Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report

1. Executive Summary

1.1. The purpose of this paper is to consider the Government's draft guidance for the preparation of an economic assessment to inform a decision on the approach to take, the process for involving partners and the timescale for producing it.

1.2. This paper seeks to:

· set out the background to the new duty

· consider the purpose of the activity and the role in informing strategic policy documents, including a future Hampshire Economic Strategy

· inform choices to be taken on the scope of the document, the spatial approach, the process of partner and stakeholder engagement and the timescale for delivery

2. Contextual information

2.1. Preparation of an economic assessment will become a statutory duty for principal authorities from April 2010, subject to the passing of the Local Development, Economic Development and Construction Bill this autumn. The Bill takes forward some of the recommendations from the Review of Sub-National Economic Development and Regeneration. The purpose of the Review was to enable regions and local areas to respond better to economic challenges and play a more significant role in promoting economic development.

2.2. Some requirements for carrying out the duty are set out in the Bill itself. Notably, in two-tier areas, the County Council will be required to consult and seek the participation of district councils within their area. District Councils have a reciprocal duty to cooperate with the County Council. County Councils are also required to take into account economic information produced as part of the evidence base for Local Development Frameworks (LDFs). The intention is that the same evidence base should be informing all local partners' decision-making.

2.3. Draft statutory guidance has been issued by the Department for Communities and Local Government to give early insight on how the Government envisages the duty being carried out. This guidance may change following further Parliamentary Scrutiny of the Bill.

2.4. Local economic assessments are intended to draw out the interlinkages between economic growth and wider social and environmental issues that impact on the quality of life. Together such assessments would inform the next review of the Hampshire Sustainable Community Strategy (SCS) and negotiations on any future Local Area Agreement and Multi Area Agreement.

2.5. Potentially, a county spatial development strategy to underpin the SCS could be developed, which would be particularly important to inform strategic level planning if statutory regional plans (which also contain sub-regional plans) were withdrawn.

2.6. The Child Poverty Bill will also place a statutory duty on local authorities to prepare an assessment of the needs of children living in poverty in their area and it is recommended that the economic and child poverty assessments are integrated to ensure that action on economic development helps to reduce child poverty in the area.

2.7. The performance of local economies and the effectiveness of local partners' actions in support of sustainable economic growth is considered under the Comprehensive Area Assessment. The draft assessment acknowledges that Hampshire's economy is prosperous compared to other areas of the country and is currently holding up relatively well in the recession. It highlights the unexpectedly high proportion of working age residents in Hampshire who have qualifications below NVQ Level 2, especially in the south of the county, and the slow rate of improvement. Another indicator highlighted is the number of 16-19 year olds not in education, employment and training and the high proportion of care leavers in this category. It also notes that young people are being disproportionately adversely affected by the recession. It is suggested that the lack of skills is constraining business growth.

2.8. Responsibility for improving skills is diffuse and undergoing change with the dissolution of the Learning and Skills Council. The economic assessment should therefore be capable of informing an in depth understanding of the wide range of skills issues in Hampshire and informing the Council's and partners' action plans.

2.9. The guidance proposes that assessments should address the following themes.

Business and Enterprise

· Structure of the local economy

· Enterprise and innovation

· Business needs

People and Communities

· Labour market (incl. levels of worklessness and reasons)

· Skill levels including educational attainment

· Economic deprivation/ exclusion and the key underlying barriers to participation

Sustainable Economic Growth

· How the local economy needs to adapt and business opportunities for `greening' the economy

· The extent to which housing and infrastructure support the economic sustainability of the area, including economic growth and economic inclusion

2.10. The draft guidance covers the thorny issue of economic geography and proposes that as far as possible, assessments should match these. Where there is an MAA, it is expected that partners will come together to prepare a joint assessment or at least collaborate. Helpfully, the guidance points out that linkages between the MAA area and the wider area should not be lost. One suggestion is that there should be a combined sub-regional assessment with individual local authority's assessments sitting underneath.

2.11. Further work needs to be done on reviewing the economic geographies that were identified in the South East Plan and the intentions of adjoining authorities will need to be considered. However as a working principle, which combines considerations of administrative pragmatism, the complex and multilayered economic geography of the South East and the potential future changes to regional planning arrangements, it is recommended there should be an overview of the whole former county of Hampshire, to include Portsmouth, Southampton and the National Parks, and more local assessments underneath this to cover south Hampshire, north Hampshire and central Hampshire and the New Forest. More local assessments of the areas of economic inequality could also be undertaken, to inform actions to reduce economic and health inequality.

3. Finance

3.1. It is proposed that the economic assessment should be carried out as far as possible utilising existing staff in Environment and the Economic Development Office, supplemented by specific commissions to add capacity and to carry out specialist work, for example on skills. The approach taken will need to be flexible enough to respond to partners if the recommendation to pursue a consistent approach with adjoining administrative areas (potentially up to regional level) is supported.

3.2. Although this will increase the timescale, compared with a full commission to a consultant, this approach will enable in house expertise to be built up and position the council well for developing our strategic thinking and undertaking future revisions. The approach should also be less costly than procuring consultants to undertake the task.

3.3. It is advised that £100,000 be identified for undertaking the duty from the LABGI award for 2009/10, although at this stage the full cost of the task is unknown. The explanatory notes to the Bill record that the additional cost of the economic assessment duty will be £7.6m per annum on principal local authorities. It is not yet known how the Government plans to fund the additional burdens arising from the Bill or how any allocation will be distributed, but the additional sum proposed would be a reasonable estimate of the level of funding the Council should receive.

4. Other key issues

4.1. The statutory duty will not commence until April 2010 and the guidance encourages their preparation being completed within 6- 9 months, with a new economic assessment being undertaken following the publication of data from the national census in 2013. It is expected that Authorities will keep their economic assessments up to date with minor adjustments and revisions, but the availability of substantial new data through the census would signal the need for a major review.

4.2. In the resolutions the Council has made following the review of the economic development function, the Council has expressed the view that it wants an in depth skills strategy developed and an annual economic plan prepared. It would therefore be appropriate to initiate the assessment now, with an aim to complete a consultation draft by the summer of 2010.

4.3. In the context of the statutory requirements surrounding the production of the assessment it is recommended that stakeholder events be held at the commencement stage as well as following the production of the draft assessment, including presentations to the Hampshire Senate.

5. Recommendations

5.1. That the Council prepare a county-wide assessment, but with more detailed sub-area profiles for different areas of Hampshire reflecting functional economic geographies, including the South Hampshire sub-region which has a Multi Area Agreement.

5.2. To facilitate the amalgamation of assessments across administrative boundaries, that the Council seek a consistent approach with adjoining areas which have strong economic linkages and across the region, if supported by other principal authorities.

5.3. That preparation of the assessment commence forthwith, in order to address previous resolutions of the Council to enhance its economic development function and to inform the next community strategy refresh and any future Local Area Agreement.

5.4. That District Councils and national and regional partners engaged in economic development be invited to contribute at the scoping stage for the assessment as well as the draft report stage.

CORPORATE OR LEGAL INFORMATION:

Links to the Corporate Strategy

Other Significant Links

IMPACT ASSESSMENTS:

1. Equalities Impact Assessment:

1.1. The guidance identifies economic inclusion as a theme to be included in the economic assessment

2. Impact on Crime and Disorder:

2.1. The assessment can explore the correlation between crime and disorder and economic inequality

3. Climate Change:

a) How does what is being proposed impact on our carbon footprint / energy consumption?

The assessment will need to examine how the local economy needs to adapt to meet commitments on carbon reduction and the challenges and opportunities for business

b) How does what is being proposed consider the need to adapt to climate change, and be resilient to its longer term impacts?

The assessment will need to take account of the potential implications and risks to the economy from long term climate change.