http://www.nwda.co.uk/pdf/NWBP

Moving Forward: The Northern Way Business Plan 2005-2008

Northern Way Steering Group June 2005

CITY REGIONS

2

FOREWORDS

DEPUTY PRIME MINISTER

SIR GRAHAM HALL

It’s only been just over a year since I launched the Northern Way, but since then there’s been real momentum.

The Northern Way is a marathon, not a sprint.

As all long distance runners know, you need to make a strong start as well as a strong finish if you are to succeed. This plan is about making that strong start.

The three regions have united in a common purpose – to develop the full potential of the North and narrow the £30bn economic divide with the rest of England.

So I want to thank Sir Graham Hall and his Steering Group for producing this Business Plan, which sets out the first steps for turning their strategy for the Northern Way into a programme for action.

The plan will promote innovation and enterprise in science and technology, and will help to develop priorities for transport.

It will help to market the excellent advantages of the North as a place to visit and invest.

And it will stimulate new ideas to increase employment, improve skills and invigorate the economy of our northern regions.

Last September, I announced a £100m Northern Way Growth Fund – a partnership between the Government and the Regional Development Agencies.

But the Growth Fund is just part of a much wider picture. It’s crucial that we make the most of the £60bn a year which is already being spent by the Government in the North.

We know we still have a lot to do to achieve our long term ambitions. But I’m delighted to welcome this Business Plan as an important step forward in creating more sustainable communities in a stronger North of England.

It describes the Growth Fund investments we will make and the early steps we will take to move towards achieving our 20 year vision as described in our Growth Strategy Moving Forward: The Northern Way. Achieving our vision of closing the prosperity gap between the North and the South will benefit the country as a whole, creating a more sustainable economy across the North of England as well as reducing the pressure in the South.

We will not achieve success by doing more of the same. As partners in the Northern Way, we need to challenge ourselves to do even better. If that means doing things more simply or doing things together, then so be it. Using the £100m Growth Fund, we will demonstrate what needs to change and how.

We will work with our City Region partners to hone their plans and help turn them into reality. We will produce the evidence where it is needed and challenge Government to produce policies and plans that are tailored to the requirements of the North.

There are difficult decisions ahead and I will make sure we remain focused. Important issues such as transport and skills present major challenges. They will require a combination of rigorous appraisal and hard choices.

While our vision is hugely ambitious, I am confident that we have the commitment, desire and energy to deliver it. This three-year Business Plan will make the strong start that we need to succeed.

Rt Hon John Prescott, MP Deputy Prime Minister Sir Graham Hall Chair of the Northern Way Steering Group

Forewords

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CONTENTS Executive Summary

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A Introduction

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B City Region Development Programmes

9

C Our Ten Investment Priorities

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C1 Bringing More People into Employment

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C2 Strengthen the North’s Knowledge Base: Drive Innovation

24

C3 Build a More Entreprenuerial North

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C4 Capture a Larger Share of Global Trade: Key Clusters

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C5 Meet Employer Skills Needs

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C6, 7, 8. The North’s Connectivity

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C9 Create Truly Sustainable Communities

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C10 Market the North to the World

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D Linkages: City Regions and Investment Priorities

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E How We Will Deliver Management and Accountability Engagement and Communications Growth Fund Budget Risk and Sensitivity Analysis Forward Plan

40 40 41 42 44 46

Membership of Steering Group

47

Abbreviations

47

City Region Development Programme All eight City Region Development Programmes are being published in full alongside this Business Plan Technical Appendices A set of technical appendices containing more detailed specifications of what will be done under each of our ten Investment Priorities has been published on the Northern Way website (www.thenorthernway.co.uk) Technical Note The output gap has not widened but the method of calculating it has changed. Since our earlier estimate that the gap amounts to £29bn annually was published, the official figures it was based on have been revised. It is now around £30bn.

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Contents

EXECUTIVE SUMMARY The Northern Way vision is clear. We seek the transformation of the North to become an area of exceptional opportunity, combining a world-class economy with a superb quality of life. We have made considerable progress and received substantial support from Government, public agencies and business leaders.

Our strategy, Moving Forward: The Northern Way (2004) sets out how we seek, over a 20 year period, to bridge the output gap of around £30bn between the North and the average for England. Bridging this gap is hugely ambitious and therefore requires a ‘marathon, not a sprint’. This Business Plan brings together City Region Development Programmes (CRDPs) for each of the eight City Regions with the ten Investment Priorities identified in our strategy. It sets out what we will do over the next three years to begin to bridge that gap. The ten Investment Priorities seek to produce greater impact for the important things we already do and by developing a robust evidence base to underpin new investment and demonstrate the case for new policies for the North. The first versions of the City Region Development Programmes – published in full alongside this Business Plan – aim to drive forward the transformation of each City Region and its component parts. These will go through a process of review with the intention that, once fully developed and costed, they will play a major part in closing the £30bn output gap.

A £100m Growth Fund has been established by the three northern Regional Development Agencies (RDAs) and the Office of the Deputy Prime Minister (ODPM). This will help us begin to implement, further develop and inform our Growth Strategy. It is a very welcome start, but the real challenge is to make even more effective use of the £60bn of Government spending in the North. We need to build on synergies, reassess priorities and, based on sound evidence, take hard decisions about what really makes an impact. Therefore this Business Plan sets a budget for the Growth Fund which will do three things: 1. Produce greater impact by doing important things together across the North • £15m will go to help fund centres of excellence in leadership, innovation and skills for sustainable communities • £12m will bring together the activities of the three RDAs in marketing the North effectively to target particular markets of investors and tourists and to enhance our cultural offer • £10m will produce science and innovation priorities for the North, develop two research centres and encourage the transfer of knowledge from institutions to companies

• £6m will bring together the efforts of the three RDAs to develop important business clusters across the North 2. Demonstrate how existing national programmes could be even more effective across the North • £15m will go to meet employers’ skills needs in areas of short supply • £8m will stimulate the desire, among young people and others, to set up in business • £12m is allocated to demonstrate effective ways of helping large numbers of people from Incapacity Benefit into work 3. Prepare a robust evidence base for new investment and specific policies that will meet the North’s requirements • £12m will produce some small but significant transport improvements and, importantly, develop the case for a new approach to transport investment in the North • £1m will develop the evidence for new investment policies in building sustainable communities in the North • £2m will support the development of the City Region Development Programmes to make them compelling proposals that gain wide support We are aware that the evidence we produce will point towards some hard choices for all of us. Transport and connectivity issues in particular will need a rigorous appraisal of what will really contribute to economic growth and a realistic assessment of the timescale in which this will be delivered.

The Northern Way Steering Group has provided the strategic direction for the Northern Way and its Business Plan. It is supported by a set of appropriate structures and procedures to enable it to track performance and manage the resources available.

Specifically, we have systems in place to manage the risks as we go forward. Throughout the three year Business Plan period, we will seek systematically to engage with an even wider set of partners to deliver the Northern Way priorities.

The key to the success of this Business Plan is leverage. Both the Northern Way Growth Fund and the public investment, which will eventually flow to support the City Region Development Programmes, must lever in additional resources and harness the efforts of others to achieve our aims. For our plans to succeed the North must become more attractive in all senses of the word. A more prosperous North, combined with a high quality of life for its residents, will not only achieve our vision, but will also rebalance the UK economy and enable the country as a whole to grow more sustainably.

Executive Summary

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A INTRODUCTION This Business Plan: • provides a detailed and costed work programme for each of the ten key Investment Priorities, including a clear evidence base, the allocation of Growth Fund to specific projects, milestones and targets • presents the progress made with the eight City Region Development Programmes, their emerging priorities and how these will be taken forward in the context of the Northern Way, regional and national priorities • describes how we will manage the Northern Way and measure its performance over the 3 year period of the Business Plan • identifies the next steps in terms of key policy priorities, engagement and communications, influencing Government and other important players to the benefit of the North.

Our vision is clear. We are seeking nothing less than the transformation of the North of England to become an area of exceptional opportunity, combining a world-class economy with a superb quality of life.

The Northern Way has made considerable progress in the last 15 months. It has received substantial support from Government, public agencies and a wide range of business leaders who have championed its cause.

Involving three regions and eight City Regions, the Northern Way represents perhaps the most significant economic development collaboration in Europe in the current decade. Therefore, it has required a new way of working of the three RDAs and their partners in the regions, local partners in City Regions and Government Departments.

In September 2004 we launched Moving Forward: the Northern Way, which set out our strategy to bridge the output gap between the North and the average for England, which equates to around £30bn per year. In January 2005, our Action Plan – Progress Report summarised progress in developing our Investment Priorities identified in the strategy and the eight City Region Development Programmes. This Business Plan sets out how we will begin to implement our Growth Strategy, including how we will allocate the Growth Fund to develop and inform our strategy. But the Steering Group recognises that bridging the output gap between the North and the average for England is hugely ambitious and therefore requires a ‘marathon, not a sprint’.

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Introduction

We have identified three principal reasons why the economy of the North underperforms relative to the average for England: • We have too few people in employment.

Although the three northern regions have almost exactly the same ratio of people of working age to the total population as the national average, there is a significant difference in the number of people who are actually working. Economic output is only generated by those who are economically active.

The North West and Yorkshire and Humber are providing 2–3% less labour than the English average and the North East provides 11% less.

• Our skills profile is relatively low. While the North fares relatively well in terms of the proportion of residents in middle ranking occupations and with middle level skills, it is especially at the lower skilled end of the spectrum that we are disadvantaged. In the North, 33% of the working age population have either no qualifications at all or are qualified below Level 2. This compares with 29.5% for England as a whole and equates to an estimated 310,000 people being ‘under-skilled’. There is also a smaller proportion of the population educated to graduate and post-graduate level.

• Our economy is lacking in dynamism. The North exhibits significantly lower business start-up rates than other parts of the UK, 30 per 10,000 people, compared with 37 per 10,000 for the UK as a whole. Both private and publicly funded research and development is disproportionately concentrated in the South of England to the detriment of the North’s capacity to innovate on a large scale. The returns on private investment in the North are often not as favourable as elsewhere. For certain areas of public investment (e.g. transport and housing) funds are frequently drawn towards the South East to tackle problems of congestion and overheating.

Figure 1 (overleaf) illustrates how the output gap of around £30bn can be split into these three component parts. Setting the ten Northern Way Investment Priorities against each of these components illustrates how collectively they will contribute to closing the output gap by addressing one or more of the challenges facing the North.

We recognise that our analysis is only approximate.

Therefore, we will develop a more sophisticated measurement tool by December 2005 that includes the milestones we intend to pass in reaching our goal and benchmarks based on other successful economies abroad.

There are a large number of mainstream activities already supporting the Northern Way which address, in part, these components of the output gap. These include employment through the Department for Work and Pensions’ Pathways to Work; skills through the Employer Training Programme and the Learning and Skills Council (LSC); innovation through funding university research and knowledge transfer; and enterprise through the newly devolved Business Links.

This Business Plan sets a budget for the deployment of the £100m Growth Fund which will do three things:

The aim of the Fund is to develop evidence for further influencing central Government investments in the North to take account of Northern Way priorities, as well as influencing investment of regional and local bodies. In particular, we will seek early discussions with English Partnerships, the LSC, the Housing Corporation and Jobcentre Plus to see what more could be done to help achieve our aims.

For our plans to succeed, the North must become more attractive in all senses of the word. A more prosperous North combined with a high quality of life for all will rebalance the UK economy and enable the country as a whole to grow more sustainably.

Each of our investments will be appraised for their contribution to sustainable development using established procedures.

To achieve our aim, the substantial existing investment – public and private – going into the North must be better focused on our strategic priorities, derived from regional strategic frameworks and the Northern Way Growth Strategy. One of the important ways in which public investment can be influenced is through the UK Government’s biennial Spending Reviews. These consider the allocation and deployment of public spending and permit their adjustment, in line with policy priorities based on need and effectiveness. Through the evidence base we gather, we will seek to influence successive Reviews, starting this year, in preparation for the 2006 Spending Review. In addition, we will make the case for a long-term commitment to the North and, where the evidence base justifies it, targeted additional investment.

By delivering this Business Plan, we aim to:

1. Produce greater impact by doing important things together across the North 2. Demonstrate how existing national programmes could be even more effective across the North

3. Prepare a robust evidence base for new investment and specific policies that will meet the North’s requirements The £100m Growth Fund is a very welcome addition, providing funding to pilot and pump-prime innovative But there is much more to play for. Our goal will only ways of working in support of the Northern Way be achieved if from now on public investment in the objectives. However, it will not in itself close the North has a significantly higher impact on growth and output gap. In order to do that we must continue to private investment in the North is increased over develop the collaborative working methods that time. For this to occur the rate of return on all types have brought us this far – working across standard of investment in the North must substantially improve institutional and geographical boundaries to and public funding must maximise its ability to lever maximise outcomes. in private sector investment.

• demonstrate the added value and effectiveness of delivering specific activities across the North • influence the way in which mainstream public programmes are implemented across the North • produce the evidence base to support policy changes and important strategic investments in the North • promote and deliver the key Investment Priorities of the eight City Regions as the building blocks for the next phase of the North’s renaissance.

Introduction

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Bridging the Output Gap Figure 1 shows how the £30bn output gap can be split into three component parts: people not in employment, insufficient skills and a lack of economic dynamism. It also displays the contributors to economic dynamism – competition, enterprise, innovation and investment – which alongside skills are the five ‘drivers of productivity’ identified by DTI-Treasury. We have set the ten Northern Way Investment Priorities against each of these components to show how, together, they will contribute to closing the output gap.

The output gap is estimated from UK Government statistics (Office for National Statistics) for the regions. The difference in output between the North and the average for England varies from year to year. The £30bn figure is a broad average drawn from the last five years of available data.

Having too few people in employment in the North contributes about £4bn to this gap. We estimate this from the value of additional output that would be produced if the North had as many people in work as the average for England. In recent years the difference has halved, so this component is smaller than it was in the late 1990s. Again, we have used five year averages. Closing the employment gap remains crucial to closing the output gap. For instance, raising the proportion of

Figure 1

people in work to 80% – the Government’s aspiration for the UK over the medium term – would increase the output of the North by £12bn.

Insufficient skills accounts for about £10bn. We have estimated the value of additional output were the skills profile of the North’s population to match that of England as a whole. This would require significant numbers being upskilled and achieving higher qualifications. It also assumes that earnings would rise to reflect newly-acquired qualifications over time.

The final component is in many respects the critical one. Even though it has enjoyed strong growth in recent years, the economy of the North lacks sufficient dynamism to achieve the transformation we seek. We estimate this accounts for over half of the output gap (around £16bn).

A more dynamic economy will create the new jobs that will draw more people into employment.

It will also require new and higher level skills that suit a modern economy and it will generate the wealth to reward a better educated workforce.

Note: While we have consistently compared the economic performance of the North to the average for England, in some of our previous publications we have wrongly said that the output gap is compared with the ‘rest of the UK’. Since our earlier estimate that the gap amounts to £29bn annually was published, the official figures it was based on have been revised.

£30bn Output Gap North vs. England Average

Too few in employment (£4bn)

Skill levels insufficient (£10bn)

An economy lacking in dynamism (£16bn)

Competition

Enterprise

Innovation

C1

Note: Output component estimates (£bn) and the total gap are drawn from five year averages of official data.

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Introduction

C4,10 NorthernC5 Way Investment Priorities

C2

Investment

C3

C6-9

B CITY REGION DEVELOPMENT PROGRAMMES The Northern Way Growth Strategy concluded that City Regions were key to any effort to accelerate economic growth in the North. The eight City Regions house 90% of the North’s population and more than 90% of its economic activity. In broad terms they correspond with the major travel to work areas, shopping catchment areas and housing markets. In recent years most of the North’s economic growth has taken place within the City Regions, with their GVA per capita growing 50% faster than in the rest of the North.

The immediate priority will be to progress the CRDPs so that by December 2005 there will be:

Therefore, in September 2004, each of the eight northern City Regions was invited by the Northern Way Steering Group to prepare a City Region Development Programme (CRDP). These first versions of the eight CRDPs provide for the first time an overview of the economic development potential and requirements of the North’s major urban economies. They look at the flow of markets across administrative boundaries and draw out the consequences for the development of policy and investment in a coherent way within these new geographies. They contain many new ideas, some of which have yet to be tested. Several of their priorities are long-established and have already secured forward funding. Other more aspirational aspects require further evidence building before being subjected to strategic appraisal.

• a much better evidence-based understanding of the national policy barriers to accelerating economic growth across the northern City Regions and what is needed to address them

As CRDPs will play a major part in closing the £30bn output gap we will continue to work with the City Regions to further develop the programmes into robust and realistic narratives, reflecting the latest research and evidence about City Region economic development, and capable of convincing a wide audience. When they are fully developed and costed they will need to have the authority and credibility to influence individuals and organisations that are responsible for setting national and regional economic priorities. Their priorities will inform the Regional Economic Strategies (RESs), currently under review, and also the Regional Housing Strategies and Regional Spatial Strategies (RSSs) which are also in preparation. They will also need to stimulate and inspire private investment in ways that deliver the aims of the Northern Way.

• a clearer view of their distinctive contribution to the Northern Way • stronger connections between them and also with our Investment Priorities • a clear description of how each City Region and key regional stakeholders will do things differently to deliver the Northern Way Growth Strategy in the context of the regional frameworks

• an examination of how they will attract private sector funding, why Government needs to continue to invest in the North and how resources could be best utilised.

The priorities set out in the CRDPs will be aligned with the Investment Priorities set out in this Business Plan and put forward in the Northern Way submissions to the Spending Review 2006 and beyond.

The following section presents brief summaries of the development programmes received from each of the eight City Regions. The full versions are published along side this Business Plan.

City Region Development Programmes

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LIVERPOOL CITY REGION to Hull corridor – and serving international, national Working through the Mersey Partnership, and by and regional markets, investors and visitors engaging with partners in Cheshire, Warrington and West Lancashire, a CRDP has been prepared which • a creative and competitive City Region, with a will help to deliver the shared vision of regaining our world-class science, innovation and R & D base, status as a premier European City Region by 2025, a 21st Century business environment, and with an internationally competitive economy and employment and productivity levels on a par with cultural offer, an outstanding quality of life, and the UK vibrant communities contributing to and sharing in • creating a talented and able City Region sustainable wealth creation.

The strategic drivers and supporting priorities for action are:

• a City Region of sustainable neighbourhoods and communities

• the City Region as a premier destination centre with an exceptional critical mass of cultural, heritage, leisure and sports attractions

This CRDP sets out more details on these five strategic drivers.

• a well connected City Region – the gateways to the North West, connecting to North America, Ireland, and northern Europe through the Liverpool

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City Region Development Programmes

‘A premier European City Region’

CENTRAL LANCASHIRE CITY REGION Working through the new Lancashire Economic Partnership, a CRDP has been produced that aims to close our £4bn output gap by promoting the unique concept of a Central Lancashire City Region as the Green City of quality urban living next to readily accessible, superb countryside – the city with ‘room to breathe’.

There are eight Priorities for Action, two of which will be instrumental in the growth of the North and of the UK economy: stimulating our advanced manufacturing base including a global presence in the aerospace sector and strengthening the North’s tourism profile through the Blackpool URC Masterplan – the UK’s largest tourism renewal initiative.

Partners will underpin these priorities of truly pan-regional significance by delivering Sustainable Urban Growth.

A sustainable network of urban locations will be developed, which will maximise the complementary economic strengths and opportunities of our key urban centres. The Green City will deliver two Regional Park proposals, nurture our market towns and support delivery of rural renewal as important to the functionality of the City Region. Connecting the City Region will foster connectivity and accessibility to secure true economies of scale and agglomeration that the City Region has.

The remaining three Priorities for Action – stimulating and spreading enterprise; expanding the role and reach of higher education; and enhancing skills and employability – will underpin the other priorities making a direct contribution to raising the value of the City Region economy.

‘A green city with room to breathe’

City Region Development Programmes

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MANCHESTER CITY REGION Building on comprehensive economic development strategies for Greater Manchester, Cheshire and Warrington, and Derby and Derbyshire, a CRDP has been prepared. It reflects partners’ views of those assets and opportunities that offer the greatest potential contribution to the growth of economic output. The vision, as set out in the Greater Manchester Strategy, and adopted for the City Region is that by 2025, the Manchester City Region will be a world-class City Region at the heart of a thriving North.

There are six ‘accelerators’ which will drive economic growth: • continuing the expansion of Manchester Airport to serve, and attract, knowledge based businesses to the North of England • further developing financial and business services

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City Region Development Programmes

• promoting the continued growth of life sciences particularly by exploiting the combined resources of higher education and commercial research • fully exploiting the economic potential of the creative, cultural, and media sector to drive expansion across the North • moving advanced manufacturing industries up the value chain • developing a vibrant communications sector both as an employer and generator of GVA, and as an enabler of productivity and competitiveness for the whole City Region How we will do this is set out in the CRDP.

‘Accelerating the growth of the North’

SHEFFIELD CITY REGION The vision for Sheffield City Region in 2025 is that it will be a pivotal international business location and one of the most successful City Regions in the North of England, highly regarded for its innovative and creative economy, strong connections to key markets, unrivalled quality of life and vibrant and cosmopolitan population.

The City Region’s key strengths have been defined which provide the foundation for future investments to realise this vision. There are four areas where energy is being focused:

• developing a comprehensive connectivity strategy • providing the skills required by an internationally competitive economy • providing an environment that encourages investment and offers a higher quality of life The key investments in these four broad areas which are key to realising our vision are set out in the CRDP.

‘A pivotal international business location’

• developing and exploiting knowledge and research on an internationally competitive scale

City Region Development Programmes

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LEEDS CITY REGION The CRDP has been produced by a partnership of the 11 local authorities making up the Leeds City Region along with other public and private sector partners. This City Region partnership was established formally following the Leeds City Region Economic Summit held in November 2004.

The shared vision for the Leeds City Region is to work together differently: to develop an internationally recognised City Region; to raise our economic performance; to spread prosperity across the whole of our City Region, and to promote a better quality of life for all of those who live and work here.

If this vision is realised, it will contribute to closing the productivity gap between the North and the South.

The CRDP aims to deliver growth of 3.5% per annum in GVA per capita. It shows how it will: • improve city regional, pan-regional and international connectivity

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City Region Development Programmes

• encourage a culture of innovation in both individuals and businesses • encourage and support the development of higher and more relevant skills amongst the workforce • accelerate the development of a world-class infrastructure within which all businesses innovate and can thrive • enhance and promote the City Region as a place to live and work • enhance the prospects of a number of high growth and high value added sectors and clusters

‘An internationally recognised City Region’

HULL AND HUMBER PORTS CITY REGION Led by Kingston upon Hull City Council, under the auspices of the Humber Forum – the strategic body responsible for economic development in the Humber sub region, the Leaders of the four local authorities which comprise the City Region have agreed the CRDP.

Humber; a worklessness pilot in Hull; and promoting an entrepreneurial culture in schools • improve connectivity by addressing key transport bottlenecks particularly those which impede access to and from the Humber Ports and improving public transport within the City Region and with other City Regions

The vision is of a Hull and Humber Ports City Region – a global gateway – with a thriving, outward• prepare our places for growth by ensuring that value looking sustainable economy building on its unique is added to passenger services and goods flowing assets of location, the estuary, ports connectivity, through the ports; the City Region’s extensive waterfront and physical environment. The opportunity is to is optimised both as a business and residential converge private and public sector investment in location; and by investing in creating sustainable planning to transform the fortunes of the City Region – communities through a wide range of regeneration, delivering wealth and employment to the people of the environmental and housing market investments City Region and contributing tangible benefit to the UK The CRDP summarises the priority actions and in terms of increased productivity. investments.

Building on the City Region’s strengths, to realise our vision, the main elements of the CRDP are to: ‘A global gateway’ • create a more entrepreneurial culture including university level provision on the South Bank of the

City Region Development Programmes

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TEES VALLEY CITY REGION • support the expansion of Teesside and Durham The Tees Valley Partnership has worked with the Universities and their contributions to Netpark County Durham Economic Partnership to prepare the for knowledge CRDP to improve the overall economic performance of the Tees Valley. This will be done by building a • develop key projects in Stockton-Middlesbrough strong diversified economy and developing as the core of the City Region, the Darlington sustainable communities.

Gateway and the Coastal Arc The most important components of the CRDP are to: In addition, improvements to connectivity are being promoted within the City Region, along with • support the development of a more competitive reductions in worklessness, and the restructuring of heavy industrial complex including the process industry cluster and nurturing new energy economy our housing markets. companies including those in emerging hydrogen, The CRDP sets out more detailed actions, which will be biomass, biodiesel and wind energy technologies taken forward and refined over the next few months.

• secure the continued expansion of Teesport particularly by securing road and rail access ‘A strong diversified economy’ improvements; and expand Durham Tees Valley Airport and associated business and distribution centres

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City Region Development Programmes

TYNE AND WEAR CITY REGION Key partners in the Tyne and Wear City Region have established a Working Group and have agreed a single vision, which allows stakeholders to take the decisions necessary to create more sustainable communities and accelerate economic growth within a Knowledge Economy. The following priorities for action have been agreed: Business Matters • supporting innovation through cross cutting programmes to grow the knowledge economy with Newcastle Science City as a central initiative for the City Region as a whole; using the public sector as a source for enterprise; and initiatives to support businesses to design new products and explore new markets for people, ideas and services Place Matters • promoting area based regeneration schemes to continue the culture led renaissance of the City Region; meet SME growth requirements in key

sectors and locations; and sustain and improve our distinctive quality of life • developing a comprehensive transport strategy to increase accessibility of employment locations • creating sustainable communities by a strategy led approach to revitalising housing markets in the context of sustainable and accelerated economic growth People Matters • establishing labour market initiatives to address worklessness and city regional initiatives to accelerate educational achievement and address skills shortages • working with local and pan regional partners on measures to support talent attraction and retention

‘Accelerating growth within a knowledge economy’

City Region Development Programmes

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City Region Development Programmes

THE RURAL DIMENSION To tackle the £30bn output gap it is essential that we focus on our City Regions where 90% of the population live and economic activity takes place. To do otherwise would dramatically lessen the impact of our efforts. Nevertheless, the Northern Way Growth Strategy recognised that across the North ‘the quality and extent of the countryside are real strengths.’

Already organisations across the North and beyond are responding positively to the issues arising from the City Region approach inherent in our plans.

For instance, the Environment Agency has offered resources to support our narrative on sustainable development for the Northern Way. The Cumbria Strategic Partnership has also offered to work with us to fashion an intelligent response to City Regions beyond their natural boundaries. We welcome such positive approaches about how we can do things differently to deliver our aspirations for the North as a whole. We will work with these and other stakeholders to develop an effective way forward.

In exploring how the rural offer – including the rural swathe of the North which runs across all three regions – can add value to and benefit from the key Investment Priorities, three priorities for action have emerged: • ensuring rural businesses are included in the roll-out of the Northern Centre of Industrial Collaboration which will bring universities and the food and drink industry together across the North to increase the rate of innovation and new product development (see C4 Capture a Larger Share of Global Trade).

• featuring the expansive and interconnected coastal and rural areas strongly in our plans for attracting European and overseas tourists (see C10 Market the North to the World).

• examining the potential role of a strong rural offer in attracting entrepreneurs to the North (see C3 Build a More Entrepreneurial North).

In addition, we will encourage the City Regions as they develop their CRDPs to increase their understanding of the economic relationship between the core urban centres, market towns and rural economies within and beyond their City Regions and what tremendous value rural areas can provide in promoting economic growth.

City Region Development Programmes

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Our Ten Investment Priorities

C OUR TEN INVESTMENT PRIORITIES Moving Forward: the Northern Way, our first Growth Strategy (2004), identified ten Investment Priorities that will help accelerate the rate of economic growth across the North. Together, they will take us towards bridging the output gap. This section of the Business Plan takes each Investment Priority in turn, describing what it is trying to achieve, what is the evidence base and how it relates to existing activities and to Government policy. It specifies what activities will take place, what outputs will be achieved, how we will measure progress and what resources will be deployed to achieve our aims.

Our Investment Priorities are: C1

Bring More People into Employment

C2

Strengthen the North’s Knowledge Base: Drive Innovation

C3

Build a more Entrepreneurial North

C4

Capture a Larger Share of Global Trade: Key Clusters

C5

Meet Employer Skills Needs

C6-8

The North’s Connectivity C6 Prepare a Northern Airports Priorities Plan and Improve Surface Access to Key Northern Airports C7 Improve Access to the North’s Seaports C8 Create Premier Transit Systems in each City Region and Stronger Linkages between City Regions

C9

Create Truly Sustainable Communities

C10

Market the North to the World

Our Investment Priorities will be managed via eight workstreams, each with a lead manager. Each workstream provides the opportunity to engage a wide variety of organisations in its design and delivery.

Our Ten Investment Priorities

21

C1 BRING MORE PEOPLE INTO EMPLOYMENT encourage people who have claimed Incapacity Benefit for a long time to participate in the scheme.

But we believe a much more targeted and customised approach is needed if we are to deal For the North to prosper, we need more people in with the issue effectively in the North, even if it means work. The Government’s policy statement ‘Realising departing from the national model. We recognise that the Potential of all our Regions: the way forward’ to present a persuasive argument to Government identified employment as the best route out of poverty we must have a robust evidence base for the and notably ‘one of the keys to improving economic effectiveness and added value of the flexibilities and performance in the regions’. While the success of the innovations we seek. We will therefore use up to Government’s New Deal means that unemployment £12m of the Growth Fund resources for pilot projects rates in the North are broadly in line with the UK that will demonstrate the effectiveness of various average, the proportion of working age people in the types of additional or enhanced activity in North on Incapacity Benefit is much higher and a accelerating the number of people moving from significant proportion have been claimants for a long Incapacity Benefit into employment. The Government time. The extension of the Government’s Pathways to has agreed to use the evidence provided by these Work programme (PTW) to include nine† areas across pilots to inform the development of Incapacity Benefit the North will play a major role in providing support to policy and also where appropriate to inform the rollhelp new claimants back into employment. But there out of successful approaches across the whole of is a northern imperative to deal with this problem in a the North, subject to the availability of resources. We more systematic way because it creates a culture of will also aim to work with Government to ensure a dependency across communities and across northern perspective is taken into account as it generations and acts as a brake on economic growth. develops the Incapacity Benefit Bill announced in the Queen’s Speech on 18 May 2005.

We believe that innovative methods are required to tackle this problem. The Government’s PTW programme has recently developed the flexibility to Our ambition is to bring a further 100,000 people currently on Incapacity Benefit into work by 2014.

Growth Fund Resources £m 2005/06

0.2

2006/07 & 2007/08

11.8

Total

12.0

† PTW

22

Areas: Barnsley & Rotherham Tees Valley Lancashire West Liverpool Durham Cumbria Greater Mersey City of Sunderland Manchester

Bring More People into Employment

Activity

Milestones

Phase 1 enhancements (up to £2m) Each region has identified a project that will demonstrate added value by testing out enhancements to the PTW Pilots.

The North East has developed an innovative approach in Easington where there is one of the highest concentrations of Incapacity Benefit (IB) claimants in the North East. Interventions based on referral by a General Practitioner will aim to show that customised support, in addition to that of the PTW, can help people who have been on IB for a long time return to work.

The North West is developing a project in Knowsley that will deliver a bespoke demand-led employment and training approach again to help people who have been on IB for a long time return to work.

A major project will also be implemented to tackle worklessness in Yorkshire and the Humber. This will focus on the Barnsley and Rotherham areas of South Yorkshire, and whilst the project will not use the Northern Way Growth Fund, evaluation of the project will be included in the evaluation framework outlined below. This will ensure that any lessons learnt from approaches employed by this project are used to inform and shape future spending reviews/policy developments through the Northern Way evaluation.

Easington September 2005 – Project commences March 2006 – 80 clients engaged of which half placed into work April 2006 – Pathways to Work Programme starts March 2007 – Project ends and 500 clients supported

Phase 2 enhancements (up to £9m) The Growth Fund will resource six further projects reflecting the Government’s PTW areas. These will be developed through consultation with practitioners with experience of dealing with claimants but managed through a Worklessness Strategy Group to ensure sufficient variety and consistency for robust evaluation to be undertaken across the pilots.

These will be supported by up to two further pilots outside the PTW areas, in Bradford and in Hull City Region respectively, to provide evidence of the impact that enhancements can produce on their own and to include inner-city areas that face particular problems and to test the effectiveness of innovative approaches without the support of the PTW programme.

June 2005 Worklessness Strategy Group established July 2005 Each region invited to submit second round of pilots for consideration by Worklessness Strategy Group September 2005 Phase 2 pilots announced and rolled out

Evaluation and Evidence Base (up to £1m) We will identify which combinations of activities produce the greatest returns in which sets of circumstances. The evaluation will be designed to generate a firm evidence base and case study material to assist in the roll-out of new approaches. We will develop an evaluation model which will build on the evaluation of the first round of PTW projects.

June 2005 Evaluation model developed July 2005 Evaluation commenced to coincide with first pilot 2006/7 Evaluation evidence produced showing which interventions showed greatest success levels and identifying lessons learnt from the wide range of approaches used.

Knowsley November 2005 Project commences December 2007 Project ends with over 3000 engaged, 300 active participants and 150 moving into employment

Manager responsible: Andrew Heydeman Lead RDA: Northwest Development Agency

Bring More People into Employment

23

C2 STRENGTHEN THE NORTH’S KNOWLEDGE BASE: DRIVE INNOVATION Science and Industry Councils (SICs) to establish the science and technology priorities for the North. New world-class joint research centres will be established, promoting technology development and knowledge transfer. We will also support growth in sectors of economic significance in the North by creating A strong knowledge base is essential in creating a Knowledge Transfer Partnerships (KTPs) that are not successful high value economy. It underpins business covered by the DTI’s national programme, and ambition and growth, attracts highly talented develop two Centres of Professional Excellence in individuals and contributes to entrepreneurial activity. relevant disciplines.

The Government’s ten year Science and Innovation We see our three Science Cities – York, Manchester, Investment Framework sets out its commitment to and Newcastle – as an integral component of the significantly increase expenditure by UK businesses Northern Way and the three relevant City Region and Government on R&D, in order to compete with European and American City Region economies that Development Programmes (CRDPs) prepared under the auspices of the Northern Way strongly feature benefit from business-university collaboration and technology transfer. Regional Development Agencies Science City activities. Section D of this Business (RDAs) are expected to perform a much stronger role Plan summarises the current position in each City Region. These show that York, one of the UK’s first and the three northern RDAs aim to invest over Science Cities, is leading the way in promoting £100m by 2010 to support business innovation.

Already the Northern Way initiative has prompted the university and industry collaboration. In Manchester, the Knowledge Capital Programme highlights the northern universities to establish the N8 group of central role that universities are playing in the City northern research intensive universities in order to Region economy. Newcastle Science City’s collaborate even more effectively, as well as the programme is now being developed. collaboration of the three northern university associations.

We will also use up to £5m of the Growth Fund to We will strengthen the North’s knowledge base by seeking to increase expenditure on R&D by both business and Government by 25% in the five year period through to 2010 and a further 25% by 2015

The North has a strong knowledge base, including academia, public research and business R&D. We will seek to expand and strengthen this as the basis for a more prosperous economic future. We will therefore use £10m of the Growth Fund to ensure that the North of England is better positioned to seize opportunities to be a world leader in selected existing and emerging technologies. We will work with the Growth Fund Resources £m 2005/06

0.85

2006/07 & 2007/08

9.15

Total

10.0

Design Centre

24

5.0

Strengthen The North’s Knowledge Base: Drive Innovation

develop a Northern Way flagship project designed to develop products, services and processes for companies across the North. Situated in Gateshead, the goal of the Northern Technical Design Centre is to make northern businesses world leaders in design technology leading to a greater share of high value global trade.

Activity

Milestones

Knowledge Transfer Partnerships (KTP) (£3m) Building from the successful national programme, a new programme of KTPs will be established in the North. These will focus on areas that are not covered by the existing programmes including Public Health and the Creative and Cultural Industries. Established management/distribution mechanisms will be used. Our objective is to inform the direction of the national programme for the future.

June 2005 Process to identify KTPs to complement national programme September 2005 Implement 14 new partnerships per annum

Science and Technology Priorities for the North Drawing on wider contributions, the three northern Science and Industry Councils are reaching agreement on the science and technology priorities for the North. These will inform decisions about the new Research Centres and other initiatives promoted by the three Councils, the RDAs, Central Government, and other key stakeholders. It will provide an input into the next Government Spending Review.

August 2005 Three SICs agree priorities for the North September 2005 Publish ‘Science and Technology Priorities for the North’ December 2005 Input findings to the Spending Review

Research Centres (up to £6m) Building from the ‘science and technology priorities’ up to three research centres will be established. These will draw together expertise within the business and academic communities to pursue global R&D opportunities in those existing and emerging technologies where the North could become a world leader. The centres will be developed jointly by industry and universities (including the N8 group of northern research intensive universities).

September 2005 SICs request proposals for new centres December 2006 Expert panels consider proposals alongside peer review process April 2006 Northern Science Council Chairs make final decision on the research centres May 2006 Implementation of research centres commences

Centres of Professional Excellence (up to £1m) The potential for centres of professional excellence in seven fields is being examined from Applied Science, Engineering and Technology, through Creative and Cultural Industries to Tourism and Recreation. The Northern Way will seek to develop at least two, in conjunction with the three northern Higher Education Associations.

July 2005 The Northern Way Task Group recommends two centres of professional excellence July 2005 Stakeholders invited to outline how they would develop their centre April 2006 Collaborative projects proposed for approval by the Northern Way Steering Group

Pan-northern Product Innovation Audit An audit of all RDA sponsored innovation activity is now being prepared.

It will identify further areas for collaboration across the North.

September 2005 Completed audits October 2005 Work alongside ODPM/DTI project to provide input into RDA Audit and Government’s Spending Review

Manager responsible: Rebecca Garrod Lead RDA: Northwest Development Agency Activity

Milestones

The Design Centre for the North (up to £5m) To support a new initiative to develop products, services and processes for companies across the North, incorporating the latest advances in science and technology. It will help to address recent evidence prepared by the Design Council which identified low design capacity as a constraint on successful innovation and overall business growth. It will develop a network of existing specialist facilities, based on a hub in the Tyne and Wear City Region, which will communicate R&D advances to designers and SMEs and support them to take proposals forward.

Outcomes will include 5,000 more SMEs employing designers and 8,000 more products, processes and services introduced by 2010

September 2005 Steering Group established, initial programme considered December 2005 Initial programme under way March 2006 Full programme in operation 2007 Hub building completed (construction began 2005)

Manager responsible: Chris Pywell Lead RDA: One NorthEast Strengthen The North’s Knowledge Base: Drive Innovation

25

C3 BUILD A MORE ENTREPRENEURIAL NORTH secondary schools will receive funding to deliver five days of enterprise education for all Key Stage 4 students. This will build on their existing Enterprise Learning Pathfinders. But we believe that we need to be more innovative and to help the Government To accelerate growth the North needs to generate and attract more entrepreneurs. They are fundamental programmes work harder if we are to create the kind of enterprising culture across the North that will help to successful economies, yet in the North we have to address the £30bn output gap. We will therefore the fewest firms per capita and the lowest rate of use £8m of the Growth Fund to promote enterprise business start-ups in the country. The RDAs have an across the North and to tackle barriers that persist. essential role in supporting business development in The project will focus on enhancing the national the regions and a significant proportion of their Enterprise in Education initiative on Key Stage 3 in budgets contribute to initiatives to promote enterprise particular schools, taking into account the problem in in the regions. The Government’s devolution of Business Link to the RDAs from April 2005 will greatly the North of a decline in educational performance at this stage – particularly among boys. enhance their flexibility and targeting in helping existing businesses to grow and prosper.

We will also use up to £5m of the Growth Fund to develop a Northern Way flagship project – a Northern But to create an enterprising culture across and Leadership Academy – designed to strengthen within the North we need to focus on our young people and the people that influence them. We need leadership, a key component of an entrepreneurial North. The Academy will be situated in the North to adopt innovative ways of reaching young people West and will be aimed at existing leaders and those that are both educational and fun that will stay with them and develop in the future. The Government has with leadership potential from all walks of life. It will nurture leadership talent and attract, grow and retain already recognised the importance of encouraging enterprise in education and from September 2005 all inspiring and enterprising individuals.

We will increase the rate of new business start-ups from 30 per 10,000 people (2002 rate) to 33 per 10,000 people by 2008.

Growth Fund Resources £m 2005/06

0.5

2006/07 & 2007/08

7.5

Total

8.0

Northern Leadership Academy

5.0

26

Build a More Entrepreneurial North

Activity

Milestones

Enterprise in Education (up to £6m) Growth Fund will match the current enterprise entitlement from the Department for Education and Skills to schools for Key Stage 4 (KS4) students by developing wider approaches to enterprise support and delivery within Key Stage 3 (KS3). Emphasis will be placed on KS3 to ensure engagement with a broad cross section of young people prior to career choices being made and to attempt to reduce the number being disengaged. Activities will include funding for a school enterprise Action Plan, teacher/champion development, and a range of enterprise experiences for young people and longitudinal evaluation of impact.

Delivery arrangements will build on existing mechanisms.

Up to £6m Growth Fund to deliver programmes to approximately 300 schools by year 3.

August 2005 Programme developed.

Managing/delivery mechanisms agreed January 2006 Programme start as part of academic year July 2006 Progress reviewed, programme re-defined following evaluation

Graduate and FE Enterprise (up to £1m) To strengthen the uneven provision of enterprise training across the North we will develop a tailored programme developed by the National Council for Graduate Enterprise. We will support Flying Start rallies and business development for graduates with all universities across the North. We will also build on existing initiatives supporting the FE sector by identifying gaps in provision and developing new support measures. Together these initiatives will provide a more consistent and higher quality level of support to the HE and FE institutions across the North by delivering a robust evidence base for the development of all future activities.

Growth Fund to support the creation of 80 businesses and engagement of 2,500 students.

September 2005 FE proposals developed September 2005 HE delivery plan developed January 2006 HE programmes start to operate June 2006 Phase 1 evaluated, Phase 2 developed

Year 2 and 3 Projects (up to £1m) To develop and implement a range of pan-northern projects to encourage increased enterprise activity. We will further examine the potential for a number of initiatives including an enterprise ‘club’ network across the North for young people; analysis of the potential for a unique marketing campaign to attract entrepreneurs including the appeal of rural areas; evaluation of a pilot scheme in Hartlepool to encourage entrepreneurs to become part of the formal business economy; and to develop a mentoring/role model scheme to promote the development of women in enterprise. We will also introduce a programme that identifies best practice across the three regions and shares it.

Manager responsible: Tim Pain Lead RDA: One NorthEast Activity

Milestones

Northern Leadership Academy (up to £5m) To create a unique and pan-northern initiative, based in the North West, which will develop more and better leaders and more productive entrepreneurs in the North. Working with key partners (including universities, colleges and Sector Skills Councils) proposals will be invited by open tender for the most innovative and cost effective business case.

The successful proposal will develop the market for leadership skills acquisition in the North through a distinctive approach that builds upon yet goes beyond current provision. The Growth Fund will help pay for this market development. Because leadership requires widening perspectives, it will involve existing and potential leaders from all sectors and a varied set of approaches. The Academy is expected by 2008, to have become: 1) A champion for leadership of the North and in the North 2) A broker of products and services 3) A hub for the management of a distributed and networked delivery model 4) An independent research based think tank 5) An entrepreneurial risk taking enterprise and to have shown it can become financially self sustaining within the Business Plan period.

June/July 2005 Invitation to Tender issued September 2005 Bids assessed December 2005 Contract awarded to successful bidder, and implementation of NLA Business Plan commences March 2006 Progress reviewed, early evaluation of impact

Manager responsible: Fran Hulbert Lead RDA: Northwest Development Agency Build a More Entrepreneurial North

27

C4 CAPTURE A LARGER SHARE OF GLOBAL TRADE: KEY CLUSTERS We will ensure that the companies in key manufacturing and services clusters across the North continue to employ at least 1.75 million people in 2025.

The geographical clustering of companies enables collaboration and economies of scale that help businesses capture a larger share of global trade.

In light of the importance of these clusters and of policies aimed at creating the conditions that encourage their formation and growth, the northern RDAs have all identified priority clusters for attention and have put resources in place to support them.

Growth Fund Resources ÂŁm 2005/06

1.1

2006/07 & 2007/08

4.9

Total

6.0

28

Capture a Larger Share of Global Trade: Key Clusters

The Northern Way is therefore a unique opportunity to develop certain clusters together across the North.

We will use up to ÂŁ6m of Growth Fund to support business led projects that provide support in a way that accurately reflects how key clusters function and how they can benefit from a pan-northern approach.

The first cluster to be targeted will be the chemicals and pharmaceuticals industry with the creation of a Centre of Excellence that will aim to improve productivity and competitive advantage in companies and supply chains.

Activity

Milestones

Linking the centres of excellence in chemicals across the North (£3.1m) A major initiative to support the chemical and pharmaceutical Industries.

This project aims to link research facilities in Manchester (COEBIO3), York and elsewhere with the Centre for Process Innovation in Tees Valley by developing new manufacturing routes for commercial exploitation across the North. The initiative is supported nationally by the DTI’s Chemistry Leadership Council. The Growth Fund investment is aimed at, in the longer term, enhancing the productivity of northern companies and in the short term (over 2 years) at exposing over 100 companies to the potential of the technology through having a pilot plant facility in the centre of excellence available for business use.

October 2005 Contractual arrangements in place with CoEBIO3 partners March 2006 Commercial team functional September 2006 Construction of pilot facility starts January 2007 Manufacturing facility operational March 2008 Over 100 companies exposed to the technology through the pilot plant

Chemical Innovation Network (£0.9m) The Chemical Innovation Network is a project developed by industry. The Growth Fund investment is aimed at two platforms (i) Responsive Manufacturing and (ii) Sustainable Technologies which are critical to the success of the northern process industries and hence to the North of England’s prosperity.

Success depends on the creation of a Productivity Improvement Toolbox based upon the portfolio of technologies developed by the partner organisations and the application of this toolbox in process companies in the North of England.

Four not-for-profit organisations (Crystal Faraday, Britest, PICME and the Centre for Process Innovation) are coming together to deliver this project.

October 2005 Assemble the project team March 2006 Preparation of Materials and Marketing plan June 2006 Tool Box fully operational December 2006 Completion of first Project 2008 Completion of all ten projects and all 100 training events delivered

Regional Defence Initiative (up to £0.85m) Building on existing RDA support measures, a collaborative pan-northern and industry-led body will open new markets and supply chain opportunities to northern companies seeking to procure national and international defence contracts. By working more closely together, the defence companies across the three RDA regions will win significantly increased orders from defence procurement agencies and private contractors overseas as well as in the UK.

July 2006 External provider appointed December 2006 Northern awareness events held January 2007 Collaborative companies start bidding forecasts June 2006 Industry led body established to oversee initiative

Food and Drink: Northern Centre of Industrial Collaboration (CIC) (up to £0.85m) The programme will roll out the existing CIC model by bringing universities and the industry together across the North to increase the rate of innovation and new product development. A networked ‘virtual’ centre will be established to exploit knowledge and expand the research base by providing consultancy support, dedicated Knowledge Transfer Partnerships and collaborative research projects as well as links with national food and drink initiatives. The Growth Fund will support the development of new products, create and safeguard jobs within the industry and lead to productivity improvements in northern companies.

December 2006 Innovation Centre operational September 2007 Full roll out of activity

Development of phase 2 Clusters: energy and environmental technologies, financial and professional services, and logistics (up to £0.3m) To analyse the needs and requirements of these clusters and assess the potential for more collaborative working across the North. Growth Fund will support feasibility studies and research to identify where current gaps are and where real added value opportunities for efficiency savings exist.

September 2005 Scoping work carried out. Research studies started March 2006 Collaborative projects identified and proposed programme evaluated

Manager responsible: Mark Rutherford Lead RDA: One NorthEast

Capture a Larger Share of Global Trade: Key Clusters

29

C5 MEET EMPLOYER SKILLS NEEDS Our Regional Skills Partnerships will make provision for 200,000 employer-specified learner places by 2008.

A prosperous, innovative economy requires a highly skilled workforce. Improving skills is essential to improving employability and productivity and hence underpins higher output. However the North has a considerable skills gap compared with the rest of England. This is particularly marked at the lower end of the skills base where 33% of the population of working age have either no qualifications at all, or qualifications below Level 2, compared with 29.5% for England as a whole. We believe that insufficient higher level skills are also holding back growth and the North has too few people qualified to degree level or above. Certain sectors have the potential to expand but don’t have sufficient numbers of skilled people to make it happen.

The Government has recognised the need to boost the attainment of Level 2 skills qualifications through the National Employer Training Programme (NETP), which funds employees who do not have them. This programme will be critical to helping those people with low or no skills in the North. But we believe that in only tackling one end of the skills shortage spectrum it will not generate the advanced, high value economy the North needs to compete on an international stage.

By themselves our employers are unable or unwilling to create and develop the high value skills required for a modern economy. We believe that it is essential to recognise this weakness and start to find ways of stimulating northern employers into investing and providing training of the workforce to a higher skills level. We will utilise the ‘dual key’ facility provided by Growth Fund Resources £m 2005/06

2.0

2006/07 & 2007/08

13.0

Total

15.0

30

Meet Employer Skills needs

Government to better match the supply of skills training with employer needs. However we believe that Government funding through the NETP and LSCs should be made more flexible so that they allow for alternative interventions in the North that kick start training investment by the private sector and other organisations.

We know that we must be able to show, through robust evidence and analysis, that there is added value in using public sector funding to do this. We will therefore use up to £15m of the Growth Fund on demonstration projects to test the effectiveness and economic benefits of supplementing the NETP with a second Level 2 qualification for individuals working in northern priority sectors but whose existing qualification is no longer relevant. In addition, we will also support private sector investment in Level 3 qualifications in priority occupations/sectors using a variety of subsidies and employer contributions on a case-by-case basis. This will include enhancement of management and leadership skills at Level 3, where this is identified as a critical gap that is holding back employer investment and economic growth.

We will work with the three northern Regional Skills Partnerships (RSPs) to support their planning for the delivery of important skills requirements, business support and employment provision. In particular, we will use their analysis to target our projects to meet the needs of employers in sectors, occupations and locations where there is a distinctly northern skills shortage.

The evidence gained will be used to underpin our policy discussions with Government and mainstream public sector investors in order to promote the need for a northern approach to intervention and investment, in the context of the Spending Review 2006 and beyond.

Activity

Milestones

Operation of Dual Key As part of the Growth Strategy the three northern regions agreed to make use of the flexibilities offered by Government to use ‘dual key’ arrangements whereby both RDAs and LSCs sign off funding plans for devolved skills budgets to better match the supply of skills training with the needs of employers.

Building on existing relationships the RDAs and LSCs (along with RSP members such as Business Link) will: • Agree strategic priorities through the RSP Action Plan • Implement clear governance arrangements established within the RSP • In the North East, test the value of jointly funding a range of projects including Skills Brokers and Flexible Skills Fund to respond directly to employer skills needs.

Summer 2005 One NorthEast and the NE LSC to undertake commissioning of joint projects Summer/Autumn 2005 RES Reviews to identify key sectors for future GVA growth which will inform RSP Action Plan Summer 2006 RSP Action Plans produced

Pilots (up to £14.5m) We will undertake pilots based on an offer of support to employers for vocationally relevant second Level 2 qualifications and priority Level 3 qualifications including management and leadership. This will enable us to test out whether these new approaches are effective in stimulating increased demand and investment from employers in skills development for their employees at these qualification levels.

The pilots will fund second Level 2 qualifications in priority sectors and locations based on the evidence established by the RSPs, including the construction and food and drink sectors where there are significant skills issues across the North. Each region also possesses sectors where there is a gap in the provision of vocational Level 2 and Level 3 skills that inhibit the regional economy.

July 2005 – key sectors idenified – confirm evidence base – detailed project plan for roll-out – target employers identified August 2005 Roll-out of pilots across three regions

Evaluation (up to £0.5m) This will establish the extent to which investment in second Level 2 qualifications and the stimulation of employer investment in Key Level 3 qualifications can produce a significant impact upon skills and productivity in the North. The evaluation will be designed to generate case studies and promotional material for these approaches which are clearly successful.

Summer 2005 Evaluation model developed July 2005 Evaluation commenced 2007/8 Evaluation evidence produced showing high levels of private training investment evident in priority sectors

Manager responsible: Andrew Heydeman Lead RDA: Northwest Development Agency

Meet Employer Skills needs

31

C6, 7, 8 THE NORTH’S CONNECTIVITY To achieve at least 17.2 million business and 6.4 million inbound leisure travellers each year through northern airports by 2030, as a key contributor to the overall target of 82 million passengers per annum identified in the Future of Air Transport White Paper.

To increase ship arrivals and throughput tonnes of northern ports to around, respectively, 25% and 35% of the national total by 2010.

To reduce congestion on our inter-urban strategic road network to below the national average, where appropriate, by 2010.

The North lies at the crossroads of nationally strategic east-west and north-south transport corridors and has a strong network of motorways, trunk roads and rail services which serve our major towns and cities. International evidence demonstrates that regions prosper when they are well connected internationally and internally, and that world-class transport links are essential elements of competitive advantage. We are, therefore, focusing our immediate efforts on: • improving surface access to Manchester Airport, especially by rail, as well as identifying how to secure the growth of all the North's airports • improving access to the North's sea ports as part of a national framework which would help reduce pressure on the road and rail routes serving ports in the south • creating better integrated public transport services within and between our City Regions. Bus services will be the dominant mode of travel but we also see the need to invest in better rail links – particularly between the City Regions centred on Manchester and Leeds and to boost the capacity of the M62 corridor.

Growth Fund Resources £m 2005/06

1.0

2006/07 & 2007/08

11.0

Total

12.0

32

The North’s Connectivity

We are determined to make these changes and others detailed in our Growth Strategy over time.

The Government’s White Paper recognised the importance of having a transport network that can meet the challenges of a growing economy. It also acknowledged the need to give its delivery partners incentives to develop and deploy coherent, innovative, local and regional transport strategies through measures such as the Transport Innovation Fund. Although the North is well connected in certain ways (north-south rail links, several good airports and thriving ports with capacity to grow, relatively short commuting trips within most City Regions), it is poorly connected in others. We are convinced that this situation hampers growth and we are determined to change it over time. Transport projects are expensive and the North will inevitably be in competition for limited funding with other parts of the country.

The challenge for the Northern Way is therefore to identify which transport projects are critical to strengthening the North’s economic performance and addressing the £30bn gap. We have identified three key ‘enablers’ – air connectivity, increased port traffic and access between and within our City Regions.

We will use up to £12m of Growth Fund resources to deliver the evidence base to back key investments, and to deliver important ‘early win’ projects that will demonstrate the economic impact of transport investment. We will establish the Northern Transport Compact as the focal point for setting pan-northern transport Investment Priorities; to develop a detailed and robust evidence base which makes a strong economic case for further investment; and to support the early win demonstration projects.

Activity

Milestones

‘Early win’ Interventions (up to £10m) To support relatively small but potentially significant investments in terms of their economic impact and demonstrate the economic impact of transport investment. Based on objective criteria, we will consider contributions to a number of potential projects, including rail access improvements to major ports, a third platform at Manchester Airport and northern franchise enhancements to rolling stock. Up to £0.5m of the Growth Fund will be used in 2005/6 with £9.5m over the following two years.

December 2005 Project delivery plans developed and agreed March 2006 First phase of funding committed

Develop the Evidence Base (up to £2m) To undertake a significant programme of work around the 21 distinct tasks identified in the Growth Strategy which will make a robust case of the economic benefits of specific investments. As a first step, we will: a) Influence national ports policy development and develop a strategy to promote the potential of the North’s ports, b) Work closely with the North’s airports on surface access priorities, developing air services from the North and securing 5th freedom rights for Manchester Airport, c) Create a new Bus Partnership Framework (with showcase pilots), d) Develop the case for increasing capacity through the Manchester Rail Hub and longer term infrastructure enhancements and e) Develop a Route Action Plan for the M62, including a best use strategy in the short term and a longer term investment plan which locks in the benefits of capacity improvements.

The full work programme for all activity will continue to be developed during 2005/6.

June 2005 Scoping study of major port potential completed December 2005 Airports access priorities agreed.

Manchester Rail Hub and M62 Route Action Plan evidence base finalised March 2006 First Bus Partnership pilot agreed

Northern Transport Compact (£nil) The Compact’s primary aim is to provide a unified voice on pan-northern transport priorities, building on the welcome recent consultation on regional funding allocations for transport. It will deliver a robust evidence base for priority improvements to the North’s transport infrastructure. The Compact will be a partnership body with membership commanding a broad range of experience and able to influence the national agenda. An initial meeting of partners in March 2005 established support for the principle of the Compact. Our next step is to agree a detailed proposal with stakeholders and Government Departments and agencies.

Summer 2005 Finalise scope and remit September 2005 Initial discussion of prioritisation of projects December 2005 Agree evidence-based submission to Spending Review 2006 2006 Develop further research base and oversee connectivity workstream

Manager responsible: John Jarvis Lead RDA: Yorkshire Forward

The North’s Connectivity

33

C9 CREATE TRULY SUSTAINABLE COMMUNITIES To create a world-class economy with superb quality of life the North must offer a wide choice of communities that are desirable places to live. Our regions offer too few such places.

while supporting within the existing framework the development of Regional Spatial Strategies (RSSs) consistent with the Northern Way principles

• develop a northern policy and investment package, including advocating changes to Government Our most popular places are straining to cope with the policies, to enable the North to expand its choice of demands placed upon them, while elsewhere we face homes and increase the replacement or innovative the quite different challenge of ‘placeless’ estates. But renewal of outmoded housing tackling these problems by focusing on the symptom has not led to lasting solutions. Nothing has yet had • facilitate providing affordable homes more quickly, the kind of impact on our regions’ places that is to suit the varied circumstances of the North necessary if we are to achieve economic success.

• investigate how we can raise the quality of our The need to try something new has been recognised, places, understanding what more needs to be in part, in the establishment by Government of its done in this area to sustain and promote market renewal programme. But we are convinced a economic growth more comprehensive focus on our regions’ places is We will also use up to £5m of the Growth Fund to needed, capitalising on the unprecedented opportunities there are to raise their quality, improving support the ODPM’s development of the Northern Way flagship project to establish the National dramatically the North’s attractiveness.

Academy for Sustainable Communities. Situated in We will utilise up to £1m Growth Fund resources to: Leeds the goal of the academy will be to promote and enhance the national pool of skills for • act to ensure new homes are located in the right sustainable communities. places for economic growth, promoting reform of the current crude approach to homes provision, Growth Fund Resources £m 2005/06

0.25

2006/07 & 2007/08

0.75

Total

1.0

Academy for Sustainable Communities

5.0

34

Create truly Sustainable Communities

Activity

Milestones

Locating new homes in the right places For too long planning homes provision in the North has focused more on numbers than quality and range. In 2005/6 we will develop the evidence for reforming this crude approach to planning homes provision in RSSs. Alternative methods suitable for the differentiated North will be proposed linking housing markets analysis and economic prospects so that in future homes will be located in the right places.

We will also work in 2005/6–2006/7 with regional partners to support, within the existing framework, development of RSSs consistant with the Northern Way principles.

June 2005 Projects scoped, stakeholders consulted, and invitation to tender issued July 2005 Contract awarded and project inception Autumn 2005 onwards Project outputs, with submission to Government Summer/Autumn 2005 RSSs formal consultation

Widening the choice of homes through increasing replacement and innovative renewal Many of our homes across the North are outmoded, built for a different era and different requirements. We need to replace these unpopular homes with a wider choice of ones appropriate for the 21st century and beyond. Market renewal is enabling us to make a start. But faster, more ambitious change is necessary if we are to achieve economic success. In 2005/6 we will develop a policy and investment package to speed up replacement and renewal together with expanding the choice of homes.

Summer 2005 Policy and investment package options analysis carried out September/October 2005 Selected options developed in detail December 2005 Preferred package recommended to Government as part of submission to Spending Review 2006

Making homes affordable in the North As in London and the South East, the North also faces the challenge of a lack of affordable homes in particular places or owing to specific circumstances. Regional Housing Strategies are identifying requirements for affordable homes and RSSs, setting appropriate targets to fulfil them.

In 2005/6 the Housing Corporation will review ways of delivering more affordable homes, more quickly, to maximise the value from its investment in the North.

July–September 2005 Policy and investment package option analysis carried out October 2005 Selected options developed in detail December 2005 Preferred package receommended to Government as part of submission to Spending Review 2006

Raising the quality of our places In the long-term, fundamentally raising the quality of all our places is vital.

Later in 2005/06 we will commission a research programme examining the nature of our places now, how raising their quality will contribute to economic success, the actions already under way to achieve this, and what more needs to be done.

Autumn 2005 Draft programme specification prepared Spring 2006 Programme begins

Public and private sector investment The significant public sector investment in delivering sustainable communities must be both continued and deployed more effectively.

We will make the case for this in the 2006 Spending Review.

We have also commissioned a study examining the options for securing private sector investment, specifically in support of delivering sustainable communities.

Early July 2005 Report on private sector investment options Autumn 2005 Spending Review 2006 is expected to begin December 2005 Northern Way contribution submitted June/July 2006 Spending Review 2006 is expected to conclude

Manager responsible: James Cruddas Lead RDA: One NorthEast Activity

Milestones

Develop relevant skills, in particular by establishing the Academy for Sustainable Communities in Leeds (up to £5m) This initiative (led and largely funded by ODPM) based in Leeds will promote and enhance the national skills base for planning, delivering and maintaining sustainable communities. It will build on the North’s existing high profile activities in this area, with extensive public and private sector engagement to become a major flagship initiative. The Business Plan for the project has just been prepared and the Growth Fund will be used to further the delivery of the project, which is expected to start operating in late 2005/6.

June 2005 Board appointed, project approved September 2005 Initial programmes started March 2006 Full roll-out under way

Manager responsible: Barra Macruairi Lead RDA: Yorkshire Forward Create truly Sustainable Communities

35

C10 MARKET THE NORTH TO THE WORLD We will use up to £12m of Growth Fund resources to create a Northern Way ‘offer’ that will attract investors, tourists and entrepreneurs to the North.

This will be based on building a highly positive image of the North and making the most of our cultural assets. The work relating to tourists and investors will build upon the substantial base of activity already under way in each of the three regions. We are taking forward a small number of key projects that will demonstrate clear added value through partnership working, achieving significant outputs and outcomes.

For the North to become truly attractive, we must We have worked closely with the Department for address the negative perceptions that remain and Culture, Media and Sport regional partners and raise our profile as a successful modern economy. delivery bodies and ensured that these initiatives are Regional branding is important and the RDAs have had some success in attracting investment. But more complementary to existing and proposed activities at a regional level and more locally. In 2005/6, two can be achieved by speaking with one voice and major projects – marketing to investors and overseas promoting the North’s assets as a whole. This will tourists – will get under way alongside preparatory help to change attitudes and ramp up investment work to develop the other projects. interest among businesses and individuals from abroad who do not have the same knowledge of English regions as the home market.

We will increase the number of overseas tourist visits to the North by 20% to 3.5 million by 2008, against a baseline average of 2.9 million visitors per year from 1999 to 2002, with a further increase to 4.5 million visits by 2015. We will also define outcomes for increases in spend per visitor, increases of UK visits, along with plans for the sustainable management of increased visitor numbers.

Growth Fund Resources £m 2005/06

2.4

2006/07 & 2007/08

9.6

Total

36

12.0

Market the North to the World

Activity

Milestones

Attract European & Overseas Tourists (up to £4.8m) To launch a marketing campaign to place the North of England and its constituent brands in key international markets as a ‘must visit’ destination. It will complement existing activities and raise customer awareness, initially in the USA and Europe, by developing touring campaigns, travel trade programmes and web-based short breaks, linked to the ‘England’s North Country’ infrastructure. Target campaign ahead of summer 2007.

Growth Fund spend of £4.8m in 2006/7 will seek to generate up to 400,000 qualified leads and an estimated £75m additional expenditure by increased tourist numbers.

April 2006 Management and specification agreed June 2006 Agencies appointed, website development, media programme agreed December 2006 US campaign and European short tour media programmes launched 2007 Programme performance evaluated with view to mainstreaming

Marketing to Investors (up to £2.7m) A pan-northern initiative to provide marketing support to existing joint inward investment offices in the USA and Australia. Targeted advertising campaigns and promotional events will be used to raise awareness of key decision makers (supported by existing RDA activity on clusters and innovation).

Growth Fund resources of £2.0m in 2005/6 and subsequent investment followed to generate an additional 14 investments during the course of the campaign.

September 2005 Promotional campaigns launched March 2006 Initial progress assessed with a view to mainstreaming

Culture, Economy and Visitor Perceptions (up to £4.5m) To strengthen the North’s cultural offer and image to support economic growth by coordinating and promoting cultural events and attractions; by developing a programme of public art and high profile displays at key gateways; and by raising the profile of the North in the media. Tangible outputs include a joint northern cultural events calendar, improved media profile, and at least five high profile ‘Welcome to the North’ public art works that change perceptions among tourists and investors. In the longer term, outcomes from improving the image of the North will positively impact upon drivers of productivity and growth.

In 2005/6, up to £0.4m Growth Fund will be used to develop these programmes with a view to full implementation in later years.

July 2005 Contract agreed to develop work on all three projects December 2005 Northern events brochure produced, feasibility studies completed and next steps agreed March 2006 Events brochure disseminated, first Welcome to the North works commissioned, media proposals under way 2006-8 Continuing implementation and capital spend on Welcome to the North works

Manager responsible: Les Newby Lead RDA: Yorkshire Forward

Market the North to the World

37

D LINKAGES: CITY REGIONS AND INVESTMENT PRIORITIES The Northern Way priorities and the Growth Fund will bring benefits to the City Region, urban and rural areas across the North.

Thus, we expect that the Pathways to Work enhancements (C1) will inform development of Government policy to make it easier for people to move from Incapacity Benefit back into work in every City Region, urban and rural community. Similarly, we see the Northern Enterprise in Education programme and the Northern Leadership Academy (C3) as benefiting a wide range of individuals from a variety of backgrounds.

We envisage that companies across the North will have the opportunity to participate in the work of the new Research Centres, Centres of Professional Excellence and the Knowledge Transfer Partnerships (C2). Our programmes to capture a larger share of global trade, (C4) initially featuring chemicals, food and drink and defence, will offer opportunities to companies in these sectors across the North. Also, our three RSPs will be working with employers in key sectors to meet skills needs (C5) where there are significant shortages across the North. The efforts to market the North as a whole (C10) will benefit the entire North.

The evidence being gathered to secure transport investments being promoted under the auspices of the Northern Way (C6, 7 and 8) focus on the North’s most important road and rail links, and those required to improve access to key ports and airports. Similarly, the evidence being gathered to support increases in investments in housing and sustainable communities and the Academy for Sustainable Communities (C9) will bring benefits to the North as a whole.

More specifically, however, the Northern Way Investment Priorities will impact on the eight City Regions as follows: Liverpool: We will be enhancing the Pathways to Work programme in Knowsley in 2005/2006 and subsequently in Liverpool. We will also be considering carefully the case for road and rail access improvements to the Mersey Docks.

Improvements to the M62 should bring specific benefits. We envisage that Merseyside’s chemicals companies will be active participants in the new centre of excellence for the chemical and pharmaceutical industries (see below).

Manchester: Similarly, we will be supporting a pilot to enhance the Pathways to Work programme in Manchester as part of Phase II of the work. The Centre of Excellence in Biocatalysis, Biotransformations and Biocatalytic Manufacture project aims to link research facilities in Manchester with those elsewhere across the North. Manchester is also a designated Science City and its Knowledge Capital Programme highlights the central role universities are playing in City Region economies. Our efforts to increase the capacity of the Manchester Rail Hub, and the M62, and improving surface access to Manchester Airports will benefit the North as a whole, but they will obviously bring specific benefits to the Manchester City Region.

Sheffield: We will be supporting a pilot to enhance the Pathways to Work programme in Barnsley and Rotherham. Our efforts to promote improvements in the Sheffield-Manchester and Sheffield-Leeds rail links will bring particular benefits to this City Region.

Leeds: We will be piloting an approach to helping Incapacity Benefit claimants in Bradford back to work outside the Pathways to Work scheme. The M62 Route Action Plan and trans-pennine rail links will be of particular importance to the Leeds City Region.

The national Academy for Sustainable Communities is now to be located in Leeds. York, one of the UK’s first Science Cities will be leading the way in promoting university and industry collaboration.

Hull and Humber Ports: We are piloting an approach to helping Incapacity Benefit claimants back to work outside the Pathways to Work in the City Region. We will be promoting road and rail access improvements to the Humber ports, which along with the M62 Route Action Plan will benefit the City Region.

Tees Valley: We are piloting enhancements to the Pathways to Work programme in the Tees Valley as part of Phase II. The Centre of Excellence for the chemical and pharmaceutical industries aims will build upon the strengths of the Centre for Process Innovation in Tees Valley. Our efforts to improve access to the North’s major ports should bring benefits to those companies who trade through Teesport.

Tyne and Wear: Enhancements to the Pathways to Work programme will commence in Easington in 2005/2006 and a second project in Sunderland will Central Lancashire: We will be supporting the be identified as part of Phase II. The Northern Pathways to Work programme in Lancashire West as Technical Design Centre is being created in part of Phase II. We see that the companies in the NewcastleGateshead and Newcastle’s Science City tourism and aerospace/advanced manufacturing programme is being developed. We will also develop industries will be key participants in Northern Way the evidence to support investment in upgrading the activities to support these sectors.

Gateshead western by-pass.

38

Linkages: City Regions and Investment Priorities

Linkages: City Regions and Investment Priorities

39

E HOW WE WILL DELIVER Management and Accountability Figure 2

Steering Group Management Group Task Group

Secretariat

One NorthEast

City Regions

Workstreams

Yorkshire Forward

City Regions

The Steering Group provides the strategic direction for the development of the Northern Way. The Task Group gives advice and support to the Steering Group and undertakes the detailed work involved in workload allocation and reporting of progress. The workstream and activity leads are responsible for ensuring that robust proposals are developed, appraised and commissioned according to established procedures.

We have established a Management Group of Accounting Officers comprising the three RDA Chief Executives, with ODPM as observers. Collectively, they will be responsible for the Growth Fund, confirming the initial strategic allocations to the workstreams set out in this Business Plan and signing off projects for approval.

The Director of Implementation will act as budget holder for the Growth Fund on behalf of the three RDAs and ODPM. The Secretariat will ensure that

40

How We Will Deliver

Workstreams

Northwest Regional Development Agency

City Regions

Workstreams

the actions in this Business Plan are delivered on time, resources are deployed within budget and objectives are met. The Secretariat and support costs amount to ÂŁ750,000 in Year 1 and ÂŁ950,000 in subsequent years.

One NorthEast will act as accountable body for the Growth Fund and its Finance Director will have strategic financial management responsibility. The lead RDA for each key Investment Priority and its associated workstream will be accountable for individual projects within the workstream, appraising and approving projects and contracting with suppliers according to the RDAs standard procedures. Lead RDAs and responsible managers are listed in Section C. We are confident that these arrangements are robust and embody clear lines of responsibility that utilise the capabilities of all three RDAs and use resources efficiently.

Engagement and Communications Working with our stakeholders Effective stakeholder engagement is essential if we are to establish the support and the partnerships required to deliver our ambitious targets. We need key stakeholders to understand and actively support our aims. We will listen to what they say and will reflect their views in our delivery plans. An enormous amount of effort has already gone into developing the relationships between stakeholders in the Northern Way. The fruits of this are evident from the pace of development of the Northern Way, its high profile and a number of ‘early wins’.

We will use the range of influential individuals including Steering Group members (our ‘champions’) who have a detailed knowledge of our plans to help us to gain stakeholder support where it is required.

We will develop a range of partnerships within the public and private sectors to ensure we deliver.

Our stakeholders include: Ministers and leading politicians; Government Departments, local authorities and public agencies; Regional Assemblies and sub-regional and local partnerships; private sector business and representative bodies; educational institutions and centres of expertise; rural and environmental sectors; voluntary, community and faith organisations.

Communications Our communications strategy identifies our key stakeholders and the messages that we wish to communicate to each. We will specifically deliver: • a Northern Way newsletter to keep stakeholders updated, to be launched in July and published four times each year • a proactive plan to input to key national and regional publications, ensuring that Northern Way success stories are readily available to all • a revised web site in July that uses new ‘push’ technologies so that more stakeholders gain detailed information on progress of our delivery plans • input to other people’s events with audiences that match ours to ensure our high profile is maintained • a major Northern Way Summit for partners in November and a series of linked thematic and geographical stakeholder events that give full updates on progress and shape our future plans

organised by Government, for example, relevant events organised as a part of the UK Presidency of the EU. We will also engage with politicians (national and local) from across the political spectrum to ensure continued wide support.

Engaging the private sector Substantial effort has already gone into informing and engaging business leaders across the North. There is a strong private sector presence on our Steering Group and close to 100 of the North’s largest businesses attended a briefing led by our private sector members in March 2005. Several businesses have already hosted their own discussions of the Northern Way involving their clients and other firms, which we have supported. To take forward the engagement process the Leeds Chamber of Commerce is organising a Northern Way meeting for all of the northern Chambers of Commerce in Summer 2005. Further events will take place across the North throughout the year.

Specific initiatives to engage private firms directly in delivery include: • proposals for the private sector to be involved in a Northern Property Investment Fund to focus on our priorities for land assembly and funding • development of a toolkit for development agencies and developers to open access to new development areas via a set of ‘off the shelf’ mechanisms that offer a range of options for sharing costs and risks.

Engagement and communications plan and budget To enable us to deliver our engagement and communications strategy we have allocated a budget for Year 1 as £400,000 and with £510,000 allocated for years 2 and 3. This will allow us to deliver our events, engagement and influencing and media plans as follows (pro rata years 2 and 3): • promotional events

£195,000

• engagement programme

£180,000

• communications and publications

£80,000

• market research and evaluation

£55,000

A detailed communications plan will be presented to the Management Group in July for approval

We will use key dates in Government and business calendars that offer communications opportunities.

These will include the annual Pre-Budget Report in November, the Budget Report in March and the Spending Reviews in 2006 and 2008. Where appropriate, we will participate in high profile events How We Will Deliver

41

Growth Fund Budget The following table describes the deployment of the £100m Growth Fund over the 3 year period of the Expenditure £m Activity C1 Bring More people into Work 3 Pilots: Easington Knowsley South Yorkshire* Evaluation/Management 6 other Pilots: Various 2x Non DWP Pilots Total C2 Strengthen Knowledge base KTP Professional Excellence Research Centres Design Centre North Total C3 Build a More Entrepreneurial North Enterprise Education Graduate and FE Other Enterprise Northern Leadership Academy Total C4 Capture a Larger Share of Global Trade CoEBio3 Chemical Innovation Network Defence Industry Food & Drink Collaboration Phase II Clusters Total C5 Meet Employer Skills Needs ETP (skills offer) Total C6-8 The North's Connectivity Transport Compact/Evidence Base Early demonstrations Total C9 Create Truly Sustainable Communities Sustainable Communities Evidence Academy for Sustainable Communities Total C10 Market the North to the World Overseas Tourists Investors Culture and perceptions Total City Region Development Programmes Support for development Total Support and Contingency Engagement and Communications Secretariat Contingency Total GRAND TOTAL *South Yorkshire pilot already fully funded

42

How We Will Deliver

Business Plan, with the focus of detailed expenditure being on Year 1.

2005/6 Capital Revenue Total

2006-8 (Indicative) Total

All Years Total

– – – –

0.100 0.100 – –

0.100 0.100 – –

0.900 0.900 – 1.000

1.000 1.000 – 1.000

– – –

– – 0.200

– – 0.200

7.000 2.000 11.800

7.000 2.000 12.000

– – – – –

0.750 – 0.100 – 0.850

0.750 – 0.100 – 0.850

2.250 1.000 5.900 5.000 14.150

3.000 1.000 6.000 5.000 15.000

– – – – –

0.300 0.200 – 0.200 0.700

0.300 0.200 – 0.200 0.700

5.700 0.800 1.000 4.800 12.300

6.000 1.000 1.000 5.000 13.000

0.400 – – – – 0.400

0.400 0.300 – – – 0.700

0.800 0.300 – – – 1.100

2.300 0.600 0.850 0.850 0.300 4.900

3.100 0.900 0.850 0.850 0.300 6.000

– –

2.000 2.000

2.000 2.000

13.000 13.000

15.000 15.000

– 0.500 0.500

0.500 – 0.500

0.500 0.500 1.000

1.500 9.500 11.000

2.000 10.000 12.000

– – –

0.250 – 0.250

0.250 – 0.250

0.750 5.000 5.750

1.000 5.000 6.000

– – 0.200 0.200

– 2.000 0.200 2.200

– 2.000 0.400 2.400

4.800 0.700 4.100 9.600

4.800 2.700 4.500 12.000

– –

0.250 0.250

0.250 0.250

1.750 1.750

2.000 2.000

– – – – 1.100

0.400 0.750 – 1.150 8.800

0.400 0.750 – 1.150 9.900

1.020 1.900 2.930 5.850 90.100

1.420 2.650 2.930 7.000 100.000

Income and Expenditure The allocation of expenditure to projects and Investment Priorities for Year 1 agreed by the Steering Group and confirmed by the Management Group is described in the table opposite. Figures for subsequent years are indicative at this stage. We plan to utilise a total of £8.8m of revenue (current) resources in financial year 2005/06. Because the Business Plan delivery will be in its early stages, our projected capital spend is only £1.1m in Year 1. Both capital and revenue expenditure will rise substantially in subsequent years.

UK Government has provided £50m for the Northern Way Growth Fund, which has been matched by an equivalent amount from the three northern RDAs. The contributions for Year 1 reflect this 50:50 split.

Income £m Source

2005/6 Capital Revenue Total

All Years Total

Northwest Development Agency One NorthEast Yorkshire Forward UK Government

0.200 0.200 0.200 0.500

1.470 1.470 1.470 4.390

1.670 1.670 1.670 4.890

16.667 16.667 16.667 50.000

Total Income

1.100

8.800

9.900

100.000

Note: Some totals may not add due to rounding.

How We Will Deliver

43

Reputational Risk The perceptions and reputation of the Northern Way A strategic approach has been taken toward risk among a wide range of stakeholders are a vital management of the Northern Way Business Plan. element of ensuring continued support for its actions Particular categories of risk have been identified and the degree of enthusiasm with which businesses as follows: and other organisations engage with us and help deliver our aims. Thus far, the Northern Way has Managerial Risk enjoyed strong support at Cabinet level, among Delivering the Northern Way will involve individuals across a number of organisations and various lines of Ministers and senior officials. If this support for the Northern Way were to diminish, it would have a leadership and command. It will require continued knock on effect, reducing the level of support offered high level commitment from each of the three

by Government agencies, other parts of the public northern RDAs and ODPM as the core sponsors. sector, businesses and the third sector.

Engagement, motivation and ensuring people possess the appropriate skills and knowledge are Therefore an important part to the activity of the critically important.

Steering Group, the RDAs and the Secretariat

Risk and Sensitivity Analysis

The Northern Way is a complex and highly visible programme of publicly funded activity. We have established structures and systems that provide leadership, clarity of responsibilities, programme management and analysis of the changing environment. The personnel involved have the skills, knowledge and the will to make the Northern Way a success.

A critical factor will be effective and clear communications between the Secretariat and those involved in the workstreams, some of whom are separated by large distances. Electronic communication is already widely used but this is also backed up by relationships built on trust. We will invest in strengthening the relationships between the Secretariat and the workstream leads, and between the workstream leads themselves.

Software and systems are in place for managing expenditure and tracking actions and outputs. These will be further developed as an early priority in order to enable them to work effectively across the entire northern region.

Market Risk For each of the ten Investment Priorities, we have undertaken an assessment of the market risks in each case. This has identified the circumstances in which the activities described in this Business Plan would have to be substantially reconfigured, or even halted. We have made an assessment of the likelihood of such changes being required. We have also established systems within each workstream that track market conditions and allow judgements to be made as to whether risks are changing over time.

44

How We Will Deliver

throughout the Business Plan period will be to invest time in strengthening even further the relationship with key politicians and senior Government officials across a range of departments.

Other stakeholders in the public, private and third sectors are vitally important too. Therefore our plans include a programme of active engagement with the private sector, focusing on those businesses with the greatest potential to bring both resources and expertise to the delivery of our goals. We have also incorporated a programme of stakeholder relationship management which will enable a wide range of individuals and organisations to play an important role in the development and delivery of our plans.

Wider perceptions of the Northern Way play an important part in positioning it as a positive force.

Therefore our activities include communicating the successes of the Northern Way to a wide audience as the Business Plan is delivered.

Financial Risk • Growth Fund There is a financial management risk were projects to overspend or underspend, or be over-committed.

In order to cover the financial management risk relating to project delivery, we are instigating a system that will build upon the well-established RDA procedures and will work across the three regions.

Therefore, we are clearly dependent on the financial management arrangements of each of the three RDAs. Additional arrangements have been put in place to manage this. These are described in the Management and Accountability section.

• City Region Development Programmes These plans are ambitious and, for the most part, are not currently fully funded. However, there is a process of assessment, refinement and negotiation to go through before the funding gap for each CRDP is totally clear. The first step is to agree the priorities in each and investigate how and when these might be resourced. Only after this is undertaken can the financial risk be properly assessed. The following chapter on our Forward Plan explains how we will go about this.

Risk Management In order to manage the above risks – and others which we identify in the course of events – we will produce a risk register that the Steering Group will consider regularly. This will ensure that risks are being managed collectively as well as individually.

Sensitivity Analysis We have identified the major market factors that could affect the delivery of our plan. They relate primarily to macro-economic conditions.

Conversely, lower economic growth, falling employment and rising unemployment would make it particularly difficult to get substantial numbers of people on Incapacity Benefit into work (C1).

Company investment in innovation (C2), collaboration (C4) and skills (C5) would fall and Government investment in housing (C9) and transport (C6-8) could be adversely affected. Business starts would suffer (C3) and the North could become more difficult to promote (C10). The City Region Development Programmes would find it very difficult to achieve their aims of accelerated growth.

Our sensitivity analysis has led us to determine that, as well as monitoring local and regional market conditions as they relate to each investment priority, we will monitor macro-economic conditions as they relate to the North and the UK as a whole. We will draw upon the expertise of the three Regional Observatories to do this to ensure a common basis with the data used to inform complementary strategies (RESs and RSSs).

An acceleration in national economic growth would enhance the delivery of a number of our Investment Priorities. The resultant high demand and employment growth would increase the rate at which we could bring more people into work (C1), and build a more entrepreneurial North (C3). Generally favourable economic conditions would underpin our efforts to drive innovation (C2), develop key clusters (C4) and build sustainable communities (C9). It would also make the North easier to market (C10) and could produce greater revenues for UK Government to invest in priorities such as transport (C6-8).

However, rapid economic growth could exacerbate skills shortages and this might cause our efforts to meet employer skills needs (C5) to become more challenging. Similarly, the City Region Development Programmes would be likely to accelerate under these conditions.

How We Will Deliver

45

Forward Plan During the first 12 months of this Business Plan we anticipate that we will pass three significant milestones:

By Summer 2006: • we will have produced our first portfolio of evidence and will be able to start drawing conclusions from it

• the City Region Development Programmes will be underway and have been reflected appropriately in • in November 2005 – to draw together stakeholders Regional Economic Strategies and Regional Spatial and delivery partners across the North to review Strategies progress against the Northern Way Growth Strategy and to contribute to developing the next phase • the Northern Way will continue to be recognised by Government as an important policy driver and will • in December 2005 – to put forward a convincing begin to be an important component of submission to Government for Spending Review Government Green and White Papers so that the 2006 that seeks to influence public policy and policies expressed within these fit with our investment and the way it is deployed in the North distinctive northern approach of England in respect of our aims • in Summer 2006 – to report on progress against this Business Plan including the City Region Development Programmes and the actions arising from the deployment of the Growth Fund

• the Northern Way is recognised by stakeholders as ‘the way we do things around here’ and appears as the context in which major initiatives in the North are developed.

Our proposals for consideration by Government in its Spending Review 2006 will include the following: • City Region Development Programmes – how we support these in securing the flexibility and funding required to meet their primary aims • connectivity – the case for further private and public investment in transport infrastructure to support our economic growth objectives • sustainable communities – the evidence for a fresh and more flexible approach to determining housing allocations • the case for an enhanced approach to skills investment to address the issues faced in the North • early evidence of how we can accelerate the move from long-term Incapacity Benefit to work for significant numbers of people In order to support both the broadening of the Northern Way agenda over time and the immediate focus on influencing public and private policy and investment, the members of our Steering Group have agreed among themselves to adopt roles as champions for the delivery of specific elements of this Business Plan.

Director’s Footnote Without a plan, we won’t succeed.

In Moving Forward: The Northern Way we described our vision for the North and our Growth Strategy to achieve it within a 20-year period.

This Business Plan has shown how we will begin to implement that strategy. In it, we articulate who will do what, by when and what the result will be.

The Northern Way Steering Group has given clear direction. I have a team in place and proper procedures for accountability and management.

The Northern Way enjoys strong and growing support for its aims and its actions – and that is not without constructive challenge.

We’ve made the plan. It is my job now to make it happen.

Vince Taylor Director of Implementation, The Northern Way

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How We Will Deliver

MEMBERSHIP OF STEERING GROUP Chair Sir Graham Hall

Former Chairman, Yorkshire Forward

Vice Chairs Professor Drummond Bone Sir Ian Wrigglesworth

Vice-Chancellor, University of Liverpool Chairman, UK Land Estates

Members Cllr Peter Arnold Mr Ed Balls MP Cllr Peter Box Cllr Derek Boden Mr Alan Clarke Mrs Irene Dorner Mrs Margaret Fay Cllr Bob Gibson Mr Bryan Gray Cllr Andrew Carter Mr Terry Hodgkinson Mr Mark I’Anson Cllr Richard Leese Mrs Linda Pollard Mr John Roberts Mr David Taylor Mr James Tuckey

Leader, Newcastle City Council Expert Adviser Chairman, Yorkshire and Humber Assembly Leader, North West Regional Assembly Chief Executive, One NorthEast and Chair of the Northern Way Task Group General Manager, HSBC Bank plc Chairman, One NorthEast Chairman, North East Assembly Chairman, Northwest Regional Development Agency Leader, Leeds City Council Chairman, Yorkshire Forward Private Sector (North East Region) Leader, Manchester City Council Chairman, Learning and Skills Council Chief Executive, United Utilities Chairman, DTP Limited Deputy Chairman, English Partnerships

Observers Mr Jonathan Blackie Mr Steven Broomhead Mr Martin Havenhand Mr Richard McCarthy

Regional Director, Government Office for the North East Chief Executive, Northwest Regional Development Agency Chief Executive, Yorkshire Forward Director General, Office of the Deputy Prime Minister

ABBREVIATIONS CIC CRDP DTI DWP GVA IB KTP LSC NETP ODPM PTW R&D RDA RES RSP RSS SIC SME

Centre of Industrial Collaboration City Region Development Programme Department of Trade and Industry Department of Work and Pensions Gross Value Added Incapacity Benefit Knowledge Transfer Partnerships Learning and Skills Council National Employer Training Pilot Office of the Deputy Prime Minister Pathways to Work Research and Development Regional Development Agency Regional Economic Strategy Regional Skills Partnership Regional Spatial Strategy Science and Industry Councils Small and Medium-sized Enterprises

47

Contacts The Northern Way Business Plan, appendices and highlights are available on the website www.thenorthernway.co.uk For a hard copy of any document or for more information contact The Northern Way Secretariat or your local regional development agency: The Northern Way Secretariat Stella House, Goldcrest Way, Newburn Riverside, Newcastle upon Tyne, NE15 8NY Tel: 0191 229 6583 One NorthEast Stella House, Goldcrest Way Newburn Riverside, Newcastle upon Tyne, NE15 8NY Tel: 0191 229 6200 Northwest Regional Development Agency PO Box 37, Renaissance House, Centre Park, Warrington, Cheshire, WA1 1XB Tel: 01925 400100 Yorkshire Forward Victoria House, Victoria Place, Leeds, LS11 5AE Tel: 0113 394 9600