Growth Deals gain momentum: firing up local economies

29 Jan 2015 02:00 PM

The government is expanding Growth Deals, with a further £1 billion of investment in local economies across England.

As part of its long-term plan to build a stronger economy and a fairer society, the government is investing a further £1 billion in local economies across England by expanding the successful Growth Deals.

View an interactive map showing highlights of each region’s growth deal.

Agreement has been reached with all 39 Local Enterprise Partnerships (LEPs) to expand significantly the Growth Deals that were struck last July. The funding, to be devolved from central government into the hands of local authorities, businesses, colleges and universities will help to train young people, create thousands of new jobs, build thousands of new homes and start hundreds of infrastructure project, including transport improvements and superfast broadband networks.

Growth Deals are a revolution in the way our economy is run. For the first time ever, infrastructure, housing and other funding has been brought together in a single pot, and put directly into the hands of local authorities and businesses to invest with their knowledge of what is needed in their area to maximise their potential economic growth.

Prime Minister David Cameron said:

Giving local communities the power and the money to unlock growth and development and make the spending decisions that work for them is a key part of our long-term economic plan to secure a brighter future for Britain and ensure a recovery for all.

That’s what Growth Deals are all about, backing local people and investing in the infrastructure, housing and skills that will drive forward local economies, create more jobs and opportunities for hardworking people and supercharge all parts of our country.

The Deputy Prime Minister, Nick Clegg, said:

A quiet revolution is underway in regions across the country and Growth Deals signal the death of the culture where Whitehall calls the shots. I’ve seen for myself the difference it makes to give local areas real power over skills, over business support, and over infrastructure spending.

The coalition government has been relentless in our efforts to sort out the public finances and set firm foundations for growth. Growth Deals help create a stronger economy and a fairer society by boosting local economies, and providing more jobs, better transport and affordable homes.

Greg Clark, Minister for Cities, said:

For Britain to fulfill its potential every part of the country must be an engine of growth. Our successful programme of City Deals and Growth Deals has put power and resources into the hands of local leaders. This billion-pound expansion of Growth Deals fuels the momentum that is now underway in our local economies.

Major projects

Some of the major projects that are being taken forward as part of the expansion of Growth Deals are:

Improving infrastructure and unlocking developments which will create thousands of new homes

These include:

£17 million investment in improvements to the A2300 Burgess Hill link road which will relieve congestion and enable a significant housing development and £15.8 million towards the multi-year transport project in Fareham and Gosport, which will improve access to this area and the Solent Enterprise Zone. In addition, this investment will support the proposed development of 6,000 homes at Welborne.
The Tolgus and Barncoose junction improvement project (£5.9 million matched with £1.7 million) will create a gateway between Redruth and Camborne in Cornwall, unlocking access for over 600 homes, 5,000 square metres of commercial space and the Kresen Kernow cultural project.
The first phase of the development of the Lincolnshire Lakes scheme that will ultimately deliver 6,000 new homes, delivering the first of 5 large lakes, surrounded by watercourses, sustainable drainage systems and green infrastructure corridors creating 310 new homes, 150 new jobs and £2 million leverage.
Around £6 million to help to bring forward sites for housing and jobs in the Black Country, including £2.3 million in Sandwell, and £0.4 million towards the development of Walsall Waterfront.

Millions of pounds for projects around the country to boost the skills that local businesses say they need

These projects include:

£8.7 million investment in Greater Birmingham and Solihull to create new training facilities, in Solihull and Birmingham, helping to address skills shortages in key sectors of the local economy
£25 million (£5 million plus £20 million local match funding) towards the development of a National Maritime Systems Centre of Excellence in Portsmouth. This centre will focus on maritime and marine capabilities, safeguard and create jobs as well as increasing exports.
£18.3 million for new innovation and training centres in New Anglia to allow more people to get the skills they need for jobs in growth sectors including energy, engineering, technology and advanced manufacturing. This includes £3 million for an aviation academy which brings together the public and private sectors to support young people to develop skills, including 80 apprenticeships a year to train staff in the full range of aviation skills. This not only helps businesses, but also young people who might struggle to get a job.
£5 million for the Institute for Advanced Manufacturing at Nottingham University, which has match funding from the University and industry of £95 million. This project will train more than 3,000 manufacturing engineers and deliver research and knowledge exchange worth £60 million.

Investment in innovation and new technologies to enable cities and communities to compete globally

This includes:

£4.5 million to establish a Very Light Rail Innovation Centre in the Black Country which will help to create new public transport technologies for the future
£2.6 million to support the development of a new technology to bring motorway and local road traffic systems together, using cloud based systems, to improve local journey times, by giving drivers live traffic information
£4 million to expand Engine Shed in Bristol, the highly successful business incubation facility. This investment will provide further incubation and grow on space for high tech companies. This investment will be matched with £5 million of local funding.

Funding for broadband networks in areas where provision is not currently available, such as remote or rural areas

This includes £6 million for the Heart of the South West that will contribute towards tackling the next 5% of premises in hard to reach areas (matched with £6 million of local funding) and £3.6 million for Cumbria to extend availability of Superfast Broadband to an additional 5,000 premises.

Lord Heseltine said:

The first round of Growth Deals proved that this model can work well, and this further set of deals demonstrates the government’s commitment to driving growth. The work that this government is doing through these deals represents the most bottom-up approach to growth that I have seen in my life time, and the opportunity that it offers to local areas to drive their own agenda is huge.

Alex Pratt, Chair of the LEP Network Management Board said:

This expansion of growth deals with another £1 billion of projects is very welcome and a further vote of confidence in LEPs and the importance local decisions setting the priorities for economic growth. The partnership of local business and local authorities continues to strengthen as more responsibilities are passed to them and LEPs remain focused on delivering these projects for the benefit of local communities.

Notes to editors

The Local Growth Fund was established in response to Lord Heseltine’s report No Stone Unturned.
Each of the 39 Local Enterprise Partnerships was invited to submit by 31 March 2014 a strategic economic plan outlining their local priorities to maximise growth.
In Investing in Britain’s Future, published alongside Autumn Statement 2013, the Local Growth Fund was committed to be at least £2 billion a year from 2015 to 2016. It is drawn from the existing budgets of central government departments.
In 2015 to 2016, £1.1 billion of the Fund was already committed (principally to local transport projects). This left £930 million to be allocated competitively in 2015 to 2016. Plans for using this funding were assessed according to their ambition and rationale, value for money and deliverability.
At Autumn Statement 2014 the government announced it would be awarding a further £1 billion of the Local Growth Fund. yesterday’s announcement sets out what Local Enterprise Partnerships intend to deliver with their additional allocation. As part of the process for agreeing the expansions to the Growth Deals, plans for using this funding were assessed according to their ambition and rationale, value for money and deliverability.
LEPs will be permitted to exercise flexibility to substitute other projects if they have been rigorously assessed and offer comparable or better value for money. The stronger the track record of delivery, the greater the flexibility the LEP will have.
Growth Deal discussions for future years will continue. Of the £12 billion Local Growth Fund, around £5 billion remains to be allocated.
The Deals are part of the government’s long-term plan to boost growth around the country, following among other projects, the multi-billion pound Regional Growth Fund and the City Deals signed with 26 urban areas across the country.
In June 2010 the government invited businesses and councils to come together to form Local Enterprise Partnerships whose geography properly reflects the natural economic areas of England. 39 Local Enterprise Partnerships have been created to decide what the priorities should be for investment in roads, buildings and facilities in their area.
View a full list of Growth Deal allocations to local enterprise partnerships