Economic Development – Policies, Priorities and Implementation

Committee and date Enterprise and Growth Scrutiny Committee 03 March 2011 10.30 am

Item No

7 Public

Economic Development – Policies, Priorities and Implementation Responsible Officer Mark Pembleton Email: [email protected] Telephone: 01743 252593

Summary

This report sets out Shropshire Council’s key economic priorities, what its Economic Development Service is doing to address these priorities and the impact of its activities on the local economy. It also looks at how these priorities are changing, particularly in relation to external influences, including the economic downturn and the change in Government and ensuing policy changes which are impacting on local service delivery. Recommendation A. That the Scrutiny Committee considers the contents of the report and

provides any feedback to the Head of Economic Development. Report This report is presented in 3 sections. The first provides background to the current Economic Development Service delivered by Shropshire Council, and includes the major influences on service delivery that have taken place in recent years. The second section highlights the Council’s current key economic priorities, the key workstreams being undertaken by Economic Development to address these priorities and any outputs and outcomes that these areas of work have achieved and are achieving. The third section includes details of emerging priorities and the work that Economic Development is undertaking in this respect. 1. Background In 2006, the Economic Development Policy Commission undertook a thorough review of Shropshire County Council’s economic development function. The Commission found that the service needed to be:

o More strategic and outward looking with greater emphasis on incorporating the regeneration agenda

o More innovative in delivery Key economic priorities were considered to be:

Enterprise and Growth Scrutiny, 03 March 2011: Economic Development: Policies, Priorities and Implementation

Contact: Mark Pembleton on 01743 252593 2

o Modernising the Shropshire economy by focusing on key growth,

technology and knowledge intensive sectors that will generate future prosperity

o Linking economic development into a wider concept of economic, social and environmental regeneration

o Being proactive, taking a strategic, leading role with partners and stakeholders and improving communication with them

o Reviewing, integrating and re-organising several key areas of activity, such as partnership working, procurement of external goods and services, property development and sector support

While the over-arching economic priorities for Shropshire remain little changed since 2006, the transition to a unitary authority in April 2009 in addition to two other external influencers, namely the economic downturn which started in 2008 and the change in government in 2010, do have a bearing on the way in which economic development is being delivered. Fundamental changes in Government policy, including the abolition of Regional Development Agencies, the closure of regional Business Links, the creation of Local Enterprise Partnerships, the rise of “localism” and the move towards the “Big Society” will be major influences in how services, including economic development, are delivered in the future. It is vital that Shropshire Council’s Economic Development service embraces these changes in order to bring maximum benefit to the businesses and residents of Shropshire. 1.1 Economic Development Structure The current structure of the Economic Development service arose from the establishment of an integrated Economic Development team resulting from the merger of the economic development functions at the former District and Borough Councils with the Economic Regeneration service at the former County Council. The structure was agreed following a report submitted by the consultants SQW who had been appointed to undertake a review of the ways in which economic development could be delivered at a county level. Amongst other options, the consultants were charged with reviewing the benefits and disadvantages of out-sourcing economic development, either partially or in its entirety, to an independent regeneration company. The consultants concluded that this option was not appropriate for a rural county like Shropshire and that there were insufficient assets to provide the income level for an out-sourced service. It is worth noting that even in more urban areas where economic development services were out-sourced, in some cases the economic development functions have subsequently been brought back in-house, eg Rejenko, Transforming Telford. The structure of the Economic Development team within Shropshire Council is currently as follows:



The structure of the Economic Development service is under review as part of the wider Council transformation programme. As part of the move towards unitary status for Shropshire, the importance of achieving meaningful engagement with local businesses and ensuring their views are fed into public sector economic strategy was recognised and led to the establishment of the Shropshire Business Board in June 2008. The aim of the Board is to provide a powerful and representative voice on business matters for Shropshire. The Board is charged with driving the direction of policy and business support activity for the county. It also plays a valuable role in lobbying relevant decision makers on issues affecting the county’s business community and economy. The Business Board has developed a three-year Business Plan (2009 – 2012) which it uses to direct and inform the Board’s activities and which forms the bedrock of Shropshire Council’s economic policy and strategy. 1.2 Recession The UK was officially in recession for a year (final quarter 2008 until the final quarter 2009), during which time GDP contracted by 6%. The country emerged from recession in the final quarter of 2009 following economic growth of 0.4%. Growth was sustained until the final quarter of 2010, when output dipped, renewing fears concerning a double dip recession. Shropshire Council was quick to react to the onset of recession with the establishment of the Economic Recession Committee (previously known as the Recession Task and Finish Group). The purpose of the Committee was to examine the effects of the recession on Shropshire and recommend to the Council what action it should take in the short, medium and long term to alleviate the recession’s impact upon businesses, households and individuals. Since the first meeting of the

Head of Economic Development

Funding and Programmes o Securing external

funding o Managing funding

programmes o Delivering and

monitoring designated grant schemes

Sector Support o Business Support o Key Sector Support:

Tourism Food & Drink Environmental Technologies Creative IndustriesManufacturing Care Sector Land Based Social Enterprise

Policy & Research o Economic Policy o Economic

Intelligence and Research

o Business Engagement

Infrastructure and Investment o Employment Land &

Property o Asset Management o Capital Programme o Marketing and Invest

in Shropshire



Committee, the Council has implemented measures to counter the immediate impact of the economic downturn on individuals, communities and businesses and longer term actions which position the county in readiness to take full advantage of the upturn in the economy are being considered. Of particular relevance to the Economic Development service is the development and implementation of the Shropshire Business Enterprise Fund which provides capital grants to start up businesses, booster grants for businesses less than three years old and retail grants to help fill empty shops. 1.3 Coalition Government The coalition government was formed in May 2010 between the Conservative and Liberal Democrat parties following the results of the General Election in which none of the main parties achieved a majority share of the vote. The impact of the new Government is already being felt not just because of public sector spending cuts, but due to a radical shift in policy, abolishing regional governance and the devolution of power from central government to people and communities via local government and other agencies. The Localism agenda will give local people the freedom to run their lives and neighbourhoods in their own way and is seen by Government as a means of strengthening democracy by:

• Devolving significant new powers to councils • Establishing powerful new rights for local people and communities • Radically reforming planning • Making housing fairer and more democratic • Creating powerful incentives for economic growth

Headline initiatives in the Localism Bill include:

• Big Society policy tools – A Community Right to Buy and Community Right to Challenge giving local groups opportunities to bid for assets and to run local services

• A General Power of Competence for local government (and similar for Fire and Rescue Authorities)

• Requirements to hold referenda where councils want council tax to exceed a threshold set by the Secretary of State

• An emphasis on new neighbourhood level land-use planning tools Economic Development already works closely with local communities throughout Shropshire. The Funding and Programmes team was instrumental in securing £1million of funding through Big Local for Gobowen, Weston Rhyn and St Martins. 2 Key Economic Priorities Shropshire’s Community Strategy 2010-2020 and the latest Shropshire Council’s Corporate Plan have three key priorities:

o Enterprise and growth, with strong market towns and rebalanced rural settlements



o Responding to climate change and enhancing our natural and built environment

o Healthy, safe and confident people and communities The first of these priorities relates directly to the economy and emphasises the importance that Shropshire Council places on developing the economy and supporting the business community as the county moves out of recession. Under Priority 1, the Community Strategy aims to ensure that by 2020:

o The economy is sustainable and businesses are competitive and resilient

o The local workforce has higher skill levels and access to better paid employment

o Services meet the needs of local people and access is easier o Housing meets the needs of local people through a range of suitable

housing options, particularly affordable housing developments o Shropshire’s reputation as a great place to live, work and visit will be

widely recognised Shropshire Council’s Economic Development team is working with local businesses, colleagues across the Council and external partners to ensure that these aims are being met. In conjunction with the priorities set out in the Community Strategy and Corporate Plan, the work undertaken by the Economic Development service within Shropshire Council is steered by the Shropshire Business Board. The Business Board Business Plan identifies the following key priorities: Business Competitiveness 1. Local Procurement, Supply Chains and Developing Export Markets 2. Streamlining Regulatory Services Affecting Business 3. Promoting Opportunities that Research and Development provides for Business 4. Reducing the Environmental Impact of Business Enterprise Development 1. Mentoring and Sharing Expertise 2. Encouraging Collaboration Investment 1. Maximising Investment in Shropshire 2. Sustainable Communities and Market Towns Cross-Cutting Priorities 1. Providing a single point of contact for information on all Shropshire Business Services 2. Developing a flexible, skilled pool of labour A number of key Economic Development workstreams are geared towards delivery against these priorities, with Economic Development officers within the team working



with Board members and other county businesses to deliver against the following set of economic priorities:

• Relevant and meaningful business engagement • Robust economic intelligence and research • The delivery of Shropshire Council’s capital programme, including the Market

Towns Revitalisation Programme • Securing external funding and managing funding programmes and grant

schemes • Providing appropriate support to Shropshire businesses • Supporting Shropshire’s key growth sectors • Ensuring that business needs are at the forefront of the skills agenda • Contributing to a Shropshire Council Broadband Strategy

2.1 Performance Indicators To measure performance against the county’s principal economic priorities, the Economic Development service is monitored against a series of key performance indicators. The most recent set of these indicators can be found in Appendix A of this report. One of the key performance indicators is the number of enquiries received by the Economic Development Service. A total of 1,037 enquiries for the period April 2010 up to February 2011 were received, which is an increase on 2009/10 (983) and 08/09 (314). 2.2 Current Workstreams 2.2.1 Business Engagement Business engagement is at the heart of the work undertaken by the Economic Development team since a better quality dialogue with our business community leads to superior economic intelligence and provides a meaningful steer in terms of policy direction and service delivery. 2.2.1.1 Business Board As reported above, the Shropshire Business Board was established pre-unification and members of the Economic Development team work closely with Board members to deliver against the priorities set out in the Business Board Plan. 2.2.1.2 Business Ambassadors To further enhance Shropshire Council’s business engagement activities, the Economic Development team services the Shropshire Business Ambassadors Network. This was established in 2007 and is a group of 25 influential business



people who, through their work and contacts, actively promote Shropshire’s considerable business assets and high quality of life. The purpose of the network is to:

Raise awareness of the business expertise and high quality products and services in Shropshire

Promote Shropshire as a great place to live, work, invest and do business Contribute to opportunities that are of benefit to Shropshire, such as inward

investment, attracting and retaining talent, expanding Shropshire businesses and lobbying on key issues

Benefits of the Network to Shropshire include:

Greater awareness of Shropshire’s profile, both nationally and internationally Supporting Shropshire companies to be competitive Increasing investment in Shropshire through attracting new businesses and

expanding indigenous businesses Attracting new talent and retaining young people and expertise Providing a strong business voice and current economic intelligence The development of strong corporate social responsibility across the county

2.2.1.3 Annual Business Summit Shropshire Council has now hosted four Business Summits, with the 2011 event scheduled to take place on Monday 23rd May. The event has become increasingly popular year on year, with 120 businesses attending in 2010 compared with 90 in 2009. The event is an excellent opportunity for businesses to speak directly to councillors and senior officers to find out more about what the Council and its partners are doing to support the local economy and is a key element of the Economic Development team’s business engagement activity. 2.2.2 Economic Intelligence and Research Economic Development’s business engagement activities generate a wealth of economic intelligence, and this is supplemented by an economic research function which provides up-to-date economic data and undertakes primary and secondary research to support the work of the wider team. 2.2.2.1 Local Economic Assessment/Spotlight on Shropshire The Local Democracy, Economic Development and Construction Act, which came into effect on 1st April 2010, placed a new statutory duty on top tier councils to prepare an assessment of the economic conditions of their area. In response to this duty, Shropshire produced Spotlight on the Shropshire Economy, which included:

• A major stakeholder event, attended by more than 60 businesses (March 2010)

• A three month consultation period Spotlight on the Shropshire Economy:



• Provides a sound understanding of the economic conditions in the area and

how they affect residents and businesses. • Identifies the comparative strengths and weaknesses of the local economy

and the nature and form of local economic challenges and opportunities. • Identifies the local economic geography, including the economic linkages

between the area being assessed and the wider economy. • Identifies the local constraints to economic growth and employment and the

risks to delivering sustainable economic growth. The need for an in-depth understanding of the local economy has become even more acute since the onset of the economic downturn as we endeavour to help our businesses out of recession. Looking to the future, as public sector budgets decrease, a comprehensive and robust diagnosis of local economic conditions will be vital to ensure that local authority and partner interventions are planned and delivered as effectively as possible to produce the best possible benefits for the businesses and residents of Shropshire. The assessment will be used to inform future strategies and policies, including:

• Local Development Framework • Local Transport Plan • Housing Market Assessment • Economic Strategy • Sustainable Community Strategy • Shropshire Regeneration Framework • Marches Enterprise Partnership Business Plan • Tourism Strategy and Marketing Action Plans

2.2.3 Capital Programme Local Authorities have a responsibility for ensuring that an adequate supply of suitable employment land is available for development in the right locations. The Council is active in securing land for employment and providing associated infrastructure to secure inward investment, encourage local business expansion and the development of new business starts ups throughout the County. This is particularly relevant where developers are unwilling to purchase and assemble employment sites. Market failure is particularly likely in the rural areas. Development of new employment sites and premises has a wide and positive economic impact upon the local area through:

o The provision of new employment opportunities o New investment into the local economy o Diversification and expansion of the local economic base o Use of local suppliers by occupying businesses – keeping the

Shropshire pound in Shropshire o Increased patronage of local shops and higher retention of retail

expenditure



o A more sustainable local economy less dependent upon one or two major employers

o Potential for the creation of more knowledge based jobs on new business parks.

2.2.3.1 Employment Sites and Business Parks Over the past several years, the Council has worked with partners to bring forward sites in and around several of the county’s market towns to ensure an adequate supply of development land and workspace. This includes Tern Valley Business Park in Market Drayton, Civic Park in Whitchurch, Long Lane in Craven Arms, Ludlow Eco Park, Battlefield Enterprise Park and Shrewsbury Business Park. Recent projects include:

• Shrewsbury Business Park has been developed by Alaska Developments. Phase I comprises 6ha (15acres) and approximately 15,000 m2 of office space generating around £20m of investment. Phase II comprise a further 6 ha. and three new offices have been constructed. A master plan is currently under preparation for the Phase II extension adjacent to Wenlock Rd. A planning application has recently been submitted for a ‘landmark building’ fronting Emstrey Island .It is also proposed to develop Phase III on Thieves Lane

• Ludlow Eco Park comprises land employment land and new office

development has been constructed to ‘BREEAM’ Excellent standard which incorporate principles of energy efficiency and sustainability to construction and management. Phase II has been identified for the relocation of the Ludlow Community Hospital and land at Phase 1 on plot 3 has recently been sold for new office development.

• Rural Enterprise Centre Network

A network of Enterprise Centres in the Marches has been developed at Shrewsbury and Ludlow in conjunction with AWM and Evans Easy Space. In the light of the winding up of AWM a bid has been submitted to the Regional Growth Fund by Shropshire Council to the provide further centres in Oswestry, Bridgnorth and Market Drayton

• The Shropshire Food Enterprise Centre opened in September 2008 at Battlefield Enterprise Park. The Centre comprises 12 units for rent for food businesses, 10 of which are occupied. The Centre is managed by Heart of England Fine foods , the supply chain and marketing company that works with local food producers .The centre also has a range of business facilities including conference suite and boardroom, meeting space with free Wi-Fi and the Taste kitchen serving high quality, locally produced food.

A Regional Growth Fund bid has been submitted by Heart of England Fine Foods to secure funding for a Phase 2 of the Food Enterprise Centre.

• Work is almost complete on delivering available employment land as part of

Phase II of Tern Valley Business Park, Market Drayton .The site comprises



5.5 hectare available for local business expansion and new inward investment for light industrial use, offices, storage and distribution. The site will be marketed in March 2011

• Rednall – the regeneration of the rural industrial estate, also supported by

Advantage West Midlands. The scheme entailed initial investment of £320,000, rising to at least £450,000 with add-ons and match funding, with 25 of the 40 resident businesses benefiting from the scheme.

• Ditherington Flax Mill Malting – Economic Development is supporting the

Growth Point Manager to secure external funding to develop this site as a destination for living, learning and enterprise in Shrewsbury, supporting the regeneration of the local area and providing a flagship within the Northern Corridor.

• The Council was working in partnership with AWM to upgrade electricity

supply in Whitchurch to meet local company needs and wider development needs arsing form expansion. Following the winding up of the Agency a Regional Growth bid has been submitted by the Council in conjunction with Grocontinental for £2.5m.

• There is an ongoing programme to secure adoption of a business parks and

industrial estates through out the county. In addition an appraisal is underway of the Economic Development portfolio of assets and workshops following the formation of the unitary Council. In conjunction with the Head of Estates who manages the estate there is an occupancy target for maximising income generation from the workshops. We have also undertaken an initial assessment and option appraisal of the Stanley Lane Industrial Estate. 2.2.3.2 Market Towns Revitalisation Programme

Shropshire Council recognises the critical importance of market towns to the Shropshire economy and in a bid to help our towns and communities counteract the effects of recession a council-wide Market Towns Revitalisation Programme has been established. The Programme is part of the overall effort to regenerate and renew the economy, environment and social vitality of our towns and is an important part of Shropshire Council’s transformation programme. £2.5 million is being made available to support the larger market towns of Bridgnorth, Church Stretton, Ludlow, Market Drayton, Oswestry and Whitchurch. The money can be used for capital schemes and is being allocated to the twons according to their population size. A £0.5 million ‘capital initiatives fund’ is also available into which the eleven other market towns throughout the county are able to bid. Towns eligible for a share of this fund are Shifnal, Wem, Albrighton, Broseley, Ellesmere, Highley, Cleobury Mortimer, Craven Arms, Much Wenlock, Bishop’s Castle and Pontesbury and Minsterley. £0.5 million is also being made available through the Rural Settlements Challenge Fund. The focus of this grant fund is for those rural areas not included in the Larger Market Towns Capital Programme or Shrewsbury. A competitive bidding round will open between March and the end of June for grant applications from £7,500 to £40,000. The supporting Site Allocations and



Management of Development document (SAMDev), and the separate “Place Plans” being prepared for each defined settlement, will help identify needs and opportunities for investment and development. Economic development officers are working with other Shropshire Council colleagues, Shropshire Council councillors and local town and parish councillors within the local communities to identify and prioritise potential projects for funding. 2.2.3.3 Invest in Shropshire Economic Development manages the Invest in Shropshire marketing campaign, which includes the stand-alone Invest in Shropshire website. The latter achieved 4,030 hits in the first three-quarters of 2010/11. 2.2.3.4 Property Searches Members of the public can undertake property searches for industrial property through the Invest in Shropshire website or can request a search from an economic development officer. The number of property enquires for last three years is as follows 2008/09:164, 2009/10:176 and in 20110/11 (to date):117. 2.2.4 Funding and Programmes Economic Development’s Funding and Programmes team plays an important role in securing external funding, managing funding programmes and implementing delegated grant schemes. The team also provides training and advice to colleagues across the Council, partners, businesses, social enterprises and voluntary groups about potential sources of funding, and is able to provide technical advice and support in completing funding applications, managing projects and ensuring compliance. Over the last year, the Economic Development team, in conjunction with the Shropshire Partnership, has produced an External Funding Strategy which was endorsed by the Leadership Board. The strategy sets out three main priorities:

• Shropshire’s partners will work collaboratively to understand priorities and existing resources and to develop externally funded projects that build on success with fresh ideas and open minds.

• Shropshire partners will be proactive in securing external funding which will have the maximum impact on the lives of people who reside, work and visit Shropshire.

• Shropshire partners will have a strong collective voice to influence, challenge and support policy makers and funders on issues relating to external funding.

The Action Plan which was developed with partners is being finalised following a 12 week consultation. This will be reviewed once the full impact of the changes for the council and partners is understood. External funding is defined as that which is: • Over and above government allocations (ie mainstream funding) • Actively sought and applied for • Secured through a competitive process



• Awarded for specific projects and programmes with defined outcomes/outputs This includes funding from Europe, Central Government, Homes Communities Agency, National Lottery, charitable sources and more. 2.2.4.1 Shropshire Business Enterprise Fund As part of the Council’s response to recession, the Shropshire Business Enterprise Fund (£310,000 over 2 years) was launched in November 2009 to provide grants to businesses to counter the impact of the recession, including the high level of empty shops. So far:

6 rounds have been held, with appraisals for the 7th round taking place in February 2011

Over 130 Shropshire businesses have received a grant through the fund, helping to create over 30 new jobs and investing over £275,000

There is a possibility of another round in March 2011, to utilise all the current budget of £310,000, depending on what the response is to the January round.

Outline proposals have been submitted for European funding to continue the scheme for a further 2.5 years. This is joint bid with Herefordshire Council, for an additional £1.13 million (including £126k revenue funding for the administration of the programme). The proposals submitted responded to a European funding call for activity affected by domestic loss, hence the inability to extend the scheme to Telford (Shropshire and Herefordshire were both running similar schemes that were affected by specific cuts to Government spending). Initial feedback on the outline was positive; hence a full application is being prepared with the aim to get approval in April 2011

2.2.4.2 Other Funding and Programmes Work The Funding and Programme Team also manage the Shropshire Tourism Grants (£500K capital and revenue) funded through AWM which is now closed to new applicants. The Team provides technical expertise to MetNet and RDPE 2012 Tourism bid to ensure compliance with European Commission requirements and support the development of rural economies by providing support and advice to the Shropshire Hills and Northern Marches Leader Programmes (£1.325M and £1.200,000 respectively). Technical support has also been given for Shropshire Wildlife Trust Meres and Mosses Landscape Partnership bid, which is worth £1.1 million. 2.2.4.3 A Challenging Time There have been a number of challenges, following announcements by the new coalition government to close the Regional Development Agencies and cut the single pot funding allocated to them and other European programmes. Some of the challenges and opportunities are listed below: • RE:think Energy - funding of £4m was identified for Shropshire Council to

undertake a £6.2m regional project. The project would support businesses to install energy efficiency and renewable energy measures. This was subsequently



withdrawn; however the team have continued to work with partners to review and redraft the bid which has now been submitted.

• Following a call for ERDF Priority Axis 2 funding, a bid to continue the Business Enterprise Grants following the loss of LABGI and LAA funding has been submitted by Shropshire Council on behalf of Shropshire and Herefordshire.

The External Funding Team continues to identify and respond to opportunities for European funding, although it is becoming increasingly difficult to access without the availability of single pot funding as a match source. 2.2.5 Business Support

The Economic Development team plays an important role in supporting business growth, working alongside agencies such as Business Link ensuring businesses access the advice they require. 2.2.5.1 Business Clinics Since May, 2010, Shropshire Council has run 30 business clinics across the county, with more than 100 businesses having attended with average attendance per clinic standing at around 5 businesses. The clinics, which are supported by Business Link West Midlands, offer free and impartial one-to-one advice on a wide range of subjects from completing a business plan to exporting to Europe. 2.2.5.2 Local Procurement A Local Procurement sub-group of the Business Board, which includes representation from the Federation of Small Businesses, Shropshire Chamber of Commerce, Shropshire Council procurement and Economic Development, Business Link West Midlands as well as the Shropshire Business Board, has been established. Specific aims of the group are:-

1. To improve local procurement opportunities within public sector tendering processes

2. To increase business awareness and understanding of local supply chains and increase business use of local suppliers

3. To maximise London 2012 Olympics and Paralympics and Glasgow 2014 business opportunities for Shropshire companies

The activity of the partners concentrates upon; providing large firms and organisations with easy cost effective ways of advertising their goods and service needs locally and; upskilling Shropshire’s small and medium sized businesses to take advantage of these opportunities. In October 2010, a very successful meet the buyer event was held, where 120 small and medium sized businesses met larger supply chain managers from both the public and private sector. A series of training sessions is now being rolled out across the county.



Shropshire Council has led the way in signing a Shropshire Charter as an indication of their support of the above aims – so far 13 of Shropshire’s major businesses have signed the charter to help raise the profile of buying locally. 2.2.5.3 Mentoring The Shropshire Business Board has set up a scheme which offers Shropshire businesses and those about to set up business the chance to receive mentoring support. The mentors, who are taken from among Shropshire’s Business Ambassadors, will work with company owners as they explore ideas to develop their business, expand into future markets and create product development opportunities. The process will help fledgling businesses build confidence in their own ability to make decisions that will shape the future of their business. The mentoring scheme will consist initially of three sessions facilitated by Shropshire Council over a two year period. Work undertaken by the Economic Development service to progress this scheme so far includes:

The preparation of paperwork, including ‘rules of engagement’ and professional indemnity insurance

The facilitation of mentor training for five Business Ambassadors The promotion of the scheme to the business community. The first start-up

company has begun to receive support and already there are a further seven local companies interested in being mentored, of which four are start ups and three are existing businesses looking to grow.

2.2.6 Business Growth Sectors The key business sectors in Shropshire that provide real opportunity for achieving economic growth are Tourism, Food and Drink Production and Processing, Environmental Technologies, Creative Industries (including design and media services) High Tech Manufacturing, Land-Based Industries, the Care Sector and Social Enterprise. In recent years, Economic Development has concentrated its resources on supporting enterprise and innovation within these business sectors. The implementation of the Shropshire Local Area Agreement (2006-2009), placed even greater focus upon support for increasing the number and improving the sustainability of key growth, technology and knowledge-intensive businesses in the county (LPSA7). It is still important to increase the number of businesses in these sectors, since they typically offer better quality, higher paid jobs. Workplace wages have traditionally been very low in Shropshire, reflecting the prevalence of traditional low paid industry and agriculture and raising wage levels closer to regional and national norms is a key economic challenge. Although still representing just 93.6% of the regional average, workplace wages did rise significantly in the year (+8.1%) to April 2010, to £437.50 per week. 2.2.6.1 Tourism The visitor economy is worth more than £0.5 billion to the Shropshire economy and attracts more than 10 million visitors a year. Almost 10% of the Shropshire workforce



is directly employed in a tourism-related industry. To support this sector, the Economic Development service:

• Is a lead partner in the Tourism Strategy Board; Shropshire Council acts as the accountable body and Economic Development manages the related external funding.

• Coordinates the newly formed Destination Development Partnerships, including Destination Shrewsbury, North Shropshire and Oswestry, Ludlow and Shropshire Hills and Ironbridge and the Severn Valley; the first phase of work is to develop strategic action plans for the partnerships.

• Undertakes business engagement with the sector and supports business networks through Tourism Association Service Level Agreements

• Coordinates business support activity for the sector and since 2008 has directly assisted 133 businesses and provided 109 individuals with skills training and advises new investors and entrepreneurs

• Develops and supports key strategic tourism project e.g. working with partners to make the most of the two neighbouring World Heritage sites – Ironbridge Gorge and the Pontcysyllte Aqueduct

• Administers the Sustainable Tourism Grant Scheme, which has delivered more than 100 grants over the lifetime of the project and which delivered a value of £173,000 in grant funding in 2010/11

• Has successfully securing RDPE bid worth £150,000 (see 2012 below) • Manages the marketing activity provided by Shropshire Tourism UK Ltd

Service Level agreement and promotes Shropshire to the media through a Press and PR service.

• Provides market intelligence and coordinates market research activity 2.2.6.2 Olympic Games 2012 The Much Wenlock connection with the start of the modern Olympic movement, through Dr. William Penny Brookes, provides a unique opportunity to promote the town and Shropshire as a visitor destination to both national and international markets, as a result of the 2012 London games. This opportunity was enhanced following the announcement to name one of the official mascots Wenlock. The Economic Development team have been working on this opportunity since the announcement of the London games in 2006 and co-financed a report in 2008 - Much Wenlock 2012 Tourism Impact Study - that made recommendations around a number of themes to maximise the visitor economy opportunities. Since LGR the 2012 work theme has been a priority for the tourism team who have been working closely with the Much Wenlock legacy group, Much Wenlock Chamber of Trade and reporting to the 2012 Shropshire and Telford & Wrekin Partnership, to deliver against the plans recommendations. Highlights of Work to Date: 2012 Much Wenlock and Shropshire Tourism Marketing Strategy - developed and agreed with partners and Much Wenlock Legacy Group/Town Council DMP (AWM Funding ) secured - 2012 PR Media service and associate press trips, support for Much Wenlock promotional leaflets, Sharing our Shropshire - Much Wenlock



RDPE external funding secured - £150,000 to support: dedicated PR office and online press service, translations of Dr. William Penny Brookes legacy into 10 languages, vodcast, iphone application, Marathon Trails promotion and small capital upgrades to the Gaskell Fields and Much Wenlock Guildhall. A secondee from the licensing team has been working for 6 months on the Much Wenlock infrastructure provision, working closely with other council departments to expedite infrastructure improvements and make recommendations re investment priorities in readiness for an uplift in visitor numbers. 2.2.6.3 Food and Drink Production and Processing Shropshire Council has been instrumental in bringing forward one of the food and drink industry’s key assets – the Shropshire Food Enterprise Centre, based at Battlefield Enterprise Park, Shrewsbury. The £7.5 million Centre is owned by Shropshire Council (having been partially funded by Advantage West Midlands) has greatly enhanced Shropshire’s reputation as an area at the forefront of the national food and drink market. The facility consists of four large and eight small food production units, conference and training facilities, meeting space and kitchen as well as offices housing the management team, Heart of England Fine Food. The latter took over the management of the centre at the beginning of March 2010. Interest in the centre has rocketed since the official opening in June. Currently 10 of the 12 units are filled with food and drink businesses and there has been a high level of interest in the remaining two units.All units are food grade ready and meet strict food industry regulations. Out of the nine businesses at Shropshire Food Enterprise Centre, three are new businesses, three have relocated from outside Shrewsbury and the remaining three are businesses which have moved to the centre from other premises in the town. Economic Development worked with Heart of England Fine Foods to develop a Regional Growth Fund bid to expand the Shropshire Food Enterprise Centre, develop a satellite centre in Herefordshire and provide specialist support to new and growing SME’s in the food and drink sector. 2.2.6.4 Environmental Technologies The Environment Industry is a fast-growing sector which generates much employment and income in Shropshire and the wider Marches area. The sector is of vital importance to the prosperity of the area and one that offers a wealth of opportunities. In 2006, the Shropshire Environmental Technologies Network was established – this was widened as the Marches Environmental Technology Network (Metet) to cover the environmental technologies sector in Herefordshire, Worcestershire and Telford and Wrekin as well as Shropshire following the successful bid for £350,000 of external funding from Advantage West Midlands in 2009.



Shropshire Council manages Metnet as a business network which promotes collaborative working among businesses that provide products or services within the environmental technologies. Metnet encourages business growth within the sector and has delivered meet the buyer events, skills events in partnership with local universities, access to finance seminars, hot topics workshops on issues such as Feed in Tariffs and networking events throughout the project area. Metnet will be holding its annual showcasing conference in March where experts are being invited to speak to the environmental business community along with support organisations who can offer advice and guidance to increase competitiveness. 2.2.6.5 Creative Industries Shropshire Council invested £10,000 in a comprehensive assessment of the Creative Industries in Shropshire and following this, has produced an action plan designed to support and encourage growth in the sector. In addition, Shropshire Council works in partnership with Creative Shropshire, which was established in 2006 by a group of sole traders who identified the need for networking within the new media sector of the industry. The group has around 50 members. 2.2.6.6 High Tech Manufacturing Although employment in manufacturing has declined in recent years, it still accounts for more than 10% of Shropshire employment, and as such is an important component of the county’s economy. It is recognised that the majority of manufacturing in Shropshire is relatively low tech, and that since highest growth is projected amongst medium and high tech manufacturing sectors, there is a need to nurture the high tech manufacturers that do operate in Shropshire and to create the conditions that they need to flourish. To this effect, the Economic Development service is providing additional support to the manufacturing sector by:

• Hosting an event in December 2010 in conjunction with Coventry University to

discuss the future of manufacturing in the UK and the support currently available to manufacturing businesses in the county. The Manufacturing Advisory Service presented their support packages and Coventry University explained the potential of virtual trading for businesses to open up the marketplace.

• Following this event, a Shropshire Manufacturing Club is being formed with an

inaugural breakfast meeting planned for Thursday March 3rd 2011. Items on the agenda include: barriers to growth, skills provision, infrastructure/ technology issues, supply chain opportunities, marketing and PR of the sector.

• Future plans for the Manufacturing Club include coordinating events around

Access to Finance, a joint event with WRAP to promote their latest fund to support the infrastructure aiding businesses to improve recycling and reduce



their levels of waste. Further plans will be made at the Manufacturing Club meeting in consultation with the businesses.

2.2.6.7 Social Enterprise Economic Development works closely with Shropshire’s extensive network of social enterprises and facilitated the establishment of Partners for Social Enterprise in Shropshire, a support partnership that extends its coverage into Herefordshire and Worcestershire. With the new “localism” agenda and aspirations towards the “Big Society”, supporting this sector will be a key component of Economic Development’s sector support activity into the future. The Funding and Programme Team is also helping social enterprise consortium to identify and bid for external resources to support set up and growth. 2.2.6.8 Business Networks In addition to the above sector specific activity, Shropshire Council also has positive and practical working relations with a number of other business networks including:

• Shropshire Rural Hub (Food, Farming & Rural Enterprise) • Federation of Small Businesses (FSB) • Shropshire Chamber; the Council is a member and sponsors the Annual

Business Awards • Heart of England Fine Foods

2.2.6.9 Service Level Agreements A small number of strategic Service Level Agreements (SLAs) are in place; the Visitor Economy SLAs provide a strategic marketing service for the County through Shropshire Tourism UK Ltd, and Tourism Associations provide business engagement and collaboration outcomes for the sector through the agreements in place. Other SLAs include funding for Enterprise South West Shropshire, Young Enterprise, Sabrina Boat and the Montgomery Canal. 2.2.7 Skills Agenda Although the Shropshire resident population is well qualified (28.6% qualified to NVQ level 4), there is a discernible increase in demand for higher skills as the economy shifts away from sectors which rely more on process/plant and elementary occupations and into high value sectors. Knowledge-based industries are expected to be the main focus of employment growth in the future, and this will translate into higher demand for workers with level 4 and above qualifications as well as for trade specific technical skills. Increased demand for managers and senior officials as well as professionals and associate technical and professional qualifications will also affect future skills requirements.



To ensure that Shropshire employers have access to the skilled employees they need both now and into the future, the Economic Development team has:

• Worked with Children and Young People’s Services to facilitate the formation of an Employment and Skills Group. This is the overarching group coordinating skills needs for Shropshire. With effective representation from key stakeholder groups in Shropshire covering the ages of 14 to 65, the Group will:-

• Develop, approve and own the Employment and Skills Strategy and

Action Plan for Shropshire to provide a road map of how the county will emerge from the recession.

• Provide a co-ordinated and integrated partner approach to addressing demand-led skills and employment priorities, with clear roles and responsibilities in respect of prioritisation, funding, influencing need, delivery and potential commissioning and improving communication among partners.

• Ensure Shropshire can talk about its needs coherently and consistently for all sectors of the community and is better able to influence at a national/regional level

• Improve cost-effective use of resources, minimising duplication of effort, maximising benefits from funding opportunities and programmes and adopting a place-based budget approach to partner engagement

• Put employer needs at the heart of employability and skills programmes.

• Embarked on a major piece of research with Shropshire businesses,

graduates living and working in Shropshire (and those who may consider doing so), and other skilled young people, to identify the barriers to employing and retaining skilled people, to establish the key skills gaps that exist now and that will exist in the future and to identify the best means of promoting and encouraging such young people to live and work in Shropshire. This piece of research is underway at the current time, with results due by the end of March. Ultimately, this research will inform potential funding bids for projects aiming to make it easier for businesses to fill skills gaps and for talented young people to find employment locally.

2.2.8 Broadband Economic Development is working with IT Services to prepare a Broadband Strategy for Shropshire Council. It is acknowledged that an effective, reliable and secure communications infrastructure is increasingly essential to life in rural communities and there is a requirement to do more than just bridging the digital divide –communities need to the have tools to fully participate in the “Big Society”. Economic Development will also play a major role in completing an application to BDUK for funding by the end of March 2011. 3 Emerging Priorities



Since the change of government last year, three new priorities have emerged for the Economic Development service, namely the Marches Local Enterprise Partnership, the opportunity to bid into the Regional Growth Fund and the need to influence the future arrangements for European Funding when the Regional Development Agencies are abolished. 3.1 Marches Local Enterprise Partnership As part of the Localism Bill, the Coalition Government’s policy is to abolish the regional development agencies and replace them with Local Enterprise Partnerships. The Marches Local Enterprise Partnership proposal was one of the first to be submitted on 12th August 2010 (with more than 50 letters of support from private businesses) and was one of the initial 24 LEPs (out of 64 proposals) approved by the Coalition Government in October 2010. The Marches LEP Board comprises 57% private sector (represented by 4 private companies) and 43% public sector (represented by the 3 local authorities). Public sector representation is provided by the Leaders of the three Councils of Herefordshire, Shropshire and Telford & Wrekin. Private sector representation is provided by the Chairs of the three strategic, area-based Business Boards. At the LEP Board, the three area-based Business Board Chairs represent the views of their wider business constituency. In this way, the area-based Business Boards provide something of a wider business sub-structure to the LEP Board. The membership of the three area-based Business Boards is representative of the sectoral make-up of the business base of each area and also provides representative geographic coverage. Board Membership is as follows:

• Chairman - Dr. Geoffrey Davies OBE, CEO Alamo Group Europe Limited

and Vice President of Alamo Inc. (USA), based at McConnel Ltd, Ludlow. • Chair of Herefordshire Economic Development Partnership Board - Ms.

Angela Smith, Federation of Small Businesses • Chair of Shropshire Business Board – currently under recruitment due to

appointment of Dr. Davies to Chair of LEP Board • Chair of Telford & Wrekin Economic Development Board – Ian Dosser,

Managing Director of Capgemini Ltd. • Cllr. Roger Philips, Leader of Herefordshire Council • Cllr. Keith Barrow, Leader of Shropshire Council • Cllr. Andrew Eade, Leader of Telford & Wrekin Council

The work of the Marches LEP has, to date, included:

• A series of business-led planning workshops aimed at identifying the key issues and priorities in the Marches area pertaining to Employment and Skills, Enterprise, Housing and Planning, Sustainability and Transport and Infrastructure

• A major launch conference in November 2010 to share the work on priorities and gather further intelligence to develop the business plan

• The development of a draft business plan • Supported the submission of the first round of RGF bids (see below)

The Marches LEP is supported by its own website – www.MarchesLEP.org.uk.



Involvement in the Marches Local Enterprise Partnership will have direct implications for the economic development function of Shropshire Council, since the LEPs will be the sub-national mechanism to support businesses to create jobs. Shropshire Council therefore needs to participate actively with the LEP to deliver economic development in Shropshire. 3.2 Regional Growth Fund The Regional Growth Fund is one of the Government’s key ways of stimulating local economic growth and creating additional private sector employment within areas and communities that are currently dependent on the public sector. The Fund will lead to the investment of £1.4bn across England over the next 3 years. The fund will be delegated to projects, packages and programmes in a number of bidding rounds. The first round, which focussed on projects and packages, had a deadline of January 21st and will allocate up to £250m of the total pot. Only those projects which could deliver large scale jobs and private sector investment, require over £1m in funding, are ready to deliver and can name the direct or downstream private sector beneficiaries were able to apply in Round 1. Shropshire Council’s Economic Development team worked to raise awareness of the funding opportunity among the Shropshire business community and support them to develop quality bids. The bids submitted into Round 1, which were supported by the Marches LEP included:

• Hereford Futures – City Centre Growth Package (Herefordshire Council) • Centre of Excellence in Precision Livestock Farming (Harper Adams

University College) • Enterprise HQ (Enterprise HQ) • Oswestry Marina (Paterson Enterprises Ltd) • Whitchurch Electricity Upgrade (Shropshire Council) • Development of Rural Business Hubs (Shropshire Council and J Ross

Developments) • Creating Conditions for Growth and Employment within the Food and Drink

Industry (Heart of England Fine Foods, Langtree/PXP, Shropshire Council, Herefordshire Council)

A summary outline of each of these projects is included as Appendix D of this document. In later rounds, smaller value projects, where the beneficiaries are unknown at the outset, are likely to be eligible to apply within programmes of activity. This should mean that both Business Support and Access to Finance initiatives as well as capital projects which were not ready to submit under the first round will be progressed in time for the next round which has an anticipated deadline of May 2011. The Economic Development team is currently working to develop Marches bids for this round. 3.3. Future Arrangements for European Funding



Communities and Local Government (CLG) will be the Managing Authority for the ERDF Programme and take responsibility from the Regional Development Agencies on 1 July 2011. Although there will be centralised processes and procedures decisions will be made at a local level and those at a local level will need to determine how this will happen. The Programme Monitoring Committee (PMC) will become the Local Management Committee (LMC) from 21 May 2011 and there will be a need to review membership and terms of reference. The LMC will be chaired by the CLG Government Ministers to ensure there is tight management, audit and compliance. A ‘significant person or persons within the region’ will become Deputy Chair/s and will be locally determined. The Deputy Chair will have responsibility for shaping the future of the Programme. All funding decisions on ERDF projects have been made by IDG in the past and it is being proposed that a new IDG group will be established which will report directly into the LMC. CLG are keen that governance/decision making models are decided locally and are happy with a number of different models operating across the country. The West Midlands Council is co-ordinating a working group to consider interim management arrangements in February to prepare a paper for the West Midlands Council’s CE Task Force meeting in 1 March, and a representative from Economic Development will be attending to ensure our views are fed into the discussions. 3.4 Economic Development Web Pages Through Economic Development’s work with the Shropshire Business Board and Business Ambassadors, it has become increasingly apparent that the Shropshire Council Economic Development web pages need to be modernised so that they have more relevance for the business community that they serve. With this in mind, the content of the Economic Development web pages has been up-dated to become more business customer focused. Films detailing the work of the Shropshire Business Board, Shropshire Business Ambassadors and information about the Shropshire Offer for businesses have been inserted. Since its completion at the end of November 2010 certain pages on the website have seen a substantial increase – the Economic Development web pages had a total of 2,309 hits in October 2010, which was the last full month prior to the changes, compared with a total of 3,617 hits in January 2010, the first full month after the changes. This represents an increase in traffic of 64%. To further improve the Economic Development web content, the decision has been made to integrate the Invest in Shropshire site back into the Shropshire Council website to strengthen the IIS brand by making it a central part of the Economic Development web pages and branded as a Council product / service. To enable this to happen the project has been approved by Shropshire Council's Web Strategy Project Team, of which Economic Development is represented as a 'senior user'. This project work has now become the priority project for the Website Transformational work, and the integration will be complete by 1st April 2011, with the rest of the Economic Development content re-branded by 30th April 2011.



Economic Development will be the first 'service' within the Council to work directly with the web development team to create a new, improved, service designed web-presence. List of Background Papers (This MUST be completed for all reports, but does not include items containing exempt or confidential information) Human Rights Act Appraisal The recommendations contained in this report are compatible with the provisions of the Human Rights act 1998 Environmental Appraisal n/a Risk Management Appraisal n/a Community / Consultations Appraisal Cabinet Member Mike Owen Local Member All Appendices Appendix A: Economic Development: Key Performance Indicators, Quarter 3 2010/11 Appendix B: Summary of RGF Submissions

Documents

Economic Development – Policies, Priorities and Implementation