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The Cornwall and Isles of Scilly Local Enterprise Partnership (LEP) Was Launched in May 2011

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The Cornwall and Isles of Scilly Local Enterprise Partnership (LEP) Was Launched in May 2011 Written evidence submitted by Cornwall and Isles of Scilly Local Enterprise Partnership (INS0039) The Cornwall and Isles of Scilly Local Enterprise Partnership (LEP) was launched in May 2011. Private sector-led, it is a partnership between the private and public sectors and is driving the economic strategy for the region, determining local priorities and undertaking activities to drive growth and the creation of local jobs. Executive Summary The Government’s Industrial Strategy should be refreshed to include wider economic, social and environmental factors that are now in play post Covid 19 by building on all of England’s Local Industrial Strategies. Industrial Strategy Grand Challenges should be updated and localised, within a national framework, and should consider the levelling up agenda, climate change, regional imbalances and measures to reduce inequality/social inclusion. The refresh should use the guiding principle of devolving decision making and delivery. The focus on key sectors in the current Industrial Strategy is sufficient if a narrow view on “growth” is used or if “trickle down” economic policies are adopted. However, whilst this approach will raise the productivity and growth of some areas it will not benefit all areas equally and those areas furthest from key industrial centres will see little or no benefit. As the future prosperity of the UK depends on unlocking the potential of all its areas, towns, high streets businesses and residents the revised Industrial Strategy needs to be more inclusive and allow for different areas to make different contributions to overall productivity levels and growth. The immense productivity gap that currently exists between the prosperous South East of England and the rest of the country on the other must be therefore be levelled-up by investing in the LEP areas that are currently lagging behind. The economic shock caused by Covid 19, which the OBR estimates as the largest ever shock to the UK economy1, has also hit some areas in the UK worse than others and this impact is expected to exacerbate the need for significant and sustained levelling up. The current economic impact of Covid 19 on Cornwall and Isles of Scilly is outlined in Appendix 1. 1. Industrial Strategy (IS) Priorities: how does the Government understand, diagnose and monitor the underlying constraints on UK economic growth and is 1 OBR ‘Fiscal sustainability report’ July 2020 this informing the IS? How has Covid-19 impacted this evidence-base and should the IS change to reflect this?: The majority of Government policy is top down or centralised relying on “trickle down” benefits to local areas from national interventions. It is largely designed to benefit large metropolitan areas and/or City Regions and is not designed to stimulate growth in rural and peripheral areas such as Cornwall and the Isles of Scilly. To support this conclusion a large body of recent research reports2 highlight that the current centralised system of government funding and policy design, delivery and decision-making delivers sub optimal results in terms of economic growth and addressing economic inequalities between different areas of the UK. They all support a more localised approach with devolution of budgets and decision making to local areas as a key design principle for future Government policy design and implementation. The evidence base that was used to support the creation of the Industrial Strategy is now dated and was created at a spatial scale that was too large to clearly identify regional inequalities and regional opportunities. Covid 19 has exacerbated regional inequalities and therefore the Industrial Strategy needs to be revised to provide a supportive environment that not only re-frames the narrative around ‘the central and the local’ but provides areas such as Cornwall and the Isles of Scilly a greater level of control over their own policymaking, development and delivery. A place- based and sector ‘inclusive’ approach is required not only because of the place-based variation in the size of economic contraction caused by the pandemic, but also because different regions have different strengths and opportunities. The productivity challenge in Cornwall and the Isles of Scilly is multi-faceted, requiring orchestrated and long-term action across the foundations of productivity. Therefore, the focus for recovery should not only be on national priorities for certain specific sectors but on the challenges, goals and vision for the future economy at a local level. Continued focus on the Five Foundations of productivity allows local areas to define how these relate to their local economy, sector mix, etc. Conditions attached to future support should focus on the delivery of the productivity outcomes required for sustainable and inclusive growth for the identified local area rather than arbitrary outputs (e.g. number of businesses supported). 2. Relevance of the IS: how can the IS be made more relevant and accessible for the UK’s supply chain, LEPs, Growth Hubs and for individual companies, 2 Grant Thornton’s Placed Based Growth – Unleashing counties’ role in levelling up England report; the UK2070 Commission independent inquiry into City and Regional inequalities in the UK; Joseph Rowntree Foundation research; the Local Government Association/ Localis study into “Fiscal Devolution” and the opportunity to adopt an international approach “Rethinking Local”; and The Institute of Fiscal Studies report entitled “Sharing Prosperity? Options and issues for the UK SPF” investors and entrepreneurs? Has it helped SMEs grow and innovate? Is it helping Ministers decide on broader market interventions and policies to recover the economy following Covid-19?: The Industrial Strategy sets out Grand Challenges to put the UK at the forefront of the industries of the future, ensuring that the UK takes advantage of major global changes, improving people’s lives and the country’s productivity. In considering how the current Grand Challenges apply at place level, Local Industrial Strategies have tried to articulate priority interventions. Our Local Industrial Strategy suggests the following: - Clean growth: CIoS is committed to carbon neutrality and has many of the resources, assets, R&D capabilities and expertise, including floating offshore wind (FLOW), to support the clean growth agenda. It can build on recent innovative projects such as Smart Islands, Cornwall Local Energy Market and the United Downs Deep Geothermal Power project. Ageing society: CIoS is ahead of the curve in experiencing the challenges of supporting older people to have healthier lives and this makes it a potential test bed for healthy ageing initiatives. It can build on R&D expertise and projects such as EPIC, Smartline and Kernow Health CIC. Future of mobility: CIoS can support the transition to zero-emission vehicles by providing low-carbon, sustainably sourced lithium for EV batteries and developing a supply chain of locally produced biomethane. It can build on the CIoS mining expertise and partnership, working with geothermal developers and the Energy Independent Farm project. Artificial intelligence and data: CIoS can play a strategic role in offering access to the ‘Environmental Intelligence Accelerator’, artificial intelligence expertise and assets such as Goonhilly Earth Station and Spaceport. The four Grand Challenges are focused on the global trends which will transform the future of the UK economy, but their focus is not universally relevant to the business base in Cornwall and the Isles of Scilly. When considering a post Covid 19 Industrial Strategy the grand Challenges are still relevant but require a refresh informed by the sectoral impacts of Covid-19 (e.g. in retail, tourism and manufacturing) and the societal/workplace shifts underway. Rather than start from scratch, Government should build on the work undertaken at local level to develop Local Industrial Strategies and use them to empower local areas to consider their contribution to the Industrial Strategy. Building upon existing policy and delivery strategies will speed up Post Covid 19 recovery. Although the focus on driving up productivity is accepted, revision would provide opportunity for additional consideration to the climate emergency, environmental growth and social inclusion. Post COVID 19, the Grand Challenges should be localised within a national framework and should consider climate change, regional imbalances/the levelling up agenda and inequality/social inclusion. Empowering local economies to find the solutions to these local, national and global challenges, whilst supporting and driving innovation, investing into infrastructure, and training and education will ultimately give local economies an opportunity to build on their local strengths and natural resources to develop solutions that will be exportable and improve both local and UK productivity. 3. IS Delivery: is the IS deliverable within the current institutional framework? Does the IS Council have sufficient insights and powers? Are Whitehall departments delivering on their respective IS obligations and how is the IS being optimised over time? How has the IS operated in the Devolved Administrations and how does it compare to our key competitors?: The current institutional framework is not focussed on encouraging growth in rural and peripheral areas and requires a significant increase in place based resource and delivery focus. The role of Whitehall Departments in delivering the IS is complicated by the emergence of new and
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