Hampshire County Council

Cabinet Item 7

23 January 2006

Hampshire County Council response to the draft Regional Economic Strategy

Report of the Chief Executive

Contact: John Rees-Evans, Head of Economic Development, Ext: 6628 e-mail: [email protected]

SUMMARY: This reports reviews the Consultation Draft issued by the South East England Development Agency (SEEDA) in preparation for the roll forward of the Regional Economic Strategy 2006 - 2016, and puts forward a series of recommended responses reflecting the County Council's own priorities, and its role as a sub-regional partner.

1. Introduction

The South East England Development Agency (SEEDA) has recently published a "Consultation Document" as the basis for rolling forward the Regional Economic Strategy (RES) to the years 2006-2016. SEEDA is seeking responses from key stakeholders in the region, which will form the basis for the final draft strategy to be submitted to the Office of the Deputy Prime Minister in February/March 06. The deadline for the Council's response is 17 February.

The RES is a significant document, which, as a set of Government-adopted policies for the region, has considerable influence not only over SEEDA's own budget (approximately £160m revenue budget in 2004/05 and net assets of ca. £140m) but over the expenditure of other government departments and agencies. It will influence:

· infrastructure investment (e.g. Department of Transport)

· skills development (e.g. Learning & Skills Council)

· business development (e.g. Business Link/DTI)

· community regeneration (e.g. ODPM etc.)

· Lottery-funded projects etc.

It is therefore vital that the views of the Council are reflected in the substance of the Strategy, as government funding for related projects is unlikely if there is no priority in the RES. SEEDA is seeking formal responses from its partners in the region and poses six questions with reference to the plan set out in the document:

1. Which of these or other challenges do you believe are most important for the future of the South East economy?

2. Which are the key issues and opportunities for intervention, and who should intervene?

3. What future inspiration or vision do you have for the South East economy?

4. Which of these or other objectives, measures and key tasks would you prioritise?

5. What will your organisation contribute to the achievement of the objectives and key tasks?

6. How should SEEDA's own activities be concentrated in contributing to the objectives and key tasks?

This report reviews the proposals and policies set out in the Consultation Document and recommends a response based on the questions posed. Copies of the Document have been circulated to Cabinet Members by separate post. It is supported by two supplementary publications: "The Evidence Base: Interim Paper" and the "KPMG Economic Impact assessment", copies of which are on the SEEDA website or available from the Economic Development Office or the Environment Department.

2. Consultation Document

2.1. The Consultation Document:

Sustainable Prosperity: the core of the proposed Strategy:

The characteristics of the proposed strategy are to build on excellence, invest in potential and safeguard quality of life. The overall aim is to maintain the historic trend of 3.2 per cent annual growth in Gross Value Added per head while at the same time reducing what is termed the ecological footprint of the region: a contemporary, spatial measure of the environmental impact of development and production. The key, long-term economic targets are to achieve a five per cent improvement in the annual productivity growth rate and bring 250,000 additional residents of working age back into employment by 2026.

The Evidence Base document identifies a range of factors that are likely to have an influence on the achievement of these aims over the period of the strategy:

· Significant demographic change - the population of the South East is set to become older on average with a lower proportion of working age and a smaller pool of available labour

· Polarised employment structure - the emergence of the "hour glass" economy with greater proportions of the working population engaged in either high skill or low skill occupations

· Growth in productivity - which is forecast to be strong in the region over the next ten years and will be necessary to maintain levels of output in the economy

· Slower output growth - despite the expected growth in productivity, output is expected to grow at a lower rate than the historical average for the region

· Significant disparities in the prospects of different parts of the region.

In setting out policies aimed at maintaining overall economic prosperity in a sustainable way and addressing weaknesses or areas of deprivation, the Consultation Document adopts a three pronged approach. This is based on six economic `drivers', an area-based differentiation in the policy approach, and a no. of `themes' which are cross-cutting and run through the whole document.

2.2. Economic Drivers

The key structure is based on the "six drivers of prosperity":-

· employment

· enterprise

· innovation and creativity

· skills

· competition and business regulation

· investment in infrastructure

However, running through the Document are a number of "area-based" variations and a number of "themes".

2.3. Area-based approach:

The Review identifies three types of area:

· the Inner South East

· the Outer South East

· The Coastal South East

Based on the analysis that the three types of area have different economic structures and dynamics, the Document proposes variations in the policy response. In Hampshire, all three banded areas are present from Basingstoke and north east Hampshire (Inner South East) to the belt of mainly rural mid-Hampshire (Outer South East) to the urban area of south Hampshire (Coastal South East). However, there are some problems with this approach for a no. of Hampshire towns (e.g. Andover, Aldershot, New Milton), as they exhibit different characteristics from those of the band in which they find themselves.

2.4. Themes:

Three themes are threaded into each economic driver section:-

· "the ICT Enabler"

· "the sustainability dividend"

· "rural aspects"

This approach enables the Document to reflect "cross-cutting" issues which affect every area of activity.

3. Role of Hampshire Economic Partnership (HEP)

HEP is a business-led Partnership (the Deputy Leader is the Vice Chairman) working for Hampshire's economy, which has consulted widely on business priorities for Hampshire. It has adopted a set of "Strategic Priorities" for the Hampshire Economy (available from the Economic Development Office) which can be summarised as:

· meeting the future workforce needs of business

· providing appropriate land use and availability

· delivering effective transport and infrastructure solutions

· driving sustainability as an integral part of economic development

· delivering growth through key trade sectors

· promoting innovation and enterprise

These Strategic Priorities will form the basis of HEP's response to the Consultation document and show how each action area will be delivered sub-regionally. As a leading member of HEP, the County Council will also have the opportunity to inform the HEP response and help ensure that stakeholders in Hampshire `speak with one voice'.

4. Hampshire Economy

4.1. Issues for the Hampshire Economy:

Analysis of the trends in Hampshire show that, overall, the economy is performing well with low levels of unemployment and adequate business investment.

However, there are challenges which the County Council and its partners need to face:

· globalisation and the attraction of low labour cost areas has led to substantial manufacturing disinvestment to areas such as Eastern Europe and the Far East

· supply side pressures on skills availability and infrastructure are affecting business competitiveness

· there are serious implications for the economy as a result of demographic change and an ageing workforce (as noted in the Consultation Document)

· employment land is being lost to housing, and there are land pressures arising from the increase in waste, and the need for better `resource management'

· rural parts of Hampshire are going through major economic and social change, with the restructuring of the CAP (e.g. single farm payments and the changing face of our market towns)

· urban south Hampshire has significant pockets of deprivation and, as an area, is underperforming relative to the rest of the region in terms of economic output and productivity (this has been a key factor in the setting up of the Partnership for Urban South Hampshire - PUSH)

· there are many people out of work or lacking basic skills, and large numbers of people with health conditions and disabilities who would also like to be in a job (e.g. there are approximately 25,000 people on Incapacity Benefit, including the Cities). There are also approx 30,300 people wanting a job - reflecting a pool of potential labour as yet untapped

4.2. The County Council has a key role to play in addressing these issues and will be looking to the RES to influence the expenditure of all government funded agencies, possibly through the development of Local Area Agreements.

5. Economic impact and role of Hampshire County Council

The County Council has a statutory duty to produce a Community Strategy to `promote economic, social and environmental well-being' (Local Government and Housing Act 2000). It is thus well positioned to lead action on the economy as well as healthy communities and social well-being. The Council's Corporate Strategy states its third corporate aim as "achieving economic prosperity". "Every Child Matters" and The Children Act 2004 also identify "achieve economic wellbeing" as being one of the five main anticipated outcomes. It fulfils these aims both directly and indirectly:

5.1. Employment: As an organisation with over 30000 staff and net revenue annual expenditure of well over £1B, the County Council has a significant impact on the Hampshire economy in its own right. It is also very concerned to implement strategies for health and well-being and enable children through the `Every Child Matters' strategy. The Council's Human Resources service has developed best practice in the fields of staff retention and diversity, employee health and well-being, and occupational health.

5.2. Enterprise: The County Council is committed to supporting the growth of enterprise in Hampshire (e.g. the Local Public Service Agreement on enterprise formation), and through its economic development and business support programmes. It also purchases goods and services to a value of over £200m p.a. locally, and has signed a Concordat with the Federation of Small Businesses to support access to public sector markets by local small businesses.

5.3. Innovation and creativity: Through, for example, its support for cultural and creative industries, the Council makes a significant contribution to innovation and creativity in Hampshire.

5.4. Skills: The Council has substantial influence, through the Children's Service and delegated school budgets, adult education, the youth service and as the second largest employer in Hampshire. It has also set specific targets in this area as part of the Local Public Service Agreement. This could be used to help drive a medium to long term skills and lifelong learning strategy in partnership with Post-16 and Further Education Colleges, the Learning and Skills Council, businesses, and other relevant agencies and providers.

5.5. Competition and business regulation: The Council can affect the local economy through its strategic plans (e.g. transport strategy, development proposals) and through its role as a regulator (e.g. trading standards).

5.6. Investment in infrastructure: The Council has an annual capital expenditure in excess of £170m of which £30m is spent on roads and IT. It is also a significant investor in environmental improvement conservation and cultural development projects. These contribute to the quality of life which attracts and retains business investment.

In view of the extensive impacts that a Council such as Hampshire County Council can have, it is surprising that the Document makes so little mention of the role of the Local Authorities as partners in the Regional Economic Strategy.

6. Working in partnership with SEEDA

The County Council has many partnerships with SEEDA, including:

· Supporting the Hampshire Economic Partnership

· Representation on various regional bodies such as Culture South East, Tourism South East etc

· Hampshire Market Towns Partnership, including Health Checks and town investment programmes in New Milton, Whitehill/Bordon

· Joint working on town initiatives in Andover and Havant, and various Single Regeneration Budget (SRB) funded schemes

· Sustainable Business Partnership - working with SEEDA and other partners to promote the sustainable use of resources by businesses

· Hampshire Broadband Partnership - working in partnership to promote the uptake and effective use of fast communications technologies by business. It includes the provision of solutions in telephone exchanges not being "broadband enabled" by BT

· Hampshire Fare and promotion of local food

· A pilot scheme to develop improved approaches to the use of broadband technology in flexible working practices, and involving partnership with the private sector

· Working with the "Area Investment Framework" for south east Hampshire to improve economic performance in the sub-region

7. What are the priorities for the County Council in developing our economy, and how do these relate to the approach in the Document?

7.1. Economic Drivers:

7.1.1. employment

The Council wishes to see employment opportunities for all, and welcomes the drive to increase economic activity rates by providing support for those currently unable to access employment through incapacity or social or educational exclusion. It welcomes the aim of minimising the impact of economic growth on inward migration with all the increased infrastructure pressures that would bring. There is also a role for the voluntary and community sector in providing people with pathways back into full time work.

Recommendation: the RES should aim to ensure maximum and effective use of our existing labour resources (including reduction of outward commuting, use of volunteers and development of new skills/lifelong learning), and keep inward-migration restricted to areas of skills shortages in the County.

7.1.2. enterprise

The Council is committed to supporting enterprise in Hampshire and has a dedicated economic development service aimed at serving existing Hampshire businesses and the creation of new businesses. It also aims to manage its policies in such a way as to provide an environment which does not hold back enterprise. The Council supports social enterprise and young entrepreneurs (c.f. Princes Trust).

Recommendation: the Council will continue to work with SEEDA and other partners to ensure that the County provides a positive environment for the stimulation of enterprise. SEEDA should make positive reference to the role of relevant voluntary groups.

7.1.3. innovation and creativity

The Council and its partners provide substantial support for the cultural infrastructure (arts centres, festivals, exhibitions theatres and performance venues etc), which makes a demonstrable contribution to the development of `knowledge-based' industries, involving creativity and innovation. It has also supported the creative and media industries consortium Wired Wessex Ltd.. The Council regards the `Measure' in the Document which refers to the "emergence of key towns and cities as centres of creativity" as of fundamental importance.

Recommendation: The RES give greater emphasis to the significance of the `cultural and creative industries' in fostering innovation and creativity

7.1.4. skills

The RES should give a lead to government on funding for skills development, including basic skills, adult education, "worklessness" (e.g. post 50s), and alternative pathways to learning. The County Council is a key player in this area through its Departments responsible for Children's Services, Adult Education and Human Resources (e.g. occupational health) and Recreation and Heritage (which provides extensive formal and informal learning programmes). It has pioneered a new approach to apprenticeships which could be extended through the region amongst other major employers. The RES should also not lose sight of the continuing need for training in vocational skills, which are essential in a high added value, knowledge based economy (key task 1.8 on page 27 of the Document is relevant to this point). There is also a need to help pass on skills between generations and retain skills in the workforce.

Recommendation: the RES incorporate specific reference to the vital role of strategic Local Authorities in this area of provision and the importance of continuing funding for adult education and lifelong learning

7.1.5. competition and business regulation

Through its Trading Standards services, and its Buy with Confidence and Fair Trading Schemes, the Council provides positive support to businesses to help them deliver a quality service to the public. It is not always a question of restricting business but rather providing effective information on regulations. In addition, business needs to know about European Directives and Regulations, which can prove a minefield to smaller businesses, and contracting conditions by major organisations (e.g. public liability cover requirements).

Recommendation: SEEDA give consideration to improving advice to business on regulations and contracting conditions, working with the public sector and agencies such as European Information Centres.

7.1.6. investment in infrastructure

a.) Land provision:

Substantial pressures are being experienced in responding to housing and employment needs. This has resulted in a concern at the loss of employment land to other uses, especially housing. The RES should acknowledge the agreements reached through the South East Plan process in seeking balanced and sustainable growth. Initiatives to address "worklessness", and to increase economic activity rates and productivity are crucial in achieving the best use of available resources without impacting on land take-up and inward migration. SEEDA also has a key role in assisting the release of significant employment sites which are currently constrained from being brought onto the market. The County Council and its partners has undertaken significant pieces of research in identifying such sites.

Recommendation: the RES should accept the South East Plan proposals for employment and housing land provision and give the lead to "smart growth". It needs also to reference its role in assisting the release of `constrained' or `brownfield' employment sites (including the use of Compulsory Purchase Order powers).

b.) Infrastructure:

The provision of physical infrastructure improvements, particularly in South Hampshire, is essential, if the area is to meet economic growth targets. The RES must acknowledge this and include references to key major projects (and barriers to growth) in its submission to ODPM.

In addition, policies and funding which lead to the reduction of pressures on infrastructure should be supported through programmes such as flexible working, e-government and the increased use of ICT.

The Consultation Document recognises that investment in infrastructure should not be confined to improving "connectivity" through more efficient physical transportation systems and digital networks. Under this heading, it identifies the need for investment in housing renewal, urban renaissance, the reuse of brownfield land and the provision of cultural and community facilities. This wider view of essential infrastructure to support sustainable economic prosperity is shared by the County Council.

Recommendation: the RES specify major infrastructure projects required to support growth, based on those identified in south Hampshire by `PUSH' and others identified by the County Council for Hampshire. The RES should also give increased emphasis to the key role of ICT in the efficient use of labour resources. The RES should also give a strong lead on the importance of the wide range of infrastructure improvements which are a necessary component of its vision for sustainable prosperity.

c.) "Second tier towns"

"Second tier towns" are undergoing significant change in their retail and industrial offer and physical conditions and are often neglected in the drive to regenerate major cities and historic market towns. There is a need to spread the benefits of urban regeneration beyond Portsmouth and Southampton city centres to Hampshire's "Second Tier" towns, e.g. Eastleigh, Andover, Totton, Aldershot, Farnborough etc.

This would enable these towns to offer, for example, local access to learning and encourage businesses and property owners to improve working environments and training opportunities.

Recommendation: SEEDA make specific references to the needs of these towns (not marked on the Document's map) and engage with other regional and national bodies e.g. Government Office for the South East and the Association for Town Centre Managers.

7.2. Area focus:

7.2.1. General principle

Although it is not clear in the Document why there is a difference between the areas defined in the Regional Spatial Strategy (South East Plan), the County Council supports the `broad-brush' area differentiation proposed in the RES. The needs of north east Hampshire, rural mid Hampshire and urban south Hampshire are very different. Nevertheless there may need to be some "fine-tuning" in the case of towns such as Andover and Aldershot (see also the point made in para 7.1.6. (c) above), which exhibit different characteristics from the broad area band to which they have been allocated. Many of the towns in the different areas see tourism and the cultural and creative industries as drivers for economic transformation, this needs to be more clearly reflected in the RES.

Recommendation: (i) the Council supports differing sub-regional approaches which meet the needs of local areas, and encourage distinctiveness and a sense of place. To fulfil this local aspiration, SEEDA should devolve its programmes to the lowest appropriate tier of Government. The RES should put more emphasis on the role of tourism and the creative and cultural industries as drivers for economic transformation in many of the towns in the south east.

(ii) The Council questions the need for the RES to designate different areas from those identified in the South East Plan.

(iii) It would also like to see the coastal belt in the RES extended to the Dorset border in the New Forest District.

7.2.2. Rural Areas:

Hampshire has been designated as a Rural Pathfinder and is looking to the RES to give substantial recognition to the need for government to be more "joined up" in its response to the challenges faced by rural communities. Whilst the addition of the rural theme to the Document is welcome, it needs to be strengthened with a full section of its own, setting out a response to the particular economic challenges faced by rural areas as identified by the Countryside Agency and the Commission for Rural Communities. Rural areas also need to be understood as being significant contributors to the quality of life of urban areas. Tourism plays a significant economic role in the rural areas (as seen by the Foot and Mouth outbreak in 2001) and this needs to be reflected in the RES.

Recommendation: the Council welcomes the RES references to "rural aspects", but would like to see a specific section for rural areas. The Document also needs to remedy the omission of references to the important economic role of National Parks and acknowledge the important role tourism plays in the rural economy.

7.2. Themes:

7.3.1. Sustainability:

The emphasis on sustainable development throughout the document is very welcome, as is the identification of new business opportunities arising from environmental technologies. It does not, however, contain a statement of commitment to promoting local supplies, particularly in the case of the use of local supply chains and such issues as the reduction of `food miles' by the use of local producers.

Recommendation: the Council welcomes the Document's emphasis on a sustainable approach to future growth, but urges the inclusion of references to the importance of local purchasing.

7.3.2. ICT "enabler"

The Council agrees that this is of critical importance if the benefits of broadband technologies and ICT are to be harnessed for `smart growth'. Initiatives supporting ICT development should be widened to include all the activities of the Agency (e.g. business development).

Recommendation: SEEDA give significant emphasis to the "ICT enabler" in their support programmes in the RES.

8. General comments on the Document:

8.1. London

The absence of any reference to the significant impacts of London on the south east economy (economic success/commuting etc) needs to be remedied in the Strategy. A significant example would also include the potential impact of the 2012 Olympics.

8.2. Results

The final strategy will need to set out clearly the resources to be allocated, the results sought and the specific targets. It will also have to have clear statements of the role of partners and especially how budgets and programmes may be devolved to sub-regional partners. There needs to be a clear distinction made between the strategy for the region and SEEDA's operational role.

8.3. Links to other plans

Whilst the Document's purpose did not necessarily involve detailed cross-referencing of other strategic plans, the final Strategy should demonstrate how these are linked. In particular, reference needs to be made to the South East Plan.

8.4. Role of Local Authorities

There is no mention of Local Authorities in the Document. In the absence of a regionally elected tier of government, it is essential that SEEDA gives more recognition to the role of Local Authorities in making a balanced and accountable judgement of the priorities of the communities which they serve. The development of Local Area Agreements should help drive this process and provide an effective delivery vehicle for more `joined-up' government at the local level. However, the Strategy will need "to differentiate clearly the roles of individual County Councils and sub-regions in contributing towards the overall achievement of sustainable development" (Cabinet decision 26^th September 2005).

8.5. Other Agencies

The Strategy needs to make clear the links to the programmes and budgets of agencies such as the Learning and Skills Councils, Business Link etc., particularly in view of the increasing degree of centralisation and control being exerted on these government-funded agencies. This can easily result in a move away from local solutions for local challenges.

9. Conclusions:

9.1. By any conventional measures, the South East is the UK's most successful region. However, beneath the headlines and averages lie substantial variations in performance with concentrations of deprivation and exclusion made all the more unacceptable by the prosperity that surrounds them. In the areas of economic success come the challenges of labour shortages, lack of affordable housing and congestion. In areas of deprivation come the challenges of enhancing expectations and providing opportunities for both individuals and business to develop and adapt.

9.2. The RES cannot, by itself, ensure the creation of sustainable economic prosperity of the South East. It is important, therefore, that all the partners who will be involved in the process are committed to the Strategy and clear about their role in delivery. It is important, therefore, for all the stakeholders to respond constructively so that the final document is clear and unambiguous.

9.3. Looked at from a Hampshire perspective, the long-term economic targets of productivity improvements and increased employment rates underpinning the aim of maintaining the long term trend of 3.2% annual growth in GVA per head while seeking to reverse the ecological footprint of the region are both consistent with the County Council's policy objectives for Hampshire as set out in the recent sub-regional advice provided to SEERA. Support for "smart" growth, is essential if the cycle of additional jobs leading to the need for additional labour leading to increased migration and greater demands for housing is to be interrupted. The emphasis on investment to support development and change also fits with the County Council's view that the development of sustainable communities depends on the timely development of both physical and social infrastructure.

9.4. As a matter of presentation, a general problem with the consultation document is that, in order to be brief, most of the evidence has been relegated to the supporting documents and much of the justification is either taken as read or presumes a higher level of understanding of concepts than may be the case. The final document would be much improved if the critical evidence was included - either in the text or by clear cross-referencing, and the technical jargon replaced by more straightforward language.

9.5. The Consultation Document is, however, a welcome and comprehensive step towards a new Regional Economic Strategy. It successfully details many of the policies needed to achieve sustainable growth , particularly the need to foster creativity and innovation to retain the region's competitive advantage. The key issues will be the balance of resource allocation between the various priorities, and the extent to which the Strategy will be able to provide a co-ordinating lead for all public funding in the region. It will also be judged on how far it is able to go to enable locally elected Councils to address the particular needs of the communities, which they serve.

APPENDIX 1

Hampshire County Council

Proposal response to SEEDA question posed in Consultation Document for the Regional Economic Strategy

1. Which of these or other challenges do you believe are most important for the future of the South East Economy?

The key challenge facing our economy is to maintain global competitiveness, whilst ensuring a balanced approach to land take (housing and employment) and other supply side factors (skills, infrastructure). The Document correctly identifies the solution as being based on increased productivity, higher economic activity rates and investment in research and development. It also correctly recognises the need to foster creativity and innovation to maintain competitive advantage. However, there will be a continuing need for service sector development including unskilled and semi-skilled workers. Investment in vocational training is an important element in this.

2. Which are the key issues and opportunities for intervention and who should intervene?

The role of the public sector is to focus on the balanced provision of investment in supply side factors (land, physical and social infrastructure, skills). Responsibility for this should be based on "subsidiarity" i.e. the devolution of control to the lowest administrative level appropriate (e.g. Local Development Frameworks, Local Area Agreements between strategic Councils and Government-funded agencies). The public sector also has a key role in promoting best practices (e.g. use of ICT in e-government, flexible working etc). Social inclusion should also be a priority for initiatives to tackle our most deprived communities.

3. What future inspiration or vision do you have for the South East economy?

The County Council's vision for Hampshire and indeed the whole of the South East economy is to maintain our global competitiveness, retaining and attracting new investment whilst ensuring that all have the opportunity to participate in a high quality of life.

4. Which of these or other objectives, measures and key tasks would you prioritise?

To achieve our vision of an inclusive society with high levels of investment and growth, we believe the following are essential:

i) measures which increase added value activity, whilst minimising impacts on the supply side (land, people, physical and social infrastructure)

ii) Flexible working practices, improved skills and knowledge transfer, use of ICT both as an enabler and as a core infrastructure, increased productivity and workforce participation

iii) Targeted action to address market failure, whether it be in deprived communities or in business achievement

iv) Provision of major infrastructure projects to support growth

v) Promotion of sustainable practices to include waste minimisation, recycling, new environmental technologies, local purchasing and local supply chains

vi) Improved co-ordination and focus of public sector funds in the form of genuinely devolved control through Local Area Agreements

vii) Support to the voluntary and community sector in their role of social support as a route to paid work and as a seedbed for social enterprise

viii) Targeted action to address the particular economic issues affecting rural communities in the region

5. What will your organisation contribute to the objectives and key tasks?

The County Council will work in partnership with SEEDA.

As the elected representatives of 1.2m people, the Council its twin aims are to:-

i) lead the improvement of the quality of life for all its communities and

ii) deliver cost effective quality services to the people it represents

As a major organisation with a budget of £1.3b and employing over 30000 people in Hampshire, it will be able to make a major contribution to the success of the Strategy. In particular, this will focus on the activities set out in paras 5,6 and 7 set out in the main body of the report. In its turn, SEEDA should ensure that as many as possible of its programmes are delegated to the sub-regional level to allow maximum local and democratic accountability.

6. How should SEEDA's own activities be concentrated in contributing to the objectives and key tasks?

SEEDA should focus on:-

i) activities which support "smart growth", encouraging initiatives which build sustainable competitiveness

ii) areas of greatest need, where people or communities are suffering exclusion or deprivation

iii) supporting local partnerships and better co-ordination of government-funded agencies/departments

iv) facilitating the release of significant employment sites especially those which are `allocated' but not available to the market

Regional Economic Strategies APPENDIX 2

Government guidance on the production of regional economic strategies:

1. The role of a Regional Economic Strategy (RES) is to provide a shared vision for the development of a region's economy, to improve economic performance and enhance competitiveness. It is required to focus on the key economic issues for the region and the address the market failures that are preventing sustainable economic development, regeneration and business growth. Although the local Regional Development Agency (RDA) has the duty to prepare a RES and keep performance under review, the aim is that the strategy is owned by, and draws on, the resources of the major partners in the region. Accordingly in developing, monitoring and reviewing the RES the Development Agency is required to consider the views of key stakeholders, particularly the Regional Assembly, on how the proposed Economic Strategy aligns with the Regional Spatial Strategy, the Regional Transport Strategy and the Regional Housing Strategy.

1. Guidance has been issued by the Secretary of State of Trade and Industry to assist RDAs with the preparation of regional economic strategies. Apart from restating the purpose of a RES and aside from practical considerations such as partnership working, consultation and collecting evidence, the guidance gives clear advice on the content, coverage and spatial dimensions of the RES. Specifically the RES required to:-

· look to the medium to long term (at least 5-10 years);

· identify key strategic issues for the region with clear priorities;

· consider the links with areas such as environment, transport, housing, tourism and culture where these have an impact on the region, or a part of it; and

· identify the organisations responsible for delivering particular aspects of the strategy and over what timeframe.

3 The RES is also required to reflect the distinctiveness of the different parts of the region and identify areas with significant problems such as deprivation, inequalities and social exclusion and the main social, economic and environmental factors which underlie these issues. As an economic strategy the RES should also identify geographical or sectoral clusters of businesses and economic activity that have the potential for improved economic performance and/or enhance the region's competitiveness.