Solent LEP Growth

SOLENT LEPA STRATEGY FOR GROWTH

Version 1. December 2012

1.0 INTRODUCTION1.1 Introduction

2.0 THE ECONOMY AND OUR KEY PRIORITIES

2.0 Area Map2.1 Our Vision2.2 Strengths2.3 Delivery

3.0 GOVERNANCE3.0 Company 3.1 Governance key

4.0 FINANCE AND RESOURCES

4.0 Resources4.1 Capital

5.0 ENTERPRISE

5.0 Introduction5.1 Vision 5.2 Actions 5.3 Summary

6.0 SKILLS FOR GROWTH


7.0 INFRASTRUCTURE


8.0 INWARD INVESTMENT

8.0 Introduction8.1 Actions

9.0 STRATEGIC PRIORITIES


SOLENT LEP – A STRATEGY FOR GROWTHINTRODUCTION1.0

The Solent LEP is led by the business community and supported by four university partners, the further education sector, three unitary authorities, eight district councils, one county council and the voluntary and community sector – all working together to secure a more prosperous and sustainable future for the Solent area.

We are already one of the most innovative and high performing Local Enterprise Partnerships as measured in overall terms through the success we have had in securing over £38 million in funding in our first full year to support the delivery of economic growth, new jobs and homes.

In addition we have demonstrated collective leadership provided by the private sector, local authority partners and key agencies, enabling us to secure Enterprise Zone status for the Daedalus Airfield and critically to agree delivery of a £27 million infrastucture package for the site that will deliver over 800 new jobs by 2015. Going forward we continue to aspire to be the most innovative and successful LEP in England and this will be measured by the positive impact our activities have on businesses, jobs, homes and communities.

This initial strategy and business plan sets out our key priorities for local growth, and shows how we will support these priorities. We hope it will provide a sound basis for dialogue with our partners and stakeholders as we work together to realise the full economic potential of the Solent economy and stimulate local growth. On a general level we welcome the commitment by Government to LEP’s with the announcement of funding to support their ongoing function providing a strong signal that they see LEPs as central to the development of the local business environment.

The Solent LEP also recognises that other important steps have been taken by Government to support our own specific commitment to stimulate local growth with the allocation of over £18 million through the Growing Places fund, £20 million through the Regional Growth Fund and the designation of an Enterprise Zone within the solent region. This will be supplementated by the devolution of funding for local major transport schemes, providing the Solent LEP to play a key role along with other partners in prioritising and funding key infrastructure projects in a new devolved system from 2015.

The Board of the Solent LEP wishes to strongly encourage further allocation of central funding and responsibility to the local area to enable us to develop strategies that are based on the economic relaities of the Solent. Working through key initiaitives such as the City deal1 it is our ambiton that in collaboration with local partners we should develop a long term growth and business plan for the area that can be used to support bids for further economic growth funds from central government to accelerate this growth.

1City deal process to award cities with major powers to invest in growth and deliver skills and jobs, support local businesses, control budgets and deliver critical infrastructure

SOLENT LEP – A STRATEGY FOR GROWTHTHE ECONOMY AND OUR KEY PRIORITIES2.0

With a population of more than 1.3 million and over 50,000 businesses, the Solent area is an internationally-recognised key economic hub anchored around the Isle of Wight, the two cities of Portsmouth and Southampton, the M27 corridor and the Solent waterway.

Test Valley

NewForest

Havant

Southampton

Eastleigh

Winchester

Fareham

Gosport

Isle of Wight

EastHampshire

Portsmouth


Our vision is to create an environment that will bring about sustainable economic growth and private sector investment in the Solent. It will assist this globally-competitive area reach its full potential, enabling existing businesses to grow, become more profitable and to be greener; enabling the creation of new businesses and attracting new businesses to the region.

As a result, there is a need to make the best use of the area’s outstanding assets of highly-skilled people, world-class businesses, outstanding further and higher education, the natural environment and a good quality of life.

The Solent economy has been impacted by the prolonged recession and it is characterised by areas of high public sector dependency, a decline in business stock, particularly in the SME sector. More recently it has had to absorb significant economic shocks brought about by the planned closure of the Ford manufacturing plant in Swaythling and the contraction in defence related activity as a result of the Strategic Defence and Security Review (SDSR). It is critical therefore that we rebalance the local economy in favour of the private sector and re-industrialise the economic base, supporting the development of knowledge based industries and high value added manufacturing, thereby providing a catalyst for regeneration. We are also committed to realising the potential of our cities and supporting areas that are economically vulnerable in order to substantially reduce the high levels of welfare dependency and secure an additional 10,000 job opportunities for those not in work. The area has real potential to deliver growth for the UK economy. Recent trends show that private sector jobs growth in Portsmouth exceeded 15% in the ten year period to 2008, reflecting the core strength of its advanced manufacturing and marine sectors. The City of Southampton and the Isle of Wight also delivered real GVA growth of 3.7% and 5% respectively over the same period.

In the period to 2026, under the Solent LEP’s leadership, the area is seeking to capitalise on identified strengths and through collaboration, commit to creating wealth through business growth by connecting business to people, expertise, finance and networks. In addition to current forecasts, create 10,000 new jobs in the Solent LEP area, contributing to GVA growth of 2.1%, equating to an extra £1bn or £6,400 per capita.


Integrating cutting edge best practice from business, universities, further education, public and voluntary sector organisations is at the heart of our LEP approach. In the period to 2026 it will capitalise on identified strengths and through collaboration commit to:

• Creating wealth through business growth by connecting business to people, expertise, finance and networks, and in addition to current forecasts, create 10,000 new jobs in the Solent LEP area

• Attracting inward investment to the area by delivering a business-led approach towards inward investment, ensuring that existing, geographically mobile companies are retained and encouraged to re-invest in the Solent LEP area contributing to GVA growth of 2.1% equating to an extra £1bn or £6,400 per capita

• Promoting the area as the UK’s leading growth hub for advanced manufacturing and marine, both at home and more importantly in the global marketplace, developing the advanced engineering and manufacturing sector through a business-led approach

• Driving regeneration of the urban areas and developing new ways of reinvigorating cities and areas of deprivation, thereby reducing benefit dependency. Solent LEP will play a role in identifying and driving forward skills development to ensure that economic growth is not held back by skill shortages in the Solent LEP area thereby increasing employment rates to 75.9% from the current predicted level of 72.7%

• Maximising value for money from key public sector investments focusing on areas that are economically vulnerable. More open, smarter and innovative public procurement is required which in turn can leverage private sector investment. It is vital that the public sector better understands the needs of business, giving local authorities the insight to respond positively to the demands of business, creating the transport infrastructure, development sites and housing to support business growth and at the same time protecting the environment and safeguarding the quality of life. This understanding will help the public sector partners learn from business and deploy business principles to increase public sector productivity.


The Solent LEP will deliver real and substantial improvements in the co-ordination of private and public investment in key areas including skills, business support, regeneration, transport, housing and inward investment to encourage additional organisations into the area. We have five strategic priorities:

• Support new businesses, enterprise and ensure SME survival and growth.

• Focus on infrastructure priorities including land assets, transport and housing, reducing flood risk and improving access to superfast broadband.

• Establish a single inward investment model to encourage companies to open new sites in the region, supported by effective marketing.

• Invest in skills to establish a sustainable pattern of growth, ensuring local residents are equipped to take up the jobs that are created.

• Develop strategic sectors and clusters (interconnected groups and businesses) of marine, aerospace and defence, advanced manufacturing, engineering, transport and logistics businesses - establishing the area as a business gateway, both at local and international levels. A growth hub will be created, developing the enterprise zone, supporting new and existing businesses as well as export-led growth in high-value services and employment. At the same time, the low carbon economy will be strengthened, reflecting the increasing importance of the sector to the Solent economy.

SOLENT LEP – A STRATEGY FOR GROWTHGOVERNANCE3.0

The Solent Local Enterprise Partnership has been registered as a company, limited by guarantee and it was incorporated on 18 March 2011. In keeping with the articles of association and in accordance with company law, the board of Solent Local Enterprise Partnership Limited has been democratically elected by its members, thus ensuring that we have a robust, transparent and accountable delivery structure in place. The structures continue to evolve reflecting the strategic role that the LEP has assumed as the lead body for Economic Development and the need to establish delivery capacity for its key programmes of work. It therefore comprises the following elements:

• The Solent LEP Board is a fully-elected board of 15 directors. They have been drawn from the area’s key business, education and local authority communities. Further information and Board biographies can be found at http://www.solentlep.org.uk/team

• Five strategic priorities have been established with supporting delivery Panel or sub-Board architecture responsible for delivery of various programmes and for proposing strategy and policy for consideration by the Main Board. Each Panel/Board is sponsored by a Board member as shown in the table below.

Strategic Priority Delivery structures Board Sponsors

Enterprise Business Support 1. RGF Investment Panel for Bridging the Gap2.Connecting with, and enabling Solent businesses in collaboration with regional business support organisations.

Enterprise Zone1. RGF Investment panel for Solent EZ Expansion Fund2. Solent Enterprise Zone Strategy and delivery groups

Business Support 1. Stuart Hill / Anne-Marie Mountifield2.Chris Allington / Steve Barber / Stuart Hill

Enterprise Zone1. Gary Jeffries / Anne-Marie Mountifield2. Gary Jeffries / Seán Woodward

Skill for Growth 1. Solent Employment and Skills board2. Solent Enterprise Zone Skills fund

Stakeholder group

1. Chris Allington2. Anne-Marie Mountifield

Infrastructure 1. Growing Places Fund Investment Panel2. Solent LEP representative for the Local Transport Body

1. John Craven/Gary Jeffries/ Anne-Marie Mountifield/ Ernie Battey

2. Russell Kew

Inward Investment 1. South Hampshire and IOW Inward Investment Board

1. Philippe Jouy/Ernie Battey

Priority Sectors 1. Solent Futures Investment Panel2. Solent Low Carbon Board

1. Russell Kew/ Anne-Marie Mountifield

2. Stuart Hill/Richard Williams

Table 3.0: Solent LEP Priorities

SOLENT LEP – A STRATEGY FOR GROWTHGOVERNANCE3.1

The diagram below outlines the governance structure for the Solent LEP based on the policy environment as it is currently is stands and taking into account the delivery responsibilities it has assumed. This will be kept under review and developed further in through the course of 2012-13 and 2013-14 as the policy environment develops further, the implications of the City Deal activity are defined and the proposed devolution of major transport scheme funding is rolled out.

Solent LEP Board

Growing Places Investment Panel

RGF Solent Futures

Investment Panel

Enterprise Zone Delivery Group

Business Support

Enterprise Zone

South Hampshire and IOW Inward

Investment Board

Solent Employment and Skills Board

Solent Low Carbon Board

Priority SectorsInfrastructure

(Growing Places Fund)

Enterprise Inward Investment Skills for Growth

Solent EZ RGF Investment Panel

RGF Bridging the Gap Investment

Panel

Enterprise Zone Strategy Group

Solent Enterprise Zone Skills

Stakeholder Group

Solent Muli-agency

Taskforce

SOLENT LEP – A STRATEGY FOR GROWTHFINANCE AND RESOURCES4.0

For the period 2012-15 Solent LEP currently2 has £19,031m revenue and £19,739m capital funding to support the delivery of its key priorities, derived from a number of sources shown in the table below.

2 As at 31 October 2012, and subject to receipt of final offer letters for RGF Programmes Solent Futures and Bridging the gap phase 2

Revenue resources £000

Core funding (local authorities) £300

LEP Core funding £125

Growing Places Fund £1,371

Bridging the Gap Phase 1 (RGF) £2,100

Bridging the Gap Phase 2 (RGF) £2,000

Solent Enterprise Zone Expansion Fund (RGF) £2,940

Solent Futures (RGF) £10,000

Enterprise Zone Skills fund £100

Capacity Fund round 2 £76

Growth and Innovation Fund (GIF) £10

Interest on balances £9

Revenue Total £19,031

Capital resources £000

Growing Places Fund £16,739

Solent Futures (RGF) £3,000

Capital Total £19,739

Table 4.0: Solent LEP Resources 2012-15

SOLENT LEP – A STRATEGY FOR GROWTHFINANCE AND RESOURCES4.1

Solent LEP has allocated capital resources to a number of selected projects. These allocations are detailed in the subsequent chapters of this plan and budgets have been allocated to each of the strategic priorities and to Solent LEP central core costs as follows:

3 £465,000 has been allocated to central costs to support the core team and Programme Management for the Enterprise Zone4 CEMAST: £3,000,000 from Growing Places and £3,00,000 from RGF Solent Futures

Table 4.1: Allocation of revenue budgets 2012 to 2015

Strategic priorities /central costs Revenue £000 Capital £000 Total £000

Infrastructure (Growing Places Fund) £906,0003 £13,739,000 £14,645,000

Skills for growth £190,000 £6,000,0004 £6,190,000

Enterprise £7,040,000 £7,040,000

Priority Sectors £10,000,000 £10,000,000

Inward Investment

Central costs and contingency £895,000 £895,000

Total £19,031,000 £19,739,000 £38,770,000

The budget for central costs and contingency includes costs for a dedicated and independent core team, comprising a Chief Executive, an administration function, broader executive support, premises costs, and generic operational overheads. In addition, the costs of the Programme Manager for the Enterprise Zone and the Account Management function are supported from the Growing Places budget and Regional Growth Fund programme respectively. This is an essential investment needed to build the capability of Solent LEP to ensure that the capacity is in place to deliver the jobs and homes linked to the Enterprise Zone, and the requirements of both the GPF and RGF programmes. It should be noted that there is currently an unallocated balance in the Growing Places Fund. It is expected that there will be a Round 2 programme, inviting bids applications against the remaining funds in the Growing Places Fund. The Board will consider these proposals in 2013.

SOLENT LEP – A STRATEGY FOR GROWTHENTERPRISE5.0

Enterprise is a key driver of productivity and economic growth. Currently, business start-up rates in the Solent fall well below regional and national benchmarks. The Solent LEP recognises that SME’s hold the key to a successful, private sector led, economic recovery in the Solent area. In relation to business enterprise our key objectives are therefore as follows:

• Supporting high growth business start-ups with exporting potential and encouraging growth in existing businesses through innovation by the development of peer-to-peer self help networks, business-to-business mentoring and more efficient networking opportunities for business.

• Expanding enterprise programmes for young people in partnership with the voluntary and community sector working with organisations such as the Prince’s Trust and Education Business Partnerships to reengage young people aged 16-25.

• Helping businesses to create and apply new knowledge by supporting the work of regional trade associations, industry and sector groups (e.g. The FSB, the Chamber of Commerce, Hampshire Alliance), working with employers in priority sectors such as advanced manufacturing and marine and supporting the development of new growth clusters e.g. low carbon economy and creative Industries. This will include assisting businesses, establishing effective knowledge economy support networks, focusing on private sector professional support around key themes such as raising finance, export markets, supply chain development and accessing expertise from universities in the area.

• Encouraging business start-ups and social enterprise in difficult to reach and economically inactive communities, working with business leaders, social entrepreneurs, universities and civil society organisations.

The need to encourage growth, commerce and manufacturing, as part of a private sector led recovery is at the centre of our plans.

In August 2011, the Solent Local Enterprise Partnership (Solent LEP) was successful in securing the much sought after Enterprise Zone status5 for part of the former MoD site, Daedalus Airfield, situated on the coast at Lee-on-the-Solent, between the cities of Portsmouth and Southampton. It is one of just 24 sites to have been granted Enterprise Zone status.

5 See http://www.solentlep.org.uk/enterprise_zone


The Solent LEPs vision is to develop the Daedalus site into the Solent’s premier location for advanced manufacturing (with a focus on aerospace, aviation and marine businesses), creating a centre of excellence for the Solent and reducing costs for businesses with a supply and/or customer chain in close proximity. The advanced manufacturing focus is intended to deliver export led growth in high value employment and capitalising on the existing sectoral strengths of the area. The long-term target is to create 3,500 jobs on the site by 2026.

To support this vision the Solent LEP and its principal partners, the Homes and Communities Agency and Hampshire County Council will be investing over £15 million in a phase one development of the Enterprise Zone, to unlock 21.6 acres of land for the development of new commercial space, including 25,000 sq ft of new advanced manufacturing business space, as well as off- site access improvements to the road network leading from Fareham and the M27 to the site. In addition, there will be £12 million invested to establish a world class training centre on the site which will provide specialist training for the advanced manufacturing sector, up-skilling employees of businesses on the site and securing the future of advanced manufacturing skills across the Solent area.

Alongside the successful bid to bring an Enterprise Zone to the Solent, the Solent LEP has also been successful in securing support from the Regional Growth Fund for the site. Up to £2.73 million will be available in a newly created Local Programme fund6 to support SME’s that are either located on the Enterprise Zone, or will be by 31 March 2014. This is a competitive grant fund that will accelerate business growth at the Solent Enterprise Zone to safeguard existing jobs for companies already located on the site or businesses moving on to the site in the area of advanced manufacturing (with a focus on marine, aviation, and aerospace or similar advanced engineering businesses).

On a general level the programme ‘Bridging the Gap for SME’s in the area’ has received RGF funding in round 2 and 3 and will cover the areas of Portsmouth, Southampton, the Isle of Wight, Havant and Gosport, as well as employees and supply chain companies affected by the planned closure of the Ford Transit Plant at Swaythling, Southampton. This scheme fits with the Solent LEP key economic priorities and our wider economic vision, focusing on business enterprise in our more challenging and difficult localities where enterprise levels are low and public sector dependency is high. The recession has hit the local economy and business stock levels have fallen as a result of company closures and a drop in the number of new business start ups. We are fully committed to supporting enterprise, the emergence of new businesses and ensuring the survival and growth of Small to Medium Enterprises (SMEs) in the Solent region.

6 See http://www.solentlep.org.uk/regional_growth_fund


Using money from the Regional Growth Fund (RGF), submitted by the LEP in partnership with The News and the Daily Echo, almost £4m funding will support up to to 100 start-ups and 100 SMEs, with high-growth potential in the Solent area via a competitive bidding process.

With this in mind the following priority actions have been identified for the period 2012-15.

Priority Actions – Enterprise Enterprise Zone • Delivery (through the Solent Growing Places Fund7) of the phase 1 £15 million infrastructure development of the Enterprise Zone, creating 897 jobs (including 615 ongoing) and delivering an additional 90 new homes

• Development and construction of the CEMAST (Centre for Manufacturing and Engineering Skills Training), thereby creating and or safeguarding 150 new jobs and establishing a world class Advanced Manufacturing Training facility, to open in September 2014.

• Delivery of the £2.79 m Daedalus SME Expansion Fund (for Aerospace, aviation, marine and advanced manufacturing) to support at least 10 businesses thereby creating and/or safeguarding 300 direct jobs, 200 indirect jobs and 50 new apprenticeships in the period to March 2015.

Business Support • Delivery of the phase 1 and phase 2 Bridging the Gap programme to support the creation of up to 100 business start ups, and up to 100 existing businesses, thereby creating and/or safeguarding 400 jobs in the period to June 2014.

7 See http://www.solentlep.org.uk/growing_places

Table 5.2: Priority Actions - Enterprise


The table below summarises the revenue and capital resources allocated to the Enterprise priority for the period 2012-15.

Revenue £000

Business Support

Bridging the Gap (Phase 1 RGF Programme) £2,100

Bridging the Gap (Phase 2 RGF Programme) £2,000

Enterprise Zone

Solent EZ Advanced Manufacturing Expansion fund (RGF Programme) £2,940

TOTAL Revenue £7,040

Capital £000

Capital Total £0

Grand Total £7,040

Table 5.3: Resource allocations for 2012-15

SOLENT LEP – A STRATEGY FOR GROWTHSKILLS FOR GROWTH6.0

There is a need to make the best use of the assets that the area already possesses: highly skilled people, world class businesses, outstanding further and higher education, and the resident labour market. It is therefore important that we focus on the needs of the sub-regional economy and the skills of the resident workforce, and our aim is to achieve sustainable economic growth by anticipating and meeting the employment and skills needs of employers within the area and by developing and retaining the talents of people to work within their local economy.

The area has a strong pool of skilled workers and we compare well with many areas on the number of graduates we can draw from. With world class universities based in the two cities and the wider Solent LEP area, there is also an opportunity to deepen the links between the academic world and the local economy to promote research that benefits the local economy and quality to attract and retain skilled workers. Skilled people are essential to securing that growth. Therefore it is vital we create the best environment for businesses to develop and train their workforce and to strive for success and we are investing in skills to establish a sustainable pattern of growth, ensuring local residents are equipped to take up the new jobs that are created.

Our approach is to better align public and private investment in training and workforce development to growth. This will be achieved by employers taking a lead, signalling how the public sector and business can co-invest most intelligently to maximise opportunities for employers and people. The Solent Employment and Skills Board is now well established and is leading work on skills for growth, prioritising initiaitives and activites that support the retention and development of local talent to support the needs of our key businesses.

As a result of their work, the Solent LEP adopted a Policy Framework ‘The use of Developers’ Contributions to Provide Workforce Training’ in January 2011. This has led to the development of the Solent Skills hub framework. This is an investment programme which is seeking to establish a skills hub for employers to support the roll out of 25 Employment and Skills Investment Plans across the Solent LEP area, supporting the major developments coming forward. One of the key barriers to growth for employers is securing the skills they need and having access to a local supply of skilled labour.

image supplied by: Southampton Universtity - www.soton.ac.uk


The proposal to establish a central skills hub for the Solent area is part of a significant change in how we approach skills issues, with employers very much at the heart of the solution. Employers based in our key sectors of Advanced manufacturing, Construction and the broader service industries, are finding it increasingly difficult to source the skills they need, One of the main barriers cited is the complexity of the skills system where they have asked the Solent LEP to work with them to simplify this interface, providing employers with a single point of contact where they can engage with providers, sector skills councils, DWP and local authorities, to secure the very best skills solutions for their businesses. The development of an employer-led skills hub will enable employers to develop their own innovative and sustainable skills solutions, boosting investment in future skills needs.

We want to establish a universal offer across the two cities to support all businesses and key developments and the LEP is committed to bringing together employers to access Employer Ownership funding. The Solent LEP also welcomes the role it will be given in setting the skills strategy for the area, having taken account of our skills priorities. Already two LEP Business Board members have seats on the Governing bodies of local FE colleges and we are piloting the creation of a new £1m employer responsive fund with four local FE colleges. This will enable employers to directly commission provision tailored to their needs delivering a truly responsive resource for the private sector to deploy according to their requirements.

Solent Apprentices for Business (Solent A4B) has also been created – a one-stop-shop apprenticeship training agency, focused on the needs of Small to Medium Enterprises (SMEs). It’s a not-for-profit organisation, providing businesses with a simple, professional and cost-effective solution to recruiting high-calibre apprentices.

Image supplied by: Southampton Universtity - www.soton.ac.uk


The Solent Enterprise Zone has a central role in driving local growth and employment in the areas of Gosport and Fareham and the wider sub region. To ensure that the businesses in the Enterprise Zone are able to access the skills support they need, we have established an Enterprise Zone Skills Fund. This will support the creation and publication of a skills plan which will set out the agreed skills priorities for the Zone and integrate these with broader skills plans and strategies in the Solent LEP area. The final output will be a jointly agreed set of skill priorities and a plan which will be published early in 2013 and it will reflect the development of the £12 million world class employer led Centre for Manufacturing and Engineering Skills training (CMAST) hub, based on the Solent Enterprise Zone. This will provide a platform to develop the long-term advanced technology skills requirements for the defence sector and wider supply chain, and critically it will create additional capacity to support the immediate and medium term skills development needs of existing and future businesses.


Priority Actions – Skills for Growth • Development of the Solent Skills hub framework to develop employer-led skills solutions on key

developments in the Solent area, creating 800 new jobs, 400 new apprenticeships and 600 work experience trials (in the period to 2014 and subject to approval by UKCES).

• Completion of the CEMAST, Advanced Manufacturing Training facility, by September 2014 to support the creation of 200 new apprenticeships places per annum at the facility to support the Advanced Manufacturing cluster.

• Development of a skills priority plan and delivery plan for the Solent Enterprise Zone by March 2013.

• Development of a Solent Skills Strategy for the area by September 2013.

• Promotion of the apprenticeship agenda, including the apprenticeship training agency and the Apprenticeship Grant for Employers.

Table 6.2: Priority Actions - Skills for Growth


The table below summarises the revenue and capital resources allocated to Skills for Growth for the period 2012-15.

Revenue £000

Solent EZ Skills fund £100

Growth and Innovation Fund 9 £90

TOTAL Revenue £190

Capital £000

CEMAST RGF Solent Futures Contribution £3,000

CEMAST Solent GPF Contribution £3,000


Grand Total £6,190


9 Includes £80,000 allocation from Growing Places Fund to support GIF Full proposal, and subject to approval by UKCES

SOLENT LEP – A STRATEGY FOR GROWTHINFRASTRUCTURE7.0

The Solent LEP is output driven and is dedicated to delivering improved coordination of private and public investment in transport, housing, skills, regeneration and other areas of sustainable economic development, focusing on:

Rebalancing the local economy away from dependence on the public sector;

Reindustrialising the economic base, supporting the development of knowledge-based industries and high value-added manufacturing;

Regeneration delivering a coalition between the private, public, voluntary and community sectors to continue the renaissance of the area’s cities and urban areas, tackling deprivation, meeting the skills needs of the economy and taking a leading role in finding low carbon solutions.

A key priority for Solent LEP is investment in infrastructure including transport, housing, flood risk mitigation and high speed broadband, which are required to unlock development sites in the area in order to deliver growth in employment supported by an appropriate level of housing. Some of these sites require a level of investment that is on the margins of what is commercially viable: others have stalled as a consequence of the recession. There is an adequate supply of land for development but there are often constraints that prevent early delivery - this affects development of Greenfield land as well as regeneration sites in urban areas that may require significant investment to make them fit for purpose.

In this context, a Solent Growing Places Fund has been established with Government funding to help stimulate growth by investment in infrastructure and development in a way that will support the area’s economic and investment priorities. This is a revolving capital infrastructure fund capable of unlocking jobs and homes in a way consistent with national objectives. The aim of the Fund will be to unlock private sector development and investment stalled as a consequence of the economic downturn and market failure, and to maximise the economic growth impact in the Solent area both in the short and longer term.

Our immediate aim is to deliver infrastructure improvements that will secure delivery of tangible outputs in the short term and which will align with other funding streams to create a larger impact. In the longer term, our objective is to prioritise investment and create a portfolio of potential projects in order to secure a planned approach to unlocking sites for future housing and employment in the Solent area.


In this initial phase, investment to support the delivery of business critical infrastructure on the Enterprise Zone has been prioritised with £11 million allocated from the Solent Growing Places Fund. This will to support the delivery of a an investment package in excess of £25 million, unlocking 21.6 acres of land for the development of new commercial space and up to 90 new homes. This will also support the development of 25,000 sq ft of new advanced manufacturing business space adjacent to the airfield and the CEMAST centre, due to complete by September 2014.

In addition The Department for Transport has announced its firm intention to devolve funding for local major transport schemes to Local Transport Bodies (LTBs) from 2015. LTBs will be voluntary partnerships between Local Authorities (LAs), Local Enterprise Partnerships (LEPs) and potentially other local organisations. Their primary role will be to decide which investments should be prioritised, to review and approve individual business cases for those investments, and to ensure effective delivery of the programmes. It has been agreed that the LTB for this local area should follow the economic geography of the Solent LEP and therefore a Solent LTB will be established. We expect to receive notification of indicative allocations shortly.


Priority Actions – Infrastructure

• Delivery of phase 1 business critical infrastructure package for the Solent EZ, unlocking 897 jobs (including 615 ongoing) and delivering an additional 90 new homes.

• Launch of round 2 of the Solent Growing Places Fund in 2013.

• Delivery of super fast Broadband to the Enterprise Zone by then end of 2013.

• Establishment of the Solent LTB by February 2013 and agreement of indicative allocations for major schemes to unlock economic growth by Spring 2013.

Table 7.1: Priority Actions – Infrastructure


The table below summarises the revenue and capital resources allocated to Infrastructure for the period 2012-15.

Revenue £000

Growing places fund £906

TOTAL Revenue £906

Capital £000

Growing Places Solent EZ Business Critical Infrastructure £8,000

Round one ring fenced capital funds11 £3,000

Round 2 funds £2,739


Grand Total £14,645


11 Applications submitted at EOI stage, subject to receiving full proposal

SOLENT LEP – A STRATEGY FOR GROWTHINWARD INVESTMENT8.0

Establishing a single inward investment model to encourage companies to open new sites in the region and to support them with effective marketing has been important to us. We fully understand that the Solent’s economic geography is interconnected. The Solent LEP have signed a Memorandum of Understanding (MoU) with the Government’s UK Trade & Investment service, making us the official local coordinator of inward investment opportunities and we have access, through our relationship with UKTI, to a host of national opportunities and we can help ensure businesses finds a suitable home somewhere in the UK.

In September 2011 the inward Investment Board supporting the Solent LEP agreed a two-stage approach to development of the inward investment service. During Stage 1 the emphasis on maintaining the gateway service and putting in place assets that will form the basis of Stage 2.

The second stage, in close collaboration with UKTI, will involve the creation of an integrated public/private sector vehicle for attracting additional inward investment enquiries based upon improving world economic conditions. Achieving a step change for the Solent region and to be seen externally as a truly competitive on a global stage, will require us to have a far greater profile and reach, only possible with a delivery model with greater critical mass and impact.

It is now appropriate and timely to take tangible action in moving towards Stage 2. The Single Gateway platform is established and, while further development work is needed, is working effectively as a platform for consideration of future arrangements. Moreover, the Gateway is funded largely through local authority contributions committed for an initial period to the end of March 2013 only. Local authorities may choose to renew their contributions, subject to satisfaction with the service, but will need to be assured that there is a long term sustainable solution to maintain and enhance the service. In addition the Solent LEP will require the Inward Investment structures to support the delivery of private sector led growth and the emerging City Deal developments. It is expected that a number of options will come forward for consideration, and this will include detail of budgetary implications. This can be used to inform future resources and budget for this priority.

SOLENT LEP – A STRATEGY FOR GROWTHINWARD INVESTMENT8.1


Priority Actions – Inward Investment

• Support the delivery of the inward investment function and single gateway service established in 2011

• Undertake options appraisal and agree Solent Inward Investment function for the period 2013-15, including a supporting budget.

Table 8.1: Priority Actions – Inward Investment

SOLENT LEP – A STRATEGY FOR GROWTHSTRATEGIC PRIORITIES9.0

The development of growth hubs and strategic sector based clusters which can deliver export-led growth in high value employment remains important to the success of the Solent economy. The area has unique sectoral strengths and there is a need to ensure that it builds on its recognised position as the leading location and growth hub for advanced manufacturing and engineering (marine, aerospace, renewable energy, environmental technologies and composites) together with supporting transport and logistics.

The major advanced manufacturing and marine cluster in the UK is located in the Solent area and is home to 1,750 marine related businesses. With GVA and GDP contributions of £3.6 billion and £1.9 billion respectively, the sector represents around 18% of the Solent economy accounting for some 48,000 jobs. The Isle of Wight is a centre for renewable energy activities and a technology hub for composite materials and their application in marine technology, renewable energy and aerospace.

Our focus has therefore been on developing strategic sectors and clusters (interconnected groups and businesses) of marine, aerospace and defence, advanced manufacturing, engineering, transport and logistics businesses.

In our first year of operation, we concentrated our efforts on developing advanced manufacturing. As part of this, a growth hub for advanced manufacturing businesses is being created at the enterprise zone at Daedalus, supporting new and existing businesses, as well as export-led growth in high-value services and employment and further detail on this can be found in the Enterprise section of this business plan.


Another key element of the Advanced Manufacturing sector in the Solent is the Defence industry and the Solent is home to a cluster of Defence businesses. Recognising the importance of this work, the University of Portsmouth were commissioned in March 2012 to produce a socio-economic impact assessment of the Dockyard in Portsmouth on the wider Solent economy. Overall the study showed that the Portsmouth Naval Base generates output of £1.68billion and supports both directly 11,900 FTE jobs and when including indirect jobs this figure raises to 19,775 FTE jobs.

These figures equate to 3.5% of LEP output and 4.1% of all FTE jobs. The base is particularly important to manufacturing where it supports nearly 7% of all jobs in the Solent LEP area. It is even more important to specific sectors such as Shipbuilding (70 percent of all FTE jobs); Property and facilities management (27 percent); Metal goods (22 percent) and Public administration and defence (14 percent). In addition every £1m directly generated by the base stimulates another £750,000 of spending elsewhere in other sectors in the LEP economy. In the case of employment for every 100 FTE jobs at the naval base the resultant downstream spending12 creates additional 66 jobs elsewhere in the LEP economy.

It is widely recognised that the level of activity at Portsmouth naval base is likely to change following a current period of peak shipbuilding activity however, what is not yet known is whether a contraction will release capacity for alternative activity. Therefore the defence sector and wider supply chain need to prepare for a transition as the emphasis moves away from ship building towards maritime support. The Solent LEP needs to ensure that we are well placed to support this substantial rebalancing of the economy, securing the valuable economic assets that we have in advanced manufacturing and defence. As a result we submitted a RGF Round 3 programme bid to support and develop the Defence cluster, the wider supply chain and our complex warship hub at this uncertain time with the objective of fundamentally securing the Solent as a global hub for Advanced Manufacturing and Defence. The intention being to bring forward new economic opportunities, including a £54 million Business transformation programme to support local companies in the complex warship hub to restructure their operations and preserve the very rich economic asset base that we have, and to reflect the increased emphasis on high end maritime services, with a view to safeguarding 1670 direct jobs, creating 300 direct jobs and creating/safeguarding a further 1200 indirect jobs.

Working with key companies such as BAE Systems, as well as the cluster of SMEs in the Defence supply chain, the Solent LEP has developed a growth strategy for the sector, incorporating the Solent Enterprise Zone and grant funding available through the range of RGF programme funds that we have to support the Advanced Manufacturing sector.

12 On average 100 FTE naval base jobs result in downstream expenditure of around £6million.


Looking towards the “greener” parts of our strategy, members of Solent LEP together with the Partnership for Urban South Hampshire (PUSH) are drawing up an action plan to help work towards a ‘low carbon’ economy for the Solent region. The development of the Solent as a Low Carbon Economy represents a significant opportunity for both the Solent LEP and PUSH to deliver not just environmental benefits, but economic growth and jobs.

It is important to recognise that this agenda cannot be delivered effectively by one organisation or partnership working alone, but that a range of partners will need to be engaged. In March 2012, PUSH agreed to support the delivery of the agenda and has committed limited resource to assist with this. On behalf of the local businesses, the Hampshire Chamber of Commerce has also offered to commit resources to the delivery of this agenda, offering to establish and run a Programme Board and provide other support around funding bids and project management. Both Southampton and Portsmouth Universities have committed to engage with the agenda and an agreed programme of actions and projects, offering to lead projects and also help identify and secure funding.


12 On average 100 FTE naval base jobs result in downstream expenditure of around £6million.

Priority Actions – Priority Sectors

• Delivery of the RGF round 3 £10 million Solent Futures programme, with a view to safeguarding 1670 direct jobs, creating 300 direct jobs and creating/safeguarding a further 1200 indirect jobs, to commence Spring 2013.

• Establish the Programme board to support the Solent Low Carbon Economy.

Table 9.2: Priority Actions – Priority Sectors


13 Subject to contract with BIS

The table below summarises the revenue and capital resources allocated to Infrastructure for the period 2012-15.

Revenue £000

RGF Solent Futures £10,000 13

TOTAL Revenue £10,000

Capital £000

RGF Solent Futures £0

Capital Total £0

Grand Total £10,000


Should you have any general queries on any of the information included in this document, please contact Richard Jones at the Solent LEP using the contact information:

By email to:[email protected]

Or by telephone on:02392 688 924

Solent LEP Growth

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