilled to other levels: in England it is 48% and for the Northwest 43.1%.

The employment rate rises to 70% for those with a just a Level 1 qualification. Providing the opportunity for people to gainqualification up to Level 2 is expected to improve their employability and provide a platform for progression into the workplace.

Given that the working population of the future will be made up of more older and fewer younger people due to demographicchange there are implications for the kind of skills development required. In addition to upskilling the existing workforce,emphasis is now also being placed on getting inactive people into work, and ensuring sustainability of employment throughskills and qualifications. It is vitally important to ensure that access to, and support for appropriate training is given to allvulnerable or disadvantaged groups as these are often disproportionately affected by lack of, and lower skills attainment.

Levels of literacy are in line with national rates, but numeracy is significantly below national norms. 83% of adults havenumeracy skills below Level 2 in the Northwest, compared to 75% for England.

For young people educational attainment has been improving and achievements at GCSE are comparable to the Englandaverage.( 44.5% of 15 year olds achieve 5+ A*-C GCSEs inc, Maths and English (UK 45.7%). There remain, however, significantchallenges around the extent and concentration of young people who are classified as NEET. The issues are greatest in theLiverpool City Region, the Manchester City Region and some parts of Lancashire.

The statistics given above are for the Northwest as a whole and identify the key drivers of supply and demand for skills. Thereare however sub-regional variations reflecting the different social and economic make up of Cheshire & Warrington, Cumbria,Manchester City Region, Lancashire and Liverpool City Region. These reflect developments in specific industrial sectors as wellas major infrastructure projects.

2716 Working Futures 2004-2014: National Report


For example there are a number of key developments requiring a varied skills response. These range from the developmentssuch as MediaCityUK and Manchester Airport expansion in the Manchester City Region, employment growth related to nucleardecommissioning in Cumbria, major retail developments in Liverpool and Lancashire and the potential benefits of the Omegasite in Warrington.

The demand led mechanism now being established means that the funding can follow the need as appropriate across theregion. In relation to transport, housing and economic regeneration, the skills system through Train to Gain and the integration ofEmployment and Skills now provides a flexible and coordinated response.

5.5 Northwest Skills Priorities 2007-2010

The Northwest Regional Skills Priorities 2007-10 below were agreed and endorsed by all members of the RSEB17 in 2006.

• Tackle worklessness by linking people, jobs and training;

• Increase the participation of 16-19 year olds in education and/or work based learning, thereby securing increases in Level 2 and Level 3 attainment and progression into higher education;

• Increase the proportion of adults with the skills and qualifications needed for employment, with a focus on Skills for Life and Level 2 attainment;

• Support adults to progress beyond Level 2 and to attain skills and qualifications at Level 3 and above, with a focus on key sectors;

• Stimulate employers to invest more in workforce development which meets business needs including innovation, management, leadership and intermediate and higher level technical and professional skills;

• Stimulate demand for, and investment in entrepreneurial, intermediate and higher level skills from individuals;

• Support providers to respond to the needs of individuals and employers through delivery of high quality provision.

These priorities are underpinned by the requirement for consistently high quality of skills provision, and the need to ensure thatall activity addresses issues of equality and diversity. This is done through prioritisation and focus on specific groups such asNEET, lone parents, BME communities, older workers and those with disabilities.

The Northwest evidence base and priorities provide the rationale for the LSC Regional Commissioning Plan as well as theforward plans of other RSEB members enabling them to demonstrate how national objectives can be delivered to supportsuccessful economic development in the regional, sub regional and local context.

5.6 Current action

In preparation for the single Regional Strategy the RSEB has now taken the lead role in preparing and identifying the key issuesand principles affecting employment and skills in the short, medium and long term, taking account of political, social, economicand environmental factors.

Further detailed analysis of the evidence from all published sources and consultation with key partners across the region during2008 has identified a number of key issues to be considered when prioritising employment and skills activity in the Northwest.Representation of all five sub-regional partnerships in the RSEB and close links to the business community has ensured thework is well grounded in the specific requirements of employers and place, as well as the generic needs of the economy.

In many cases the future skills requirements and priorities will be driven by PSA target requirements and the recognised needsfor a nationally competitive economy. This will be done through the increased acquisition of Skills for Life, Level 2 & 3qualifications and Apprenticeships through to the higher level skills and leadership and management requirements needed tosupport a dynamic regional economy. The RSEB work, however, enables these priorities to be interpreted flexibly to reflectspecific Northwest requirements.

17 The North West RSEB membership: NWDA, LSC, JCP, TASSC, TUC, GONW, HEFCE, NWUA, Sub regional partnerships, 4NW, AoC as well as sub groups to include employers, sectors, and the third sector

28


5.7 Future challenges

The recent work undertaken by the RSEB has highlighted a number of emerging critical challenges which will reshape theNorthwest skills priorities in the single Regional Strategy. These build on and refine the existing priorities but also recognise theneed for short term responses to reflect the current economic downturn. The challenges18 for comment and review are set outbelow:

Shorter Term Critical Challenges:

• Responding to the challenges of economic recession by tackling the economic and social effects of large scale redundancies and lower levels of recruitment;

• Responding to the challenges of economic recession by helping employers to plan and provide for their current and future skills needs.

Longer Term Critical Challenges:

• Providing the support that the workless need to gain sustainable and rewarding employment, especially those from the groups and communities most adversely affected by unemployment, a lack of work or underemployment;

• Raising the aspirations and attainment of young people, especially amongst 16-19 year olds;

• Ensure a commitment amongst adults to the skills and qualification’s they need for employment, with a focus on Skills forLife and Level 2 attainment, as well as attainment at Level 3 and above;

• Stimulate employers to invest more in workforce development at all levels, including innovation, leadership and management, and entrepreneurial skills.

5.9 Key skills investment

The established experience of close working in the Northwest ensures that the key investment for the skills priorities in theNorthwest not only includes the LSC budgets (notably Train to Gain and Adult Responsive) but also the European Funds (ESFand ERDF), NWDA skills budget, JobCentrePlus and HE budgets.

Skills investment is determined nationally and for the LSC it is based increasingly on a demand led system where funds followthe learner need. To give an idea of the scale of funds to support the region the 2007/08 LSC expenditure in the Northwestamounted to £1.577 million. The Northwest ESF budget for 2007 – 2010 delivered via LSC and Job Centre Plus amounts to£238 million.

The Northwest has already demonstrated how it acts collectively to align investment to the skills priorities with examplesincluding:

• Aligned use of ESF to ensure a seamless progression for those outside the labour market or threatened by redundancy, to obtain skills to secure and sustain themselves in employment;

• Joint action to maintain and expand Apprenticeships particularly in the public sector;

• The Higher Level Skills Project which brings together resources from HEFCE and NWDA, through a wide partnership encompassing Hefce, NWDA, LSC, Sector Skills Councils, AoC, GONW, NW Providers Network and NW Business Link.

• The enhancement of the Train to Gain Service with funding from the NWDA to support leadership and management;

• Use of LSC, ESF and NWDA funds to support employee engagement in skills through the Northwest Unionlearn Fund;

• Capital projects bringing together HE and FE to support the local community needs e.g. Burnley campus;

• Emerging joint commissioning of services between LSC and JCP;

• Work with the JEC to provide a joint RSEB response to support individuals affected by the labour market downturn.

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18 Full details of these challenges including the shared evidence base and rationale can be found in the following documents both of which can be found on the LSC North West and NWDA websites: www.lsc.gov.uk/regions/NorthWest/ and www.nwda.co.uk• North West Skills and Employment Evidence Base November 2008• The North West Skills and Employment Challenges Dec 08


30

5.10 Other issues

Although outside the scope of RFA2 there is concern about the current HEFCE/DIUS embargo on further growth therebyrestricting opportunities for Level 4 training at a time when it has been identified that the Northwest economy (and people)need them most.

In light of the Machinery of Government changes currently taking place and the move to an increasingly demand led system itwill become increasingly important to retain regional coordination and traction to address strategic skills issues in order tocontinue to respond effectively to the specific economic development needs of the Northwest and its sub regions.

6. How this advice was produced

The advice provided builds on existing strategies and takes account of the views of a wide range of stakeholders and deliveryagents at a variety of spatial levels.

There has been a high quality debate about the key priorities, and this response, therefore, represents the response of theregion, not simply that of GONW and 4NW. GONW supported the process through its role as facilitator, and the drafting processwas led by NWDA, 4NW and the RSEB, supported by a Working Group comprising:

- NWDA (Chair)

- 4NW

- RSEB

- GONW

- HCA

- Environment Agency

- Highways Agency

- Network Rail

The advice has arisen as a product of consensus, using existing governance and inter-agency working arrangements whereverpossible. There was also a six week written consultation period supplemented by a regional consultation event on 9th January2009. It has utilised extensive evidence and research to provide integrated, credible advice, consistent with wider nationalstrategy and policies. There have been two levels of activity:

• Consideration by thematic groups for each of the four areas:

- Transport - Regional Transport Forum

- Housing and Regeneration - Regional Housing Board

- Economic development - RS Advisory Group

- Skills - RSEB

• Final advice circulated to the above as well as Regional Leaders’ Forum Executive Board and the NWDA’s Board for comment and input, and signed-off by the Chairs of the Leaders’ Forum Executive Board and the NWDA.

In order to reinforce and enhance the region's commitment to sustainable economic development, a detailed sustainabilityappraisal of the advice was undertaken, using the regionally approved Integrated Appraisal Toolkit, as was an equality anddiversity impact assessment.


Designed and Produced by the Northwest Regional Development Agency Marketing Department

27th February 2009

NWDA j2-24

Northwest Regional Development Agency

PO Box 37Renaissance HouseCentre ParkWarrington WA1 1XBTel: +44 (0)1925 400 100Fax: +44 (0)1925 400 400e-mail: [email protected]

www.nwda.co.uk www.englandsnorthwest.com

4NW Wigan Investment Centre Waterside Drive Wigan WN3 5BA Tel: +44 (0)1942 737928

www.4nw.org.uk

Contact

Dave Harrison, Director of Partnerships (NWDA)Steve Barwick, Director of Strategy - Scrutiny, Europe and Sustainability (4NW)


Document

Documents

regional economic strategy

single regional strategy

regional housing strategy

new regional strategy

regional spatialstrategy

investment priorities

long term priorities

regional leaders forum