Strengths and Challenges of Great Manchester LEP Area

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1.0 Introduction

With the argument surrounding ‘planning vacuum’ caused by regional policy, the regional scale has been usurped by a ‘localist’ philosophy for growth and sustainable development (Pugalis, 2015). In the past, the emerging issues include ‘shadow cities and regions’ without appropriate skills, innovation and revenue-raising potential and the persistent gap in regional growth rates. As such, governments have abolished regional planning and focused on a local scale which has been regarded as a more effective scale to strategic planning. Local Enterprise Partnerships (LEPs) is one of the significant new policies introduced by the Coalition Government to encourage economic development.

Local Enterprise Partnerships (LEP) which was established in 2011 and 39 LEPs in the UK including London was set up intended to engage with function economic areas. According to the Coalition Government, LEPs should deliver economic strategy, deliver growth at the scale of local economic areas (LEAs), and rebalance the economic geography of England. LEPs become more and more important over time. RTPI (2015) states that some LEPS tend to act as strategic actors cooperating with others in the complicated field of sub-national development, which means an evolution from the original conception of LEPs as the primary actors in sub-national development.

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Because there is the greatest degree of devolution outside of London in Great Manchester (Combined Authorities: signs of success, 2017), Great Manchester LEP will be a case study to be analyzed. The purposes of this paper are to find what outcomes lead by the institutions operating and central government policies in one LEP area-Great Manchester, evaluate these outcomes and identify the strength and challenges the LEP area faces.

2.0 Main Problems from Dynamic global context

This part aims at seeking out the problems that cities face and LEPs needs to solve in the context of dynamic globalization. UN-Habitat(2010)states that ‘World is inexorably becoming urban’ and there will be more people living in cities than in rural areas. Meanwhile, a great deal of problems coming with. These problems include:

2.1 Unbalanced development

With the urbanization, cities development is more often unbalanced. Florida (2005) mentioned that the world is becoming ‘spikier’ with people gathering in dense urban settlements. As such, it can be seen that location seems to be placed on a more and more important point and inequality of sites is also becoming increasingly apparent. UN-Habitat (2010) described that cities tend to be divided by ‘invisible borders’ to form the ‘center’ and ‘off-center’ or ‘high’ and ‘low’ areas. In some areas, the infrastructure, well-kept parks, gardens and up-market residential areas are featured. However, other areas suffer from a severe lack of housing, services, recreation, cultural facilities and scarce public infrastructure investment. In recent years, related methods have also been sought to rebalance ‘core-periphery’ relations.

2.2 New Priorities

Urbanization has also led to more intense competition among cities, especially in terms of the economy. Because the world becomes more globalization, not only urban but also national productivity will increase. Additionally, Friedman (2005) argued that this is a new contemporary era called Globalization 3.0. Compared with previous Globalization 1.0, people tend to put their more eyes on multinational companies drove global integration rather than a nation. Moreover, with regard to the economic aspect which is different from the above world view, some researchers state that the world economy is flattening with the need for development straining skills to get jobs. According to Pain and Van Hamme (2014), the global ‘new ’economy relies on knowledge-based production and trade which shows ‘new’ economic system focused on ‘financial and linked business’ and professional ‘advanced producer services’. Therefore, this has brought a lot of difficulties in the development of the local economy to a certain degree.

2.3 Space and Scale

For a city, its functional area might not fit well with its territorial boundary. Jane Jacobs states that natural boundaries which are the wholly ‘artefacts’ cannot be used to define ‘City-Regions’. Castells (1996) mentions that the social and economic processes operate in a space of flow. What’s more, According to ESPON ‘Tiger’ study, under the situation of the global space of flows, a real functional relation cannot be map onto geographical ‘place’ boundaries. It is no doubt that brings a real challenge to the planning progress.

3.0 Case Study – Great Manchester

3.1 The context of Great Manchester LEP

Great Manchester is the second city in the UK. Becoming a financially self-sustaining city in terms of size, assets, skilled people and having significant political and economic influence to other cities are the aims of Great Manchester. With the economy developing gradually, there are 2.7 million people and over 100,000 businesses in Greater Manchester, which give Greater Manchester a chance to compete on a global scale.

The GM Local Enterprise Partnership (GM LEP) is regarded as the heart of Greater Manchester’s governance arrangements. It is a central character to bring the wider partnerships together from local government, businesses to educational institutes, including the public, private, voluntary and community sectors. GM LEP also plays a leading role in a number of key initiatives, for instance, the GM Space Framework, GM Investment Strategy, 2040 Transportation and Regional Review. It also would likely to achieve their ambitions by setting their strategic ambitions and key priorities in some local policies and combining with some central policies (GMCA, 2019).

3.1.1 Instruments

Facing several socioeconomic risks, a number of safeguards would be set up in a city and a great deal of consideration about social security nets, local/regional infrastructure as well as a perspective to securing longer-term growth while stimulating consumption or employment in the short term would be included. Some policies would be utilized to bring the bear on local socioeconomic conditions and reduce gaps and other structural problems.

Local Scale

Greater Manchester Strategy

Growth & Reform plan

Annual Performance Report

Governance Statement

Governance Assurance Statement

Terms of Reference

Central Scale

Rollback the state / Devolution

Local Enterprise Partnerships

Planning Reform / Localism

City Wide Deals and Mayors

Northern Powerhouse

Enterprise Zones

3.2 Strengths

3.2.1 Creating Benefits for both Employees and Employers

Some challenges that LEPs face including improving infrastructure, skills, investment, housing and business support have been met to a certain extent. For example, in terms of creating work placements and providing homes, the construction industry in Great Manchester would be focused and play a leading role. This is because it accounts for 8% of the United Kingdom Gross Domestic Product (GDP) with a workforce of 2.6 million. Additionally, CITB (2016) showed that there are 9405 construction businesses and 88000 construction. Moreover, to improve skills, opportunities and growth for both young people and unemployed adults, National Skills Academy for Construction (NSAfC) which is a project-based training concept and have become incorporated into planning policy provides a demand-led training model and help clients gain the right skills needed (CITB, 2016). According to the source, Great Manchester has a huge skilled labour market now (my local economy, Review of LEP area economies, 2014).

At the same time, some opportunities also have been provided for employers. The City Deal set up a Greater Manchester Employment and Skills Board which is a voluntary partnership to collaborate the LEPs providers and government agencies to create greater opportunities for employers to master ownership skills. According to respondents, this encouraged employers to participate more broadly in the skills system. Employers in the relevant departments participate in the design of the apprenticeship framework which is suitable for use in the legal profession, catering, hospitality and digital game programming. As part of the program, Greater Manchester partners will continue to negotiate with employers to ensure that these apprentices are teaching the right skills (Naomi Clayton, Louise McGough, 2015).

3.2.2 Working together across local authorities

It is can be seen that a closer cooperation relationship between local partners and authorities. LEPs include local planning authorities (LPAs) but are not led by them. Combined authorities are a key factor to selectively delegating power and funds to local authorities. The special terms of the joint authorities are to stimulate local growth outside of London and the southeast, giving the district mayor and the Greater London Authority some power and autonomy (Combined Authorities: signs of success, 2017). Greater Manchester provides examples for joint working and decentralises powers to help the Government to deliver its economic goals. In Greater Manchester, the Association of Greater Manchester Authorities (AGMA) has been a key player in coordinating the regeneration of the city. Joint working has enabled the delivery of important projects for the city’s economy, like the Manchester Metrolink tram extension and the Daresbury Science and Innovation Campus (Kieran Larkin, 2010).

3.2.3 ‘Best fit’ functional economic market areas (FEMAs)

LEPs is a useful tool for functional economic market areas (FEMAs). The national and regional level is often deemed as a too-large level to deal with many issues facing individual urban economies, as well as local authority areas are seen too small because they manage a smaller area which is a geographical place than their economic markets. Policies designed by a local authority are difficult to consider comprehensively the costs and benefits when policies are implemented and relate to the areas outside their administrative boundaries (Kieran Larkin, 2010). However, LEPs are more fit for FEMA. When policies are made at the FEMA level and they are more suitable for the area’s real economic market. Additionally, LEPs also could work with near LEPs and devolved administrations in broader territories (The Future of Local Enterprise Partnerships A report by Shared Intelligence for LEPs and the LEP Network, n.d.). Therefore, there will be a good correspond emerging between FEMAs and LEPs. LEPs would likely to make more strategic decisions on economic development.

3.2.4 Dealing with local problems effectively

Creating LEPs also Gives opportunities to Great Manchester to tackle specific issues by themselves. Regional Development Agencies (RDAs) are limited, this is because not only regional agencies could not know more details about the site but also cities do not have enough powers for the demand of shaping their local economies. However, LEPs would be likely to lead specific to policy decisions being aimed at priorities at the right level and would devolve power away from Whitehall. According to GMCA (2017), the politics and economic context have reformed significantly since 2013, particularly in view of developments including the refresh of the Greater Manchester Strategy and securing the Growth Deal, Devolution Agreements,the Northern Powerhouse agenda and the referendum to leave the EU. Moreover, GM LEP also would likely achieve the ambitions by setting their strategic methods and key priorities in the Greater Manchester Strategy and Growth & Reform plan. To achieve the transparency of planning progress and ensure public participation, it also notices set out where the public could see the progress of delivering an Annual Performance Report. Therefore, it can be seen that these specific actions would tend to be combined through GM LEP.

3.2.5 Funding opportunities

The LEP also have opportunities to get more funding through different sources and support from policies. According to some evidence, £500k has been gained by the cooperation between GM LEP and GMCA each year from the Government to improve its capacity and deliver its strategic priorities (GMCA, 2018). In the recent two years, a number of key thematic areas have access to receive funding, including supporting the research and evidence base; Refreshing the Greater Manchester Strategy; Enabling the development of the GM Spatial Framework; Supporting the development of the digital Manchester Channel; supporting transport projects.

Additionally, GM LEP is given access to bid for other sources of grant and it can use the money to invest significant economic projects in GM. These resources shown by GMCA (2018) include:

Enterprise Zone funding: The evidence shows that Airport City EZ has got £6 million funding to reform power infrastructure.

Greater Manchester City Deal: Because of GM City Deal, Greater Manchester owns the financial powers of £90 million tax revenue. The government has also funded £4.4 million for a Business Growth intended to integrate trade, investment and business advice.

Local Majors Fund and EU funding: Previous Growth Deals, Greater Manchester LEP would receive the funding from Local Majors Fund and EU funding to develop the transport projects for the period of 2014-2020.

Growing Places Fund: Greater Manchester LEP gained £37,358,032 from it.

Regional Growth Fund: GM LEP received Over £122 million from the Regional Growth Fund.

The Local Growth Fund: Through the Local Growth Fund, over £2.9 billion worth of Growth Deals will be funded in the North to contribute to addressing these issues. This round of funding will provide an additional 556 million of support for LEPs in the Northern Powerhouse as an economic vehicle for boosting economic growth.

3.3 Challenges

3.3.1 Unbalanced distributions

Although GM LEP has contributed to creating jobs that are beneficial for rebalancing economies, the development of Great Manchester still spiky in terms of areas with complete infrastructures. This will lead to Distributional problems and it’s related strategic policies are rarely formulated into planning or infrastructure decisions. For example, low-income neighbourhoods are given less chance to approach the green space, a park or open land. Additionally, there are considerations to protect the green belt. However, these green belts are beneficial to people who-who live in nearby, usually affluent, suburbs, and detracts from the preservation or creation of green spaces within the city (Diane Coyle, n.d.). According to Diane Coyle, this is a ‘self-reinforcing’ process, a community with the green belt will deserve high price, which would not be tackled in the short -term by GM LEP.

3.3.2 Environment Challenge

Focusing on the development of the economy will also bring many negative effects. The challenge of the environment is a key omission and it is the cost of economic growth. The impact on the environment from economic development includes general short-term pollution, longer-term damage to natural resources, for example, the reduction of biodiversity, the loss of urban green space, the depletion of groundwater levels, and the demolition of natural flood protection facilities such as swamp floodplains.

As such, a low carbon economic transition is needed significantly in Greater Manchester because the UK tends to be independent on fossil fuels, it, however, faces some difficult. According to GMCA (2017), developing low carbon and environmental sector; increasing energy security, reducing the risks with regard to unstable energy prices and reducing fuel poverty are their main aims to contribute to ill-health and reduced productivity. GM targets to achieve the 48% reduction in CO2 emissions by 2020 to deal with the temperature increase. However, these aims are difficult to be completed. For example, Although the electricity network in Great Manchester is generally full-bodied, some areas with limited capacity cannot meet the new demand because of unbalanced development (GMCA, 2017). therefore, While LEP and GMCA know the challenges of the environment and set goals in terms of low carbon economy into the policies, there are some issues on how to overcome barriers.

3.3.3 Innovation weakness

Additionally, we also face important insufficiencies in terms of innovation. This is because there are globally competitive firms in each sector and new and small businesses and just over half of firms in Great Manchester are innovation-active, as well as there is new demand for low carbon economy. As such, developing science properties plays a vital role to support the need for innovation and create opportunities for them. However, the cost, lack of project development abilities and lack of willingness to pay have Made innovation projects difficult to advance (Chao, Lee & Wang, 2015).

3.3.4 Information Failure about the Investment

Whilst there are many opportunities for receiving money, there is an information failure that limits the extent to which the enterprise understands the available options because Financing providers and strategic organizations have confirmed that manufacturers seeking financial support for capital investment have a range of investment financing options. According to research, banks become frustrated because they feel difficult to find a company that seeks financial support. In addition, when manufacturing businesses needed investment support, they had been served with alternatives available to traditional bank loan funding. This would show that businesses are suffering from the failure of seeking funding, due to the lack of information available to businesses about these alternatives. This is why a number of ways to get funding, but GM manufacturing companies still be struggling with lack of finance and why a chance to receive finance was identified as a significant barrier to the commercialization of new thoughts and technologies (Diane Coyle, n.d.) As such, there is clearly a lack of information market in the statement of existing funding options, significant information including surveys of local businesses, engagement events and day to day interaction with businesses should be communicated (Combined Authorities: signs of success, 2017).

4.0 Conclusion

In the context of Brexit and the anticipation of the next few years, policies in the UK are constantly being updated to adapt to this complex situation. This paper has analysed the opportunities and challenges faced by the GM LEP area. It must be acknowledged that since the establishment of the LEP, which is beneficial for GM in terms of creating jobs, cooperating between the private sector and local authorities, dealing with problems according to the real situation and increasing opportunities for funding. All of these have created conditions for balancing the GM economy.

However, the challenges GM faces cannot be ignored. In terms of unbalanced distribution, this is a complicated problem that cannot be eliminated for a long term, and few specific strategic policies are set in planning. Thus, in future, policies and implementation measures in terms of opportunities to equip complete facilities for poor communities should be noticed in the planning process. In addition, with regard to the negative impact of rapid development on the environment. Whilst, local institutions tend to work together to create a low-carbon economy, it is difficult to achieve the goal of LEP because of some parts of GM have no capacity of techniques and equipment. Finally, although there are many sources of funding due to the influence of many local policies and central policies, in reality, a large number of companies and enterprises are not invested. Therefore, LEP should strengthen communication with local enterprises so that information related to enterprises could be understood in time, making many strategic policies that can be implemented efficiently. If agencies work together to improve economic development and solve potential problems at the same time, GM will achieve more balanced development.

References

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