State of the Region: LEPs to close North-South divide

LOCAL enterprise partnerships and the introduction of enterprise zones are being touted as key drivers in closing the North-South divide.

With public sector funding being slashed, investment vehicles such as the Regional Growth Fund are also being heralded as a saviour for private sector growth.

TheBusinessDesk.com’s State of the Region survey gives business leaders the chance to voice their views on what impact government initiatives are having on the West Midlands economy.

TheBusinessDesk.com is delighted to be running this milestone project in association with our lead sponsor, law firm DLA Piper, and which is also supported by accountancy group PwC and the CBI.

David Brammer, legal director in planning for DLA Piper’s Birmingham office, said: “Tuesday’s Autumn Statement revealed a bleak forecast for declining growth and rising unemployment.

“The Office for Budget Responsibility reduced its growth forecast to 0.7% for 2012, down from the 2.5% growth for 2012 predicted in March.

[FORM: 53]

“Yet there was some positive news for the regions as the Chancellor pledged up to £40bn in state-backed loans to small businesses, enhanced backing for UKTI and an additional £1bn for the Regional Growth Fund (RGF) over the term of this Parliament.

“This represents a significant addition to the £1.4bn that had already been allocated through the RGF to projects around the country, although it still does not match the funding levels previously available to the now disbanded regional development agencies, which totalled approximately £1.4bn per year.

“It will be interesting to see how businesses respond. In last year’s survey, just 10% of respondents from the West Midlands felt that they had a clear understanding of the Regional Growth Fund.

“However, this year the Midlands has fared relatively well from the RGF. It has supported key regional businesses such as Worcestershire-based IT firm Elonex, which received a multi-million pound grant to relocate its manufacturing from China to a new facility in the UK, along with Aston Martin, Jaguar Land Rover and Alstom.

“Last year, when asked what should be done to drive growth in the region, respondents stated that transport and infrastructure should be the priority for the region and so the Chancellors announcement of an extra £5bn of capital investment for big, strategic infrastructure projects should come as welcome news.

“The national infrastructure plan includes a number of important strategic projects for the Midlands including a managed motorway scheme for the M6 between Birmingham and Manchester and the A45/46 Tollbar End improvement scheme.”

[FORM: 53]

Michael Kitts, above, Midlands leader for PwC’s government and public sector practice, said: “Closing the regional prosperity gap is more difficult than ever for government. Money is tight and the scope for significant transfers to more highly stressed regions is challenging.

“However, sufficient will to rebalance the economy fairly in favour of the regions will, in my view, lead to long lasting and more evenly spread economic well being for UK plc.

“Private sector growth is essential for our region and the LEPs and enterprise zones will play a central role in helping to create jobs, attract investment and provide the stimulus the West Midlands needs to reach its potential. Creating a higher skilled workforce and renewing our cities, towns and rural areas are essential priorities.

“Improving critical infrastructure is also vital. The much welcomed announcement on improvements to some key areas of the local road networks will help reduce journey times to and from the region and will go a long way in boosting growth.”

[FORM: 53]