Agenda item

To comment on the development of the Local Industrial Strategy

The Committee considered a report of the Director of Policy, Strategy & Communications providing an update on the progress to develop a Local Industrial Strategy to be the central element of a new strategic policy framework intended to replace the LEP’s current Strategic Economic Plan. The item was last considered by the Committee on 13 July 2018.

The following were in attendance for this item:

• Alan Reiss, Director of Policy, Strategy & Communications
• Emma Longbottom, Head of Policy and Strategy Coordination

Following questions from members and further discussion, the Committee learned:

• The LEP Board is leading the development of the Local Industrial Strategy and will make the ultimate decision.

• Each of the (thematic) advisory panels (that include both private sector and elected members) that report to the LEP are involved in developing the strategy.

• Although the government has been clear that the Local Industrial Strategy is not a bidding document and details of future funding mechanisms are not yet clear, it is estimated and hoped that around £120m a year will be made available to the LEP in the future via the future UK Shared Prosperity Fund. 

• A successful outcome in three years timing would include the LEP having:
  1. Developed a clear strategy that is approved by the government
  2. Received new funds released by the government
  3. Begun investing in interventions to achieve the identified strategic goals
  4. Begun to see short term benefits from those interventions

• Although the Leeds City Region and York & North Yorkshire LEPs are currently each developing their own separate local industrial strategies, they have taken into account the ongoing intention to create a new LEP covering the whole of Leeds City Region and North Yorkshire by:
  1. collaborating on the development of the evidence base,
  2. coordinating on mutual areas (such as rural issues)
  3. establishing a joint independent expert panel
  4. Keeping in close touch at officer level
  5. Collaborating on consultation in the overlapping areas.

• The LEP has not yet decided which of the four ‘grand challenges’ (artificial intelligence/data, future mobility, ageing society and clean growth) it will focus on. The government has asked each LEP to choose where to focus.

• Whilst a strong case could be made for all of them, the LEP is currently leaning towards either ‘clean growth’ or ‘ageing society’ because:
  1. Clean growth: the region’s existing local energy assets and sector put it in a strong position to realistically achieve its zero carbon targets and position itself as a national leader.
  2. Ageing society: one of the biggest employers in the region is the health and social sector (est: 250,000 employees) and the region has emerged as a strong performer in the health technology industry which would put it in a strong position to supply the needs of an ageing population nationally.

• Discussions are still ongoing about whether the strategy should be focused on certain sectors of the economy or take a broader approach. Feedback shows that businesses prefer the latter.

• There will also be a strong ‘place’ based element to the strategy as a key ambition of the LEP is to ensure that the benefits of growth are felt across the region, not just in certain areas or districts.

• Measuring productivity in certain sectors such as health and social care and other public sector areas, which happen to be the largest employers in the region, is more complex than in other sectors.

• A key component of improving productivity is ensuring that businesses have access to the right people (skills) and tools (innovation) – which will be key priorities of the strategy.

·         The strategy could support this by ensuring that there is enough focus on fostering greater engagement between schools (skills), universities (innovation) and local businesses.

• With regards to accessing current innovation, although there are nine respected universities in the region, greater work must be done to ensure that local businesses are able to access, and invest in, research and innovation.

• Future innovations in automation will be beneficial to improving productivity and generate further innovation, it provides a great risk to existing workers if they are not sufficiently trained so they can transition to new careers.

• Although strategies and policies should take into account the needs of the present, there should be an equal focus on the needs of the future and determining what the LEP wants the economy to look like and endeavour to support only those businesses and policies that will help achieve that goal.

• Although financial services is a large, growing and key industry in the region, it does not feature heavily in the emerging strategy as the focus should be on sectors that need support. Financial services is doing well without intervention.

The Committee requested that:

• The research commission reports currently being reviewed by the independent expert panel – along with the draft policy proposals and, later, the draft strategy – be brought back to the next two committee meetings. 

• Further information be provided on:

Resolved: 

i)     That the report be noted and the committee’s comments be considered further.

ii)    That the Local Industrial Strategy be brought back to the following committee meetings in September and November 2019 so that the committee can consider the final economic evidence report, draft policy proposals and the draft strategy prior to its submission in December 2019.