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Interim Report May 2018

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Interim Report May 2018 Interim Report May 2018 www.cpier.org.uk Foreword FROM THE CHAIR OF THE REVIEW, DAME KATE BARKER The Cambridgeshire and Peterborough Independent Economic Review (CPIER) is pleased to present the interim report, which has been led by the Cambridgeshire and Peterborough Independent Economic Commission (CPIEC). It is co-funded by the Cambridgeshire and Peterborough Combined Authority, the Business Board of the Combined Authority, and Cambridge Ahead. This is of course the Commission’s report. The views expressed have been developed as independent – as our funders asked us to do. The Commission is now roughly at the half way stage in the review. We have gathered a great deal of evidence. Much of the evidence we have is data on the Cambridgeshire and Peterborough economy. Most of what we have now is from published sources, and we have commissioned a range of new research too. Some of that is available to us now and informs this report. Much of the research is still underway and will be reflected in the final report. At this stage, we have not set out a wholly definitive analysis of where the economy of the area is heading and what should be done about it. This is more our view of where the economy is today and how it got there, an important starting point for the review. While the area the review has responsibility for is defined by its administrative geography, we are primarily concerned with the economics of the area, and we therefore refrain from artificially simplifying, or forcing together, the economic geography. We also acknowledge where there is evidence of significant economic linkage beyond the administrative area. But the interim report aims to do much more than set out data and economic evidence. We have been clear from the outset that no Commission or process of review could fulfil the terms of reference we have been given (available here1) without taking full account of the views of the people, businesses and other organisations whose work contributes most to the creation of the economic present and future of the area. That is why we issued a call for evidence in January. We received 52 responses, which are summarised in this interim report, and for which we are very grateful. The Commission has also had a range of very informative discussions with the Local Authorities of the area and with the Combined Authority Mayor, as well as other local stakeholders. These too are reflected in this report. We use our baseline economic findings and the views of a wide range of people and organisations to set out what we see as the most important policy challenges facing Cambridgeshire and Peterborough in the years ahead. The Commission believes these are the most important to tackle if the area is to meet the goal set out in its Devolution Deal with Government (to increase economic output by nearly 100% over the next 25 years, from £22bn to over £40bn). Every area will have to maximise its contribution, where the challenges, and what success will look like, are different. While it is critical to plan for the projects of the future, it is even more important to do the right things now. This will mean ensuring strong growth continues in high-output areas, and laying the ground for future growth in lower-output areas. In our final report, we will offer our views on how this goal might best be achieved and a series of policy recommendations which support it. Here we aim to lay the foundations for the final report. Whilst we would welcome views on any aspect of this report, the policy issues are the most important and where we would be particularly interested to receive feedback. With this in mind, we are inviting comments on the interim report. You are welcome to submit any responses, views and supplementary evidence to the Commission at [email protected]. We would be very grateful if responses were sent by 8th June 2018. Dame Kate Barker 1http://www.cpier.org.uk/about-us/terms-of-reference/ CONTENTS Executive Summary 4 1. The Economy of Cambridgeshire and Peterborough 1.1 Overview 8 1.2 Economic Geography 10 1.3 Growth 16 1.4 Business 23 1.5 Human Capital 30 1.6 Cambridgeshire and Peterborough 34 Futures 2. Perspectives On The Future Of Cambridgeshire And Peterborough 2.1 Introduction 37 2.2 The Economic Geography of 38 Cambridgeshire and Peterborough and the Nature of Growth 2.3 The Role and Scope of Industrial Policy 40 2.4 The Social Inclusion Dimension to 43 Growth 2.5 Human Capital: Education and Skills, the 44 Role of Higher Education and Migration 2.6 Transport and Infrastructure 46 2.7 Housing 50 2.8 The role of the public sector 52 3. Towards The Final Report 3.1 Questions for further consultation 53 3.2 Next steps 53 Appendices Appendix 1: Calculation of the CA/BRES 54 combined measure of growth in Corporate Employment Appendix 2: Business overview of each 54 district Appendix 3: Employment location quotients 58 according to BRES data 4 EXECUTIVE SUMMARY Executive Summary THIS REPORT felt everywhere (although not by everyone). this can be unlocked. However, the relatively This is the Interim Report of the CPIER, which What is clear, though, is that there are different poor connectivity of the fens, which for the is the first major project undertaken by the dynamics at play. The area can be broadly purposes of this report broadly comprises CPIEC. It has been commissioned and funded understood as three economies, based the Districts of Fenland, and parts of by Cambridgeshire and Peterborough around Cambridge, Peterborough, and the Huntingdonshire and East Cambridgeshire, Combined Authority, the Combined Authority’s fens. As with any characterisation, it simplifies is one very important factor in shaping both Business Board (formerly the Greater – there are, for instance, significant crossover recent and more longstanding, lower growth Cambridge Greater Peterborough Local areas – particularly Huntingdonshire, which in the area. The area has a large agribusiness Enterprise Partnership) and Cambridge looks to Peterborough in the north, and the and food sector, which plays a big part in Ahead. This is a report of the CPIEC. It is Cambridge area in the south. feeding the nation – 37% of English acreage intended to inform policy decisions undertaken given over to the growing of vegetables in by the Mayor, Combined Authority, and Peterborough has been and remains a the open is found in the fens4. However, others but it is an independent report and diversified economy with strong traditions the area’s economy has historically grown the views expressed here are those of the in manufacturing and engineering, but with modestly, and the value of its output is below Commissioners only. a strong base in services too. It has strength that of other areas. in its excellent rail connections to London This interim report sets out the progress in and the Midlands via the East Coast Mainline, The remaining part of the area is centred on the CPIER to date. It is intended to stimulate allied to reasonable national road connectivity Cambridge, and includes South Cambridgeshire debate and views on its contents are and significant room for growth, making it an and parts of East Cambridgeshire and welcomed. Throughout the report we have ideal centre for a range of economic functions Huntingdonshire. This large area has grown highlighted key questions the final report will requiring otherwise scarce, affordable but dramatically for some decades, fuelled to a answer, and here we would especially value connected premises. This is reflected in a significant degree by the growth of Cambridge’s input. The closing date for views on the report quickly growing population – currently the innovation-rich boom, which is concentrated is 8th June. Following the completion of the fourth fastest-growing city in the UK2. in the city and South Cambridgeshire, but has research undertaken by the Commission and Nonetheless, Peterborough’s economic spread out from there, and is complemented further consultation and deliberation over the evolution and the loss of traditional jobs by similarly strong performance in the spring and summer, the final report of the has had an impact in some parts of the city, southern part of Huntingdonshire. This is a CPIER will be launched in September 2018. creating localised problems. phenomenon that has historic roots dating back to the 1960s, but has been refreshed by Peterborough has long had a natural role as new waves of investment and technological THE ECONOMY OF CAMBRIDGESHIRE the gateway to the fens and there is some development. This report analyses the AND PETERBOROUGH evidence of this today in commuter patterns. nature of growth in and around Cambridge Section 1 of the Report sets out the evolution Though (as with the connectivity south to and concludes that this growth is driven by of the economy of Cambridgeshire and Cambridgeshire) relatively poor road and rail locally-specified factors (and may be slow to Peterborough in recent years. It demonstrates connectivity have limited links into this area, spread as a result), and that the natural pull there have been markedly different trends the exception being relatively well-connected of this growth is towards the south and east. across the area. There are real reasons for northern Huntingdonshire. optimism – business birth rates in all districts The economy, travel to work and housing have increased over the last six years, GVA The fens hold the area’s greatest natural patterns of Cambridgeshire and Peterborough (Gross Value Added – a measure of the value asset in the extremely high quality arable are dominated by these three core areas of output of the economy) has been increasing land – 50% of England’s grade 1 agricultural which adjoin each other in an indistinct way.
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