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2017 Budget reaction

Andrew Hodgson, Chair of the North East Local Enterprise Partnership (LEP), today gave his reaction to the Budget delivered by Chancellor Phillip Hammond.

“This is a Budget that recognises that we face a range of challenges but is focussed on preparing the economy for the future.

“The Chancellor has prioritised actions which can strengthen the UK’s competitiveness through innovation, skills and investment in housing and infrastructure.

“I fully support devolution to the North East and welcome today’s announcement by the Chancellor, with details that the three North of the Tyne local authorities have struck a devolution deal with Government.

“The business community in the North East wants devolution of finance and powers from central Government to the North East and would like these devolved funds to cover as much of the North East as possible. Decision-making by locally elected politicians for local people is important.

“However, the door must be left open for all of the other local authorities in the North East who may decide in the future that they would also like to be part of a devolution deal.

“Any deal for the North East region should have the delivery of the Strategic Economic Plan at its heart and be focused on boosting economic growth and creating more and better jobs in the North East.”
“We welcome the £337m investment in the Tyne and Wear Metro system. I personally wrote to the Chancellor ahead of the Budget to call for this funding.

“The strategic importance of the Tyne and Wear Metro to the local economy of the North East of England cannot be over-stated. It carries up to 40 million passengers each year, two thirds of whom are travelling for work or education and is a significant employer in its own right.

“The Transforming Cities Fund, which will invest £1.7bn into transport infrastructure and the commitments to develop the next generation of 5G technologies, were also positive. The North East can play a key role in testing and delivering 5G for the UK.

I also welcome the £20m to help further education colleges prepare for the new T levels.

“I was encouraged that the OBR has confirmed we can expect to see ongoing jobs growth across the UK. The North East Strategic Economic Plan (SEP) has set an ambition of generating more and better jobs for the North East and we hope today’s Budget will create opportunities to support that.

View a fuller budget overview from the North East LEP here.

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In conversation with Andrew Hodgson: Even a small rise in productivity has a big economic impact

Boosting productivity is one of the key economic challenges of our age and is an issue the North East Local Enterprise Partnership is setting out to help tackle through the launch of a new pilot programme.

Growth Hub High Performance collaborates with senior business leaders to develop and deliver strategy and business models that drive higher levels of performance, profitability and competitiveness.

Delivered through the North East Growth Hub, the scheme will help companies learn from senior business leaders through specialist performance coaching, peer driven workshops and best practice visits.

The pilot programme supports the LEP’s pledge to create more and better jobs for the regional economy – better quality jobs being driven by better productivity.

If all businesses raise their productivity performance, even by only a little, the economic impact will be significant.

Poor productivity is holding back the growth of the UK economy as a whole and is the subject of much debate amongst business leaders, Government ministers and economic analysts.

A landmark recent report by Sage and Nesta into small and medium-sized businesses in the UK, mapped entrepreneurs at a local authority level for the first time.

‘The State of Small Business’ showed a postcode lottery in productivity levels – with SMEs in the most productive local authority in the UK 26 times more productive than those in the least.

Such a patchwork of performance is not good news for a national economy ranked the least productive of the G7 nations.

If businesses are not helped to be more productive then their profit margins will be squeezed, they therefore can’t pay people more and living standards will fall.

Companies become less competitive and less profitable which ultimately slows both business and economic growth.

Greater productivity is a challenge set down in the region’s Strategic Economic Plan as one that the North East must meet as a priority to bridge the widening gap we have with the UK’s productivity level as a whole.

Helping companies to become more productive is widely recognised as being a catalyst for economic growth, higher wages and greater competitiveness.

To tackle this challenge, the North East LEP is working with the industry lead Productivity Leadership Council, chaired and formed by Sir Charlie Mayfield in 2015.

Businesses learn best from other businesses so our approach in the new Growth Hub High Performance programme is structured around best practice sharing between peers.

It will introduce participants to exemplar firms from across the region, as well as providing access to the practical tools and techniques that can be used to implement improvements.

The programme is structured around the key drivers of high performance such as future planning, leadership, talent development and the adoption of digital technology.

The High Performance programme isn’t for everyone; it’s specifically aimed at senior leaders from businesses with between ten and 50 employees. Critically, participants must have a strong desire to transform their company’s performance and be prepared to dig deep and fully participate in this short yet challenging programme.

It is structured around four, full day, peer driven workshops which begin next month.

For more details go to www.northeastgrowthhub.co.uk

 

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Region’s schools and colleges pledge their support for North East Ambition

More than 280 people representing schools, colleges and education institutions across the region joined the North East Local Enterprise Partnership (LEP) on Friday 14 July to pledge their commitment to improve careers education for each and every student in the North East.

The launch of North East Ambition saw more than 130 schools and colleges sign up to adopt, implement and achieve the Good Career Guidance benchmarks eight clearly defined benchmarks for high quality careers education that improve students’ transition from school to work by identifying routes to a successful working life.

Andrew Hodgson, Chair of the North East LEP said: “Following the success of the Good Career Guidance benchmarks pilot led by the North East LEP, it’s fantastic to see commitment from schools and colleges across the region that more young people will have access to life-changing careers education.

“The attendance at the event demonstrates the overwhelming commitment from those in education, business and other areas of industry to support North East Ambition and improve opportunities for our region’s young people. The North East LEP has worked hard to bring the sectors together in what is a unique collaboration that covers the entire region.

“Ensuring our future workforce is work ready is key to the economic success of our region. Improving skills is at the heart of our strategic economic plan and supporting schools and colleges to implement the Good Career Guidance benchmarks will help us achieve this.

“We’re well on our way to achieving our aim of 100,000 more and better jobs by 2024 and the launch of North East Ambition reinforces that ambition.”

David Baldwin Executive Headteacher at Churchill Community College and Norham High School said:

“We, as educators, all have a responsibility to ensure that we can help children become an effective part of society. The Benchmarks provide an effective framework for careers education, information, advice and guidance that allows us to do this.

“Leadership is crucial to making the Benchmarks work – I’d urge schools and colleges to ensure careers is represented on their senior leadership team and that there is resource in place, internally and through partnerships, to deliver the guidance.

“This isn’t about money, it’s about appropriate allocation of resource to help young people be ambitious, and achieve those ambitions. I’m delighted to see the Benchmarks being celebrated and look forward to them being adopted by more schools and colleges.”

North East Ambition builds on the success of the Good Career Guidance benchmarks pilot in the North East LEP region, which involved 16 schools and colleges. Recognised nationally as ‘transformational’, the pilot has gained significant national traction.

The 16 schools and colleges involved in the pilot attended the event, as did schools and business leaders enrolled in the North East LEP’s Enterprise Adviser network, which sees business people from some of the North East’s most successful industries work strategically with senior leaders in secondary schools to shape the quality of careers provision.

Michelle Rainbow, Skills Director at the North East LEP said: “We’ve seen what a positive impact the benchmarks can have on both schools and students.

“North East Ambition is about ensuring all young people, regardless of their starting points or backgrounds, have access to high quality careers advice that improves opportunities for them in their working lives.

“The initiative brings education, business and other stakeholders together to deliver effective and innovative careers education fit for the 21st Century.”

Schools and colleges attending the launch will be invited to a second event later in the year demonstrating how to put the Good Career Guidance benchmarks into practice. A North East Ambition toolkit is also available via the North East LEP website, www.nelep.co.uk

For more information about North East Ambition, visit www.nelep.co.uk/improving-skills(

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Voluntary sector is vitally important for economic growth

At a recent LEP Employment and Skills Board meeting, the importance of the third sector to our sustainable economic growth was again brought home to me.

Board member Carol Botten, deputy chief executive of VONNE, reinforced how voluntary organisations are changing, adapting to a world where business acumen is a priority as grant funding becomes scarce.

More of their income is derived from delivering contracts and services with an emphasis on being commercially focused and sustainable to ensure future viability.

Carol played a leading role in refreshing the employability and social inclusion section of our new Strategic Economic Plan (SEP), to better recognise the job and wealth creation value of our third sector to the North East economy.

Voluntary organisations often reach out to those people deemed by some to be ‘unemployable’.

Using their care and expertise, they are helping the North East LEP and its other partners implement the SEP’s employability and social inclusion agenda on the ground.

Strengthening our employment rate is crucial to sustainable economic growth, and for those on the margins of society, finding meaningful employment is a fundamental route out of poverty and exclusion.

Newly released Third Sector Trends Data for 2017 underlines the economic importance of voluntary organisations and their activity. Figures show there are 7,000 formal voluntary groups based in our region.

They employ 37,500 full-time equivalent employees. Across the whole of the North of England, the third sector is a larger employer than the finance and insurance industry.

Its value to the North East economy through salaries is estimated at £750m.

A growing number of third sector organisations are experiencing rapid growth, such as Changing Lives in Gateshead.

Back in 2006 it was a North East focused employer of 84 people with a £2.2m turnover.

Fast forward just over a decade and it works with disadvantaged people from the Midlands to Berwick, with 465 staff on its books and a turnover of £16.3m.

As my fellow board member Paul Varley tells me, profit is no longer a dirty word in the third sector.

Paul is chair of Northern Rights, an acclaimed social enterprise managed by local people helping the disadvantaged find work.

Taking surplus profits and investing them into doing even more good through the core services they deliver well, means charities reach more people who need their help.

The North East LEP and its partners have set the region the bold target of creating 100,000 more and better jobs over the next seven years.

In doing so, we recognise the growing contribution of organisations such as the Tyne Gateway Trust, its sharp business acumen creating the revenue to be able to invest into the business and grow.

Pauline Wonders, the trust’s strategic director, and her team work with the long-term unemployed, people whose self-confidence has been shattered to the point where some don’t consider themselves worthy of work.

Her team of 24 staff – all of whom were previously unemployed themselves – connect with people, nurture their self-esteem and give them the tools to start their own community enterprises or support them into sustained work.

Inspiring, important activity with real economic value.

Andrew Hodgson,

North East LEP Chair.

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Andrew Hodgson gives his view on devolution

In his latest column for the Journal newspaper, North East LEP Chair Andrew Hodgson gave an update on recent talks around a devolution deal:

As Chair of the North East Local Enterprise Partnership, I’ve made it clear in the past and reiterate my belief that it makes economic sense for a devolution deal to encompass the whole of North East LEP area. For me it’s not about political ideology or money, it’s that making local decisions on local strategic issues is common sense.

The subject is very much back on the political agenda with talks taking place between the three local authorities North of the River Tyne – Northumberland, Newcastle and North Tyneside – and Secretary of State, Sajid Javid, to strike a deal for their area.

It’s clear that despite a huge effort from the LEP and the business community, the seven North East local authorities are not in a position to progress devolution together at this time.

I also appreciate the importance of progressing devolution to a timetable where the North East is not left behind the rest of the country, which in the eyes of Government is to have a mayor by 2018 – a very challenging timetable.

Therefore, we will work with the three councils and any other councils who wish to move towards a devolution deal, to ensure a devolution deal in the North East has business-focused outcomes.

I have confirmed the LEP’s position with both the Government and the north of Tyne councils and insisted that the door must be left open for all, or any, of the local authorities south of the Tyne who may decide in future that they would like to pursue this current devolution opportunity.

I fully respect the decision made by local authority elected representatives and officials south of the Tyne that the terms offered by Government at present are not ones they feel they can recommend to the people they represent. We will continue to ensure businesses in the south of the region are not disadvantaged by the on-going discussions.

Any deal for the north of the region should have the delivery of the Strategic Economic Plan (SEP) at its heart to boost economic growth.

We’ve been refreshing our SEP and are looking forward to profiling the immense progress that has been made in terms of its delivery and contribution to increasing our economy.

Taking local control over finance and powers for areas such as housing, skills and transport can only help our growth and successfully deliver the bold agenda set out in the SEP.

For example, securing £380m in North East Growth Deal funding, piloting the Good Career Guidance Benchmarks programme, funded by the Gatsby Foundation, with 16 schools and colleges, and creating a North East Innovation Board of industry leaders to steer major investment projects are all important milestones – but need to be built upon by any devolution deal.

We’ve come far and achieved much in a short space of time, but there’s still a long way to go for the North East economy to contribute its full worth to the Northern Powerhouse and UK.

 

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£26m ERDF call for organisations to lead North East growth and tackle flood dangers

Innovation, high growth businesses and reducing flood risks headline a new £26m call for applications from the European Union in the North East.

The latest round of European Regional Development Fund (ERDF) investment earmarked for the region seeks expert partners to deliver maximum return on the £26m cash pot.

The North East Local Enterprise Partnership works closely with Government to ensure that the European Funding allocation is aligned to projects that help deliver the North East Strategic Economic Plan.

The latest funding round consists of:

 

• Up to £16m to promote research and innovation. The North East LEP has a goal of making the region an innovation hotspot in Europe.

Investment will concentrate on backing companies working in the North East’s four ‘smart specialisation’ areas of passenger vehicle manufacturing, subsea and offshore technology, life sciences and healthcare and creative and digital industries

• Up to £2.5m to enhance the competitiveness of small and medium sized firms. This investment is looking to increase the density of high growth SMEs in the North East LEP area.

These firms have a disproportionately high positive impact on regional growth – in 2014 it is estimated the North East had 600 high growth companies with a combined turnover of £2.4bn and 21,000 employees. A 25% increase on 2014’s figure could generate an extra £186m of regional GVA and create nearly 4,000 new jobs

• Up to £8.6m to address specific environmental risks, ensuring disaster resilience and developing disaster management systems.

In the North East LEP area there is a determination to reduce the risks from flooding and climate change. Local partners are being sought to find innovative and new ways to reduce flood and erosion risk to economic infrastructure and businesses, enabling them to survive, thrive and grow.

Andrew Hodgson, North East LEP Chair, said: “The UK is still very much in the European Union and until we leave it, the North East LEP is determined to take the maximum opportunities for the regional economy from the investment offered by the ERDF programme.

“This new funding call presents a real opportunity for North East businesses and organisations which I urge them to pursue if they have a viable project which meets ERDF objectives.

“I would urge companies and organisations wanting to know more to visit the North East LEP website for more information.”

The North East LEP will be holding an information event giving more detail about the calls on 5 January 2017. To register to attend the event, please click here.

Chancellor of the Exchequer Philip Hammond has extended the European Union funding guarantee to the point of Brexit, confirming that the Government will honour European Structural and Investment Fund (ESIF) projects signed before Britain leaves the EU.

The 2014-2020 ESIF are planned to inject more than £437m into the North East. ERDF is part of the total ESIF North East allocation.

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North East LEP Autumn Statement reaction

The North East Local Enterprise Partnership today welcomed Government focus on boosting productivity through infrastructure, innovation and business growth measures in the Autumn Statement.

Andrew Hodgson, North East LEP Chair said:

The Chancellor of the Exchequer Philip Hammond’s focus on raising national productivity through substantial infrastructure and innovation investment mirrors the approach of the North East’s Strategic Economic Plan.

We welcome the Chancellor’s recognition that we are making a stronger contribution to the national economy through the creation of more and better jobs.

The Government has committed to investing £23bn into a National Productivity Investment Fund to boost innovation and infrastructure over the next five years which provides opportunities for our region to exploit.

We welcome the Chancellor’s focus on 5G broadband development through a £1bn fund and trials programme – the region has written to the Chancellor with a proposal to create a trial site for 5G in the North East.

The £220m funding for pinch points on strategic roads gives the North East an opportunity to further develop schemes in relation to the strategic highway network in the region.

Investment into the ultra-low emission vehicles sector represents a major opportunity for the North East with its strong automotive sector and highly developed low carbon vehicle programme.

We are delighted that our joint proposal for a Science and Innovation Audit with other Northern LEPs will be going ahead in round two.

A group of tax changes will benefit companies in the region’s rural and urban communities.

We look forward to learning in the coming days the allocation of funding to the individual Northern LEPs through the Local Growth Fund to finance strategic capital projects.

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Deal signed for new £145m super fund for the North East

A £145m super fund to support the growth of hundreds of North East businesses will go live early next year after an agreement was signed today.

The North East Fund – formerly known as JEREMIE 2 – will offer different types of equity investments and loans to firms to drive local growth, investment and job creation in the region.

The agreement has been signed by the seven Local Authorities in the North East, North East (SPV) Limited and the Department for Communities and Local Government (DCLG) which has responsibility for the European Regional Development Fund (ERDF) in England.

The announcement has been heralded as a milestone in public sector support for regional business growth and will be a catalyst to access significant European Investment Bank (EIB) investment.

Over the next five years, the North East Fund will pump loan, equity and mezzanine funding into new and existing fast-growing businesses across a wide range of sectors which will spearhead new regional economic growth.

The North East LEP led the project team negotiating for the region, and agreed with Government to develop the North East Fund at the Autumn Statement last year, to ensure that the super fund would be managed and spent exclusively in the North East. It sits alongside the Northern Powerhouse Investment Fund (NPIF) operating in other LEP areas to drive business growth right across the Northern Powerhouse.

The new fund combines ERDF backing with EIB finance and legacy money generated from historical funds which have operated in the North East LEP area since 2003.

It is estimated that the North East Fund could provide financial support for 600 businesses; help create around 2,500 jobs in the next five years and a further 1,000 jobs throughout the life of the fund – and deliver a legacy fund of up to £80m over the next decade for further financial support to companies.

Andrew Hodgson, North East LEP Chair, said:

Securing The North East Fund for investment into our region is fantastic news and the result of many months of hard work by regional partners with Government.

“The agreement signed today with Government ensures the Fund stays in the North East, to back the investment plans of our fastest growing, brightest firms. It is a prime example of public sector partners working together to achieve maximum return for the North East economy.

Councillor Paul Watson, Chair of the North East Combined Authority (NECA), said:

The first round of funding was a very successful scheme. It’s very pleasing to know that our region has now secured a second funding scheme.

Businesses need access to finance because it helps them to plan ahead, to grow and expand, and to create jobs and economic growth in the North East.

Andrew Mitchell, of the Project Team charged by North East LEP with delivering the Fund, said:

This is great news for the region. Despite the uncertainty created by the Referendum, this is a vote of confidence in the North East on the part of the European Investment Bank which will be a key partner in the fund. The commitment of North East LEP, the seven local authorities and Government to delivering a regional fund has been crucial in unlocking this programme.

Stephen Lightley, Chief Executive Officer of North East Access to Finance Limited, said:

It is great news that Government approval has been secured for the North East Fund and that the North East LEP’s share of the financial legacy of the public sector SME investment funds that invested from 2003 to 2009, is providing a key element of the finance for the new fund. It was always the vision of local stakeholders that returns from these older funds would be redeployed into future funds and now it is being achieved.

The NECA Leadership Board agreed to put special local authority borrowing powers in place which ensured the North East Fund will be ready to invest in 2017, after the hugely successful Finance for Business North East Fund stops investing in December.

That fund invested £147m into 900 North East and Tees Valley companies and to date has created almost 3,300 new jobs, safeguarded a further 3,300 and brought over £160m of further private sector investment to the region.

It is envisaged that the North East Fund will help finance viable firms unable or partially unable to secure loan funding from the banks and other sources.

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Nissan’s decision to continue production in Sunderland underlines the quality of the region’s automotive sector

Last week the North East LEP, along with the region’s business leaders and workforce, welcomed the announcement that Nissan will produce its new Qashqai and X-Trail models at its Sunderland plant.

This decision not only secures the jobs of nearly 7,000 people at the Nissan plant itself but also tens of thousands of jobs within the wider supply chain which is linked with Nissan throughout the North East.

Production at Sunderland’s Nissan plant began in 1986 and the first car to roll off the production line was a Nissan Bluebird. During the past 30 years models including the Nissan Micra, Nissan Note and Nissan Infiniti Q30 have all been made in Sunderland and the electric Leaf model has been produced here since 2012. The plant turns out around half a million cars a year and has ambitions to increase production even more, further cementing the region’s reputation as a leader in the automotive industry.

I believe that Nissan’s decision is a clear indication that the North East’s automotive sector is world-class. Cars produced in Sunderland are exported to more than 130 countries and the plant is regularly ranked as the most productive in the UK. It’s an astounding fact that one in every three cars made in the UK is made at the site in Sunderland.

The North East is at the forefront of the automotive industry – not just in the UK but globally – and this is something which the North East LEP will be working to build on, with the advanced manufacturing and automotive sector forming a key part of our strategic economic plan for the region.

The news that Nissan will continue to produce its cars in Sunderland is important for people working in the automotive sector today and it’s also important for young people in the region. It’s vital that the future workforce have good quality career opportunities which they can progress to when they leave education. We’ll continue to work with education providers and local industry to make sure that our young people are equipped with the skills they need to begin their careers here in the North East.

Nissan’s decision is an investment in the North East, an investment in our automotive sector and an investment in the people here who make it a global success story.

Andrew Hodgson, Chair of the North East Local Enterprise Partnership