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An Extended Annual Assessment of the North West RES 2006 A Final Report 23 September 2010

An Extended Annual Assessment of the North West RES 2006 A Final Report

Contents

Executive Summary .................................................................................................................. i 1: Introduction .......................................................................................................................... 1 2: Positioning RES 2006 .......................................................................................................... 4 3: Developing and designing RES 2006................................................................................. 8 4: Delivering RES 2006 .......................................................................................................... 15 5: Regional change and progress ........................................................................................ 27 6: RES 2006 outcomes and contribution ............................................................................. 33 7: Learning the Lessons........................................................................................................ 38

Contact:

Joe Duggett

Tel:

Approved by:

Simon Pringle

Date:

0161 475 2109

email:

jduggett@sqw.co.uk

23 September 2010

Managing Director

www.sqw.co.uk

An Extended Annual Assessment of the North West RES 2006 A Final Report

Executive Summary Background and purpose 1.

SQW Ltd was commissioned by the North West Development Agency (NWDA) in March 2010 to complete an independent Extended Annual Assessment of the North West Regional Economic Strategy (RES) 2006. This Executive Summary sets out the key findings from the Assessment, which was completed in August 2010.

The purpose of the Assessment was two-fold: •

to assess regional performance in delivering against the intent of RES 2006 over the RES’s delivery period (2006-2010)

•

to identify the lessons learned from RES 2006 to inform future strategy in, and across, the North West.

The Assessment was not an economic impact evaluation of RES 2006 and its Actions. Rather, it was designed to be an accessible and rounded consideration of RES 2006, and its Themes: Business, Skills and Education, People and Jobs, Infrastructure and Quality of Life.

The Assessment involved extensive consultation with partners across the North West providing strategic and/or operational perspectives on RES 2006, a review of documents and monitoring data, and detailed analysis of socio-economic trends. This quantitative and qualitative approach together formed the evidence on which the Assessment, and its lessons, are based.

Setting the scene 5.

RES 2006 did not start with a blank canvas. As the third regional economic strategy for the North West, it was shaped extensively by the vision, partnership structures/relationships, and investment decisions developed through its 2000 and 2003 precursors. Further, the sustained economic challenges for the North West provided the contextual backdrop to the development of the new strategy. Long-term, the North West had lost ground to England, with its residents becoming less wealthy – relative to the national average – over the preceding decade and a half, and workforce productivity 85% of the England level in 2004.

As such, RES 2006 was rooted in the genealogy of its precursors and the region’s economic context. But RES 2006 sought to move on and develop regional partnership working, the evidence bases, and economic priorities that it inherited.

Developing and designing RES 2006 7.

The development of RES 2006 was a notable success story for the region, and the NWDA in particular who led the process, demonstrating the increased maturity and capacity of partners across the North West with regard to regional economic development priorities.

In headline terms, the Assessment found that:

An Extended Annual Assessment of the North West RES 2006 A Final Report

•

through an open consultation process well regarded by partners, the collation of a robust evidence base, and, for the first time in a North West RES, the use of econometric forecasts, RES 2006 delivered a strategy with credibility and resonance for partners

•

RES 2006 set out a coherent regional vision and overall strategic intent, articulating more fully the scale, scope, and complexity of the socio-economic issues facing the region

•

RES 2006 was essentially ‘focused on the right things’, but, crucially, it was ‘constructively permissive’ in its design, generally establishing areas for action not prescriptive projects. This was important to enable partners to align activity to the RES in its delivery phase

•

RES 2006 gave more attention than before to place-based issues, and started to move the region towards thinking about functional economic geographies.

These were important upsides for RES 2006. But, looking back, elements of the development and design of RES 2006 provide important learning lessons. Four are noteworthy: •

the desire to consult widely and consensually made it difficult for partners to come down on the hard issues that really mattered most, as such, RES 2006 was probably too broadly cast in its intent. The need for ‘braver’ prioritisation in the future is a clear message to emerge from the Assessment

•

the Thematic approach of RES 2006 provided a sound coverage of issues facing the region, but this approach undermined to some extent the linkages present across policy domains. A more integrated approach across Themes is required going forward

•

because the thinking of RES 2006 on functional economies was at a formative stage, it did not appreciate fully how the ‘same’ issues present differently in different circumstances across places. The need for a more nuanced approach to spatial issues, based on functional economic areas, is an important lesson for the future

•

although a sound ‘regional strategy’, more could have been done to deliver a genuine ‘Strategy for the North West’ in RES 2006. A clearly defined role for those particular issues/assets that differentiate the North West and its places should be a hallmark of future strategy efforts.

Delivering RES 2006 10.

RES 2006 provided a valuable and consistent framework for economic development activity across the North West. Key findings included: •

RES 2006 remained fit-for-purpose over 2006-2010 as a statement of overall intent, with a resilience to changing circumstances owing to its breadth and lack of prescription

•

RES 2006 enabled partners to identify progressively better the ‘strategic fit’ of their activities to regional priorities, starting to move the region towards a ‘what my activity should do for RES 2006’ perspective

An Extended Annual Assessment of the North West RES 2006 A Final Report

•

RES 2006 helped to embed sub-regional working through the integration of subregional strategies/action plans to its intent

•

delivery against RES Transformational Actions was strong; the evidence suggests that progress was made against all 45, with important potential long-term economic benefit for the region.

11.

RES 2006 also delivered additionality, as evidenced through Theme-based research completed for the Assessment. RES 2006 accelerated the development and improved the quality of projects delivered over 2006-10, and helped to secure funding for projects developed by partners.

12.

More qualitatively, RES 2006 played a significant role in developing partnerships and improving co-ordination across the region. In a number of cases, the partnerships developed through RES 2006 enabled a more co-ordinated response to the recession than might have otherwise been the case.

13.

Against these positive outcomes, the Assessment suggests that the role of RES 2006 was principally as a strategic ‘check-point’ for aligning funding and delivery, rather than as a dynamic factor in partner project development and strategic planning. This meant that the opportunity for RES 2006 to play a substantial ‘commissioning’ role was not substantively realised.

The differential influence of RES 2006 14.

The influence of RES 2006 varied by different constituencies of interest as shown in Figure 1. Figure 1: The spectrum of RES 2006’s influence on organisation types

NWDA

Easy to detect

Sub-Regional Partnerships, City Regions, 4NW

Regional public sector delivery agencies i.e. JCP, Area-based regeneration agencies i.e. URCs

Local Public-sector Authorities, focused Private sector representative groups i.e. CPRE, representative AoC, Voluntary groups i.e. IoD, EEF sector

Influence of RES 2006

Central Government

Private sector

More difficult to detect

Source: SQW

15.

The differential influence is broadly as may be expected. That said, how Local Authorities and the private sector (and its representatives) can be influenced more fully in future strategy efforts is an important consideration going forward.

16.

There was also a temporal dimension to the influence of RES 2006. Strongest in 2006, the RES’ influence reduced over time, even for those agencies most closely associated with it.

iii

An Extended Annual Assessment of the North West RES 2006 A Final Report

Some loss of influence was to be expected, as the novelty of the strategy wore off, however, this was accentuated because RES 2006 was arguably not as flexible as it might have been to adapt to changing contexts. Whilst conferring certainty, this inflexibility meant that when crises did occur, such as the recession, the regional response was led not through the economic strategy, but the NWDA’s Annual Corporate Plan. 17.

The Assessment also suggests that there was some uncertainty in the region over where overall accountability for the performance of RES 2006 ultimately lay. The NWDA saw RES 2006 as the ‘region’s strategy’, whilst wider communities of interest saw it as the NWDA’s strategy. Clarity on accountability, to ensure consistent influence and commitment, will be important for future strategy efforts.

Regional change 18.

Significant absolute economic progress was made by the North West over the RES 2006 period. Regional GVA growth in 2008 was (marginally) higher than the England level for the first time in well over a decade, and skills levels improved markedly.

19.

However, the GVA gap to England grew over RES 2006’s lifetime. Further, although there is some uncertainty at this stage owing to time-lags in data, the evidence suggests that the region will not meet in full the eight headline targets established for RES 2006, as set out in Table 1. Table 1: Performance against headline RES 2006 targets Target

Measure

2006 baseline (2004 data)

2010 update (2008 data)

Target hit at 2010 update

Achieve GVA growth above the England average

Per annum GVA growth

NW: 4.7% Eng: 5.5%

NW: 3.6% Eng: 3.5%

Yes

Create 150,000 net new jobs

Number of jobs in the region

3.02m

2.99m

Raise the firm formation rate

Number of formations

28,850

27,650

Reduce the number of people with No Qualifications by 80,000

Working age population with No Qualifications

724,600

621,500

Increase the number of people with Graduate Qualifications by 120,000

Number of people with Graduate Qualifications

840,800

953,100

No (strong progress)

Increase the number of people in the workforce by 83,000 to meet the England employment rate

Employment rate

NW: 72.8 Eng: 74.7

NW: 70.3 Eng: 73.0

Reduce the number of areas in the worst 5% deprived, nationally

Number of areas in the worst 5% deprived, nationally

579

569 (2006 data)

Yes

Reduce CO2 emissions per £ of GVA

CO2 emissions per £000 GVA

0.57 (2005 data)

0.52 (2007 data)

Yes

20.

From a headline perspective, therefore, RES 2006 did not deliver fully against its quantitative intent. However, this perspective does not account for quite how pervasive and widereaching the effects of the recession were on the region, nor how the targets related to structural issues requiring many years of solid concerted action.

21.

An important lesson is that a more flexible approach to the RES’ targets would have been helpful. Alternative scenarios (RES 2006 scenarios were largely to growth trends) or a

An Extended Annual Assessment of the North West RES 2006 A Final Report

revision of targets at mid-point would have enabled the headline purpose of RES 2006, in quantitative terms, to remain realistic and deliverable.

The Strategic Added Value of RES 2006 22.

RES 2006 had potential to deliver one or more of five types of Strategic Added Value (SAV), as set out in Table 2. Table 2: Categories of Strategic Added Value

23.

Strategic Leadership and Catalyst

Articulating and communicating regional development needs, opportunities and solutions to partners/stakeholders in the region and elsewhere

Strategic Influence

Defining the distinctive roles of partners, and facilitating partners and stakeholders to commit to shared strategic objectives and activities

Leverage

Mobilising partners/stakeholder to commit resources to economic development activity

Synergy

Improved information exchange/knowledge transfer and coordination and/or integration of the design and delivery of interventions

Engagement

Engagement of stakeholders in the design and delivery of regional and sub-regional priorities and programmes

Integrated findings of the Assessment regarding RES 2006’s SAV are summarised below. Figure 2: The Strategic Added Value of RES 2006

Source: SQW

24.

Positively, the Assessment found evidence of SAV across all five categories. The contribution was most pronounced in terms of Strategic Leadership and Catalyst and Engagement.

25.

The development of RES 2006 was central to this SAV contribution, moving-on strongly the partnership working agenda in the region. As such, developing RES 2006 arguably proved to be as valuable as the resultant document itself, although the strategy document was ‘known and used’ throughout its delivery period.

An Extended Annual Assessment of the North West RES 2006 A Final Report

What has been learned? 26.

The Assessment delivers six key Learning Lessons: Managing inclusivity in strategy development •

The process of consultation/engagement in drawing up RES 2006 demonstrated the value of an open and engaging process in strategy development. Formal/informal relationships were initiated or strengthened, and the challenges faced by the North West widely debated and communicated. However, going forward, increasing partnership maturity will be required – partners need to think for, and be committed to, the collective, not just their own constituency or specific interest group.

Be clear on where accountability rests •

Formal accountability for the successful delivery of a strategy needs to be clearly established and implemented. This was arguably not the case with RES 2006. A genuine partnership approach to RES 2006 was an important step-forward. But this established roles, rather than ultimate responsibilities and accountabilities, for the strategy’s performance. Who ‘owns’ a strategy and is accountable formally for its success, or otherwise, needs to be clearly identified from the outset of future strategy efforts in the North West. Without this accountability for performance, genuine traction will not be secured.

Braver prioritisation, and ‘hard-choice thinking’ is required •

There is a continuing need for greater prioritisation in economic ‘thinking and doing’ in the North West. Although more focused than earlier RES iterations, RES 2006 still ‘tried to do too much’. Bolder decision-making is required – underpinned by a sound evidence base recognising the multi-dimensional drivers of economic development across places, sectors, and communities – which injects focus and rigour to strategy efforts. A commitment to maximising Return on Investment as resources tighten and budgets are stretched will be key, as will ‘tree-tops thinking’ and subsidiarity i.e. setting shared priorities for those things that are genuinely strategic, and devolving down responsibility to the appropriate scale.

Flexibility and future-proofing is key, for momentum to be maintained •

RES 2006 proved a resilient framework against which partners could focus their activity in a period of what turned out to be major economic uncertainty. But this meant that RES 2006 became somewhat ‘locked at a point in time’, used principally as a ‘check-point’ to justify interventions. Future strategy efforts need to be more dynamic, remaining topical and current whilst at the same time bearing in mind the fundamental issues faced across its places and communities. A rolling three-to-five year strategy and action plan, annually revised and amended should be considered, with effective monitoring to inform this process, in a dynamic sense. Commissioning activity should be a hallmark of future strategy efforts.

An Extended Annual Assessment of the North West RES 2006 A Final Report

Strategy must align with real-world complexity •

The Thematic approach of RES 2006 was appropriate for its time. However, there needs to be greater emphasis placed on integration and cross-thematic working, reflecting real world complexity. With fewer actions, linkages could be better highlighted/optimised. Going forward, the importance of energy, carbon and environmental resources as influencers on economic development need to be recognised.

Focus on the wealth and productivity agenda •

The focus of RES 2006 on the scale of the North West’s deficits to England, in GVA and employment terms, provided an important ‘focusing of minds’ on the challenges faced across the region and its places. However, no specific target was set for productivity, and a ‘logic chain’ linking Actions to quantitative targets was not established. Future strategy efforts need to ensure that the ‘wealth creation’ imperative, as reflected in productivity measures, is reflected fully in both targets and objectives/priorities, and that a clear link is established to understand the impact of the strategy on productivity performance.

vii

An Extended Annual Assessment of the North West RES 2006 A Final Report

1: Introduction

1.1

SQW was commissioned by the North West Development Agency (NWDA) in March 2010 to undertake an independent Extended Annual Assessment of the North West Regional Economic Strategy (RES) 2006. This Final Report presents the findings of the Assessment, which was completed in August 2010.

Setting the scene 1.2

RES 2006 was the third regional economic strategy for the North West. Prepared by the NWDA in partnership with a Regional Advisory Group, and launched in March 2006, RES 2006 established the vision for the North West to become a: ‘Dynamic, sustainable international economy which competes on the basis of knowledge, advanced technology and an excellent quality of life for all’.

1.3

Three Drivers, with five associated Themes, were identified in RES 2006 through which to realise the vision, with the intention of closing the output gap with England, estimated in 2006 at between £13-20bn (Figure 1-1). Figure 1-1: RES 2006 – Vision, Drivers, and Themes

Source: RES 2006

1.4

RES 2006 was adopted by regional partners across the public, private and voluntary/community sectors, and explicitly identified as ‘the region’s strategy’. That is, whilst the NWDA had overall responsibility for its delivery and monitoring, the implementation of RES 2006 was intended to be a shared commitment by partners across the North West.

1.5

Originally planned to cover the 2006-2009 period, RES 2006 was extended into 2010 whilst a new integrated strategy for the region was developed. The intent to pursue a formal statutory integrated strategy has now ceased, altering considerably the strategic context and economic development circumstances the region now faces going forward.

An Extended Annual Assessment of the North West RES 2006 A Final Report

Purpose of the Assessment 1.6

Annual Assessment Reports, tracking progress in delivering RES 2006, were led ‘in-house’ by the NWDA in 2007, 2008 and 2009. These Assessments reported on progress against RES 2006 Actions, based on feedback from RES Action Leads (nominated individuals within organisations responsible for delivery of RES 2006 Actions, thereby ensuring partnership input to the process), and regional socio-economic performance.1 Bi-annual reports on progress against Transformational Actions were also prepared for NWDA’s Board.

1.7

These preceding Assessments were not designed to capture the qualitative content, attitudinal stances, and wider process reflections essential to a full understanding of the contribution of RES 2006. Given this, the Final Assessment was designed to explore three perspectives, namely:

1.8

•

the overall performance against the five RES 2006 Themes, and RES 2006 as an integrated whole, over the 2006-10 period

•

the ‘soft’ as well as the ‘hard’ contribution of RES 2006, reflecting its role as a qualitative process, as well as a generator of quantitative outputs

•

the learning from RES 2006, from things that have gone well, and those that have been less successful.

Importantly, this Assessment is not an economic impact evaluation of RES 2006 and its Actions. Nor is it solely focused on the NWDA’s role in delivering RES 2006. Rather, its purpose is to provide an accessible and rounded consideration of what was done in the name of RES 2006, quantitatively and qualitatively, in 2009/10, and over its wider delivery period.

The challenges faced, and our approach 1.9

1.10

Three key challenges were evident in meeting the purpose of the Assessment. •

First, understanding, and accounting for in the analysis, the pervasive impact of the recession of 2008, and its effects on regional economic performance, public sector resources and private sector investment priorities.

•

Second, providing a robust account of what RES 2006 involved and achieved, given the personal/institutional ‘memory loss’ as a result of people and time moving-on.

•

Third, isolating the effect on partners and stakeholders of the process of planning the integrated regional strategy (as was evident at the time of the fieldwork) on perceptions of RES 2006, by that stage a four year old document.

Within this context, and overseen by a Steering Group from the NWDA, the Assessment involved three work-streams: •

extensive socio-economic baselining and analysis against RES 2006 indicators and wider data sources to identify how the region has performed in socio-economic terms over the RES 2006 delivery period Previous Assessments can be found at http://www.nwda.co.uk/publications/strategy.aspx

An Extended Annual Assessment of the North West RES 2006 A Final Report

1.11

•

a broad review of relevant documentation and data including the body of evaluation evidence collated over the RES 2006 period, previous scrutiny and assessment work on RES 2006 and regional economic development activities, and NWDA spend/output data cut by RES Theme

•

a wide programme of consultation with 98 consultees drawn from the public, private and voluntary/community sectors providing strategic and/or operational perspectives on the delivery of RES 2006.2

Emerging messages were also presented to the NWDA Board and the Regional Strategy Advisory Group (RSAG) in late-June and mid-July 2010 respectively. The sessions provided opportunities for calibration and challenge on the findings of the Assessment, with the feedback informing the completion of the analysis and this Final Report.

Reading the Assessment 1.12

The remainder of this Report is structured as follows: •

Section 2 sets out the context for RES 2006

•

Section 3 presents the findings related to the development and design of RES 2006

•

Section 4 discusses the delivery of RES 2006, through its five Themes and as an integrated investment and strategic framework

•

Section 5 presents the headline messages from the socio-economic baseline and analysis of performance against RES targets and measures

•

Section 6 comments on the outcomes delivered by, and contribution of, RES 2006 with a focus on Strategic Added Value (SAV)

•

Section 7 provides the key Learning Lessons from the Assessment.

1.13

‘Partner and Stakeholder perceptions’ boxes are presented throughout the report drawing on the consultation process. They are non-attributed, but direct comments, and were selected to reflect the general message or range of views/perspectives that emerged on key issues.

1.14

Separate Technical Annexes provide further detailed information underpinning this Assessment, including a baseline of socio-economic performance and detailed Thematic Assessments.

Acknowledgements and further information 1.15

SQW would like to thank all those individuals who assisted us with our work. We had considerable support and engagement from busy people, for which we are grateful.

1.16

If you require any further information about the Assessment, or wish to obtain copies of the Technical Annexes, please contact Yvonne Herbert at the NWDA (yvonne.herbert@nwda.co.uk). 2

With the fieldwork completed over March-July 2010, we explicitly did not consult with Central Government.

An Extended Annual Assessment of the North West RES 2006 A Final Report

2: Positioning RES 2006

2.1

This section sets out, in a concise manner, the key context for RES 2006. It then identifies the implications of this context for this Assessment.

The strategic legacy 2.2

RES 2006 did not start with a blank canvas. As the third regional economic strategy for the North West, it was shaped extensively by the overall vision, partnership structures and relationships developed under its precursors in 2000 and 2003.

2.3

In a real sense, the first two iterations of the RES were a ‘learning-curve’ for partners in regional economic development as they started to develop their regional craft, characterised by the NWDA as: •

‘building engagement’ in 2000, with a focus on establishing, for the first time, consensus on the socio-economic issues faced by the North West

•

‘developing innovative approaches’ in 2003, with a greater emphasis on prioritisation of the region’s main economic drivers.3

2.4

Alongside maturing partnership-working over 2000-2006, the evidence-base was also developed, providing an increasingly nuanced understanding of the economy of the North West, its challenges and opportunities, and the priorities for addressing what were increasingly recognised as ongoing structural deficits.

2.5

Further, RES 2006 inherited the legacy of investment decisions and project activities made and delivered under previous iterations of the RES. With a revision required every three years by Government,4 an over-lap of project activities and funding across RES’ was to be expected as projects looked to address, what in many cases, were generational issues. For the NWDA in particular, this was a very important determinant of the activity to be delivered over the period of RES 2006.

2.6

In short, although RES 2006 was an opportunity for a fresh articulation of updated regional economic development priorities, it inherited an already well-established set of project activities and delivery mechanisms/approaches developed under previous strategy efforts. This did reduce the ‘room for manoeuvre’ available to partners in the developing the strategy, but it also ensured a level of continuity and consistency in regional economic development priorities to address long-standing challenges.

3 4

Independent Performance Assessment (IPA) Self Assessment, NWDA, 2006 2005 Guidance to RDAs on Regional Strategies, Secretary of State for Trade and Industry, 2005

An Extended Annual Assessment of the North West RES 2006 A Final Report

The socio-economic landscape 2.7

2.8

RES 2006 was also rooted in the socio-economic context of its time, regionally and nationally. Although economic progress had been evident over the first half of the 2000s, by its mid-point the North West retained: •

a significant productivity deficit to England, driven principally by lower productivity in its business and service sectors

•

too few people in work, with a lower overall employment rate than nationally and a lower proportion of employees in ‘knowledge-based’ activities

•

significant skills and enterprise deficits compared to national levels

•

major areas of persistent and entrenched deprivation, both in the region’s core city-regions and locations distant from employment and business growth.

These deficits contributed to an estimated GVA gap of £13bn, subsequently revised to £16.2bn based on updated data.5 Table 2-1 sets out a range of headline indicators at the time of RES 2006’s development for the North West compared to England. Table 2-1: RES 2006 baseline indicators (data from 2004 or 2004/05) North West

England

Scale of deficit

GVA per head (£)

15,161

18,021

-2,860

GVA per job (£)

£34,185

£40,251

-6,066

Median resident annual earnings (£)

20,895

22,438

-1,543

Business Births per 10,000 of WAP

68.6

79.7

11.1

Employment rate

72.8%

74.7%

-1.9pp

IB Claimants per 10,000 WAP

1,052

726

326

% Economically Active with NVQ4+

28.4%

30%

-1.60pp

% WAP with No Qualifications

16.9%

14%

2.9pp

Source: National Statistics and Nomis

2.9

In many ways, the position at 2004 was not new. Indeed, the region had been losing ground to England over the preceding 15 years in overall economic performance: in 1989 GVA per head in the North West was 89.3% of the England level, by 2004 it was 84.1%, meaning, practically, residents of the North West had become less wealthy relative to the national average over this period.

2.10

GVA per head and aggregate GVA growth data for the North West and England over 19892004 are presented in Figure 2-1.

The GVA gap data excludes regional price differentials

An Extended Annual Assessment of the North West RES 2006 A Final Report Figure 2-1: Long-term regional economic performance, North West and England

GVA per head 1989-2004

Aggregate GVA growth 1989-2004 240

19,000

220

England

17,000

GVA Growth (1989 = 100)

North West GVA per head (£)

15,000 13,000 11,000 9,000 7,000

200

England North West

180 160 140 120

5,000 1989

1992

1995

1998

2001

2004

100 1989

1992

1995

1998

2001

2004

Source: National Statistics

The realities of regional strategies 2.11

Above and beyond the strategic and data context, in framing RES 2006, and this Assessment, it is important to recognise the complexities, contradictions, and challenges that present in the development of any regional strategy, and which were still much evident for RES 2006.

2.12

Three tensions are of central importance: •

any region is made-up of distinct places, communities, and interests which a regional strategy must accommodate. But in responding specifically, there is an ever-present danger of losing regional-level focus and integration

•

in developing a RES through consultation and inclusion – which is what the ‘partnership’ imperative requires – priorities will proliferate. Too often, partnership working is taken to mean everyone secures what they want in return for their involvement, as promoting selected places/groups is seen as ‘too difficult’ or ‘unfair’ – in short, the process delivers lowest common denominators rather than highest common factors

•

so, pitching a RES appropriately is hard to get right – too ‘case-specific’, and it loses its regional ambition and scope, too ‘high-level’, and it misses out on the component geographies/groups that make the region what it is

so, there is an inherent contradiction in establishing the balance between regional ‘Must Dos’ and partner ‘Must Haves’

good strategy is about clear, firm, decision making. But in economic development, there are not simple either/or choices such as tackling need rather than exploiting opportunities, or preferring employment creation to wealth maximisation. In an increasingly complex world, thinking across issues becomes critically important

so, strategy development involves balancing complex and changing factors. In 21st Century economic development, there is no single answer, but a spectrum of interrelated choices.

An Extended Annual Assessment of the North West RES 2006 A Final Report

Implications for the Assessment 2.13

2.14

The contexts set out above suggest four main implications for this Assessment of RES 2006: •

First, although learning the lessons of experience is important, we need to watch for ‘wisdom after the event’. For example, although the evidence base had developed considerably by 2005/06, the understanding of functional economic geographies or the importance of energy and carbon economics to the economy, were significantly less well developed than today. So, judging RES 2006 solely through the perspective of what we know now in 2010 is unhelpful, and misleading.

•

Second, RES 2006 represented the ‘next stage of a process’ in regional economic development for the North West. Existing relationships, activities and financial commitments, plus increasingly complex economic factors, framed and informed the development of RES 2006. As such, it is important to be aware of the constraints to, as well as opportunities for, RES 2006.

•

Third, recognising the historical trajectory of the North West’s economic performance is essential. Turning around significant absolute, and particularly relative, deficits is not something that can be achieved in four/five years alone. So, realism is required in assessing the socio-economic performance of the region over the RES 2006 period, and in making judgements about the impact of RES 2006 on these conditions.

•

Fourth, given the range of interests involved, it is unavoidable – as evidenced in the consultation process completed for this work – that there will be diverse perspectives on RES 2006. Given the breadth and complexity of the economic development landscape, a strategy will mean many different things to different groups at different times across the region.

In summary, therefore, and against this backdrop, this Assessment is not about whether RES 2006 was ‘right or wrong’. It is about priorities and balance, and considering whether these were appropriately struck. The Assessment is also concerned with drawing out instructive learning for the future for those organisations who have invested in progressing RES 2006 this last five years.

Chapter Summary

•

RES 2006 was not developed within a vacuum. Previous iterations of the strategy, existing funding/project commitments and relationships, a challenging economic environment, and the ever-present complexities in ‘doing’ good strategy were all important contextual factors influencing its genesis.

•

These are important considerations in framing the Assessment of RES 2006.

An Extended Annual Assessment of the North West RES 2006 A Final Report

3: Developing and designing RES 2006

3.1

Conscious of the context set out in the previous section, what can be said, in 2010, regarding the development and design of RES 2006? Overall, the story is a positive one, with RES 2006 representing a major step-forward from its precursors. But a number of the initial positives had double-edged results as RES 2006 progressed to delivery. We discuss these more fully below.

Developing RES 2006 3.2

The development of RES 2006, by which we mean the process of consultation and evidencegathering completed over 2005/06, was a significant success story for the North West, and the NWDA in particular who led the process. This success rested on three key foundations.

3.3

First, the consultation process underpinning the development of RES 2006 was an effective and constructive exercise, delivering a genuine ‘regional conversation’, even before the phrase became fashionable. Steered by the NWDA and a RES Advisory Group involving 25 regional organisations, the key constituencies of interest were engaged effectively in a debate over regional priorities and futures. The process delivered a step-change in the scale, sophistication, and scope of consultation compared to previous strategy iterations (a reported 6,000 participants were involved in the process).

3.4

RES Advisory Group partners were also engaged in writing the strategy document, helping to feed-through partner engagement into the final version of the output. That said, not all partners/stakeholders consulted as part of this Assessment felt the initial debate/consultation for RES 2006 was effectively translated into the resultant strategy. In part, this filtering of views is inherent to strategy development, as not all views can be accommodated. But it suggests that more could have been done to justify publicly – in market failure or rationale terms – the logic for those elements that did make it through.

3.5

Nevertheless, in the round, the Assessment suggests that the consultation process was of considerable value in developing formal and informal relationships and trust amongst regional partners.

3.6

This is consistent with the message of the Independent Performance Assessment (IPA) of the NWDA in 2006. The IPA identified ‘general consensus from partners and stakeholders that the consultation process (for RES 2006) has been very strong and is much improved from the same process three years ago. Improved communications by the NWDA has allowed key partners to play key and active roles in understanding and developing the new RES.’ 6

Independent Performance Assessment, North West Development Agency, National Audit Office, June 2006

An Extended Annual Assessment of the North West RES 2006 A Final Report

Partner and Stakeholder perceptions – the consultation process ‘The process was very effective; it was a genuine attempt to consult throughout production. It was a model in the sense that it involved the right people, had effective processes, and took note of feedback’ – Strategic partner/public sector ‘The process itself was very positive and inclusive. However, the level of inclusivity meant that they tried to write the strategy by committee initially, but it was then taken forward by NWDA and the link to the debates/views of partners may have been lost’ – Strategic partner/public sector

3.7

Second, the evidence base for RES 2006 represented a similar step-forward in the sophistication of the secondary and condition indicator evidence used in the prioritisation process. Although stronger on the ‘hard’ economic issues than for the social and environmental aspects, and arguably somewhat ‘traditional’ in its spatial focus, with an emerging but not fully developed understanding of functional economic geographies, the evidence base for RES 20067 did seek to explain why the data were as they were, suggesting where effort might be best directed.

3.8

Third, and related, for the first time RES 2006 made good use of econometric forecasts in its underlying logic, especially as these related to the ambition for growth. Developed alongside the wider evidence base, the forecasts allowed for specific and evidence-based targets to be established for RES 2006. Partner and Stakeholder perceptions – the evidence base ‘It reflected the economic evidence on areas of regeneration/need. Highlighted the skills gaps and education - all were really useful targets to try and achieve. At the time GVA was everything - we've moved on now. In economic terms it was very robust’ – Operational partner/public sector ‘The evidence base for RES 2006 was probably the best that could be hoped for - I felt it was focused and fair’ – Strategic partner/private sector

3.9

Overall, therefore, the Assessment suggests that the development process of drawing-up RES 2006 generated buy-in to the strategy that emerged, and that the strategy itself was based on a sound evidence base.

Reflecting on the strategy that resulted The positives . . . 3.10

The strategy that emerged from the development process discussed above had a number of positive characteristics. In headline terms: •

RES 2006 provided a clear sense of long-term vision and direction for the North West. It presented this in a communicable and accessible manner enabling key See North West Economic Baseline, July 2005

An Extended Annual Assessment of the North West RES 2006 A Final Report

partners to coalesce around a shared regional intent. Partners/stakeholders across the region generally appeared to have accepted, and bought into, the high-level vision and direction of RES 2006. •

RES 2006 delivered a valid strategic intent, well suited to its contextual environment. Specifically, the explicit focus on the GVA gap and employment deficit helped to improve understanding of the scale of the challenges to be addressed and ‘focused the mind’ of partners on the job that needed to be done. Although previous RES’ had discussed the challenges for the region, their scale and severity was more comprehensively articulated in RES 2006. Further, RES 2006 started, really for the first time, to probe how these sorts of factors inter-relate.

•

RES 2006 was essentially ‘focused on the right things’. Within its Themes, Factors and Objectives, it captured effectively the range of issues facing the North West and its economy. Although specific issues, such as the rural economy, climate change or manufacturing/nuclear opportunities, could have been more prominent according to selected consultees for this Assessment, at an overarching level, at the time of its preparation, there were no substantive gaps in its coverage, thematically or spatially.

3.11

Importantly, RES 2006 reflected more fully differential spatial issues and challenges than previous iterations of the strategy. A significant number of Actions were focused on specific places (East Lancashire, Barrow, Preston etc) and/or typologies of place such as Housing Market Renewal Areas or those with Urban Regeneration Companies (URCs). This recognition was welcomed by partners and important in helping to align sub-regional and regional priorities. The Assessment suggests this improved spatial element emerged in part as a result of lobbying by spatial players for RES 2006 to recognise their particular issues/opportunities, but also owing to a more nuanced understanding in RES 2006 than previous RES’s on the role of places in economic development.

3.12

Crucially, RES 2006 was also what has been termed ‘constructively permissive’ in its framework. That is, although providing an extensive set of priorities and Actions, the breadth and lack of prescription in RES 2006 – generally establishing areas for activity rather than designating specific interventions as had been the case with RES 2003’s Action Plan8 – provided an accessible framework against which partners could align their existing activities. Partner and Stakeholder perceptions – the positives of RES 2006 RES 2006 ‘was the first RES that had real direction, linked to need, and in an understandable form’ – Operational partner/public sector ‘ A strength of RES 2006 was its clear sense of long-term vision and direction’ – Strategic partner/private sector

3.13

Overall, RES 2006 represented clear progress for the North West in its design of a regional economic strategy. It was more grounded in evidence, more focused, more spatially aware, and more nuanced than RES 2003. 8

Regional Economic Strategy, Summary Action Plan 2003-2006

An Extended Annual Assessment of the North West RES 2006 A Final Report

. . . and unintended consequences 3.14

The findings above are all important upsides for RES 2006. However, there were less positive consequences. Three in particular have been highlighted by the Assessment. Inclusion and prioritisation

3.15

To a significant extent, the desire of partners to consult widely and consensually in developing RES 2006 made it difficult for the strategy to come down on the hard issues that really mattered most. As a result, RES 2006 was probably too broadly cast in its intent and not sufficiently focused on the regional ‘Big Plays’. It ‘tried to do too much’ thereby limiting its overall cohesion and clarity.

3.16

A clear message from our consultation process is that partners/stakeholders consistently perceived that RES 2006 contained too many Objectives (47) and Actions (122, including 45 Transformational Actions) for it to remain genuinely strategic, and importantly, communicable. Research from 2007 also suggested that whilst a majority of the 122 Actions had a strong rationale, the extent to which they were likely to be effective in tackling the underlying failure was more mixed (see Figure 3-1).9 This suggests some Actions may have been included because partners ‘wanted them there’, rather than because they provided the most appropriate approach to addressing the underlying market and/or other failures. Figure 3-1: Strength of rationale and effectiveness of RES 2006 Actions 90 80

Actions

70 60 50 40 30 20 10 0 High Overall strength of rationale

Medium

Low

Uncertain/N/A

Action's likely effectiveness in tackling failure

Source: North West RES Actions Failures and Rationales Analysis, 2007

3.17

As discussed in Section 2, striking the balance between partner inclusion and prioritisation in strategy development is tricky, particularly for a region as complex as the North West. However, the Assessment suggests that the coherence of the ‘action plan’ element of RES 2006 appears to have been compromised by a focus on securing engagement as a principal goal in its design stage. Brave, but potentially unpopular prioritisation seems to have been sacrificed to a noticeable extent.

3.18

So, RES 2006 was a considerable improvement, in its focus and targeting, compared with its precursors. However, looking back, there could have been a more challenging approach to setting agreed shared priorities; this is an important learning lesson.

North West RES Actions Failures and Rationales Analysis, SQW, April 2007

An Extended Annual Assessment of the North West RES 2006 A Final Report

Themes and linkages

3.19

Although the Thematic approach adopted in RES 2006 was helpful in providing a high-level clarity of purpose, with appropriate Themes, arguably more could have been done to understand the interconnections between them, both potential tensions and positive synergies. For example, growing labour market participation (People and Jobs Theme) and building business competitiveness (Business Theme) are not always positive sum.

3.20

An effort was made to link issues across Themes in RES 2006. For example, Actions that contributed to objectives within more than one Theme were highlighted. However, the evidence that this was (i) understood by partners and (ii) evidenced in subsequent project design is limited. Further, it suggested other Actions did not have linkages to other issues.

3.21

We return to issues of integration and synergy later in the report. However, while attempts were made to link issues across Themes, looking back, more could have been done to promote an integrated approach to strategy implementation. Again, this is a constructive learning lesson going forward. Spatial complexity

3.22

Because the thinking of RES 2006 on functional economic geographies was at an early stage, with hindsight, it did not fully appreciate how the ‘same’ issue might present differently in different circumstances. As argued in an earlier Scrutiny report ‘Different parts of the North West have different problems . . . there is clearly a need for the regional programme to ensure that it delivers sub-regional sensitivity.’10 The challenge was to achieve consistency in strategic intent across the region, whilst enabling tailored solutions to be stimulated to meet the needs of geographies and/or markets (labour, enterprise, and knowledge).

3.23

The Assessment suggests that this, admittedly difficult, balance was not fully delivered in RES 2006. Within RES 2006, some issues were assumed to work equally across the region, whilst for others a very specific spatial focus was applied. As a result, the Assessment suggests that RES 2006 suffered both from a perception of ‘micro-managing’ local priorities and activities, and of being not fully reflective of the economic complexity across the region.

3.24

In any context, this issue is hard to get right. Positively, RES 2006 represented the first genuine attempt, strategically, to understand functional geographies across the North West. But, the need for a consistent and nuanced approach to spatial issues in future strategy efforts is an important lesson from RES 2006. Partner and Stakeholder perceptions – unintended consequences ‘The issue with RES 2006 was not the fit with the issues in the region, but the fact that the priorities were far too widely cast, the problem with this is that if you start out too flexibly it will unravel’ – Strategic partner/public sector ‘The 5 thematic approach may have been helpful in designing the RES, but this is not 'real life', and it could have been more integrated across policy themes’ – Operational partner/public sector

Scrutiny of the NWDA and Five Themes of the NW RES 2006, NWRA

An Extended Annual Assessment of the North West RES 2006 A Final Report

‘RES 2006 had a relatively well developed spatial dimension and this was important as it helped to focus on specific areas of need i.e. Blackpool, Barrow’ – Strategic partner/voluntary sector

Additional ‘design’ considerations 3.25

Three further important learning lessons emerge from looking back at the design of RES 2006.

3.26

First, RES 2006 could have more clearly expressed the differentiators of the North West. RES 2006 did cover the positive ‘USPs’ of the North West – the nuclear sector, tourism, natural assets – and its specific challenges – entrenched deprivation in the core cities, the scale of vacant and derelict land. However, the breadth of the strategy masked somewhat these issues i.e. they were subsumed in, rather than the principal pillars of, the strategy. To an extent, as globalisation makes economies and societies more interconnected, the issues affecting places will coalesce. Further, that issues are shared does not detract from their importance. However, the challenge for RES 2006 was to progress relative to other places, as well as absolutely. So those areas where the North West had particular strengths/weaknesses were crucial as if optimised/addressed, they would provide the potential to progress faster than competitors. So, although a sound ‘regional strategy’, the lesson is that more could have been done to deliver a genuine ‘strategy for the North West’.

3.27

Second, the articulation of the Actions in RES 2006 could have been more consistent. Some Actions were Activities (things to be delivered), some Objectives (what activity aimed to achieve), others Aspirations (less tangible, and longer-term/higher-level objectives, although this final distinction is less clear). Examples are shown in Table 3-1. This variance reduced the coherence of the strategy, and made its effective monitoring challenging. Table 3-1: The variable nature of RES Actions, by Theme Theme

Activity

Objective

Aspiration

Skills and Education

A32: Support the roll-out of the National Employer Training Programme (Train to Gain) to deliver basic through to intermediate level skills and a skills brokerage

A39: Increase the number of people studying higher level skills in science, engineering and technology (especially from state schools)

A30: Develop a skilled workforce in rural areas to enable business to diversify and expand

Infrastructure

A70: Complete the West Coast Mainline upgrade, particularly in Cumbria

A66: Reduce levels of congestion by increasing use of public transport and reducing peak traffic volumes

A93: Better align investment and service delivery at regional, sub-regional and local levels

Source: SQW analysis of RES 20006

3.28

Third, a more fully developed ‘logic chain’, linking the Actions and their outcomes to quantitative targets would have been beneficial. The strategy did not link Actions or Themes to the headline RES targets, and there were not Theme-level targets or impact measures established. This represents a missed opportunity for generating strong evidence on the attribution of RES 2006 (and its Actions) to the achievement of its intent.

An Extended Annual Assessment of the North West RES 2006 A Final Report

Chapter Summary

•

The process of developing RES 2006 is evidence of the increased maturity and capacity of partners across the North West, led by the NWDA, to identify regional economic development priorities. Positive characteristics of the strategy included a clear sense of long-term vision, a logical and evidenced Thematic approach, and a more nuanced understanding of spatial issues.

•

Learning lessons from the development of RES 2006 include the importance of prioritisation in strategy development, the need to integrate effectively policy themes to reflect ‘real-world’ issues, and the primacy of identifying distinctiveness in order to deliver relative economic progress.

An Extended Annual Assessment of the North West RES 2006 A Final Report

4: Delivering RES 2006

4.1

This section turns to the delivery of RES 2006, providing a view of its performance as a framework for economic development activity. It incorporates key findings from the Thematic analysis, and a number of project cameos drawn from evaluation evidence reviewed by the Assessment to provide a flavour of RES 2006 ‘on the ground’.

Inputs to RES 2006 . . . 4.2

RES 2006 set out an indicative scale of investment required to deliver against its intent, amounting to some £45bn of public funding (over 2006/07 to 2008/09) within its ‘scope of influence’. This included the NWDA’s Single Programme allocation and budgets from organisations/policy areas such as LSC, Higher and Further Education, transport and social protection. However, as noted in the strategy document itself, RES 2006’s influence on noncore economic development funding was limited.

4.3

It has not been possible to quantify accurately the extent to which this scale of investment was delivered against RES 2006: organisations involved in its delivery have generally not monitored their investments against its priorities.11 Crucially, there has not been a system in place to monitor total expenditure across RES Actions in a systematic fashion. However, we have been provided with comprehensive monitoring data from the NWDA. By combining data on NWDA expenditure with the public/private leverage secured by NWDA projects (as a proxy for partner contributions), we can get some sense of the indicative scale of investment aligned directly to the delivery of RES 2006. This is summarised in Table 4-1. Table 4-1: NWDA expenditure plus public/private leverage over RES 2006 (2006/07 to 2009/10) Business

Skills and education

People and jobs

Infrastructure

Quality of Life

Legacy projects

Total

NWDA expenditure (£m)

571

454

216

197

1,581

Match funding leveraged by NWDA (£m)

760

486

138

1575

1,331

940

310

335

182

3,156

Total (£m) Source: NWDA monitoring data

4.4

This c.£3.2bn underestimates the investment made against the delivery of RES 2006. It does not capture, for example, LSC and JCP inputs in delivering its mainstream services in support of RES 2006, or the cost of infrastructure projects delivered by the private or public sector.

4.5

However, this investment-type was less directly influenced by RES 2006, and to a significant extent, especially for mainstream national programmes, ‘would have happened anyway’. The key issue is the extent to which RES 2006 played a role in influencing and bending spend to regional priorities set out in the strategy. This issue is discussed in more detail below. 11 Consultations with delivery partners probed for spend/outputs monitored against RES 2006. In most cases organisations had not monitored investment against RES 2006.

An Extended Annual Assessment of the North West RES 2006 A Final Report

Cameo 1 – RES 2006 activity on the ground Project: International Trade Programme RES Theme: Business Lead RES Actions: 17 and 18 Activity and investment The International Trade programme was funded by NWDA and UKTI to deliver internationalisation support to businesses across the North West. NWDA funding of c.£4.5m for 2007/08 to 2009/10 was directed towards the targeting of priority sectors of RES 2006 (Biomedical, Energy & Environmental Technologies, Advanced Engineering & Materials, Food & Drink, Digital & Creative Industries and Business & Professional Services). A further c.£340k NWDA funding was approved to support a series of ‘Meet the Buyer’ events. The project involved UKTI investment of £5.25m over 2007/08 to 2009/10. The total project cost was therefore around £10.1m. The project activities included the work of International Trade Advisors providing trade and exporting advice to businesses, priority country market specialist advice, a Meet the Buyer programme, and the delivery of sector trade missions. An evaluation found that stakeholders felt the programme had good fit with other business support interventions across the North West, and was recognised as an important component of the regional business support offer, particularly to high-growth businesses.

Strategic fit, and contribution to RES 2006 RES 2006 included a Transformational Action to develop an Internationalisation Strategy. The Northwest International Business Forum (NWIBF) was charged with taking the lead in progressing this and an Internationalisation Strategy and Action Plan (ISAP) was produced outlining a coordinated approach to internationalisation for the region. The International Trade Programme was one of the key activities developed to deliver against its intent. The additionality of RES 2006 itself in the development of the project is not covered in depth in the evaluation; the programme was a continuation of an earlier intervention, and extended/re-focused existing activity delivered by UKTI. That said, the programme demonstrated very strong alignment with RES 2006, and the focus on RES priority sectors added value to the contribution of the programme to the strategic agenda. Indeed, the total direct, indirect and induced impact for the International Trade Project over 2007/08-2008/09 was around 10,100 net additional FTEs, with a GVA impact of £390m. Source: Interim Evaluation of NWDA’s Funding of the International Trade Programme, SQW analysis

. . . and progress in delivery 4.6

Given its remit, this Assessment did not seek to replicate the comprehensive review of progress against individual RES Actions contained within previous RES Assessments. However, information has been collected on performance against Transformational Actions, with the progress achieved summarised in Table 4-2.

4.7

Table 4-2 suggests that performance against Transformational Actions is positive, with progress made on all Transformational Actions set out in RES 2006.

An Extended Annual Assessment of the North West RES 2006 A Final Report Table 4-2: Progress against Transformational Actions by Theme Action achieved/delivered

Progress made but Action not delivered fully

Business – 7 out of 10 TAs achieved/delivered Action 1: Transform Business Link Northwest Action 9: Secure MediaCityUK Action 12: Enable business to implement innovation Action 15: Implement the Northwest Science Strategy Action 17: Assist companies to compete & develop Internationalisation Strategy Action 23: Improve Business Resource Efficiency support Action 24: Develop and implement a Regional Climate Change Action Plan

Action 8: Undertake cluster programmes priority sectors to develop higher value activity Action 13: Enhance Business/Higher Education collaboration and knowledge transfer Action 16: Support the development of major research concentrations and knowledge nuclei

Skills – 3 out of 7 TAs achieved/delivered Action 26: Deliver basic skills for individuals without qualifications Action 37: Educational Infrastructure: 14-19 Action 38: Educational Infrastructure: Higher Education

Action 27: Deliver skills required by priority sectors Action 28: Delver the skills required to maximise the economic impact of key growth opportunities Action 31: Develop skills in the current workforce Action 35: Develop management/leadership and CSR skills

People and Jobs – 5 out of 11 TAs achieved/delivered Action 43: Deliver support to improve peoples’ prospects of getting a job Action 44: Develop and deliver intensive support for those groups with low employment rates compared to England Action 45: Develop job brokerage linking employers and individuals Action 54: Capitalise on the strengths of Manchester, Liverpool and Preston Action 56: Implement Regional Rural Delivery Framework

Action 47: Develop and implement an integrated economic plan for East Lancashire Action 48: Implement the Blackpool Masterplan Action 49: Develop and deliver the Barrow Masterplan Action 50: Develop and implement an integrated economic plan for West Cumbria Action 52: Develop and encourage employment creation in or near deprived areas Action 55: Private sector investment into Crewe, Chester, Warrington, Lancaster and Carlisle

Infrastructure Jobs – 3 out of 11 TAs achieved/delivered Action 63: Demand management and infrastructure improvements in Greater Manchester and Cheshire/Warrington Action 64: Improve road access to Liverpool City centre Action 85: Ensure new housing provision in locations which support wider regeneration or knowledge based economic growth

Action 65: Develop the second Mersey crossing, working with the private sector12 Action 67: Identify and deliver necessary capacity improvements to the Manchester Rail Hub Action 72: Grow Manchester and Liverpool John Lennon Airport Action 73: Grow the Port of Liverpool Action 77: Develop Manchester Metrolink (Phase 3) and effective mass transit for Liverpool and within the Mersey Belt Action 80: Deliver the designated Strategic Regional Sites Action 87: Set Housing Market renewal within a strong economic context Action 66: Reduce levels of congestion by increasing use of public transport and reducing peak traffic volumes

Quality of Life – 4 out of 6 TAs achieved/delivered Action 96: Support Liverpool European Capital of Culture 2008 Action 101: Improve Tourism Attack Brands and Signature Projects Action 113: Develop the economic benefit of the Natural Environment Action 119: Invest in Quality Public Realm and Green Space

Action 111: Develop the Regional Equality and Diversity Strategy Action 114: Implement the Lake District Economic Futures Policy Statement

Source: Consultation feedback, previous RES Assessment and SQW analysis

12 A decision on the Mersey Crossing will be made as part of the Comprehensive Spending Review in Autumn 2010

An Extended Annual Assessment of the North West RES 2006 A Final Report

4.8

However, owing to the framing of the Actions and absence of a ‘logic chain’ for monitoring as discussed in Section 3, the positive picture painted in Table 4-2 is based mainly on progress in delivery, rather than if the Transformational Actions have ‘addressed or solved’ the underlying issue in play. The extent to which the socio-economic performance of the region has changed over the RES 2006 period, and ultimately therefore, whether the Transformational Actions have contributed to addressing the long-term issues prevalent in the North West, is discussed in Section 5.

4.9

Further, although the Infrastructure Theme has not performed as strongly as others in delivery progress against its Transformational Actions, a more reflective qualitative assessment set out in Table 4-3 suggests quite the opposite. In part, this is based on the long-term nature of Infrastructure Transformational Actions, with planning and funding complexities in play not experienced as consistently in other Themes. However, it also demonstrates that progress in activity does not correlate mechanistically with outcomes or longer-term strategic benefits. Cameo 2 – RES 2006 activity on the ground Project: STEM E&E Partnership Project RES Theme: Skills and Education Lead RES Actions: 39, 15, 27 Activity and investment Established nationally in 1996, the objective of STEMNET is to encourage young people to have a positive attitude towards science, technology, engineering, and mathematics with a view to educational and career development opportunities. This project supported the establishment of a North West STEM E&E Partnership (enterprise enrichment and enhancement) in May 2007 to provide improved access to information regarding STEM opportunities including engagement with businesses and industry. The project involved planned NWDA funding of £450k over 2007/08 to 2008/09, with a further £40k provided by STEMNET, although an evaluation of the project reported underspend owing to initial delays in establishing the Partnership. The activity supported by the project included two FTE posts (the STEM E&E Partnership Manager Communications Manager and an administration support post); the development and maintenance of the STEM Partnership web portal; a programme of events and conferences to engage with stakeholders, such as teachers, and to deliver a CPD training days for teachers; and the North West Regional STEM E&E and Enterprise Mapping Exercise including the identification of school interaction with STEM E&E activity providers.

Strategic fit, and contribution to RES 2006 An evaluation of the project concluded that the strategic alignment of the project to RES 2006 was strong. Further, the project contributed to delivery against the North West Science Strategy (RES Action 15). The evaluation emphasised the regional influence of the Partnership in establishing the structure and partnership arrangements to improve the co-ordination and profile of STEM E&E activities across the region, thereby contributing to RES and Science Strategy objectives. The principal contribution of the project to RES 2006 was based on its Strategic Added Value, as opposed to the delivery of quantitative outputs and outcomes. Benefits delivered included increased coordination, alignment and partnership between key stakeholders, education providers and businesses; increased engagement with hard-toengage schools achieved through the mapping study, awareness raising events and web-portal; and improving the provision of regional intelligence in terms of the levels of schools engagement in E&E activity. Source: Evaluation of the STEM E&E Partnership, NWDA data, SQW analysis

Key findings from the Thematic analysis 4.10

Building on the Transformational Action analysis, Table 4-3 presents headline messages from the research into the delivery of the five RES Themes. The Table also provides a Themelevel assessment of additionality i.e. to what extent things have been done more quickly, to a higher level of quality, with a greater degree of scale/reach, or indeed at all, as a result of RES 2006 (rather than the specific programme and projects delivered against it).

An Extended Annual Assessment of the North West RES 2006 A Final Report

4.11

Further Theme-level analysis are located in the Technical Report. Table 4-3: Messages from the Theme Assessments Key messages

Was additionality delivered?

Business Regional performance in delivering against the intent of the Business Theme was relatively strong. Key strengths included the internationalisation activity (in particular FDI and international trade), and the embedding of regional sectoral support in key growth areas. Further, progress was made across the North West at an aggregate level in growing the business base and ensuring an ongoing commitment to R&D and knowledge transfer activities. Notable activities delivered by partners within the Theme include the development, implementation and updating of the Regional Climate Change Action Plan, the implementation of the North West Science Strategy, and access to finance projects such as the Business Angel Finance and Venture Capital Loan Fund. The regionalisation of Business Link was also delivered by Business Link and the NWDA, one of the Transformational Actions. Key learning messages to emerge from the Thematic Assessment included: •

the persistent enterprise deficit in the region remains a central barrier to growth and whilst this is a long-term issue, and significant business related outputs and outcomes from RES 2006 may take time to work through the economy, arguably a greater focus on enterprise development activity is required to deliver on the GVA growth intent

•

more focus and prioritisation was required by partners within the Theme with fewer projects taken forward and a clearer articulation of what was expected of partners for genuine engagement and commitment to be secure

•

the Assessment suggests that business engagement with RES 2006 has been evident, and representative groups in particular saw the RES as a helpful tool, but the ‘translation’ of RES 2006 to the business sector could have been stronger. Realistically, businesses – and especially SMEs – are not likely to engage in detail with a RES, however, more clearly articulating how the Business Theme ‘removed the obstacles’ for business, and a more nuanced understanding of both supply and demand issues for the regional business base would have been helpful and helped to translate the strategy to the private sector and its representative groups.

Yes, to an extent The Assessment suggests that the RES 2006 process/framework played a role in catalysing specific projects, and providing the framework for taking forward major projects with long-term economic benefits i.e. Media City and climate change adaption activity. However, the GVA gap has grown ‘on its watch’, and although realism is required, the underlying business structure of the region has not shifted substantially against relevant comparators over the RES 2006 period.

Skills and Education The Skills and Education Theme provided a logical, communicable and coherent structure for activity within the policy sphere. This provided a fit-forpurpose context for NWDA spend and a resilient and consistent framework used by other partners to shape and align spend where there was discretion or flexibility to do so. Notable activities delivered by partners within the Theme include capital projects around HE and FE such as the University of Cumbria, Burnley and Blackburn Colleges, and Winsford Learning Zone, and revenue projects such as Fusion and the Higher Level Skills Pathfinders. Key learning messages to emerge from the Thematic Assessment included: •

the processes and partnerships underpinning, and developed through, RES 2006 have proved important in strategic and operational developments including responses to the recession, and in the development of the new Regional Skills Strategy. These partnerships will continue to be important notwithstanding strategic and policy developments and likely future funding restraints

•

identifying Skills and Education as a distinct Theme was, on balance, the right approach to highlight its importance in wider economic development, but this did not reinforce fully the connections and linkages with other Themes and factors that were somewhat lost in delivery

•

the strong focus on basic and higher level skills in RES 2006 may have distracted attention to some extent away from intermediate skills which are also vital for the sustainability and breadth of the economy; choices had to be made in developing the Theme, but whether a ‘hollowing-out’ of skills in the North West occurs in the longerterm needs to be watched for.

Yes The Assessment highlighted examples of additionality generated in both capital and revenue projects – major developments, such as the University of Cumbria, would not have been delivered as quickly or to the same extent without the context provided by the RES 2006, and activity and associated outcomes have developed facilitated by RES 2006, such as the regional hub for the National Enterprise Academy, which might otherwise have been located elsewhere. Further, RES 2006 has provided a context for encouraging innovation and piloting of activity which would otherwise not have taken place. RES 2006 also generated valuable process outcomes around strategic partnership working that would not have happened, at least not as quickly, without the framework and impetus provided by RES 2006.

An Extended Annual Assessment of the North West RES 2006 A Final Report

Key messages

Was additionality delivered?

People and Jobs RES 2006 reflected accurately the key issues facing the region in the People and Jobs Theme, and good progress was made in delivery. That said, many issues underpinning the Theme are long-standing and structural to the North West economy; they could not realistically be addressed over a single RES cycle, even without the pervasive impact of the recession. Notable activities delivered by partners within the Theme include the sub regional worklessness projects, and regional projects focused on addressing the employment needs of particular groups such as migrants, older workers and offenders. The Theme also included capital infrastructure activity such as in Barrow, West Cumbria (including the Energy Coast and the new nuclear agenda) and Blackpool. Key learning messages to emerge from the Assessment included: •

there are examples of successful projects in which RES 2006 as a strategic framework played an important facilitation and ‘agendasetting’ role, for example, the sub-regional worklessness projects, JCP ESF and Future Jobs Fund, and progress in long-term visions for stimulating economic growth in areas remote from growth

•

regional and sub-regional partnerships and structures underpinning RES 2006 (and delivering against the RES intent) were important in enabling responses to the recession and – in the sense that these have developed since 2006 – are a legacy of RES 2006, progress was also made in establishing sub-regional and local plans to address needs

•

the evidence suggests that RES 2006 and the structures/partnerships it framed did inform, where flexibilities allowed, the allocation of resources by mainstream partners (e.g. ESF), this is important as the specific projects developed at a regional/sub-regional level specifically to deliver against RES 2006 are modest in scale compared to the national mainstream programmes addressing worklessness.

Yes, to an extent On balance, the Assessment suggests that although some of the activity, and associated outputs and outcomes might have taken place anyway owing to the mainstream nature of the activity, the outcomes arguably would not have been delivered to the same extent (or as effectively) or have been targeted at the same places/groups without the context provided by RES 2006. RES 2006 also made a positive contribution around encouraging coherence and partnership working amongst People and Jobs stakeholders. The Assessment suggests that the partnerships underpinning the RES’ development and delivery did galvanise action and enable a quicker and more coordinated response to the recession than might have otherwise been the case.

Infrastructure The Infrastructure Theme performed strongly, with major strategic infrastructure projects and priorities progressed over the 20006-10 period. However, a significant number of the Actions and objectives established in RES 2006 have yet to some to fruition, and although notable progress was made, for example, in reclaiming brownfield land, the full economic benefits of the work delivered by RES 2006 will not be evident in regional conditions and performance in the short-term. Notable activities delivered by partners within the Theme included the completion of the West Coast Mainline upgrade, Heysham Link Road and other road improvements, the large-scale Newlands programme to remediate brownfield land and ongoing development of the identified Strategic Employment Sites. Key learning messages to emerge from the Assessment included: •

important transport actions have been delivered or moved-on through the RES 2006 framework e.g. the West Coast Main Line Upgrade, taking forward Manchester (now Northern) Rail Hub, and road access to Liverpool City Centre, and significant progress has been made in addressing land use issues in the region e.g. taking forward Strategic Regional Sites and reclaiming large areas of brownfield land

•

as a strategic framework, RES 2006 played an important role in corralling and focusing infrastructure planning and investment, helping to deliver better formulated policy and interventions. For example RES 2006 influenced the Regional Funding Allocation for transport, and the Regional Spatial Strategy which was developed subsequently – more operationally, the Strategic Employment Sites would probably not progressed to the extent they did without the focus and continued commitment to their development found in RES 2006

•

RES 2006 articulated the challenges and opportunities in this policy area effectively with the importance of the Manchester and Liverpool city-regions as drivers of the regional economy provided with justified prominence in the strategy document (although views on the spatial logic of some of the Infrastructure and wider investments varied across the stakeholders consulted, as may be expected).

Yes The Assessment suggests that significant activities, outputs and outcomes delivered by partners under the Infrastructure Theme would not have been delivered to the same scale or with the same speed without the focus, strategic alignment and business case that RES 2006 provided. That said, although RES 2006 was important and regularly used in the infrastructure context, the extent to which it directly ‘made things happen’ over and above wider funding and strategic priorities is, perhaps understandably, limited. Less tangible process activities and benefits – around partnership of public sector actors, stimulating development and attracting private sector confidence – arguably might never have happened at all, and clearly to a lesser extent, without RES 2006.

An Extended Annual Assessment of the North West RES 2006 A Final Report

Key messages

Was additionality delivered?

Quality of Life The Assessment suggests that the Quality of Life Theme performed strongly in parts, most notably in its tourism elements. However, the performance of the Theme ‘in the round’ was mixed owing to a relatively limited underpinning rationale and logic model linking its strands into a cohesive set of activities. Notable activities delivered by partners within the Theme include Liverpool Capital of Culture (see below), the programme of major regional events, support to the development of the Museum of Liverpool (part of the wider Mann Island Project), Natural Economy Northwest research to explore how the natural environmental assets of the region could be more effectively exploited, and physical regeneration programmes, for example in Blackburn. Key learning messages to emerge from the Assessment included: •

delivery against the tourism and visitor economy aspects of the Theme was strong, with the Assessment suggesting that the focus and intent of RES 2006 was regarded by partners as playing a key role in this positive performance; RES added-value through promoting regional co-ordination and the identification of strategically important tourism investments that helped to stimulate and support project delivery

•

the community and environment strands of the Theme appear to have performed less strongly, with activities broadly reflecting existing priorities i.e. the Environment Agency’s focus on flood protection and GONW’s commitment to implement the Sustainable Communities Plan – although it is important to recognise that the desired impacts for the Theme focused on ‘behavioural’ Actions were always going to be difficult to capture and implement

•

RES 2006 appears to have little influence on resource allocation by Quality of Life partners above and beyond the Tourist Boards and SRPs, and the extent to which RES 2006 influenced, in a dynamic sense, regional partners in the community and environment area appears to have been limited.

Yes, in certain areas, but additionality for the Theme as a whole was limited Relevant stakeholders did develop new partnerships during the period of RES 2006 – bringing agencies and actors together and establishing shared priorities – but the additionality of RES 2006 in this process appears to be somewhat limited. The lack of a coherent ‘voice’ for the Theme and arguably limited explicit links between its strands played an important role in this. That said, in its tourism and image aspects the Theme appears to have delivered additionality, with the profile provided to the issues in RES 2006 an important strategic and operational catalyst for activity and co-ordination.

Source: SQW

Cameo 3 – RES 2006 activity on the ground Project: Liverpool European Capital of Culture 2008 RES Theme: Quality of Life Lead RES Action: 96 Activity and investment Liverpool was selected as European Capital of Culture 2008 in June 2003. Led by the Liverpool Culture Company, an organisation specifically established by Liverpool City Council to deliver the programme up to and beyond 2008, the programme involved some 7,000 activities in 2008 and over 41,000 activities across four years (2005-2008), including full events, performance days, exhibition days, training and educational workshops, either delivered by the Liverpool Culture Company or arising from direct grants or procurement. The programme involved total investment of around £130m over the 2003/04 to 2008/09 period, £91m of which was invested over the RES 2006 period (2006/07 to 2008/09). Public investment over the RES 2006 period included £51m from Liverpool City Council and £7m from ERDF Objective One. NWDA monitoring data identified some £6.2m of NWDA expenditure against RES Action 96, including £2m direct to the capital of Culture programme, £1.6m to the ‘Look of the City’ project, and £1.5m for marketing support to be delivered by TMP.

Strategic fit, and contribution to RES 2006 Support to the successful delivery of the European Capital of Culture programme was identified in RES 2006 as a key priority for the region. Action 96 was recognised as a Transformational Action within the Quality of Life Theme, linked to relevant Skills and People and Jobs Actions (28, 54 and 55). Consultations for the Assessment suggest that the strategic impetus provided for the Capital of Culture programme by this identification in RES 2006 was significant; both for the successful implementation of the programme itself, and in encouraging partners across the region to recognise the potential benefits that could be leveraged from the activity. In quantitative terms, a recent impact assessment of the programme found that European Capital of Culture 2008 attracted 9.7 million additional visits to Liverpool in 2008, constituting 35% of all visits to the city in 2008. The programme generated an estimated economic impact of around £750m (based on estimated direct spend) attributable directly to the Liverpool ECoC title and events programme. Source: Creating an impact: Liverpool’s experience as European Capital of Culture, NWDA data, SQW analysis

An Extended Annual Assessment of the North West RES 2006 A Final Report

RES delivery ‘in the round’ 4.12

Based on the findings of the Thematic Assessments, and the broader cross-cutting evidence, what can be said about RES 2006 as a delivery mechanism for economic development in the region? A consistent framework for activity

4.13

Positively, RES 2006 provided a consistent and resilient framework for regional economic development over the 2006-10 period. Specifically: •

RES 2006 remained essentially fit-for-purpose as a statement of overall intent over 2006-2010, demonstrating resilience to changing circumstances owing to its breadth and lack of rigid prescription, this ensured that RES 2006 remained an important point of reference in the delivery of interventions and the development of new projects/ideas

•

related to this, RES 2006 enabled partners to identify progressively better the ‘strategic fit’ of their activities to regional priorities, starting to move partners across the North West towards more of a ‘what my activity should do for RES 2006’ perspective, rather than ’what’s best for me’ approach

•

RES 2006 played an important role in embedding further sub-regional working across the North West. At a strategic level, the alignment of sub-regional strategies and action plans to RES 2006 was important in helping to clarify and better prioritise subregional activities.13 Operationally, regular (quarterly) meetings were held between SRPs and the NWDA to discuss priorities and progress, with feedback formalised in half-yearly reports on progress against the RES 2006 (including monitoring/feedback on Transformational Actions and stakeholder working). Partner and Stakeholder perceptions – RES 2006 as a framework for activity ‘The recession has changed the priorities and challenges for partners, but the RES logic has remained broadly appropriate over its time’ – Strategic partner/voluntary sector ‘RES 2006 was written during growth period, but has still proved valid in the downturn. Emphasis changed but it was broad enough to hold its worth’ – Strategic partner/education sector

The differential influence of RES 2006 by community of interest . . . 4.14

RES 2006 played an important influencing role on key regional economic development agencies and actors.

4.15

Most notably, the NWDA, was influenced strongly in its activity and resource allocation by RES 2006. Over 2006-2010, Agency funding broadly went to where RES 2006 said it should, demonstrating publicly a commitment to the strategy that was generally recognised 13 This message was evident from the consultations for this assessment, both with the SRPs and others. It was also found in the North West Sub-Regional Partnerships - Interim Evaluation completed by SQW in July 2009.

An Extended Annual Assessment of the North West RES 2006 A Final Report

and welcomed by partners/stakeholders. On occasion, the NWDA did appear to stray from the intent of RES 2006 in its investment decisions. However, the Assessment suggests that this only became an issue following the recession as new priorities emerged. 4.16

For other public sector agencies and actors RES 2006 also provided a focus, a stimulus, and a recognised framework at both strategic and operational levels. However, the extent to which partners ‘owned’ RES 2006 was varied, with a clear ‘spectrum of influence’ evident. This spectrum, reflecting the extent to which RES 2006 informed activities, changed behaviours, and influenced investment decisions, is depicted in Figure 4-1. Figure 4-1: The spectrum of RES 2006’s influence on organisation types

NWDA

Easy to detect

Sub-Regional Partnerships, City Regions, 4NW

Regional public sector delivery agencies i.e. JCP, Area-based regeneration agencies i.e. URCs

Local Public-sector Authorities, focused Private sector representative groups i.e. CPRE, representative AoC, Voluntary groups i.e. IoD, EEF sector

Influence of RES 2006

Central Government

Private sector

More difficult to detect

Source: SQW

4.17

As suggested above, aside from the NWDA, the SRPs and 4NW appear to have been most directly influenced by RES 2006, although both were involved in its ongoing monitoring. That said, the extent to which the SRPs co-ordinated genuinely the delivery of RES 2006 subregionally appears to be open to question. Although SRPs were identified as leads for a significant number of Actions (with collective or individual responsibility for 34 of the 122 Actions), how close they remained to the delivery of these Actions ‘on the ground’ appears to have been mixed.

4.18

Importantly, genuine traction appears to have been limited with Local Authorities. The key issue determining this influence appears to have been the nature of the interaction with RES 2006. That is, where Local Authorities were bidding for funding from NWDA or other regional pots, RES 2006 was important, but when they were not the RES’s role in shaping the design of services and allocation of resources was limited. The type of authority (upper tier/lower tier) does not appear to have been the major factor. Any direct influence of RES 2006 on the private sector also appears to have been, less surprisingly, limited.

4.19

These conclusions must be caveated. The Assessment did not include a comprehensive survey of all Local Authorities or businesses across the region. It may be, therefore, that RES 2006’s traction was stronger than suggested above. However, our sense from the research is that the strategic influence of RES 2006 on both Local Authorities and the private sector, in

An Extended Annual Assessment of the North West RES 2006 A Final Report

the round, was open to significant development and improvement. This is an important consideration going forward. 4.20

We did not consult with Central Government for the Assessment, so have made no firm conclusion on its engagement/reaction to RES 2006. However, the research did not identify evidence that RES 2006 led to a ‘bending’ of central resources towards the North West over 2006-10. Given that a drive to influence Central Government has been a central feature of successive RES’, this is somewhat frustrating. That said, the relationship needs to work both ways; the Assessment suggests that Government steer to the region on the strategic alignment of RES 2006 to national thinking and its role in informing central investment decisions over 2006-2010 was not as consistent or authoritative as would have been valuable.

4.21

Clearly, in practice, the ‘spectrum of influence’ discussed above was fluid given the range of agencies involved, and there will have been exceptions to the rule. For example, consultations as part of the Assessment with businesses and business representatives did provide examples of RES 2006 informing, if not directly influencing, investment plans and business strategies.

4.22

Further, the typology depicted in Figure 4-1 is similar to what we might expect, with the probable exception of Local Authorities. So, RES 2006 did influence substantially those actors most directly engaged in its delivery, such as the NWDA and SRPs, as well as those, albeit less substantially, in wider communities of interest across the region. . . . and the influence of RES 2006 over time

4.23

There was also a temporal dimension to RES 2006’s influence. Its influence was strongest in 2006, supported by the broad consultation process that informed its development. However, this influence reduced over time, even for those agencies most closely associated with it.

4.24

A loss of influence is to be expected with any strategy as its novelty and freshness wears off. But above and beyond this generality, RES 2006 suffered because it was arguably not as flexible as it might have been to adapt to changing contexts. From one perspective, this was positive, as inflexibility confers certainty. Its focus and purpose remained ‘in situ’ across the 2006-10 period, enabling corporate plans and institutional strategies to be framed around RES 2006 objectives and Themes.

4.25

However, as there was no process for revising RES 2006, when crises did occur, such as the recession, the regional response was led through the revision of the NWDA’s Annual Corporate Plan14, not the economic strategy. Over time this caused some uncertainty amongst strategic and operational partners as to which – RES 2006 or the Agency’s Corporate Plan – was preeminent, for the Agency and the wider region. With NWDA as the recognised lead for RES 2006, this impacted on the integrity of the strategy as the principal framework for economic policy in the region, and no process was in place to claw-back this status.

NWDA, Corporate Plan 2008-2011 Refresh for 2009/11

An Extended Annual Assessment of the North West RES 2006 A Final Report

Partner and Stakeholder perceptions – RES 2006’s influence ‘RES 2006 has been used by Local Authorities and helped to prioritise resources especially in work with the sub-regional partnerships and groups . . . but for Local Authorities its much more about how to access any funding or strategic support from the RES rather than as a strategic focus’ – Strategic partner/public sector ‘RES 2006 became increasingly less important over time . . . it may not have been sufficiently flexible to remain relevant’ – Strategic partner/public sector

RES 2006 as a ‘regional check-point’ . . . 4.26

RES 2006 represented an important ‘check point’ and strategic reference for partners across the North West over 2006-10. In its delivery, it was used by partners effectively to make the case, and secure funding, for their existing/planned activities.

4.27

This ‘check point’ role was important in providing a sense of continuity and legitimacy for public investment, and was possible given RES 2006’s broad remit and its ‘constructive permissiveness’. RES 2006 was also regarded by partners as a ‘statement of intent’ for where regional funding should be allocated and distributed. The Assessment suggests that it was used by agencies, including, but not limited to the NWDA, in their investment decisions.

4.28

The drawback, however, of this ‘check-point’ status is that the opportunity for RES 2006 to ‘commission’ and inform new activity was not realised fully. Projects/activities appear to have been designed first, and then aligned to RES 2006, rather than developed directly from the priorities and actions set in the strategy. This limited the extent to which RES 2006 was able to stimulate and inform new activities to address the on-going and evolving economic challenges in the region. . . . and wider reflections on delivery

4.29

Two final reflections are important in assessing the delivery of RES 2006. •

RES monitoring, though helping to secure ongoing traction, could have been used in a more dynamic fashion. The Annual Assessment reports were the principal mechanism for tracking performance of RES 2006. They provided a useful evidence base, highlighting where progress had been made, where Actions were not being achieved, and where more needed to be done. There are also examples of the Annual Assessments influencing new activity, for example, the NWDA’s ‘Releasing Potential’ research which was stimulated by the 2007 Assessment. However, this Final Assessment suggests that earlier Annual Assessments generally did not provide hard evidence on how RES Actions might be amended and tweaked, or wider strategic lessons for consideration by delivery partners. As such, a more flexible mechanism for monitoring and change management would have been useful to inform priorities and activities in real time.

An Extended Annual Assessment of the North West RES 2006 A Final Report

•

The perception that RES 2006 was ‘the NWDA’s strategy’ persisted across its delivery period. Despite the buy-in to RES 2006 generated through a highly inclusive development stage, separating the implementation of RES 2006 from the work of the RDA was challenging, and not possible, for some partners. In short, the NWDA saw RES 2006 as the ‘region’s strategy’ whilst the wider communities of interest saw it as the NWDA’s strategy – as a result there was uncertainty over where ultimate accountability lay.

Chapter Summary

•

RES 2006 provided a sound strategic framework for economic development across the North West, providing a level of resilience to changing circumstances owing to its breadth and lack of rigid prescription. It played an important role in enabling partners to identify progressively better the ‘strategic fit’ of their activities to shared priorities and agendas over 2006-2010, with potential long-term benefits as partners embed this focus going forward.

•

Performance was generally positive in the implementation of Transformational Actions, and the Thematic research suggests that RES 2006 delivered additionality in activity i.e. it did support activities that would not otherwise have been delivered as well, at the same speed, or indeed at all.

•

RES 2006 provided a consistent ‘check point’ for supporting existing and planned, activities although the opportunity for RES 2006 to work to ‘commission’ activity seems to have not been realised fully.

•

The influence of RES 2006 varied considerably across both place and time. The influence of the strategy across constituencies of interest was broadly as expected, with the exception of Local Authorities, although its influence on all groups did appear to reduce over time. As such, looking back, RES 2006 could have been more dynamically flexible and responsive to change, with a clear process for its revision put in place to ensure it remained a ‘live’ strategy.

•

A key lesson from RES 2006 is that the institutions responsible for a strategy’s success, as well as its implementation, need to be established to secure genuine commitment and accountability.

An Extended Annual Assessment of the North West RES 2006 A Final Report

5: Regional change and progress

5.1

In the light of the preceding descriptive chapters, this section presents an overview of the performance of the North West against the quantitative headline targets set out in RES 2006. The section also assesses progress by the region in addressing its underlying productivity deficit, as measured by GVA per job and per hour worked, relative to England.

Performance against RES 2006 Targets 5.2

RES 2006 identified eight headline targets for 2006-2009 (extended to cover 2010). The targets drew on econometric modelling and the evidence base developed to underpin the strategy, although the targets set were consciously ambitious and challenging in order to stimulate and drive forward delivery. They were not tied explicitly to RES Themes (no quantitative targets were set by Theme) and they were at a regional level i.e. there were no specific sub-regional targets to allow for differential performance across the North West.

5.3

Performance against the targets, tracked over the lifetime of RES 2006, based on the most upto-date data, are summarised below. It is important to note that we cannot yet be certain if the targets have been achieved because data is available up to 2008 only, whilst RES 2006 remained active into 2010. That said, we are able to provide a five-year time-series comparing the data available at the time of RES 2006’s development (generally for 2004) to that available for this Final Assessment (generally for 2008). Target 1: GVA growth Target

Measure

2006 baseline (2004 data)

2007 update (2005 data)

2008 update (2006 data)

2009 update (2007 data)

2010 update (2008 data)

Achieve GVA growth above the England average

Total GVA (£m)

103,393

106,675

111,329

116,466

120,702

GVA growth > England average

NW: 4.7%

NW: 3.2%

NW: 4.4%

NW: 4.6%

NW: 3.6%

Eng: 5.5%

Eng: 3.9%

Eng: 5.5%

Eng: 5.6%

Eng: 3.5%

£19.5bn

£20.3bn

£22.3bn

£23.4bn

£23.8bn

GVA gap to England

TARGET CURRENTLY ACHIEVED Regional GVA growth in 2008 was above the England level. However, the GVA gap with England increased by c.£4.3bn over the RES 2006 period. Further, GVA growth in the North West in 2008 owed in part to delay in the impact of the recession on regional performance owing to structural differences to England i.e. higher public sector employment and lower reliance on financial and business services.

An Extended Annual Assessment of the North West RES 2006 A Final Report

Target 2: Job creation Target

Measure

Create 150,000 net new jobs

Number of jobs in the region

2006 baseline (2004 data)

2007 update (2005 data)

2008 update (2006 data)

2009 update (2007 data)

2010 update (2008 data)

3.02m

2.98m

3.00m

3.03m

2.99m

TARGET CURRENTLY NOT ACHIEVED The number of jobs in the North West fell over the RES 2006 period by around 33,000

Target 3: Firm formation rate Target

Measure

Raise the firm formation rate

Number of formations

2006 baseline (2004 data)

2007 update (2005 data)

2008 update (2006 data)

2009 update (2007 data)

2010 update (2008 data)

28,850

29,200

27,300

30,200

27,650

42.3

42.7

39.8

44.0

40.2

Firm formation per 10,000 people

TARGET CURRENTLY NOT ACHIEVED The firm foundation according to the latest data was lower than the baseline position at the outset of RES 2006, in both absolute and per head terms.

Target 4: No Qualifications Target

Measure

2006 baseline (2004 data)

2007 update (2005 data)

2008 update (2006 data)

2009 update (2007 data)

2010 update (2008 data)

Reduce the number of people with No Quals by 80,000 and ensure no district has more than 29% with No Quals

Working age population with No Quals

724,600

708,400

663,900

629,700

621,500

Proportion of WAP with No Quals

17.7

16.9

15.8

15.0

14.7

Districts with more than 29% with No Quals

TARGET CURRENTLY ACHIEVED The total number of working age people with No Qualifications fell by over 100,000 over the RES 2006 period and the latest data show no districts in the region with more than 29% of people with No Qualifications.

In November 2009 ONS replaced the ‘Business start-ups and closures: VAT registrations and de-registrations’ publication with a new ‘Business Demography’ dataset. VAT data is no longer updated. The table presents data from the Business Demography publication. The methodologies vary between the two datasets so the original RES 2006 target to increase the number of new businesses formed to 21,000 per annum is no longer appropriate.

An Extended Annual Assessment of the North West RES 2006 A Final Report

Target 5: Graduate Qualifications Target

Measure

Increase the number of people with Graduate Qualifications (NVQ4+) by 120,000

Number of people with Graduate Qualifications % WAP with Graduate Qualifications

2006 baseline (2004 data)

2007 update (2005 data)

2008 update (2006 data)

2009 update (2007 data)

2010 update (2008 data)

840,800

910,500

924,900

955,400

953,100

NW: 26.9

NW: 28.4

NW:28.7

NW:29.5

NW: 29.6

Eng: 28.3

Eng: 30.0

Eng: 30.9

Eng: 32.1

Eng: 32.2

TARGET CURRENTLY NOT ACHIEVED, BUT STRONG PROGRES MADE The number of people in the workforce with Graduate Qualifications increased by 112,000 over the RES 2006 period, 8,000 below the target. That said, the region did not meet the England average over this period. The target appeared to assume that the England level would remain constant over the period – in fact, to equal the England average would have required an increase of around 195,000 over the RES 2006 period.

Target 6: Employment rate Target

Increase the number of people in the workforce by 83,000 to meet the England employment rate and ensure no district has employment rate of <68%

Measure

Number of people in the workforce Employment rate

Districts with employment rate less than 68%

2006 baseline (2004 data)

2007 update (2005 data)

2008 update (2006 data)

2009 update (2007 data)

2010 update (2008 data)

2.98m

3.05

3.03m

3.04m

2.96m

(04/05)

(05/06)

(06/07)

(07/08)

(08/09)

NW: 72.8

NW: 72.5

NW: 72.0

NW: 72.1

NW: 70.3

Eng: 74.7

Eng: – 74.2

Eng: 74.4

Eng: 74.5

Eng: 73.0

TARGET CURRENTLY NOT ACHIEVED The number of people in the workforce according to the latest data was 20,000 lower than the baseline position. The number of people in the workforce did rise over the first four years of the RES 2006 period, although the employment rate remained consistently below the England average over this period.

Target 7: Deprivation Target

Reduce the number of areas in the worst 5% deprived, nationally

Measure

No. of areas in worst 5%: Average resident earnings

2006 baseline (2004 data)

2007 update (2005 data)

2008 update (2006 data)

2009 update (2007 data)

2010 update (2008 data)

579

569

£21,923

£22,052

£22,833

£23,864

£24,000

An Extended Annual Assessment of the North West RES 2006 A Final Report

TARGET CURRENTLY ACHIEVED The number of areas in the worst 5% nationally was marginally lower according to the IMD 2007 than the IMD 2004. However, this data should be treated with caution as no further updates are available. As a proxy for deprivation, data shows an increase in average annual resident incomes over the RES 2006 period, up by around 9% between 2005-2009.

Target 8: CO2 Emissions Target

CO2 emissions Reduce CO2 emissions per £ of GVA

Measure 2006 baseline (2004 data)

2007 update (2005 data)

2008 update (2006 data)

2009 update (2007 data)

2010 update (2008 data)

CO2 emissions per £000 GVA

0.57

0.55

0.52

CO2 emissions (kt)

62,329

61,364

60,792

CO2 emissions per capita (t)

9.1

9.0

8.9

TARGET CURRENTLY ACHIEVED CO2 emissions per £000 GVA reduced over the RES 2006 period, with aggregate and per capita emissions also reducing.

5.4

As demonstrated above, regional performance against RES 2006 targets has been mixed. Four of the eight targets are currently on course to be hit, although the deprivation target must be treated with caution owing to the lack of up-to-date data. In three cases, related to enterprise, job creation and the employment rate, the target is likely to be missed by some distance. The graduate qualifications target has not been quite hit to date, although strong progress has been made.

5.5

The impact of the recession, over which RES 2006 has little control, will have played a part on these data, and without its consequences we may reasonably expect to see a more positive picture, especially in terms of employment. However, this should not mask fully the longterm nature of the enterprise and employment deficits. Essentially, even prior to the downturn, regional performance did not exhibit consistent growth above national levels required to close the GVA gap with England.

5.6

As noted in Section 2, it is not arguably realistic to expect long-term deficits to be turned around in a three or four year window; these are structural issues requiring many years of solid concerted action. Nevertheless, it is noteworthy that the regional GVA gap with England in 2008, some three years into the delivery of RES 2006, was £4.3bn larger than at the strategy’s outset.

Productivity performance 5.7

RES 2006 did not set a target explicitly for productivity performance. This, despite the overall focus of closing the GVA gap and the underlying rationale for a significant number of Actions across its Themes. However, if the overall GVA gap with England is to be closed

An Extended Annual Assessment of the North West RES 2006 A Final Report

productivity – as measured by GVA per worker or per hour worked – will need to rise substantially. 5.8

Consistent with the moving-out of the overall GVA gap described above, the data suggest that at this headline level, the North West has essentially ‘kept pace with’, rather than closed the gap to England over the RES 2006 period. Figure 5-1: Measures of regional productivity performance GVA per job in the North West grew consistently over the RES 2006 period, but relative to England only marginal progress was made . . . 50

England North West

GVA per job (£000s)

• GVA per job in the North West in 2008 stood at £40,350 compared to £47,150 in England

RES 2006 period

• The regional performance in 2008 equated to 86% of the England level, essentially the same proportion as in 2004 (85%)

25 2000

2001

2002

2003

2004

2005

2006

2007

2008

• In short, over the RES 2006 period the productivity gap to England closed only marginally despite strong absolute productivity gains

. . . and output per hour worked, a second indicator of regional productivity, continues to soften relative to the UK as a whole 115

England Outputs per hour (UK = 100)

110

• Output per hour worked in the North West reduced year-onyear over the RES 2006 period relative to the UK

RES 2006 period

North West

105

• In 2008, regional output per hour worked was equivalent to 87.9% of the UK average, compared to 101.7 in England as a whole

100

• The North West was ranked 9th out of the nine English regions in output per hour worked in 2008

85 2000

2001

2002

2003

2004

2005

2006

2007

2008

Source: National Statistics

Messages for the Assessment 5.9

This Assessment is not about establishing causality between RES 2006 and regional economic performance. There are too many factors in play, time-lags in the data, and crucially, this Assessment is focused on RES 2006 as a strategy; it is not an impact evaluation of the projects/programmes delivered under it.

5.10

Nevertheless, it is important that notable deficits to national socio-economic performance persisted across the RES 2006 period, and whilst progress was made, for example, in the skills arena, four of the eight headline targets established for RES 2006 have not yet been achieved. From a simple headline perspective, the data therefore suggest that RES 2006 has not delivered against its founding intent. There are, however, three mitigating factors:

An Extended Annual Assessment of the North West RES 2006 A Final Report

5.11

•

how pervasive and wide-reaching the effects of the recession have been on the region

•

the increasingly competitive and challenging economic environment within which the region is operating, in which other places are not standing still

•

the role of the market and private sector behaviours/activities that drive regional economic performance.

As such, falling short against a number of the targets set in RES 2006 does not mean the RES itself has failed. Rather, the secondary data suggests a number of important and instructive learning lessons: •

the targets set in RES 2006 were based on future growth scenario projections largely to growth trends, and on a single trajectory. Alternative ‘what-if’ scenarios for the region, against which performance might have been more accurately tracked, especially following the economic downturn, would have been beneficial

•

as there was no mechanism in place to revise formally the targets in RES 2006, with the impacts of the recession – with, for example, some 75,000 more claimants of Job Seekers Allowance in the North West in August 2009 than one year earlier – a number of the targets established for RES 2006 became undeliverable. Again, a systematic progress for revision to the targets, reflecting of the changed economic conditions, would have been helpful

•

as the targets were not aligned to RES Themes and Actions a clear link for how RES 2006 delivery would impact on condition indicators was not established. An opportunity was missed here to integrate the targets throughout the RES process, thereby helping to frame and inform project appraisal and delivery

•

the majority of the GVA gap with England at the time of the RES’ development owed to lower workforce productivity. However, RES 2006 did not provide a specific target for raising productivity in the short or longer-term. A clearer focus on the centrality of productivity growth, as articulated in an explicit target for raising productivity, as measured in GVA per job, was a missed opportunity.

Chapter Summary

•

Regional performance against the headline targets established in RES 2006 has been mixed. Although definitive conclusions are not yet possible because of time-lags in the data, currently four of the eight headline targets are likely to be hit, or are currently on course to be hit. However, three of the targets, focused on job creation, the employment rate, and enterprise are well below the required target.

•

Crucially, the regional GVA imbalance to England grew over the RES 2006 period, whilst the productivity gap of the region’s workers to England improved only marginally. Developing an explicit target for regional productivity should be considered by partners in future iterations of regional strategies.

An Extended Annual Assessment of the North West RES 2006 A Final Report

6: RES 2006 outcomes and contribution

6.1

The previous section focused on the quantitative, this section turns to the qualitative contribution of RES 2006, and its constituent Themes, using the concept of Strategic Added Value (SAV).

Understanding Strategic Added Value 6.2

6.3

Strategic Added Value (SAV) is the ability of an organisation, intervention, or strategy, to deliver benefits over and above its quantitative outputs and outcomes. Developed as part of the Impact Evaluation Framework for the RDAs, SAV provides a helpful framework for assessing the qualitative contribution of RES 2006, based on five components as follows: •

Strategic Leadership and Catalyst

•

Strategic Influence

•

Leverage

•

Synergy

•

Engagement.

Assessing SAV is difficult generally because the effects occur through decision-making processes and networking/engagement activities, and people do not record ‘their SAV’ as they go along, or how they have been influenced. Further, investment decisions, delivery emphases and policy perspectives are subject to many different influences, and personal and institutional memory of the rationalisation for decisions/actions decays over time.

SAV contribution of RES 2006 6.4

Reflecting the complexities discussed above, the SAV assessment of RES 2006 is not based on a mechanistic ‘scoring’ process. Rather, it draws on the broad range of evidence reviewed as part of this study, and in particular the findings of the qualitative consultations completed with 98 partners/stakeholders across the region. As such, it presents a reflective, synthetic and rounded view of the SAV contribution of RES 2006, and its Themes.

6.5

Based on this approach, the SAV contribution of RES 2006 is presented in Figure 6-1. Three points are important to consider when reviewing the findings: •

across SAV headings and Themes, the assessment varies, sometimes markedly – this reflects the different processes and outcomes relevant to each SAV category

•

the assessments reflect the collective SAV contribution of RES 2006 and its Themes, not a commentary on the performance of individual organisations/actors

•

the analysis focuses on the observed SAV attributable to RES 2006 itself, rather than the contribution of specific project/programmes delivered against it.

An Extended Annual Assessment of the North West RES 2006 A Final Report Figure 6-1: Strategic Added Value of RES 2006 Limited SAV

Significant SAV

Strategic Leadership & Catalyst

“articulating and communicating regional development needs, opportunities and solutions to partners/stakeholders in the region and elsewhere” The RES 2006 development process delivered improved consensus and insight amongst regional partners into the nature and extent of the region’s economic challenges, complexities and priorities. Although the prioritisation in RES 2006 could have been improved, the Assessment suggests that the ‘key issues’ facing the North West were more fully understood as a result of RES 2006, through both its development and implementation. RES 2006 also delivered a strong statement of overall intent and strategic vision – this provided partners with a cohesive framework against which to design/deliver activity and played an important role in ‘focusing the mind’ of the scale of the challenge to be addressed.

Business Skills & Education People & Jobs Infrastructure Quality of Life

There is evidence of RES 2006 catalysing activities that would not otherwise have progressed at all or as quickly. This was based on two factors: •

its recognised status as a resilient and constructively permissive ‘reference point’ against which partners could align projects – albeit potentially retrospectively – and secure funding

•

through the identification of specific projects/issues as RES Actions that provided a strategic focus in taking activity forward and in securing funding and engagement i.e. University of Cumbria, Media City

Underpinning these findings, RES 2006 had excellent recognition within the North West, most notably amongst public sector partners, but also across the voluntary and community, and to a lesser extent the private sector. Although, there was a close association of RES 2006 with the NWDA, it clearly ‘set the regional agenda’ in an economic development context over the 2006-10 period. Limited SAV

Significant SAV

Strategic Influence

“defining the distinctive roles of partners, and facilitating partners and stakeholders to commit to shared strategic objectives and activities” RES 2006 identified ‘who does what’ in the North West in an economic development context and the ‘Action Lead’ device secured initial buy-in, although this reduced over time, partly because RES 2006 was not ‘refreshed’. However, the large number of Actions limited the extent to which RES 2006 ‘led’ partners to commit to shared objectives/priorities, and its potential to influence strategically the activity taken forward. Essentially, RES 2006 validated and embedded the existing role of, and further clarified the relationships between, partners across the region through tying, for the first time in the strategy document, specific organisations to RES Actions. This helped to ensure that RES 2006 provided a robust framework against which partners could align interventions to the regional agenda, reducing duplication of effort and resource.

Business Skills & Education People & Jobs Infrastructure Quality of Life

RES 2006 also raised the profile and awareness of specific policy themes and places e.g. the Skills and Education Theme as a whole, the economic potential and contribution of tourism and the visitor economy, and specific places such as Preston, West Cumbria, and Blackpool. However, in other areas, less was achieved e.g. the importance to the region of manufacturing, and the contribution of the voluntary and community sector. The development and implementation by NWDA of a regional climate change and sustainable consumption action plan, supported by wide ranging regional partnership, is evidence of strategic leadership (under the Business Theme and with close links to Quality of Life), although the Assessment suggests that RES 2006’s broader influence on securing climate change as a mainstream policy priority could have been optimised to a greater degree. Further, observed strategic influence by RES 2006 on changing the behaviours of Local Authorities, and, less unexpected, the private sector, was limited.

An Extended Annual Assessment of the North West RES 2006 A Final Report

Limited SAV

Significant SAV

Leverage

“mobilising partners/stakeholder to commit resources to economic development activity” NWDA monitoring data demonstrates significant leverage secured from public and private sources supported by NWDA, most notably in the Business and People and Jobs Themes. However, the Assessment suggests limited evidence of RES 2006 itself (as opposed to projects or access to RDA funding) consistently and substantively ‘bending the spend’ of partners not engaged centrally in regional economic development activity. This is also shown in NWDA evaluation evidence; that the dynamic leverage influence of RES 2006 was limited over the 2006-10 period i.e. although leverage funding was delivered for NWDA projects allocated to specific RES Actions, the attribution of this to RES 2006 was limited.

Business Skills & Education People & Jobs Infrastructure Quality of Life

Rather, the SAV of RES 2006 in a leverage context, was in endorsing, legitimising and providing a context for, existing and planned expenditure, rather than dynamically bending or influencing new investment in the region. That said, the lack of robust monitoring data from partners limits the extent to which the leverage of RES 2006 can be assessed accurately. Consultations with major regional businesses and business representative organisations suggest that RES 2006 helped to ‘set a framework and environment’ for private investment. This informed business decisions and may have helped to secure investment for the region. However, the additionality of this benefit is likely to be low with commercial drivers paramount. Nevertheless, RES 2006 does not appear to have been seen as a negative influence on, or hindrance to, effective business investment decisions and market performance of the North West by the business community. Limited SAV

Significant SAV

Synergy

“improved information exchange/knowledge transfer and coordination and/or integration of the design and delivery of interventions” There is some evidence that RES 2006 and its focus/delivery improved linkages and synergies between policy domains e.g. the integration of transport into the economic agenda through the focus in RES 2006 was helpful and constructive, and the inclusion of higher education and skills as increasingly key elements of the economic agenda. However, the down-side of Thematic focus of RES 2006 was the reduced opportunity to join-up and integrate fully the issues and multi-dimensional challenges facing the North West. As a result, the Assessment suggests that genuine integration across the Themes of RES 2006 was less well developed than it could have been and the synergy of RES 2006 was reduced as a result. The large number of Actions and objectives within RES 2006 also reduced the potential for synergy outcomes to be delivered by the strategy.

Business Skills & Education People & Jobs Infrastructure Quality of Life

The completion and dissemination of RES Annual Assessments by the NWDA were an important contribution to the regional evidence base, and the process of collating the Assessment helped to improve knowledge transfer and exchange with partners across the region. However, these benefits were not maximised as the process did not appear to be ‘fed back’ consistently into activities and decision making in ‘real time’ as comprehensively as might be expected.

An Extended Annual Assessment of the North West RES 2006 A Final Report

Limited SAV

Significant SAV

Engagement

“engagement of stakeholders in the design and delivery of regional and sub-regional priorities and programmes” The RES 2006 development process over 2005/06 delivered strong engagement outcomes. It brought key stakeholders together in establishing regional priorities and developed partnership working. Both at its development stage and in implementation RES 2006 also facilitated constructive dialogue between partner agencies at both strategic and operational levels, and in formal and informal guises. Increased sub-regional and city-regional engagement has been evident across the North West over the RES 2006 period i.e. Manchester and Liverpool city-region developments, the development of MAAs in Lancashire etc. The influence of the RES on these developments is not straightforward, but the increased recognition of place and city-regional economies initiated in RES 2006 played a role in creating the conditions for these developments to be progressed and engaging actors in city-regional and other functional-geography activities.

Business Skills & Education People & Jobs Infrastructure Quality of Life

Levels of engagement SAV varied across the Themes of RES 2006, with the Assessment suggesting that the additional engagement benefits generated were most significant, and potentially sustainable, in the Skills and Education and people and Jobs Themes. The Quality of Life Theme did help to engage partners, albeit in its constituent strands rather than ‘across the piece’. Source: SQW

Bringing the messages together 6.6

RES 2006 delivered significant SAV benefits to the North West and its communities of interest. The development of RES 2006 was important, moving-on strongly a process of partnership working, shared vision and collective focus on the key issues facing the region. As such, developing the strategy arguably proved to be as valuable as the resultant document itself.

6.7

As in other regions, there are ever-present tensions between places and agencies, and these were found in the consultation process for this Assessment. RES 2006 has not ‘solved’ these issues in full. But, it did progress the North West, and its places, towards a more partnershipbased model of economic development, where the parts are located in the context of the whole.

6.8

Owing to the results of the development of RES 2006, and the ongoing partnership working environment that it fostered, RES 2006 was also significant in securing engagement for the subsequent strategic prioritisation process over 2009/10 in formulating what became the draft ‘Future North West: Our Shared Priorities’ (the successor to RS2010).

6.9

Further, it is worth emphasising that RES 2006 was ‘known and used’. The danger of strategy is that the document is seen as the end in itself, and ‘sits on the shelf’ once agreed. Encouragingly this was not the case with RES 2006. The benefits delivered by the strategy, particularly in terms of Engagement and Strategic Leadership and Catalyst were sustained throughout its delivery period.

An Extended Annual Assessment of the North West RES 2006 A Final Report

6.10

Overall, in SAV terms, whilst RES 2006 did not deliver a transformation in qualitative outcomes compared to previous strategy efforts, it made a significant contribution to taking forward economic ‘thinking and doing’ across the North West over its delivery period.

Chapter Summary

•

A rounded assessment of RES 2006 needs to look in detail at the qualitative outcomes delivered, couched in terms of Strategic Added Value (SAV). Too often these qualitative benefits of strategy efforts are given insufficient attention. An important learning lesson is that capturing the SAV-based contribution of strategy efforts, as far as practical within ‘real time’, has to be done better going forward.

•

RES 2006 delivered significant outcomes in terms of the Strategic Leadership and Catalyst and Engagement elements of SAV, with the initial development stage of the process an important contributory factor to this.

•

The Assessment suggests that in the round, the SAV contribution of RES 2006 was important, and helped to move-on partners across the North West in their economic development capacity and capability, with major potential for longer-term benefits to be delivered as a result.

An Extended Annual Assessment of the North West RES 2006 A Final Report

7: Learning the Lessons

7.1

This concluding section of the Assessment brings together the key Learning Lessons from the experience of RES 2006 for partners to review and assess.

7.2

The Learning Lessons draw on both:

7.3

•

those things where activities/delivery went to plan, confirming that things were set-up and implemented effectively and that need to be taken forward, sustained, and embedded

•

those things that did not go as anticipated or, in hindsight, were not set-up or designed as effectively as they could have been, and where things might be done differently in the future.

Against each Learning Lesson is provided SQW’s independent and reflective view on its implications for the future.

Learning Lessons •

Learning Lesson 1: The process of consultation and engagement in drawing up RES 2006 demonstrated the value of an open and engaging process in strategy development. Formal and informal partnership and relationships were initiated and/or strengthened, and the challenges faced by the North West widely debated, articulated and communicated.

•

Implications for the future: A well-managed and open engagement process is vital to securing buy-in and developing effective partnership working and trust. However, going forward, increasing partnership maturity will be required – partners need to think for, and be committed to, the collective, not just their own constituency or specific interest group.

Learning Lesson 2: RES 2006 proved a resilient overarching framework against which partners could focus their activity and resources in a period of what turned out to be significant economic uncertainty. But this meant that RES 2006 became somewhat ‘locked at a point in time’, used principally as a ‘checkpoint’ to justify interventions, rather than as a tool for enabling partners to respond dynamically to new realities.

Implications for the future: Future strategy efforts in the North West should be of a more dynamic character, remaining topical and current whilst at the same time bearing in mind the fundamental issues faced across its places and communities. For the future, a rolling three-to-five year strategy and action plan, annually revised and amended should be considered. Commissioning, rather than responsively funding existing activity, should be a hallmark.

An Extended Annual Assessment of the North West RES 2006 A Final Report

•

Learning Lesson 3: RES 2006 provided an effective ‘translation’ mechanism to align NWDA’s funding to regional priorities, highlighting the importance of the role of the Agency in securing strategic engagement from partners over 20062010. Although for some it was hard to tell ‘where the RES stopped and the NWDA began’, the commitment of the Agency to the implementation of RES 2006 was key in the progress it delivered across its five Themes.

•

Learning Lesson 4: RES 2006 embraced spatial thinking more fully than previous RES iterations. This moved-on helpfully regional thinking on functional geographies, and for those places identified in RES 2006 Actions as regional priorities, delivered tangible benefits.

•

Implications for the future: Future strategy efforts increasingly need to focus their attention on ‘real’ economic areas and functional geographies to ensure that public investment and strategic focus aligns with, and contributes to, market opportunities and trends where possible, and addresses genuine market failures where they persist and arise.

Learning Lesson 5: The explicit focus of RES 2006 on the scale of the North West’s deficits to England, in GVA and employment terms in particular, provided an important ‘focusing of minds’ on the challenges faced across the region and its places. However, no specific target was set for productivity, and the ‘logic chain’ linking the Actions proposed and the targets set could have been more clearly identified, both issues that should be considered going forward.

•

Implications for the future: The Assessment has highlighted the importance of engaging local authorities centrally in the process of economic development prioritisation and delivery, to ensure that established relationships and linkages are maintained and deepened, especially as resources become tighter. Further, it is vital that those leading the strategy ‘walk the walk, as well as talk the talk’ consistently in their decision-making processes and investment decisions. Straying from the remit of a strategy to support ‘pet projects’ is unhelpful in terms of maintaining wider partner alignment and focus.

Implications for the future: Future strategy efforts need to ensure that the ‘wealth creation’ imperative, as reflected in productivity measures, is evident in both the targets and objectives/priorities set, and that a clear link is established to understand the impact of the strategy on productivity performance. In short, economic strategies need to focus at heart on getting the underlying economic basics right, whilst not ignoring the social and environmental issues and consequences.

Learning Lesson 6: Formal accountability for the successful delivery and performance of a strategy needs to be clearly established. This was arguably not the case for RES 2006. A partnership approach to the design and delivery of RES 2006 was an important step-forward, with specific delivery leads for the first time allocated to specific Actions. But this established roles, rather than ultimate responsibilities and accountabilities, for the strategy’s performance.

An Extended Annual Assessment of the North West RES 2006 A Final Report

•

Learning Lesson 7: There is a continuing need for greater prioritisation in economic thinking and doing in the North West. RES 2006, whilst more focused than earlier iterations, still ‘tried to do too much’. Further, what needs to be done for the North West in the round given the economic linkages and relationships across the area needs to be a core component of this increasingly prioritised approach. Owing to RES 2006’s inclusivity in development, it was perceived by some to be ‘micromanaging’ sub-regional and local issues.

•

Implications for the future: Bolder and more mature decision-making is required – underpinned by a sound evidence base recognising the multidimensional drivers of economic development across places, sectors, and communities – which injects focus and rigour to strategy efforts. A commitment to maximising Return on Investment as resources tighten and budgets are stretched will be key, as will the principles of ‘tree-tops’ thinking and subsidiarity i.e. shared priorities for those things that are genuinely strategic, and activity delivered at a regional level only when doing so is more effective than at a sub-regional or local scale.

Learning Lesson 8: The Thematic approach of RES 2006 was appropriate in design. However, going forward, there needs to be greater emphasis placed on integration and cross-thematic working, reflecting real world complexity.

•

Implications for the future: Who ‘owns’ a strategy and is accountable formally for its success, or otherwise, needs to be clearly identified from the outset of future strategy efforts in the North West. Without this accountability for performance – where success is recognised, and weaknesses are tackled – genuine traction will not be secured.

Implications for the future: There is a need for greater clarity in, and a more consistent approach to, identifying the linkages between policy Themes in future strategy efforts. With fewer actions these linkages could be better highlighted. Crucially, going forward, the importance of energy, carbon and resources as influencers on economic development need to be recognised.

Learning Lesson 9: The monitoring of RES 2006 provided evidence on activity and progress in delivery, but did not capture the strategic influence of the strategy on partner investment and behaviours. As a result RES monitoring did not drive dynamic change to Actions in the way that it could have.

Implications for the future: Good strategy involves establishing priorities and outcomes to be achieved and the processes/systems for accurate monitoring. Future strategy efforts should ensure mechanisms are in place to track, as systematically and comprehensively as possible, the inputs allocated to, and outputs generated from, activities within its scope. All partners engaged in delivery need to monitor against the collective strategy to allow for accurate attribution, evaluation and impact assessment. Further, monitoring data and feedback should be used dynamically to formally revise actions/activities i.e. monitoring for learning, not compliance, purposes.

An Extended Annual Assessment of the North West RES 2006 A Final Report

•

Learning Lesson 10: Scenario planning and growth trajectories should be embedded within strategy to ensure that it is ‘future-proofed’ against unforeseen changes, and is able to respond flexibly and quickly. With hindsight, RES 2006 was based on a largely straight-line view of regional growth which meant the potential for anticipating alternative scenarios, which the recession demonstrated, was missed. In part this contributed to RES falling short of a number of its headline targets.

•

Implications for the future: Robust and evidence based scenarios predicated on independent econometric modelling and analysis, for example, in terms of GVA and employment targets, should be part of the strategy development process, and contained within the targets and aspirations it sets.

Learning Lesson 11: The principal potential value of a regional economic strategy (or similar strategy effort) is its role as a process and framework to inform, guide and influence the behaviours, investments and decisions of partners; its role is an enabler, rather than a direct generator of quantitative outcomes and impacts. This value is most effectively captured in the categorisation of Strategic Added Value.

Implications for the future: Alongside improved systems for the monitoring of quantitative data, future strategy efforts should establish at their outset a clear and consistent framework and methodology for capturing, in ‘real time’, SAV as and when it occurs.

In closing . . . 7.4

This Assessment represents the first time that a North West RES has been subject to a reflective, qualitative and independent review at its close. As such, this work itself is testament to the increasing maturity of those engaged in the economic development of the region, and their willingness to understand the effects that their work is having on the North West’s people, places and businesses. Further, overall, the Assessment is a positive and supportive one.

7.5

RES 2006 was not perfection, rather a step on the journey, so there are lessons to be learned. Crucially, these lessons are relevant to all partners engaged in RES 2006, and those engaged in discussions and thinking on the future economic development landscape of the region. They need to be taken-on-board, collectively, to ensure that the knowledge, capacity, and learning developed through RES 2006 is successfully carried forward into future economic development activity across the North West.