RES%20Assessment%20Report

RES Assessment Report 2008

Northwest Regional Economic Strategy

June 2008

RES Assessment Report 3c:Layout 1 28/8/08 14:41 Page 2

THEMED CHAPTERS

page 2 RES Assessment Report 2008


Contents

3 Executive Summary

5 Introduction

7 Headline Targets

10 Business

16 Skills and Education

20 People and Jobs

24 Infrastructure

28 Quality of Life

SUMMARY


page 3RES Assessment Report 2008

Executive SummarySince their establishment in 1999, Regional Development Agencies have been required toproduce Regional Economic Strategies, working with partners and on behalf of their regions.The Northwest’s strategy has evolved to become well targeted on specific actions. The 2006Regional Economic Strategy (RES) included only 45 Transformational Actions and was the firstthat could be “performance managed”, with each action being assigned a “lead” organisation.In addition the 2006 RES set 8 headline targets for the region for the first time.

To support this performance management an Annual Assessment Report is produced, togetherwith six monthly monitoring of progress on Transformational Actions. This assessment report issupported by a more detailed report on each RES factor and action. A small number ofmonitoring indicators have been agreed for each RES factor and progress against theseindicators, together with a commentary on each RES action, has been combined to produce thesummary commentary below for each RES factor. This report is developed and endorsed by theRES Advisory Group.

Many of the transformational actions in the RES are long term in nature (such as the creation ofMediaCityUK in Salford) and will therefore take time to affect the economic performance of theregion and targets in the RES. Actions in the RES are the responsibility of a wide range ofpartners in the region, and by acting together behind a common strategy the region can achievesubstantial change. Tackling worklessness, for example, and achieving a long term employmentrate of 80%, will require concerted effort from all relevant partners and this indicator is includedin all Local and Multi Area Agreements.

The Northwest economy has, however, made substantial progress over the last five years as thetables below show:

• GVA has grown by 26%• The number of knowledge jobs has grown by 12%• Annual Firm Formation rates have increased by 9%• The number of working age people without qualifications has fallen by 15%• The number of people in the workforce with graduate qualifications has risen by 19%

The table below sets out headline indicators and shows Northwest progress from 2001-2006, thelast year for which we have data.

Measure (Northwest data) 2001 data 2006 dataGVA £88bn £111bnNo. of jobs 2.89m 3.01mNo. “knowledge” jobs 1.10m 1.23m% “knowledge” jobs 36.5% 39.9%Firm Formation (no.) 16,485 17,920Firm Formation per 10,000 people 31 32No. fewer businesses than England average 38,525 38,821Working age popn with no quals 768,000 649,000% of working age popn with no quals 18.9% 15.8%Workforce with graduate qualifications 759,000 901,200% of workforce with graduate quals 25.0% 28.6%Size of workforce 2.89m 2.97mEmployment rate 71.2% 72.4%




Progress since the last RES assessment report in 2007 has also been steady. Our overallconclusion is that the RES remains valid and fit for purpose. However, it is clear that economicconditions are currently becoming tougher. The combined impact of a tightening global creditmarket and high energy and commodity prices has still to be fully understood. However, it is likelythat despite years of good progress, achieving some of the headline targets will be extremelychallenging. Detail of progress in the last 12 months is set out below.

• Significant progress in implementing RES actions, with delivery of activity on the ground underway.

• Significant progress on skills indicators, particularly on the proportion of people with basic skills. An important further milestone for the region will be improving the proportion of people with Level 2 skills as the entry level for employment.

• Improvements in the number of graduates and the number of knowledge jobs in the Northwest, although not yet at a rate which would close the gap with the England average.

• Reductions in the firm formation rate. However, this is 2006 data and a new Business Start-Up service was introduced in 2007, which will not yet be having an impact on this data set. It must also be remembered that firm formation is currently measured by VAT registrations,and much activity is targeted at smaller enterprises and start ups. Later this year a new data set on businesses registering for PAYE will be available and this will be a more accurate measure of firm formation.

• Virtually no change in employment rates, despite increased skills levels. The economic impact of poor health still remains high.

Major challenges for the coming year will include:

• Responding to the tougher economic conditions that the region will face. In particular we will need to focus on creating the right conditions to ensure ongoing private sector investment,and work to understand the recent unfavourable movements in firm formation rates.

• Stimulating employer demand to invest in training and development. For the region to achieve Leitch targets we cannot rely on new entrants to the labour market alone. A substantial proportion of the required increase in skill levels will have to come from the existing workforce.

• Taking forward the recommendations of the recent preliminary work on releasing the potential of the region's workforce.

• Ensuring a balance between growth which drives the economy towards higher value added goods and services (and hence higher productivity) and growth which enables economic participation for all (and hence higher employment rates). This will require us to consider measures other than GVA to judge success, such as household incomes, quality of life and equality measures.

• The emerging demographic downturn and changing role of migration, combined with significant health issues that the region faces. These will result in challenges to growing the size of the Northwest workforce.

• Ensuring that the economy continue to grow in a sustainable way. The region has recently agreed to produce a Northwest Regional Strategy integrating economic, spatial, environmental, social, housing and transport priorities. Understanding the inter-relationships between all these issues, and in particular the environmental considerations to further economic growth, is essential if the Northwest is to be a sustainable low carbon economy in the long term. Energy, water and waste constraints to growth in parts of the region and sustainable transport to avoid further congestion were issues raised by many people this year in discussions on progress in implementing RES 2006.



IntroductionThe Northwest Regional Economic Strategy 2006 (RES) has now been in place for two years, overhalf its lifetime. This annual RES Assessment Report follows the pattern of last year’s, givingprogress on all actions contained in RES 2006 and our assessment of the implications of this forfuture investment, activity, and focus. This summary report is organised by RES factor and includesinformation on the data results contained in the full Baseline Update of economic and spatialindicators.

The RES Assessment Report 2008 gives a picture of many RES actions well underway andsignificant successes achieved. However, the RES Baseline Update shows some indicators turningred, and less progress towards our headline targets than we hoped by this stage. This is a causefor concern, although not surprising given tougher economic conditions predicted in last year’sreport. Some decreases represent a relatively slight decline from a strong improvement last year,and so are still above the baseline of two years ago. Data takes a while to be released and inmost cases is only now beginning to reflect the early months of the RES.1

However, the targets are ambitious and for a reason – to create the conditions whereby theNorthwest can enjoy economic health and prosperity. If data indicators are turning red, and thebenign economic climate of the last decade is hardening, all organisations charged with playinga part in that objective have a more intensive role to fulfil.

We have moved on significantly with much of what was signalled in the Baseline Update 2007.Partners have succeeded in formulating plans to strengthen leadership and managementcapabilities and release the potential of the region’s workforce; in coordinating and expandingroutes for people to access skills and move into work; in managing a major research programme;and in implementing a regional equality and diversity strategy. Data this year reveals animprovement in the skills profile of the region.

The national economic slowdown causes us to assess the vulnerability of our economy. Our firmsface higher prices for energy and many commodities, affecting key sectors and emphasising theimportance of strengthening international competitiveness, and maintaining inward investment asan important productivity driver. Prospects for growth are variable across the region with someareas facing a more positive set of circumstances than others. This context reinforces the need toenable even further private sector confidence and investment levels, support for business start-ups,growth to build up the private sector in the Northwest and greater skills and employabilityprovision to adapt to continuing industrial and sectoral change. The challenge for our region isabout creating opportunity, not reproducing what others do but identifying and exploitingopportunities based on our competitive advantages which enable the Northwest to develop astronger position.

There is no sense of regional complacency about our economic progress so far and the RESremains, in the view of partners, a reliable set of actions for delivery and prioritisation ofinvestment. The analysis would suggest that we need to focus even more effort on a number ofkey areas:

• Capitalise on simultaneous strategic development over the next one-to-two years to strengthen our coordination of the planning and land use, housing, transport, energy and environment strategies and investment plans. While a substantial challenge, our prize for integrating these public sector levers would be to achieve higher levels of sustainable economic growth and well-being, while strengthening the Northwest contribution to tackling climate change.

• One example of this opportunity will be the need to set a clear regional direction to influence the release of land for new generation waste treatment and recycling plants and renewable energy generation. Alongside this, it will be important for the region to devise new, stronger actions that support the renewable technology sector and maximise the possibility of nuclear new build in the region.

1 Caution is required in interpreting relatively small annual changes, especially with the high confidence intervals imposed by many datasets.




• Data this year shows good progress in achieving basic skills/qualifications at Level 2. However, we are not yet using the skills of the existing and potential workforce most effectively, and spatial areas and demographic groups with deep levels of deprivation remain.We continue to lose people in the 25-49 age group from the region, Incapacity Benefit (IB) claimant levels remain extremely high, and there is evidence that the economic impact of poor health is increasing. As a region we need to consider how to respond to this further, building on successes already achieved. Moving towards Leitch recommendations for increasing the profile of upper levels of qualifications in the region will require stimulating stronger employer demand for training and higher level skills in the existing workforce, including activity to extend further our nationally-leading Northwest Train to Gain participationrates.

• There is growing evidence that an important determinant of productivity is the manner in which the workforce is managed, and that their skills and innovation capacity are utilised by employers, alongside the strength of networks and knowledge sharing. Last year’s Summary signalled the need for the region to consider how best to release the potential of the region’s workforce, generating greater enterprise capabilities within the whole current and potential workforce. The resulting task-and-finish group has now reported and the challenge for the region will be to achieve buy-in and implementation of its findings.

• Sustainable transport is going to be key to the development of the Northwest’s city-regions. We need to look around to see who, nationally and internationally, is getting this right. How can our region plan for growth without increasing transport congestion?

• Data indicators around RES actions relating to Enterprise and Innovation have become more negative. The recent slowdown in the economy is a factor in this, and Business Link Northwest’s delivery against targets has been positive. Levels of VAT registered business formation in the region are not yet progressing past the baseline of 2006, although levels of self-employment are higher. Stronger achievement of this headline target will be imperative if the private sector in the Northwest is to create wealth and move the region on from current requirements for public sector investment.

Partners have this year demonstrated a move forward from a focus on process to a determinationto achieve delivery on RES actions. As a region we need to consider setting further challenginggoals to focus our activity and investment into delivering transformational change in the transitionyears to a Regional Strategy without a RES update in 2009. This collective positive attitude tostrengthened delivery and joint prioritisation of activity needs to be continued. This is essential ifwe are to maximise the impact of ongoing public sector investment into the Northwest in creatingthe conditions where private sector investment can flourish, and build an economy and societythat weathers a national economic slowdown and delivers on prosperity and opportunity for allour residents.

The report uses a colour coding system to provide a summary of progress in the yearto enable the reader to get a quick overview of progress:

green - good progress or action substantially completed

amber - some areas of good progress but not yet confident of achieving action

red - significant challenges or constraints on achieving this action still remain



Headline TargetsProgress against the 8 targets in the RES has been mixed, as the table below shows. The region islikely to achieve the targets set in the RES 2006 for reforming the skills profile of our population,both at the ‘no qualifications’ level and at graduate level. However, the region is still experiencinglower levels of firm formation than desired, and is unlikely to achieve targets set for job creation andemployment rate. The headline GVA growth figure remains below the England average.

Target 2006-2009 Measure 2007 Update(2005 data)

2008 Update(2006 data)

2006 Baseline(2004 data)

GVA Growth (latest data 2006):

Job Creation (latest data 2006/7):

Firm Formation (latest data 2006):

No Qualifications (latest data 2006):

Graduate Qualifications (latest data 2006):

Employment Rate (latest data 2006):

Deprivation (latest data 2007):

CO2 Emissions

Achieve GVA growth above Englandaverage (to close GVA/head gap withEngland in the longer term)

GVA: £103bn £107bn £111bnGVA growth: 5.5% 3.4% 4.5%GVA gap: £17.5bn £18.4bn £19.5bn

Create 150,000 new jobs, 80,000 in“knowledge occupations” to have same% in these occupations as England

Raise the firm formation rate to21,000 per annum (to have same rateand business stock as England in thelonger term)

No. jobs 3.04m 2.99m 3.01mNo. “knowledge” jobs 1.19m 1.21m 1.23m% “knowledge” jobs 38.8% 39.4% 39.9%

Reduce the working age populationwith no qualifications by 80,000 andno district with more than 29%. (In thelonger term to have the same % asEngland)

Working age popn with 724,600 697,000 649,000no quals:

% of working age popn. 17.7% 17.0% 15.8% with no quals:

Districts with rate more 2 0 0than 29%

Increase the workforce with graduatequalifications by 120,000 to meet theEngland Average

Workforce with graduate 840,800 891,700 901,200quals:

% of graduate quals: 26.9% 28.4% 28.6%

Increase the workforce by 83,000 (tomeet the England employment rate)and no district to have an employmentrate less than 68%. (In the longer termto achieve an 80% employment rate)

Workforce: 2.98m 2.98m 2.98mEmployment rate: 72.7% 72.6% 72.5%Districts with rate less 4 4 4 than 68%:

Reduce the number of areas in theworst 5% nationally. (In the longer termless than 20% of people with ahousehold income less than 60% ofthe GB median)

No. of areas in worst 5%: 579 No Update 569

% of people in households 12% No Update 12%with income less than 60% of GB median:

Reduce CO2 emissions per unit ofGVA. (In the longer term to meet Kyototargets of emissions 12.5% lower than1990 levels)

CO2 emissions per unit See text below of GVA

CO2 emissions See text below

Note: Those items marked in green are moving in the right direction and are on track to meet the target. Those items in amber aremoving in the right direction, but not quickly enough to meet the target. Those items in red are moving in the wrong direction.

Firm Formation (no.): 18,080 17,940 17,920Firm Formation rate per 33 33 3210,000 peopleNo. fewer businesses 38,000 37,000 38,800than the England average




Gross Value Added (GVA)

The GVA of the Northwest has increased by £4bn from 2005 to 2006 (4.5%). However GVAgrowth has been below the England average of 5.1%. This means that the GVA gap hasincreased, from £18.4bn to £19.5bn. (Latest data revisions have put up last year’s figure of£17.8bn to £18.4bn).

This £18.4bn gap is accounted for by:

• £3.7bn due to fewer people of working age and fewer people working than the England average, compared to £3bn in the RES 2006 and £3.5bn in last year’s update.

• £14.7bn due to lower productivity of those people in work (compared to £10bn in the RES2006 and £14.3bn in last year’s update). This is partly a reflection of differences in regional prices.

Sub-regionally the contribution to this gap is shown in the bar chart below, together with changesfrom RES 2006.

Job Creation

From 2005 to 2006 the number of jobs in the Northwest increased by 23,000 (+0.8%), againsta decline in England of over 140,000 (-0.6%). The Northwest has therefore improved itsposition, and improved vis-à-vis England, but is not yet back to the level of the 2006 baselinefigure. The number of knowledge jobs in the Northwest increased strongly, now forming 39.9%of our employment here. The England figure of 43% in “knowledge occupations” is anappropriate stretch target.

This data fits with GVA data suggesting that economic conditions improved in the Northwest inthis time period, and we are making good progress on continuing the structural transition toknowledge economy jobs.

Firm Formation

The region has experienced a decrease in the number of VAT registered firms started, both inabsolute numbers and as a rate per 10,000 people. We consequently have fewer businessesthan the England average, and this has worsened over the baseline figure. We look unlikely toachieve the targets we had set for 2009.

No Qualifications

The Northwest has done well in relation to this target in the last year of data (2006). The numberof people in the working age population with no qualifications reduced again, by almost50,000. We maintained the achievement reported last year of having no district within theNorthwest with a “no qualifications” rate of 29%. We are well on track, therefore to achieve thisimportant RES target.

20000

Employment

15000

10000

5000

-5000

0

RES 2006Cumbria

2008 Update

RES 2006Cheshire

2008 Update

RES 2006Greater

Manchester

2008 Update

RES 2006Lancashire

2008 Update

RES 2006Merseyside

2008 Update

RES 2006Northwest

2008 Update

Productivity



While this is welcome progress on levels of “no qualifications”, this is joined in importance withachieving an increased proportion of the population with Level 2 qualifications, seen as the entrypoint for employability in the majority of roles. Data indicators are progressing in the rightdirection, and it is at sub-regional and local level that much of the solution to this can begenerated. In particular, the key will be to drive up demand for first Level 2 qualifications fromemployers and individuals. There may be a role for Multi Area Agreements (MAA) and Local AreaAgreements (LAA) in further stimulating this demand.

Graduate Qualifications

The Northwest has moved halfway towards the target set out in the RES 2006 of increasing thenumber of people with graduate qualifications by 120,000. We now stand at over 900,000economically active people in the Northwest with graduate qualifications. This is a goodachievement, reflecting a necessary improvement in the ability of the region to generate theworkforce required by both the private and public sector, and addressing a key supply-sideconstraint on growth. However, the Northwest has not been improving as fast as England, so thechallenge of closing the gap in relative proportions of the workforce at graduate level remains.In the baseline year our relative shortfall equated to 80,000 graduates, now our relative shortfallequates to 94,000.

Employment Rate

Little change on data indicators for this target, meaning that the region is unlikely to meet theRES target of an additional 83,000 people in the workforce. The employment rate has declinedslightly to 72.5% compared to England’s 74.3%, and there remain four districts where theemployment rate is less than 68%, meaning that significant concentrations of worklessnessremain.

Deprivation

This year, data relating to 2007 has been released enabling an assessment of progress towardsthis RES headline target. The region has now slightly fewer areas in the most deprived 5%nationally, and remains static at 12% of people with a household income less than 60% of theGB median.

CO2 Emissions

In 2005, total carbon (C02) emissions for the Northwest stood at 61 million tonnes. This was a2.4% reduction from the baseline year (2003).

In 2005 C02 emissions per Unit of GVA stood at 0.58 which means that as a region we havebecome more efficient since the baseline year (0.64).

Source: DEFRA; per unit GVA calculations by NWRIU.

** Note that this data is indicative only; 2005 may not be directly comparable with previous years due to differences in methodology.

*** As a measure of efficiency.

Northwest

Englandexcl. London

Total GVA (£ million) C02 Emissions perUnit of GVA***

% ChangeC02

C02 Emissions(Kt C02)

2003 2004 2005 2003 2004 2005** 2003 2004 2005** 2003-2005

97707 103035 106501 62826 61151 61317 0.64 0.59 0.58 -2.4

670787 708788 735604 401522 399499 394531 0.60 0.56 0.54 -1.7




BusinessENTERPRISE (RES ACTIONS 1-7)ProgressGood progress has been made with Business Link Northwest operational throughout 2007-08.In its first year, targets have been achieved with 87,000 businesses assisted and 5,525 intensiveassists resulting in a £389 million GVA impact. The focus is now on improvements in servicelevels and administrative systems and processes. The key business programme on Start-Upsexperienced early delays but is now underway, having made considerable efforts to consult withstakeholders. A programme to support High Growth Business Start-Ups is delayed but expectedto launch shortly. Developing a stronger enterprise culture in the region is a priority and this yearmore events have reached an increasing number of people. A full suite of financial products forstart-ups, innovation and growth are now available in the region.

DataThe data shows a negative picture for most of our key indicators of business density (we saw adecrease in the number of businesses compared to the England average), business start-ups per10,000 people, and business start-ups as a percentage of the national rate. Although much ofthis decline represents a slight fall-away from the good results last year, we are neverthelesssignificantly away from our 2009 targets. However, three year business survival rates haveincreased and now equal UK rates. Self-employment rates continue to increase, and otherunderpinning indicators are looking stronger, including engagement of graduates and our HigherEducation Institutions (HEI) in commercialisation. There is evidence of green shoots of recovery inincreasingly positive attitudes to entrepreneurship, especially compared to static national figures.

Implications and Further Actions/BarriersThere has been significant regional and national change over 2006 and 2007 to work through,in the reorganisation of Business Link, extensive participation in the national Business SupportSimplification Programme, the simultaneous development of a new ERDF Northwest OperationalProgramme and the preparation of both a national and regional Enterprise Strategy.

We recognise that changing enterprise culture and business density is a long-term ambition, andit will take time to accelerate results. However, the data implies that the significant amount ofpublic sector expenditure on enterprise is increasing self-employment rates, but not so far havingan impact on a stronger net VAT registration profile. The region needs to debate this implicationand decide on short to medium term actions which look likely to achieve the long-term businessgrowth target.

Going forward we need to concentrate on delivery, particularly meeting challenging businesssupport needs across the region, achieving real transformation through the regional and sub-regional Enterprise Strategies, and enabling our HEIs to deliver further on their enterprisecapacity. There is an appetite for Business Link Northwest to offer a strong aftercare service,increasing business survival rates, which will increase business density and employmentopportunities. A successor venture capital loan fund for high growth small and medium-sizedenterprises is proposed for 2008/09. A message from the region is that the current high levels ofinternational immigration we see could very well form a source of enterprising people and newbusiness starts-ups, given the right support.



REGIONAL SECTORS (RES ACTIONS 8-11)ProgressClear progress on delivering sites and transport infrastructure for the MediaCityUK developmentat Salford Quays, but slower progress in developing Media Enterprise Centres (a specific supportproject to MediaCityUK) and projects within the Media Sector Development Plan. The strategywork completed in 2006 for Business and Professional Services highlighted the need to do moredetailed analysis and action planning in the Financial and Professional Services sub-sector. Thiswork is nearing completion. In Liverpool, Capital of Culture 2008 has stimulated a creativeapprenticeship and enhanced routes into employment in retail, tourism and hospitality. Therevision of the Regional Tourism Strategy has been well received and the role and focus of TouristBoards is supported, and increasingly strategic.

DataA mixed picture with a good increase in the number and proportion of people working inknowledge sectors, although the gap in proportion of employment accounted for by this sector,compared to the England average, remains the same. Priority sectors as a proportion of GVA hasimproved strongly, although still not up to the level of the 2006 baseline figure after adisappointing result last year. There is still some way to go, therefore, before closing the gap withEngland figures. There has been positive growth in tourism figures, particularly in Manchesterand Liverpool, offset by marked decline in Blackpool.

Implications and Further Actions/BarriersAs in Enterprise, a considerable amount of work has gone in at a regional and sub-regional levelto improve our understanding of our priority sectors. Delivery of actions and business/clustersupport is now the key tactical priority. The region is concerned overall about progress indeveloping a stronger knowledge economy and actions and investments within this RES factorrelate strongly to strategic priorities in Science, R&D, and Innovation. Regionally, emphasiscontinues to be placed on making MediaCityUK a success, and the imperatives are to maintaingood progress on the physical development and deliver the associated labour market, supplychain, innovation and enterprise opportunities. The tourism focus remains on improving qualityand understanding of the marketplace.

INNOVATION (RES ACTIONS 12-14)

ProgressThe regional Innovation Strategy is being finalised and re-drafted following the release of thenational White Paper. Actions will then move forward as quickly as possible. Innovation advisorsare seen as important to achieving this RES factor and will now be delivered through BusinessLink Northwest, but progress has yet to be made on recruitment for these posts. A pilot project onbusiness-university collaboration is underway with the Northwest Food Alliance. Increasingknowledge transfer in the region is a key activity: there has been recent recruitment into HE-Business Engagement, and strong project activity via the Higher Level Skills Pathfinderprogramme. Innovation vouchers as suggested by the Sainsbury Review are being rolled out, andtargets firms new to innovation.

DataMost data have not been updated. Patent applications have decreased markedly but we shouldbe wary of drawing too many conclusions from this one data set alone. We expect that theforthcoming work by Organisation for Economic Co-operation and Development (OECD) oninnovation across the North of England will strengthen our information on this important factor.




Implications and Further Actions/BarriersActions around innovation and knowledge transfer are one of the most essential factors indeveloping a highly skilled and highly productive economy. Achieving the targets within the newInnovation Strategy and delivering more strongly on knowledge transfer will be importantpriorities, as will delivering on the recommendations of the Northwest Manufacturing Group. Much work has gone on in the past 12 months to focus on leadership and management, andenabling the value of innovative ideas in the whole workforce, and the region now needs toimplement some of the recommendations of that work as a fundamental driver of productivity.

SCIENCE/R&D (RES ACTIONS 15 -16)

ProgressAreas of good progress on actions in this factor should not be overshadowed by April’s negativepublicity about continued funding at Daresbury. Two Science Strategy projects (e-Health andMaterials Chemistry) have begun; 65 companies are now in the Daresbury Innovation Centreand there is international interest in investing further; and the Government has approved two newresearch institutes there. Both proposed new NHS research centres, in Manchester and inLiverpool, have very recently been approved by Government. Phase 1b of the Liverpool SciencePark is under construction, but other actions on major research concentrations have been slowerthan planned, and planning restrictions have drastically restricted the development of LancasterScience Park.

DataThe latest data for Business R&D spend shows a fall from last year bringing it lower than thebaseline figure. Similarly a reduced percentage of UK business R&D is in the Northwest, raisingconcerns. The main target for 2009, which is to achieve 5% of Government non-HEI R&D in theNorthwest, looks unlikely to be met, as data for this indicator shows a fall against last year,although it is still marginally above the 2006 baseline figure.

Implications and Further Actions/BarriersThe changing economic climate and changing Government investment priorities raise questionsover the future level of science and R&D expenditure in our major public sector facilities andprivate sector firms. We expect to see worsening R&D levels for Government for quite some time,and it may be that a slower-growing economy nationally reduces private sector R&D spendsimilarly.

Overall, the region is experiencing rather poor data results and needs to seriously considertactics for redressing this. There are significant sites and projects which contribute towards ourobjectives for the region and which need continued effort and focus, including Manchester’sScience City (MKC/NESTA project), Lancaster Science Park, Liverpool Science Park and LiverpoolInnovation Park. The region needs to debate the bigger picture for the knowledge economy andassess whether the total set of investments/activity performed by the public sector here is enough,both to stimulate private sector R&D and position the region well to expand on our competitiveadvantage sectors and develop a greater knowledge economy. There is a need to look carefullyat the numbers of students of STEM subjects in the region.



INTERNATIONAL COMPETITIVENESS (RES ACTIONS 17-19)

ProgressClear progress has been made against the internationalisation strategy with an action plan inplace and a detailed business plan and three year funding agreed with UKTI. A series of activitieshave been undertaken and recruitment into overseas offices restarted, which had been underthreat pending the outcome of the national review of UK overseas inward investment presence.Good progress has been made on business support to exporters with over 250 companieshelped with significant assistance to improve their international business performance.

DataThere has been mixed news on indicators around internationalisation. There has been a fall inthe number of exporters and the value of exports from the Northwest, although these numbersneed further explanation due to change in methodology. There has been an increase in thenumber of Foreign Direct Investment (FDI) projects, which are important in adding productivityand greater research-intensity to the regional economy. The region is looking on course toachieve the target for FDI projects, although the percentage of these projects that are research-intensive has fallen in the last year of data.

Implications and Further Actions/BarriersThe global environment is both a significant opportunity and series of threats/risks for theNorthwest, particularly at the moment where the international context of increasing oil and foodprices will affect Northwest firms. The focus of further work is very much on developing internallycompetitive clusters, strengthening our global competitive advantage in science and research,and delivering appropriate skills to enable our companies to compete and to attract foreigndirect investment. It will be important for the region to increase the number of research-intensiveFDI projects. There is a major target for regional Business Link Northwest to achieve in exportand international business assistance, and it will be vital for our firms to export substantiallymore. Options are being explored for an overseas student programme designed to exploit thevalue of this important resource for the region.

ICT (RES ACTIONS 20-22)

ProgressProgress has been slower than planned on the development of a new High Impact ICT strategy,but this is now in the final stages of production and has delivered a useful evidence base. ICTbusiness support is now closely integrated into Business Link Northwest. Good progress wasmade on running a series of Intelligent Business events across the region.

DataExcellent progress on indicators was reported in a recent data update. The region now has 82%of businesses using computer systems, compared to 74% in the 2006 baseline. The proportion ofbusinesses using internet and broadband has narrowed to three percentage points behind the UKaverage figure, whereas two years ago it was ten percentage points adrift. Broadbandconnectivity is strong with the region already exceeding its 2009 2Mbs target availability.

Implications and Further Actions/BarriersThe focus of attention is turning to project delivery and business support with the launch ofBusiness Link Northwest and endorsement of the High Impact ICT Strategy. The region needs todebate how to target public sector investment most appropriately, whether it is best to provideuniversal support to business or invest into specific sites. It will be important for the enterprise andtrading opportunities represented by MediaCityUK to begin to be exploited. Thought leadershipin this field includes developing our regional approach to next generation access (fibre basedhigh speed communication), which has the potential to generate competitive advantage, andcontribute to increasing flexible working and reducing traffic congestion.



SUSTAINABLE CONSUMPTION AND PRODUCTION (RES ACTIONS 23-25)

ProgressExcellent progress has been made on the Business Resource, Efficiency and Waste (BREW) project, workingwith businesses on sustainable consumption and production, particularly in integrating resource efficiencyadvice into the suite of products offered by Business Link Northwest, and in achieving annual target figuresregarding businesses assisted, tonnes of raw material saved, tonnes of CO2 saved and other outputs. Anew 3 year ENWORKS programme has begun. There has been good progress on actions within theClimate Change Action Plan. The Corporate Social Responsibility programme has out-performed against itsannual targets.

DataThere has been relatively good progress on indicators. The percentage of our regional energy demandproduced from renewables has risen. While total regional waste has risen, the amount of commercial andindustrial waste has reduced.

Implications and Further Actions/BarriersKey priorities for this RES factor are to maintain competitiveness for the region as global energy prices rise;to continue to reduce levels of industrial and commercial waste; and to bring down CO2 emissionscontributing to tackling climate change. Regional partners need to consider whether further coordination ofactivity could enable the development of key sites for waste facilities and renewable energy generation,allowing the Northwest to strengthen its environmental performance. Also, there is concern by regionalpartners that we are not yet well-placed to achieve more sustainable transport connections.

On particular programmes, lack of additional funding from Defra to continue the BREW programmejeopardises the future of projects and provision of business advice. A continuation strategy has beendeveloped, reliant on accessing funding through the ERDF Northwest Operational Programme, andachieving match funding from other sub-regional resources. We also need better coordination of messagesto businesses via the various private-sector facing organisations. The Climate Change Action Plan isprogressing well but requires continued focus and greater capacity if it is to achieve its full potential for theregion. Future delivery of Corporate Social Responsibility advice and assistance is at risk and similarlyrequires an increase in regional focus, perhaps via Leadership and Management projects and the BusinessLink Northwest infrastructure.




Skills and EducationBASIC SKILLS (RES ACTION 26)ProgressGood progress has been made with Skills for Life enrolments growing at an above-target level, anemployability skills programme launched and additional activity commissioned with funding from theEuropean Social Fund (ESF).

DataData shows good progress overall, and is particularly strong in reducing the number of people above theEngland average with no qualifications, down from 120,000 to 90,000. Like last year, the Northwestcontinues to record zero districts in which more than 29% of the population have no qualifications, downfrom four in the baseline year. The number of people without an NVQ Level 2 continues to decrease,implying that onward progression from basic skills through Level 1 to Level 2 is beginning to occur. Therehas been a 1 percentage point reduction in the number of 16-19 year olds without an NVQ Level 2 (i.e. 5good GCSEs).

Implications and Further Actions/BarriersThe headline indicators and partners’ performance against targets show that we are making good progresson the basic skills provision, although there is still an issue with poor attainment on numeracy skills. Newtargets (in line with Leitch recommendations for future economic needs) are likely to be much morechallenging, and it is right that they are because the new jobs being created are very likely to be at Level 2or above. The region needs to consider what actions and investments will further improve the skills profileat both ‘no qualifications’ and Level 2 standards.

The relevant agencies have been working intensively to integrate employment and skills policy andprovision, and to make sure that European funding can be used most appropriately to support theseprogrammes. Providing English for Speakers of Other Language (ESOL) tuition is an important way in whichthe region can further utilise the skills and productivity assets of those migrating in to the Northwest.

SECTOR SKILLS AND WORKFORCE DEVELOPMENT (RES ACTIONS 27-34)

ProgressGood progress on intermediate skills and workforce development has been made with a major programmeof adult apprenticeships launched in five business sectors; the signing up of over 250 employers to theSkills Pledge, where employers commit to workforce training; and the Northwest being the best performingTrain to Gain region in England, with the number of learners continuing to increase. Some sector specificadvances have been made including creative and media apprenticeships in Liverpool and Manchester, theNational Skills Academy for Business and Financial Services in Manchester and the Nuclear Skills Academyin Cumbria. The important national pilot Higher Level Skills Pathfinder is up and running with Skills forCare. Addressing an area of concern from last year, a redundancy ‘blueprint’ has been agreed which isdesigned to strengthen training and qualifications for workers moving from declining sectors to growthsectors. Overall, the region is delivering increasing integration of skills with employability and employmentactions.

DataGood progress has been made for the region with the majority of indicators moving in a positive directionand excellent increases in the percentage of the working age population with at least a Level 2, Level 3,and Level 4 qualification. There has been a notable increase in the number of adult learners studying a fullLevel 2, and an increase over the baseline in the numbers of those studying a full Level 3. For the secondyear we have no data update for employers reporting skills gaps. The percentage of the population in ruralareas possessing Level 2 and Level 3 skills has declined, which is a concern, although may be a result ofdata irregularities. Workforce training figures for the Northwest remain very similar to national rates,although the region has slipped marginally in the last year of data.




Implications and Further Actions/BarriersIt remains of paramount importance to increase the number of employers investing in training theirworkforce if we are going to deliver the skilled and motivated labour force vital for our competitiveness.The main public sector lever here is the Train to Gain programme, and investment in this is due to doubleover the next three years. Targets for the region include a headline ten-fold increase in the numbersstudying Level 3. There will be an increasing role for sector skills councils who need to deliver onknowledge of employer demand to develop qualifications which are fit for purpose and guide appropriateprovision, and who have a key role to play in stimulating greater demand from employers for enhancedskills and training. The key question for the region to address is how to achieve stronger progressionthrough skills levels, particularly progression of those already in the workforce at Level 3 to advance toLevel 4, which is necessary if we are to approach what might be our regional targets under Leitchrecommendations. We will have to develop a new focus and set of actions which successfully stimulatedemand from employers for higher level skills, and also actions to strengthen links between HEIs andindustry. There is also an important regional imperative to enable in-migrants to contribute as strongly aspossible to our economy, both in employment and in business starts-ups.

LEADERSHIP AND MANAGEMENT (RES ACTIONS 35-36)

ProgressThe Northern Leadership Academy project is running to target, and two limited scale projects on highgrowth coaching and business volunteering mentoring have shown positive initial results. The enterpriseskills/culture programme has succeeded in engaging approximately 6,000 students in Further Education(FE) colleges and 100 schools at Key Stage 3.

DataIt is difficult to assess this as there are a limited number of data indicators and some have not beenupdated. There has been a slight but worrying decline in the percentage of the workforce employed asmanagers and senior officials, exacerbating the differential between national rates and the Northwest.There has also been a small decline in the number of businesses with Investors in People accreditation,although numbers have held up well in the context of the removal of grants towards this programme.

Implications and Further Actions/BarriersAs signalled in last year’s baseline report, leadership and management is a key area for improvement toclose the productivity gap. The data shows that there is an issue for the region in fully utilising its workforceand achieving the benefits of our innovation and enterprising capabilities. Last year the region decided tofocus effort on developing recommendations for workforce development, and this has generated a numberof policy recommendations headlined “Releasing Potential”. Partners are beginning also to work on newinterventions, particularly: mentoring offered through Business Link Northwest; supporting Train to Gain’snew Leadership and Management provision; and developing and rolling out a leadership programmeacross the region, raising awareness and market penetration through the Northern Leadership Academyportal. Additionally, enterprise skills/culture is due to step up its reach and impact with more substantialofferings at HE and FE level, including the rollout of an Engineering Career Academy.



EDUCATIONAL INFRASTRUCTURE (RES ACTIONS 37-40)ProgressFive national skills academies have been launched covering financial services, nuclear, food anddrink manufacturing, construction and general manufacturing. There has been slower thanplanned progress on actions to increase the number of people studying at a higher level in STEMsubjects. Good progress has been made in enhancing FE/HE provision in Burnley and inestablishing the University of Cumbria which has now been formally launched.

DataThere has been an increase in the percentage of students achieving 5 good GCSEs at age 16,and a corresponding decline of over 3 percentage points in the percentage of school leaverswho lack a Level 2 qualification. Similarly, good rises have been achieved in levels of attainmentat age 19, and in the number of full-time higher education students. However the percentage ofHE students studying science, engineering and technology has continued to decrease. There hasbeen a slight reduction in the number of young people not in employment, education or training(NEET), but the differential with the England figure has widened.

Implications and Further Actions/BarriersRepeated evidence base studies and regional partners discussions have reaffirmed that theNorthwest needs to develop a stronger skills profile, particularly at Level 3 and Level 4 to supportkey sectors and encourage the growth of private sector firms. Regional efforts to strengthen theFE and HE offer, particularly for hard-to-reach communities, have been successful and there is abroad consensus in the region that alongside the Building Schools for the Future programme theeducational infrastructure is sufficient. The imperative now is to focus on making sure the coursesoffered both meet and stimulate employer demand, and the region needs to develop actionsaround building the numbers progressing through qualifications levels. A key issue for strongstrategic leadership will be the transfer of responsibility and resources for 16-19 provision fromthe Learning and Skills Council (LSC) to local authorities. We need to close the gap in NEETfigures with England. It will be important for the region that we make clear and substantialprogress this year on developing actions to improve STEM study rates.




People and JobsJOB LINKAGES (RES ACTION 41-46)ProgressRegional partners have made good progress in developing a Skills for Jobs framework. JobCentre Plushas delivered significant programmes, with good achievement against outcome targets, and the rollout ofPathways to Work is due to be completed shortly across the region. A regional strategy is in place toreduce child poverty and in Merseyside a tactical toolkit for addressing child poverty has been createdand implemented. There has been slower than planned progress on the creation of Job Developerslinking employers with vacancies to workless individuals. City Strategy Pathfinders (formerly CityEmployment Strategies) are in place in Merseyside, Greater Manchester and Blackburn with Darwen andhave achieved some initial outcomes, and a worklessness programme by JobCentre Plus in Cumbria hasstarted, focusing on those hardest to reach on Incapacity Benefit (IB).

DataThere has been no significant change in rates of employment or benefit dependency (employment datarelates to 2006, and benefit rates relate to 2007). Virtually no change in the overall employment rate ineither the Northwest or England means we are still two percentage points adrift at 72.5%, and there arestill four districts with an employment rate of less than 68%. Amongst marginalised groups, employmenthas risen for non-white people and the over-50s, but decreased for disabled people. The benefit claimantdata shows marginal change, in a negative direction, with IB claimant rates still 3 percentage pointsabove the England rate, meaning over 408,000 people on IB.

Implications and Further Actions/BarriersThe key issue for the future must be a continued focus on tackling low employment rates in deprivedareas and amongst groups who are not yet accessing economic opportunities. While the main publicsector agencies of LSC and JobCentre Plus are working well together to link employability and skills, anddelivering significant programmes to tackle worklessness (including joint activity to maximise use ofEuropean funding streams), the region needs to ensure that this activity is focused and extensive enoughto make the necessary difference. Transforming outcomes for Northwest residents requires increasedactivity and coordination for the hardest to reach communities via the City Strategy Pathfinders. It is earlydays for these but the region will become clearer this year on our expectations and targets for theseprogrammes. The Deprived Areas Fund and Working Neighbourhood Fund bring very substantialresources into the Northwest and partners will need to be both strategic and tactical in their use of thisfunding. Separately, the national child poverty reduction target needs focus and resources going forwardand Merseyside’s toolkit could become an important regional approach, linked where appropriate intoCity Strategy Pathfinders. As part of an increasingly joined up approach the Department for Health’s newImproving Access to Psychological Therapies (IAPT) fund provides the Northwest with £42m over 3 yearsto address needs of people with mental health barriers.

LOCAL EMPLOYMENT (RES ACTIONS 47-56)

ProgressIn RES areas remote from growth, work has just restarted on an integrated economic plan for EastLancashire. In Blackpool most sites and physical regeneration schemes are on target - a goodachievement - although confidence was affected by a delayed government response to the Taskforcereport and non-achievement of Peoples Playground funding. In Barrow both the Marina Village andRamsden Business Park have progressed well and are now seeking private sector development interest.In Cumbria the West Cumbria Master Plan is proceeding more slowly than anticipated, and there hasbeen underspend on the Cumbria Rural Action Zone programme.

In growth areas, Preston has achieved some tangible successes in preparatory work for key city centreretail, office and commercial schemes. Greater Manchester has completed its enterprise strategy andmade good progress in establishing the key frameworks for information and evaluation of businesssupport, particularly focusing on aftercare and growth assistance to increase business survival rates. InMerseyside the Urban Regeneration Company Liverpool Vision has fulfilled its objectives, an importantprospectus for Liverpool Knowledge Quarter has been is developed, and partners have worked closelytogether on the development of new European programmes. Carlisle has made slower progress thanexpected, and in Chester the international financial situation has affected developers’ plans. Crewe publicrealm is progressing well but the location of a new rail station remains undecided.




Supporting business start-ups and enterprise in and near deprived areas is a priority for theregion. Progress has been slow but the Start-Up project is now running. Similarly major effort wasrequired from regional partners to participate in the emerging European (ERDF) programme andagree appropriate investment frameworks.

DataThere has been a small decrease in the number of Northwest super output areas in the worst 5%deprived, nationally. Both the Northwest as a region and its rural districts seem to have madeadvances in median taxpayer income. There has been a significant jump in business density inrural areas which is now well above the target for 2009.

Implications and Further Actions/BarriersThe actions in this RES factor are concerned with improving the way that places within theNorthwest are able to generate thriving economies and labour markets. This has been the focusof significant activity and investment by regional partners during – and before – the operation ofthis RES. So far the region has seen good economic progress in Manchester and strong physicalregeneration in Liverpool, although Liverpool still needs activity to tackle sector productivity,business density, and deprivation issues. Preston’s development is so far predominately in lowGVA value areas of business, although major private sector plans are coming to fruition for thecity. Areas of limited progress include East Lancashire and Blackpool, where complex siteassembly and land remediation work is continuing – the challenge will be to garner support for alarger, economically viable plan. It is recognised that connectivity between East Lancashire andManchester and Preston must be improved if the sub-regional economy is to address its structuralweaknesses. It will be important for the region to assist local and sub-regional partners informing effective partnerships with the capacity to deliver against these complex challenges. Across West Cumbria the key issue is the implementation of the masterplan and a focus onexploiting the potential of the energy coast. In Barrow securing private sector developmentcommitments for housing and business infrastructure works is essential.

Greater Manchester’s appetite for strengthened business aftercare and support to drive upsurvival rates – rather than increased ‘churn’ – is important to achieve a greater business densityrate, and stronger local employment, and this focus should be replicated across the region. InMerseyside the Enterprise Strategy is an important step forward, and in Liverpool there are majorprojects from the new ‘Liverpool Vision’ economic development company, created through amerger of URC Liverpool Vision, Liverpool Land Development Company and Business Liverpool,which will need resource to create the conditions for further major private sector investment.

The region must move to decisions with Network Rail in Crewe, in securing private sectorinvestment into development in Chester, and in tackling congestion and uneven growth inWarrington while commencing the Omega development. Lancaster has been an impressivecentre of growth recently, and in future needs to both bring larger initiatives forward and find away to balance new initiatives (particularly around the university and Heysham) with sustainableplanning, transport and infrastructure development.

HEALTH (RES ACTIONS 57-59)

ProgressPartners are now working collaboratively to develop a regional lead on healthy workplaces, butuntil recently no progress has been made on this action. The Access to Sport strategy has maderelatively good progress and is linked in to national frameworks and 2012 legacy/opportunitiesprogrammes. We note the rollout of the new Improving Access to Psychological Therapies (IAPT)fund (see Job Linkages). Within the Community RES Factor progress has been made indeveloping a stronger evidence base for health and coordination of public policy regionally.



DataMixed progress on those health indicators have been updated. Life expectancy has increased andthe percentages of the Northwest population who are obese or who smoke has declined. Thenumber of days lost per employee per year through sickness absence has increased. Thepercentage of Incapacity Benefit (IB) claimants is unchanged and the number has grown slightlyto reflect over 408,000 people.

Implications and Further Actions/BarriersThis RES factor brings together actions and investments regarding health, with a focus on issueswhich affect the size and productivity of the workforce such as IB claimant numbers, the numberof working days lost to sickness and health profiles in areas of deprivation. Although some of themedical indicators for the population have been improving, the economic impact of poor healthis worsening, both in IB claimant levels and working days lost to sickness. This should be ofsignificant priority to the region. The stronger health evidence base has revealed a worryingdivergence of health statistics within the Northwest, whereby the most deprived 20% of areas in adistrict are generally worsening compared to their district as a whole. The region must developand prioritise further and stronger actions to focus on addressing these issues. Regional partnershave agreed that we need to understand mental as well as physical health barriers to economicparticipation.

It will be important to strengthen delivery of actions to achieve healthy workplaces and toincrease sport facilities, utilising the new Community Investment Fund at the local authority level.

POPULATION CHANGE (RES ACTIONS 60-62)

ProgressThere has been good progress in increasing the number of firms engaging with the work of theMigrant Workers Northwest Forum. There has been little progress on developing schemes toretain graduates. In research terms an important report on Demography and Migration hasincreased our understanding of the ageing population in the Northwest, the experience ofmarginalised groups, and the impact of inward migration in recent years (available from theNorthwest Regional Intelligence Unit).

DataThe data shows a strong impact of migration into the Northwest, with national insurance no.registrations higher in 2007 and marginally higher again in this 2008 update, and higherenrolment onto English as a Second Language (ESOL) courses, along with an increase ininternational students studying here. Other indicators are more negative with falling in-migrationfrom other parts of the country and lower graduate retention of both our Northwest students andthose who came from elsewhere to study here.

Implications and Further Actions/BarriersThe Northwest needs more people to drive our economy, and UK and international inward-migrants, including students, are very likely to be strong contributors to the economy, both inenterprise and employment. Graduate retention is an imperative for us. Similarly, as part of theBasic Skills/Workforce Development factors, economically and socially we need to step up ourefforts to ensure that in-migrants can settle in the Northwest and use their skills to contribute toeconomic growth here. While migration and student flows both bring down the average age ofthe population, this is not fully counter-acting the ageing effect and the Northwest needs to payattention to this dramatic demographic trend for future years. We also need to recognise (inconjunction with the Housing Factor) that potential new housing growth points in the Northwestwill affect our population profile.




InfrastructureTRANSPORT (RES ACTIONS 63-79) ProgressGood progress has been made on Highways Agency actions, with the M62/M57 access road worksahead of schedule, the full annual programme of minor improvements implemented, and progresson ramp metering and the ‘influencing traffic behaviour’ programme, whereby information isconveyed to drivers via variable message signs. There has been slightly slower progress thanexpected on plans for the A556 (the M6 to M56 link). Last year the region prioritised transportinvestments in the Regional Funding Allocations mechanism and approved schemes have made goodprogress, although progressing schemes to approval has been slow (much of which is dependent onthe Department for Transport). Importantly, initial approval has been received for the M6-Heyshamlink road. Unfortunately, government still has not given a decision on the Manchester TransportInnovation Fund bid which addresses traffic congestion, although funding for Metrolink expansionhas been approved. Several schemes or projects have been reported on by partners, includingBlackpool Airport, where infrastructure improvements are projected but not yet agreed; the secondMersey Crossing, which has reached planning application phase; and Manchester Airport, which hascompleted the first stage of a £35m redevelopment.

DataThere is complex data on this RES factor with positive trends slightly in the majority, including anincrease in the number of journeys not taken by car, number of rail journeys, number of passengersusing Liverpool John Lennon Airport, and a reduction in ‘most significant vehicle delay’ – i.e. delaysexperienced at the most severe traffic blackspot in the Northwest. Data around average vehicledelay experienced does show a rise, and there has been a slight fall in the number of passengersusing Manchester Airport. An interesting indicator around access of people to jobs shows a fallingpercentage of people in receipt of Jobseekers Allowance in Greater Manchester that are within30 minutes access to the city centre by public transport.

Implications and Further Actions/Barriers

The region will need to work together this year on the Regional Funding Allocations process todetermine priorities. Influencing national investments is highly important and there is concern that thestrategic importance of the Manchester rail hub is not yet reflected in national thinking (in this regard,the Northern Way connectivity report is useful). Traffic congestion harms our competitiveness andquality of life and there is a concern that levels of traffic growth risk outstripping demandmanagement measures.

Transport linking people with jobs is a key priority. Network Rail continue to develop work on theRoute Utilisation Strategies (RUS) programme in the region which will set the context for railinvestment. The region needs to achieve both greater connectivity and continued modal shift,ensuring people can access employment sites via public transport and developing innovativetransport solutions. Local development frameworks being developed need to include analysis of theneed for supporting infrastructure and network demand management. The potential impact of newhousing ‘growth points’ need to be integrated into transport planning. In this regard, data fromGreater Manchester on accessibility is of concern. In other sub-regions, transport scoping work hasstarted in Cumbria, Lancashire has put forward a number of transport projects prioritised to extendaccess to employment opportunities, and strategic multi-modal/land use models covering Warringtonand Greater Manchester are in development. For the future, regional partners may wish to developactions around influencing and modifying household decisions on transport.

LAND USE (RES ACTIONS 80-84)ProgressThere has been mixed progress against strategic regional sites, including formulating plans aroundLiverpool University Edge, but critical highways constraints are preventing further progress at theLancaster Science Park at Bailrigg. Work has started at the 3MG site in Halton. Key brownfield sitesincluding Kings Waterfront in Liverpool and New Islington in Greater Manchester are completed. Animportant regional review of employment land is underway, with the potential to identify a newgeneration of employment sites, alongside and supporting the review of Regional Strategic Sites.New sub-regional employment sites portfolios are under preparation in Lancashire, Cumbria andMerseyside.



DataWhile there has been a slight fall in the sq m of floorspace being developed, we have seen a decrease inhectares of brownfield land (and therefore a slight fall in the proportion of England’s brownfield land that islocated in the Northwest), a decrease in the amount of vacant and derelict brownfield land and buildings anda good strong increase to over 80% in the percentage of new dwellings built on previously developed land.

Implications and Further Actions/BarriersThe most pressing issue for land use may well be the potential for a slowdown in the property market,following the credit crunch. There are concerns relating to the provision of utilities to new employment sites,particularly electricity, and a study is underway to improve the knowledge of all stakeholders. So far regionalpartners feel that we are successfully working together to maximise the best use of ERDF funding. It will beimportant to continue this work and link to planning issues to maintain the release of land for housing andemployment uses, particularly as the detailed outcomes of the Regional Spatial Strategy Partial Review andRegional Housing Strategy emerge, and in the context of potential new housing growth points. Specific areas for increased focus and investment by regional partners include Basford outside Crewe,Kingsway in Rochdale and ongoing support for development of the Daresbury Science and Innovation Park,as well as developments on important sites in Liverpool, Lancaster, Omega near Warrington, andManchester.

HOUSING (RES ACTIONS 85-87)

ProgressThe framework for housing provision is under review but there has been limited progress in receivingGovernment modifications to allow the Partial Review of the Regional Spatial Strategy to move forward.The Strategic Housing Market Assessment is underway and progress has been good on the production of aregional homelessness strategy and work understanding supported housing. We note Government fundingreductions for housing market renewal areas in the Northwest.

DataStock of housing in the Northwest has risen, without significantly affecting the ratio of house prices toearnings, which is still significantly below the England ratio, indicating relative affordability on a regionallevel, although with a very variable position across the region. The number of low demand dwellings, bothlocal authority owned and those of registered social landlords, has taken a marked fall which indicatesgood progress, although the region still has an issue with a percentage of the dwelling stock which isdeemed unfit.

Implications and Further Actions/BarriersAgainst a background of changing market conditions, it is imperative that regional partners work togethereffectively to join up spatial and housing strategies, at regional, sub-regional and local level. The region willbe engaged this year in the preparation of a new Regional Housing Strategy, and it will be important tointegrate this with both the Partial Review of the RSS, and the evolving Northwest Regional Strategy. We mustbe ready for prioritisation work through the Regional Funding Allocations exercise. This work is taking placein the context of two important trends affecting housing: higher interest rates and the impact this has onfunders of social housing; alongside the Government agenda about growth in housing numbers andexpected decisions on housing growth point bids.

PLANNING (RES ACTIONS 88-90)

ProgressActivities in this factor have progressed slowly. At the regional level, the EIP Panel’s report on the draft RSSwas published in May 2007. The Secretary of State’s Proposed Changes, issued in March 2008, arecurrently the subject of public consultation. The North West Regional Assembly has also drawn up a projectplan for a partial review of RSS. The number of Local Development Framework (LDF) documents beingproduced by the region’s local planning authorities has increased substantially, although relatively few havereached the stage of being tested at examination.

DataThe number of planning applications granted has risen slightly, with a small rise also in the number of thosegranted within eight weeks. There has also been an increase in the overall number of business planningapplications and housing applications and an increasing percentage of these are on previously developedland.



Implications and Further Actions/BarriersIt is difficult to assess whether the planning system is increasingly enabling sustainable growth in the region.Reports from sub-regional partners in particular reflect concern that in some areas planning and economicdevelopment proposals are not mutually supportive. The key message from regional partners is that further workand stronger actions are vital to link planning, housing, land use and transport together. We have an opportunityover the next two years to strengthen our strategic and tactical coordination to achieve sustainable businessgrowth, quality place-making and address the climate change agenda. The challenge is substantial but partnersdisplay an appetite to bring these agendas together and set a strong regional lead on achieving this.

ENERGY (RES ACTION 91)

ProgressThere has been progress on carbon-saving and energy-saving programmes, with the Carbon Trust in particularbeing very active in the Northwest and the opening of the Capenhurst Energy and Innovation Centre.

DataOur total energy consumption has decreased despite economic growth. However, what looks on the face ofit to be an increase in the percentage of energy demand produced from renewable sources is tempered bythe fact that the Northwest is now proportionately a much smaller part of renewables for the UK than it waswhen the baseline was established, meaning that other regions are delivering significantly more energyproduction from this sector.

Implications and Further Actions/BarriersOur key priorities for this factor going forward are ensuring security of energy supply, supporting theeconomic development of the energy sector and contributing to efforts to tackle climate change by reducingCO2 emissions. Continuing rises in world energy prices may have a detrimental impact on Northwest firms.

On sectoral growth, the renewable energy sector is thought to be one of our competitive advantages yet thedata shows a decrease in the relative importance of this in the Northwest compared to the UK. Majorinvestments in waste to energy facilities can be anticipated but there is a serious risk that they may not receivelocal planning approval. Investments in offshore wind generation are likely, but the challenge is to delivertargeted support for the sector to build our own presence in technology and operations. Nuclear new build inthe region may become a possibility but infrastructure (grid connections) is not ideal. We suggest that theregion needs to determine over the next few months how to focus appropriate actions on renewables and thenuclear sector.

INVESTMENT (RES ACTIONS 92-94)

ProgressExcellent progress has been made in developing and gaining approval for the new ERDF, ESF and RuralDevelopment Programme for England (RDPE), all of which are now in delivery phase. The Northwest RegionalEuropean Partnership has made substantial progress in responding to European Commission consultations onissues of relevance to the Northwest. Sub-regional partnerships have produced new Sub-Regional ActionPlans which align to the RES and prioritise actions and investments.

DataWhile appropriate baselines for this RES factor need to be established, information available for budgetfigures for calendar year 2008 show the ERDF programme to be potentially €138.5m (approx £102m) andthe ESF programme to be potentially €97.5m (approx £73.1m).

Implications and Further Actions/BarriersThe region will continue to engage with the European Union on several different levels, including influencingpolicy, delivering programmes and projects co-financed by the EU, responding to legislation and promotingthe Northwest in and across the European Union. A further action will be to become more engaged in theinter-regional and collaborative dimension of the EU, alongside a necessary and important focus on ERDF,ESF and RDPE programmes supporting investments in the Northwest.





Quality of LifeCULTURE AND IMAGE (RES ACTIONS 95-105)ProgressSubstantial achievements have been made in marketing the region and in securing major events(including a Northwest Cultural Campaign and Northwest Natural Environment Campaign).There has been a successful focus on business marketing for the creative and digital sector,science and inward investment. Liverpool European Capital of Culture 2008 has madesignificant achievements so far, especially including the launch of the Liverpool Echo Arena andBT Convention Centre, which is a major boost to business conference and events facilities in theregion. Early indications (evidenced by the Impacts 08 programme) are showing that attendanceat events and numbers of visitors from outside the region are exceeding expectations. Progresshas been good on visitor economy attack brands including Chester Super Zoo; Hadrian’s WallHeritage; and Jodrell Bank. Strategies for Visitor Information and for Business Tourism have beenproduced, and increasing support for business growth and skills are helping to boost the visitoreconomy sector. There has been slower than expected progress on the development of a SportSector Strategy and Action Plan, and a strategy for the outdoor sport sector, although work hastaken place on gaining benefit for the Northwest from the 2012 London Olympics. CultureNorthwest’s activity has included: facilitating and supporting activity in key areas such asCumbria, Pennine Lancashire, Blackpool and the Fylde Coast; launching the Northwest CultureObservatory Online and developing the Culture and Image evidence paper, both of which haveimproved intelligence on the sector; and delivering the regional vision for the Cultural Olympiadthrough a process of consultation – this includes the development of a programme of activitybringing £3.02m into the Northwest from the Legacy Trust UK.

DataMany data indicators for this sector have not been updated. Regional tourism indicators,including the number of overnight stays and day visits, have increased. However there are somesub-regional areas of concern including visitor numbers to the Lake District. Year long studies ofsame day tourism and of business tourism are generating a better evidence base on which tobase policy and investment decisions.

Implications and Further Actions/Barriers

There is an increasing desire to understand the importance of place quality in destination choiceand in the experience of, and economic value generated by, visitors. Pilot work in this area willstrengthen our ability to influence investment in the future. Service quality continues to be ofconcern, with a strong focus on work to improve the skills of the workforce in the visitoreconomy. Major events remain a priority and Manchester and Liverpool continue to improvetheir aspirations and deliverability. We will sustain efforts to secure value for the Northwest fromLondon 2012 in sport and marketing, and to increase visitor marketing and business and inwardinvestment marketing.

COMMUNITY (RES ACTIONS 106-112)

ProgressProjects within the cleaner, greener, safer agenda have made variable progress, while thosereporting on actions relating to community cohesion are more positive about success. The roleof the voluntary sector is strengthening and a Voluntary and Community Sector strategy andaction plan is agreed. Local Area Agreements (LAA) have made good progress on negotiationsfor improvement targets, and the Northwest has generated four potential Multi-Area Agreements(MAA). Strong intelligence on public health issues has been developed in the region and there issignificant commitment to maintaining coordinated regional intelligence and strengtheningstrategic collaboration between health, local authorities, and the voluntary sector.

DataA number of data indicators have been released revealing small or limited improvements inmeasures, including a reduction in many crime figures and fear of crime. There has been nochange in the number of local authorities with good (four star) ratings, and no change in thepercentage of households below 60% of the national median income level. The number ofNorthwest super output areas in the worst 5% deprived, nationally, has decreased by a smallnumber.




Implications and Further Actions/BarriersThis factor is intended to provide a framework for the many activities designed to create cleaner, safer andgreener communities, strengthen community cohesion, and develop and run high quality local services. Itis proving difficult to assess progress here – data outcomes are ambiguous so far while there is a range of‘green’ and ‘amber’ signals on progress of individual projects. Regional partners recognise that it isimportant to look beyond the outputs of individual discrete activities and set out an assessment of whatmore could be achieved, particularly by the third sector, to gain social benefit and a cohesive society withinthe Northwest, and what the constraints and enablers for this activity could be. Voluntary sector partnersare collaborating on a potential monitoring model using achievement against LAA indicators. As regionalpartners we have a responsibility to assist the third sector in working with us.

A key focus for the future will be delivery of tangible outcomes for the Regional Equality and DiversityStrategy. We would like to have better data on small areas and groups in society and will be looking toimprove our understanding and possibly boost the robustness of national datasets. Indicators around thehealth of the population are improving (see RES factor Health) however there is concern about anincreasing divergence of health statistics within the Northwest, whereby the most deprived 20% of areas ina district are generally worsening compared to their district as a whole.

ENVIRONMENT (RES ACTIONS 113-122)

ProgressProgress against actions in this factor includes the development regionally of a Green Infrastructure (GI)strategy, clearly linking investments in GI with economic and social benefit. Regional work with businessesvia Enworks is progressing well. Actions relating to improving the design and build quality in our urbanareas are progressing well with a design review panel in place and good involvement from the constructionindustry. In the visitor economy progress has been made in marketing the region’s environmental assets tovisitors.

Sub-regionally, in Lancashire the future role of the East Lancashire Regional Park is being evaluated. TheLake District Economic Futures programme has made relatively good progress towards projectdevelopment, including a framework for transport. In Cumbria, public realm improvements have beencompleted in Keswick and are under construction in Windermere, Ambleside, Cockermouth and Egremont.In Greater Manchester the Greenheart Plan and Croal Irwell Plan are both in development, but the level offunding is unclear. In Merseyside progress has been strong on the considerable public realm andinfrastructure projects underway, particularly in central Liverpool, Southport, and Mersey WaterfrontRegional Park. A Knowledge Quarter Prospectus has been developed to invest in public realmimprovements around the University of Liverpool.

On the rural agenda, considerable progress has been made on establishing sustainable farming and foodobjectives into the mainstream of projects, particularly RDPE (see RES action 56), but also including healthand climate change.

DataVery limited data updates here. Of the two separate indicators that have been updated this year, one ispositive and one is negative. The estimated number of visitors to the Lake District National Park has fallenbelow the 2006 baseline. Work seems to have progressed well on the region’s flood management systemsand households with access to a flood warning service.

Implications and Further Actions/BarriersThe Northwest has a strong range of natural assets and visitor/leisure brands and opportunities. Partnershave ambitious desires to improve the tourism offer, public realm quality, and the look and liveability of localvillages, towns and infrastructure. It will be important for sub-regional partners to take up the NaturalEconomy Northwest work and for the region to consider how we can develop a legacy and a continuationof the good natural economy and green infrastructure work.

One barrier to these programmes is funding, and on the agenda to improve our design and build qualitythere can also be barriers around aspirations and ability to procure at a high enough standard. However,there are significant prioritisation pressures from the wide ranging economic and spatial developmentagendas which includes transport, enterprise, innovation, skills, health and employability. As a region weunderstand that all the RES factors work together simultaneously to affect the Northwest and either enablethe private sector to create wealth, or prevent and hamper the conditions in which business can do so. Weneed to be very clear about how green infrastructure, quality public realm development, and improving thevisitor and leisure offer can make a difference to the economy, and work to develop plans which will enableour region to exploit and maximise the comparative advantages in the natural and quality of life assets wepossess.



This document can be made available in the following languages:Bengali, Chinese, Gujarati, Somali, Urdu and Hindi.

Please contact the Marketing Department on 01925 400 100

This document can be made available in large print, brailleand audio tape. Please contact the Marketing Department on 01925 400 100

www.nwda.co.uk


NWDA i7-25

2008

The Northwest Regional Development Agency PO Box 37Renaissance HouseCentre ParkWarrington WA1 1XBTel: +44 (0)1925 400 100Fax: +44 (0)1925 400 400

www.nwda.co.ukwww.enw.co.uk/visitwww.enw.co.uk/invest

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This document is available in large print, braille, audio tape and the following languages;Bengali, Chinese, Gujarati, Somali, Urdu and Hindi. Please contact the Marketing Department on 01925 400100


RES%20Assessment%20Report

Documents

res factor

res action

annual assessment report

regional economic strategy

detailed report

northwest progress

transformational actions

number of people