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North East LEP areaEuropean Structural and Investment Fund Strategy 2014 - 2020
Together we will create more and better jobs through smart, sustainable and inclusive growth.
April 2016
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Welcome
The North East economy – key facts
The North East is...
Our strengths and weaknesses
The North East Local Enterprise Partnership area - our plan for growth
European Structural and Investment Funding - helping to deliver our plan for growth
ESIF allocations split by theme
European Structural and Investment Funding in the North East LEP area - in summary
European Social Funding in The North East LEP area - in summary
European Agricultural Fund for Rural Development in the North East - in summary
Governance
Working in partnership
Annex A - National Governance
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04
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06
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08
09
10
11
12
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Contents page
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Today the North East Local Enterprise Partnership (North East LEP) area has a globally competitive economy. It is home to nearly two million people and contributed £35.4 billion to the UK economy in 2014.
Following the UK recession the North East LEP area has demonstrated high potential for growth, hitting record employment rates for the region and having more people employed than ever before. Productivity grew at a faster rate than most other LEP areas during 2013 and was ranked 4th amongst all LEPs for growth in GVA per head during 2013. NELEP was ranked 5th for growth in GVA per head over the 10 year period 2003 and 2013.
It is our existing and emerging industries which set us out from the crowd and create the conditions for growth.
Our existing strengths lie in advanced manufacturing, our high quality healthcare system and technologies (such as virtual reality, electric vehicles and advanced materials), pharmaceuticals, energy, low carbon and renewable technologies, logistics, professional services, forestry and tourism – all of which are showing promising signs of growth. Our first class further and higher education system underpins these strengths.
The North East is also emerging as a potential global leader in a number of new and emerging industries. As a world leader in passenger vehicle manufacture, the North East will provide a cleaner, greener future for all.
We are also known for having one of the fastest growing creative, digital, software and technology communities in UK; thriving subsea and offshore sectors; as well as a globally significant presence in the health and life science sectors.
Other areas of opportunity include surface science, ageing, satellite technologies and energy networks.
Indeed, the North East has an excellent basis from which to grow and create more and better jobs.
That is not to say that we do not face challenges to growth. The demand side challenge is that we need more businesses in the North East. We can achieve this through a combination of higher numbers of business start- ups; greater survival rates, growth of established businesses and more businesses relocating to the area. We want our businesses to be competitive, to innovate and to export their goods and services to the rest of the UK and beyond. Investment in research and development will certainly support these goals; collectively this will create more and better private sector jobs for the North East.
Our supply side challenge is to ensure that local people have the right skills for growth to meet business needs. We need to work closely with businesses, schools, colleges, universities and training providers to ensure our young people are fully aware of future job opportunities and are guided to the appropriate training. We are working with partners and with businesses to support programmes that are inclusive and which up-skill and re-skill those who are of working age and looking for work so that they too can find jobs that meet employer demand. Matching supply and demand is central to achieving an effective labour market.
We have worked with our partners to establish our plan for growth - the North East Strategic Economic Plan - and we are working together in partnership to support businesses and our local communities to deliver this plan.
Our job now is to make the most of the opportunity brought about by European funding, maximising the opportunity to create the right environment for smart, sustainable and inclusive growth that will lead to more and better jobs. The key strategic themes of our overarching Strategic Economic Plan- innovation, business growth, skills, employability and inclusion, and transport and digital connectivity- align neatly with European objectives on smart, sustainable and inclusive growth; and the skills and inclusion interventions will help connect people to these opportunities.
I would like to thank everyone who has been involved so far, including those who took part in the public consultation on our draft strategy in 2014. Moving forwards, the North East European Structural and Investment Fund Sub-Committee, which consists of representatives from the public, private and voluntary sectors, will advise and help to steer investments that offer the best opportunity to create jobs and growth.
So whether it is business support, finance, skills gaps or driving innovation, European funding gives us the chance to act and make a real difference.
The North East is a fantastic place in which to live, work and visit. Together we will achieve great things for our area.
Neil Warwick,North East LEP Area ESI Fund Chair
Today the North East is a globally
competitive economy.
Population of:
The North East LEP area contributes
to the UK economy.
04
A68
A68
A1
A1 (M)
A1
A1
A68
A68
A69
A19
A696
A189
A697
A69
A688
A691
A690
A693
A692
Principal rail links
Tyne & Wear Metro
LEP boundary
Motorway
Key routes
Enterprise Zone
Ports
Airports
Hexham
Consett
Spennymoor
Sedgefield
SeahamChester-le-
Street
BishopAucklund
BarnardCastle
To York,Leed,
London,Midlands
To Carlisle,Manchester
To Edinburgh, Glasgow, Aberdeen
Haltwhistle
RothburyNorthumberland
National Park
Alnwick
Wooler
Holy Island
Berwick-upon-Tweed
FarneIslands
CoquetIsland
Blyth
Blaydon
SUNDERLAND
DURHAM
Wingate
NEWCASTLEUPON TYNE
GATESHEAD
NewcastleAirport
Peterlee
Houghton-le-Spring Easington
CramlingtonWhitley Bay
AshingtonMorpeth
NewtonAycliffeNewtonAycliffe
Washington
SouthShields
Bellingham
NorthShields
Population 1.95 MILLION
310,000 People Economically Inactive
49,230 Enterprises
1.25mWorking Age
370,000Retirement (65 +)
340,000 Young People
(Under 16)
25.1%of Working Age
Population
National Average:22.3%
29%of Working Age
Population
National Average:36%
87% Micro 13% Small/Medium 0.4% Large
(VAT/PAYE Registered)
351,000 People with High Level (Level 4) Skills
7.3% of total workforce jobs
The North East Local Enterprise Area Economy – Key facts 1
69.4% Aged 16-64 National average: 78.3%
883,900 People Employed
Self Employed people
GVA £35.4bnGVA per head £18,111
98,200
60% of total private sector business employment
Employed by SME Businesses
350,000 1 All data is based on the latest information available as at 25 January 2016. Source ONS
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The North East is ...
...Well connected to national and international markets Through key international gateways and strong rail and road connectivity to the North, South and West. The Port of Tyne and Newcastle International Airport offer passenger and freight connections to global markets. Newcastle and Durham rail stations are well-connected through the East Coast Mainline and Cross Country routes.
The ports of Berwick, Blyth, Sunderland and Seaham also provide freight maritime links.
These international and national gateways are particularly important for local export-led sectors.
...Known for its sector strengthsIn advanced manufacturing, healthcare system and technologies (such as virtual reality, electric vehicles and advanced materials), pharmaceuticals, energy, low carbon and renewable technologies, logistics, professional services, forestry and tourism.Our first class further and higher education system underpins these strengths.
...Emerging as a potential global leader in a number of new and emerging industries and is host to world class universities and research institutions The North East has a long history of invention and a pioneering spirit; we led the world in the development of rail passenger travel, engineering and scientific discovery in the Industrial Revolution.
Today the North East has particular advantages that set us out from the crowd; these are referred to as our ‘Smart Specialisation’ areas:
• Through Passenger Vehicle Manufacture with a particular focus on Low Carbon vehicle technology, we are leading the way to provide a cleaner, greener future for all. The North East has taken up the challenge of finding solutions to provide a cleaner, greener future for our transport systems, homes and cities. Cleaner, sustainable travel is one of the planet’s greatest challenges – the North East is ideally placed to meet it. “Our aim is to be a leading test bed and demonstration area for low carbon vehicles; they are transforming the way we live our lives, changing the infrastructure of our cities and our impact on our planet.”
• We have one of the fastest growing creative, digital, software & technology communities in the UK. Creative, digital, software and technology pioneers are spearheading the region’s growing reputation as a hotbed of ideas, entrepreneurial spirit and tech collaboration. “We will foster an environment for businesses to be more efficient and competitive through digital enablement”
• Our subsea ecosystem offers world class engineering & manufacturing. North East pioneers were among the first to recognise the huge commercial potential of subsea technology in the 1970s. We have built on their revolutionary work, creating a ‘family tree’ of new industrial growth across the region. “Today our ability to find innovative solutions gives
us a leading edge in subsea technologies globally and offers fantastic inward investment opportunities.”
• Our globally significant life sciences and healthcare sectors are strong and growing. We produce 33% of the UK’s Gross Domestic Product in pharmaceutical manufacturing and household names such as GlaxoSmithKline, MSD and Piramal Pharma Solutions all choose to call the region home. “A number of our hospitals are globally recognised as centres of healthcare excellence and the region has cemented its position as one of the UK’s leading academic bioscience centres for research, teaching and training.”
• Other areas of opportunity include surface science, ageing, satellite technologies and energy networks.
...A Place that offers opportunities for business growth As well as our emerging sectors we are also seeing growth in business services and professional services and logistics, as well as retail. Furthermore, the strategic road networks including the A1 and A19 corridors, the banks of our industrial rivers and the coast are providing current and future opportunities, especially through the North East Enterprise Zone to provide the necessary physical economic infrastructure to support the growth of these sectors.
...At the forefront of low carbon economic growth We are a premier location for low carbon, sustainable private-
sector led growth. We have a track-record of innovation in energy and manufacturing technologies, a strong research base and valuable natural assets.
...Home to a thriving rural economyOur rural areas are extensive and include the greater part of Durham and Northumberland, with a rural hinterland in parts of Tyne and Wear.
The rural economy has great potential to enhance the area’s wider economic success. Building on its diversity, sector strengths, and its physical, natural and business assets, there is potential for a greater representation from across sectors to grow and for a step-change in productivity.
...A place for great sports, culture and tourism We have two Premier League football teams, Premiership Rugby Union team, an international Test status cricket ground, an international athletics stadium and world-class cultural venues.
In recent years we have hosted the Lindisfarne Gospels Exhibition, the British Science Festival, the Turner Prize and international sporting events such as the Tour of Britain, Olympic Football, World Cup Rugby, Rugby League Magic Weekend and the Ashes, while continuing the success of the Great North Run.
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Strengths
Weaknesses
Threats
Opportunities
Foreign direct investment (FDI)Strong performance in attracting FDI and associated jobs compared to other regions. The North East LEP was the second most successful area for FDI in terms of jobs created in 2014/15 (3,105 new and 166 safeguarded jobs).
AttractivenessAttractiveness of area’s lower living costs, increasing real value of wages.
ProductivityCapitalise on existing strength to raise productivity levels around vehicles and offshore energy.
ManufacturingStrong manufacturing expertise, leading to a high proportion of employees in this sector, making up 10% of North East LEP area jobs.
SkillsThe ability to match the supply of skills with business needs.
Enterprise zoneBenefits for investors for locating in area’s Enterprise Zone area or City Deal/Accelerated Development Zones schemes.
Graduate retention, Progression and MigrationIncreased numbers of businesses demanding highly skilled labour are required to avoid underemployment and address longer term skills retention and attract inward migration.
Social economyGrowth potential in delivering goods and services which have wider social benefits. Open procurement opportunities through the Social Values Act.
Demographic changeAn ageing population means that we will need to adapt to an ageing workforce who are in work for longer. This has implications for improving the sustainability of employed people in the over 50s age group through improved continued training and reskilling.
InstitutionsReputation of academic and research institutions, innovation assets and networks. Trade diversification
North East businesses need to build upon their comparative advantage and emerging strengths, expanding into a wider range of international markets to alleviate the impacts of localised economic shocks and increase the region’s economic resilience. This includes increasing trade links within the domestic market.
Cost and connectivityCompetitive input/land costs, web connectivity and sectoral strengths for major employers.
Knowledge intensive businessConcentration of knowledge intensive businesses particularly in software technology, electronic, gaming and creative businesses.
TradeStrength in growing export industries and improving access to international markets via the regions ports and new international flight paths.
HousingHousing stock in need of investment to improve availability of quality homes.
ConnectivityInternational and national access via Newcastle International Airport, North Sea ports, High Speed Rail Connections and trunk road network.
AssetsOutstanding natural and developed assets, including UNESCO World Heritage Sites, a National Park, and transport infrastructure.
TradeThe North East is one of the only English regions with a trade surplus (£4.5m), with an increasing share of exports to EU countries (56%).
Enterprise ratesLow enterprise rates and dependency on large and public sector employers as source of employment.
Research and developmentLow investment in research and development activities.
Access to financeLack of access to appropriate access to finance and limited supply of investment to Small and Medium Enterprises and social enterprises.
Private sectorUnder represented private sector particular in services such as professional, technical and business administration.
Internal connectivityLocalised congestion, weak public transport access to some key employment areas and isolated communities. Public transport affordability, ageing infrastructure and inadequate rail capacity.
External connectivityPoor transport links east to west and north to south, restricting access to markets, affecting supply chains and imposing costs on business. These include single carriageway ‘A’ roads, lack of electrification of key rail routes and outdated rolling stock.
SkillsBelow national average skills levels impact negatively upon the North East LEP area’s productivity, growth and wage levels. Only half of the area’s working age population have level four qualifications and above and one in six have up to level one skills. Skills shortages are concentrated in the youngest and oldest working age cohorts of the population.
Employment and InclusionHigh labour market inactivity rates and lower employment rates than the national average, employment rates, driven in part by poor health, entrenched deprivation and a lack of opportunities. Highest level of inactivity in the country at 25%.
Gross value added (GVA)In the last three years, the area has been one of the country’s top five performers in GVA per head growth.
To maximise growth opportunities we need to build on our strengths and address our weaknesses
Digital connectivityHas been improving but still falling short of some other parts of the UK and Europe. Digital connectivity is required as an enabler of rural growth, self-employment and flexible working. Target of 95% access to superfast broadband by 2017.
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Business growth & finance“Our goal is to create an intelligent business ecosystem that supports and accelerates business growth, productivity and trade.”
Business growth creates jobs and wealth; the North East benefits from an innovative business environment and a competitive cost base. However, the area has a low business density and reliance on the public sector for employment compared to other parts of the UK. With a clear focus on the survival and growth needs of established small businesses and smart specialisation, we will give our economy greater competitive advantage by enhancing entrepreneurship and enterprising skills, boosting prosperity, productivity and profitability to increase wages and employment.
We will make the North East a place where it is easy to start and grow a business by helping businesspeople find and utilise the right information, expert advice and finance to grow and thrive. We will get more business start-ups, support existing businesses to thrive and grow and to grow more quickly, and attract more new businesses to the area.
Assets & infrastructure ”Our goal is to create sustainable communities, unlock our key employment sites and invest in our local assets.”
The North East has strong links between where people live, work, and visit.
We will invest in our urban centres, our key employment sites, our tourism, cultural and heritage assets and our rivers and green infrastructure to retain our businesses, our workforce and to attract visitors.
Skills ”Our goal is to develop a flexible and skilled regional workforce that is able to meet the needs of our businesses. ”
A skilled workforce is central to private sector led growth; the area has a strong reputation for responding to the opportunities presented by a growing and changing economy. Indeed, the North East boasts the highest proportion of apprenticeships in the UK.
We need our young people to be fully aware of job opportunities and guide them to appropriate training; we must also up-skill and re-skill those already of working age, creating sustainable employment opportunities for all. We will support a shift in our workforce toward higher level skills attainment, ultimately to ensure we have the right skills to maintain and grow our economy.
Transport & connectivity”Our goal is for the North East to become host to the UK’s fully integrated transport system.”
Improving our transport and digital connectivity links is essential to ensure businesses can strengthen supply chains and achieve access to markets as this will drive investment and grow trade, export, and our ability to compete globally, to allow people access to work and to attract people to visit and stay.
The North East is also leading the way in supporting a modal shift from traditional car usage to electric vehicles and other means of transportation. This will in turn reduce congestion, further driving economic activity. We will continue to secure better links to attract visitors, to enable businesses to increase trade and exports, and get more people to and from jobs
Innovation“Our goal is to take our place as a leading innovation Hot Spot in Europe.”
Innovation is an engine for growth; put simply it’s about matching what’s needed with what’s possible to create economic value or social good. Today’s new products, services and processes will drive opportunities to create tomorrow’s new jobs and industries. We will focus on what we are good at, giving our economy greater competitive advantage by driving rapid growth and creating more and better jobs.
The North East has significant innovation strengths; our areas of competitive advantage - also known as smart specialisation - are passenger vehicle manufacture, creative, digital, software & technology , subsea and offshore engineering, and life sciences and healthcare. Other areas of opportunity include surface science, ageing, satellite and energy networks. We will maximise growth opportunities in our smart specialisation areas. We will get more businesses innovating and develop more skilled people to meet business demand.
The North East Local Enterprise Partnership area - our plan for growthWe have worked with our partners to establish our plan for growth - the North East Strategic Economic Plan - and we are working together in partnership to support businesses and our local communities to deliver on this plan. Our aim is to achieve the following:
“By 2024 our economy will provide over one million jobs”
Employment & inclusion ”Our goal is to increase employment, ensuring no one is left behind.”
Employment is the key route to combating poverty and exclusion.
Despite an improving picture in recent years the area has relatively high levels of unemployment and inactivity compared to other areas in across the country; this is particularly the case for young people.
Our older workers who also face skills challenges against a backdrop of longer working lives and ill health.
Our challenge is to maximise employment opportunities for all.
We will overcome barriers to employment by tackling deprivation and addressing the multiple factors that contribute to social exclusion and deprivation.
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European Structural and Investment funding Helping to deliver our plan for growthOur job now is to take advantage of the opportunity brought about by Europe 2020 and associated European funding, creating the right environment for smart, sustainable and inclusive growth which will lead to more and better jobs – the aim of our Strategic Economic Plan. The key strategic themes of our overarching Strategic Economic Plan align neatly with European objectives on smart, sustainable and inclusive growth.
The European Structural and Investment Funds (ESIF) are the European Union’s main funding programmes supporting jobs and growth across Europe. In the UK these are made up of the European Regional Development Fund (ERDF), European Social Fund (ESF), European Agricultural Fund for Rural Development (EAFRD) and European Maritime and Fisheries Fund (EMFF). Whilst all of the programmes are managed nationally, the Government is keen to ensure this funding is focused on local priorities which align with the Strategic Economic Plans as defined by Local Enterprise Partnerships across England (with the exception of EMFF which is much smaller and is managed nationally).
Consequently the North East LEP area has been given two separate notional allocations for ESIF funding; these allocations are split into two categories:
• Durham has the status of a ‘transition region’ due to its relatively lower economic performance (between 75-90% of the European average GDP); projects can secure up to 60% of ESIF funding 2
• Tyne and Wear and Northumberland are classed as ‘more developed’ which means their economic performance is 90% or above the European GDP average; projects in this area can secure up to 50% of ESIF funding
2All projects must be compliant with EU State Aid regulations; therefore this is the maximum allocation that can be secured. Please refer to ESIF State Aid guidance on the GOV website for more details 3 This also includes the Youth Employment Initiative funding for the Durham area
ERDFAims to strengthen economic growth and social cohesion by correcting imbalances between regions.
It focuses its investments on several key areas: innovation and research; the digital agenda; support for small and medium-sized enterprises (SMEs); and the low-carbon economy. ERDF action is designed to reduce economic, environmental and social problems in urban areas, with a special focus on sustainable urban development, through ‘integrated actions’ managed by cities.
EAFRDRural development policy helps rural areas to meet economic, environmental and social challenges and opportunities that face them in the 21st century.
In line with Europe 2020 and the overall Common Agricultural Policy objectives, three long-term strategic objectives for EU rural development policy in the 2014-2020 period can be identified: fostering the competitiveness of agriculture; ensuring the sustainable management of natural resources, and climate action; and achieving a balanced territorial development of rural economies and communities including the creation and maintenance of employment.
ESFAims to help people get better jobs and ensuring fairer job opportunities for all.
The European Union is committed to creating more and better jobs and a socially inclusive society. ESF works by investing in Europe’s human capital: its workers, its young people and all those seeking a job, in particular those who find it difficult to get work.
How much do we have in the North East LEP area?
Durham €93.7m
Tyne Wear & Northumberland €195.8m How much do we have in
the North East LEP area?
How much do we have in the North East LEP area?
Durham €71.5m3
Tyne Wear & Northumberland €185.4m
What we will achieve?
Enterprises supported 13,626
New enterprises 4,165
Employment Increase 4,145
Green House Gas reductions 40,328
What we will achieve?
Jobs created 350
Businesses supported 140
Premises with access to super-fast broadband
300
What we will achieve?
Participants engaged in programmes
163,930Unemployed engaged
in programmes 55,020
Participants with disabilities 33,150
Participants under the age of 25 19,900
Participants aged 25 - 29 1,460
Participants aged 50+ 35,330
Ethnic minorities 9,510
€289.5m€13.1m
€256.9m
TotalTotal
Total
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Northumberland, Tyne and Wear Durham
EUROS STERLING 1 EUROS STERLING 1
European Regional Development FundInnovation € 37,990,553 £29,632,631.34 € 20,202,394 £15,757,867.32
SME Competitiveness € 84,349,776 £65,792,825.28 € 44,221,258 £34,492,581.24
Low carbon € 61,048,751 £47,618,025.78 € 23,475,245 £18,310,691.10
Climate Change € 8,194,936 £6,392,050.08 € 3,583,975 £2,795,500.50
Community Led Local Development € 4,234,017 £3,302,533.26 € 2,218,851 £1,730,703.78
European Social FundAccess to Employment € 37,248,989 £29,054,211 € 8,071,455 £6,295,735
Sustainable Integration of Young People € 9,474,938 £7,390,451 € 7,352,112 £5,734,647
Youth Employment Initiative 0 0 € 18,000,000 £14,040,000
Active Inclusion € 21,237,956 £16,565,606 € 9,908,277 £7,728,456
Community Led Local Development € 9,859,155 £7,690,141 € 2,535,211 £1,977,465
Access to Lifelong Learning € 88,948,281 £69,379,659 € 21,706,295 £16,930,910
Improving Labour Market Relevance of Education and Training Systems € 18,641,176 £14,540,117 € 3,933,516 £3,068,142
ESIF allocations split by themeOur proposals for European Structural and Investment Funds are based on a significant evidence base and widespread local partner engagement and consultation.
The resulting allocations, as set out below, represent the best fit of these in relation to the national Operational Programme figures, as provided by the Managing Authorities to each LEP area.
Through negotiations with the Managing Authority the desired allocations for Sustainable Integration of Young People and Access to Lifelong Learning for the Durham region have been achieved however, there remains a couple of areas where our local proposals do not fit with the national figures provided.
These specifically include SME Competitiveness, where our preference was for a higher local allocation and Low Carbon, where our preference was for a lower local allocation. Ongoing discussions continue around local needs and requirements.
Throughout the strategy we have used the national allocations proposed by the Managing Authorities: DCLG and DWP, but these do not necessarily reflect local priorities exactly.
The outputs included have been provided by the managing authorities on national modelling and do not necessarily match the local context.
1. Member State ESI Funds allocations and the Operational Programme of each Fund are in euros. ESI Funds notional allocations to LEP areas are therefore also in euros. Sterling valuations of LEP area euro notional allocations will therefore naturally change to reflect ongoing euro/sterling fluctuations and the most recent revaluation of January 2016 applies a rate of €1 = £0.78.
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Innovation SME Competitiveness
Low Carbon
Climate Change
Community Led Local
Development
Durham (€93.7m) €20.2m €44.2m €23.5m €3.6m €2.2m
Tyne and Wear, Northumberland
(€195.8m)€38m €84.4m €61m €8.2m €4.2m
ACTIVITIES
Improve access to appropriate incubation space, and test and lab facilities, to increase number of businesses innovating & the commercialisation of research and development (1a)• Provide specialist infrastructure
and facilities to support smart specialisation areas
• Provide incubation space and incubator programs (idea creation, innovation awareness and open innovation activities, Intellectual Property strategies, investor readiness, etc.)
• Improve access to incubation space• Provide appropriate test and
lab facilities
Support greater collaboration and open innovation between enterprises, research and public institutions (1b)• Support ‘Open Innovation’ through a
single Regional Innovation Network• Support activity that increases
start-ups and spin outs delivering innovation
• Support University Research Commercialisation Initiatives (university/business consortiums)
Support bringing more new products / processes to firm/market (with a focus on our smart specialisation areas) (1b)• Support to increase innovation
in businesses• Support catalytic competitions
- promote innovation in smart specialisation sectors
• Support Grand Challenge projects (address socio-economic challenges through innovation)
• Support other Innovation and research and development project specific support
Ensure the right blend of finance is available to support business formation & growth through Access to Finance financial instrument framework (previously known as JEREMIE 2) (3a and c)
Ensure a co-ordinated and integrated Business Support offer; with clear alignment with the North East Growth Hub and mainstream funded activities. (3a, c and d)• Increase entrepreneurship
and enterprise by promoting skills to start a business/self-employment
• Investor readiness (focus on smaller businesses with high growth potential)
• Increase growth, productivity & resilience
• Increase trade & export growth
• Social Enterprise support (pre-start, start up guidance, advice & business planning)
• Digital technologies (SME support to take up superfast broadband and strengthen digital capacity)
• Increase inward investment into region
• Developing enterprise learning & skills development
• Provide mentoring for private and social enterprises
Develop strategic sites and provide appropriate incubation and grow on space for businesses, potentially through an Urban Development Fund (3a and c)
Support growing the low carbon sector, capitalising on innovative technologies ensuring the right blend of finance is available, including through Access to Finance financial instrument framework (previously known as JEREMIE 2) for Tyne and Wear and Northumberland (4f).• Support to enhance the supply
chains (particularly renewable energy generation, construction and retro-fit and intelligent and integrated systems such as smart grids)
• Support the development and commercialisation of new and innovative technologies and demonstrate responses which reduce carbon emissions and energy use (target : smart specialisation sectors)
Reduce the costs, and carbon impact of, energy generation and usage• Enhance access to, and take-up of,
low carbon and renewable energy by supporting demonstration and roll out of small-scale renewable energy (4a)
• Support innovative approaches and technologies to improve the energy efficiency of energy systems, networks and public, and community sector properties (4c)
Support the demonstration of integrated technologies and data-based approaches to achieve ‘whole place’ carbon reduction (4e)
Support climate change adaptation• Support advice to businesses to
improve energy efficiency and resilience (4b)
• Support projects that demonstrate the use of green and blue infrastructure to improve business resilience to flooding (5b)
Enhance capacity within communities for economic growth• Support new/
improved Community Hubs delivering community and business benefits.
• Support stronger linkages into the wider economy by the strengthening of local supply chains, business networking, and wider interventions from partners to tackle specific economic issues.
• Support interventions that support entrepreneurship and enterprise including pre-start activity, in a holistic manner which links businesses to local accommodation and support.
• Support for new forms of enterprise (including social enterprise).
Sustainable Urban Development 5
€5.6m €19.7m | €3.7m
European Regional Development Funding in the North East LEP area - in summaryThe European Regional Development Fund (ERDF) aims to strengthen economic and social cohesion in the European Union by correcting imbalances between its regions. In response to the challenges and opportunities for growth set out in our Strategic Economic Plan, the North East LEP area will focus its activities around the following:
5 Sustainable Urban Development (SUD) Funding has already been accounted for in the total allocations given at the top of the table. A Sustainable Urban Development Strategy has been developed to operate in the ‘More Developed’ part of the North East LEP area; this will draw on €29m of investment. The North East Combined Authority will take on delegated functions to select projects as the Intermediate Body for SUD.
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Skills Employment Inclusion Community Led Local Development6
Durham (€71.5m) €25.7m €33.4m €9.9m €2.5m
Tyne and Wear, Northumberland
(€185.4)€107.6m €46.7m €21.2m €9.9m
ACTIVITIES
Support for Management, Leadership and Enterprise skills (2.1) Support skills provision that delivers an increase in business starts targeted at the smart specialisation and growth sectors; pre-start support; entrepreneurial skills development; and training for innovators throughout their academic and business careers.
Support for employer led skills activities (2.1) Focused on SMEs in smart specialisation and growth sectors.
Support skills development for the workforce (2.1) Develop skills including: for those newly employed/ low skilled and those facing redundancy; enabling progress or sustainment in work. Focus on low skilled, tackling barriers to employment. Skills refresh e.g. IT skills/specific qualifications to address gaps in emerging technologies.
Support for industry specific intermediate and high level skills that respond to employer demand and offer flexible responses to emerging and projected skills needs (2.1) Focused on smart specialisation and growth sectors.
Support for collaborative projects (2.2) Placements, internships or other activities enabling students & graduates to gain industry relevant experience & skills to meet current & future employment demands.
Enable businesses to engage in skills provision & work directly with education providers to link industry with curriculum (2.2). Locally relevant activities supported will align course content with business demand, lead to increased work placement opportunities and create work-ready, highly skilled employees.
Business/educator links for business growth (2.2) To include support to encourage take up of graduates & highly skilled staff; tackling replacement demand and succession planning leading to increased participation in higher level skills
Access to Employment for Job seekers & Inactive People (1.1)• Support for individuals with
mental health issues• Support individuals who
are completing work programmes but are not in employment
• Access to labour market: programme of engagement & employability skills provision supporting unemployed/inactive to participate in activities leading to employment. To include locally responsive and intelligent Information, Advice and Guidance service
Sustainable Integration of Young People (1.2 & 1.3)• Address gaps in provision
for young people aged between 15 – 24 that are Not in Education, Employment or Training (NEET) or at risk of becoming NEET
• Youth Employment Initiative (1.3 - Durham only) addresses gaps in provision for young people aged 15 – 29 but the focus will be on those aged 15 - 24
Address multiple barriers to employment for those furthest away from the labour market (1.4)
Build capacity and support the voluntary and community sector and social enterprises to address multiple barriers to employment (1.4)• Provide grants to deliver
services for those furthest from the labour market.
• Support to develop the capacity and leadership of social entrepreneurs to address need of local community
Targeted support for those with protected characteristics (1.4)• Address long term
imbalances in key sectors• Specific tailored support
to address imbalances, including access for vulnerable groups and deprived areas.
Localised support to ensure people from deprived areas can move toward or into employment (1.5).• Identify and tackle specific
local barriers to employment and skills.
• Support social integration initiatives
• Support interventions which focus on connecting businesses and fostering good relationships with local residents to raise their awareness of local career opportunities, engaging those furthest from the labour market, including younger people and raising the aspirations of people aged 50+.
• Deliver learning, skills and employability activity to build re-engagement of those who would not access this provision through other areas of the European Structural and Investment Fund Programme, mainstream provision or employment.
European Social Funding in the North East LEP area - in summaryThe European Social Fund (ESF) aims to help people get better jobs and ensure fairer job opportunities for all. In response to the challenges and opportunities for growth set out in our Strategic Economic Plan, the North East LEP area will focus its employment, inclusion and skills activities around the following:
6 Note; Community Led Local Development funding is drawn from inclusion allocation.
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€13.1m
Support for micro and small businesses (measure 6.4)
Provide capital grants to support rural businesses grow and create jobs• Focus on key sectors: manufacturing,
engineering, pharmaceuticals, food and drink, tourism and creative industries
• Investment that increases business productivity and creates opportunities for job creation in higher level skills and in wage levels
Provide appropriate tourism accommodation, priorities for the first call are particularly in the following areas:• Outside of market towns, where they have
links to attracting more Dark Skies visitors and/or plug gaps in accommodation on recognised cycle and walking routes
• In the upland areas (including Kielder Water and Forest Park, Northumberland National Park and adjacent settlements, and the North Pennine Area of Outstanding Natural Beauty (AONB)
• High quality accommodation (properties with Visit England 4 star accreditation)
€6.25m
Support for broadband infrastructure (measure 7.3)
Provide Superfast Broadband to rural localities not yet served and outside of current rural superfast roll-out plans, particularly in more remote parts of Northumberland • Collaborative approaches to invest in
community broadband solutions • Fixed and mobile technology solutions
€0.62m
Support for visitor destinations and tourism infrastructure (measure 7.5)
Provide opportunities to improve the range and quality of tourism destination facilities to attract more higher spending and longer staying visitors from outside the North East • Enhancing visitor facilities in connection
with emerging market e.g. ‘Dark Skies’ visitor economy
• Development of adventure recreation - walking trails, cycle routes, water sports and climbing
• Development of nature tourism – including in our AONBs, National Park and other protected landscapes
• Support for heritage attractions – improving access and understanding of our industrial, Christian, Roman heritage
€5.6m
Support for tourism co-operation (measure 16.3)
Development of Destination Management Plans and collaborative initiatives between businesses to identify and develop networks and supply chains.
€0.62m
European Agricultural Fund For Rural Development in the North East - in summaryRural development policy helps rural areas to meet economic, environmental and social challenges and opportunities that face them in the 21st century. In the North East LEP area our rural areas make an important and distinctive contribution to the North East economy of which tourism plays an important role. However, whilst employment and self–employment and also home-working are notably higher than our urban communities, levels of productivity per job are relatively low.
With an indicative allocation of £10.5m from the National Growth Programme – the European Agricultural Fund for Rural Development (EAFRD)7– there is an opportunity to address this productivity gap by supporting both direct investment in small businesses and local economic infrastructure that can attract new and benefit existing businesses. The North East Farming and Rural Advisory Network (NEFRAN), North East Rural Growth Network and Northern Tourism Alliance are playing an important role in ensuring stakeholders representatives from our rural communities and organisations, who collectively have a vast range of knowledge and expertise in the rural economy, are engaged and consulted in the identification of priorities and development of project calls.
Although a number of scattered localities are potentially eligible for EAFRD funding in Tyne and Wear, the focus is on the designated rural areas of Northumberland, Durham and neighbouring parts of western Gateshead, including the Derwent Valley.
Following consultation with regional stakeholders we have set out our preferred EAFRD resource allocations, subject to agreement with the Rural Payments Agency. The specific priorities listed below relate to the first calls for projects which we expect to issue in 2016.
7 The allocation of £10.5m derives from an allocation of €13.1m using an exchange rate of €1 = £0.8. Please note the allocation is subject to final confirmation in light of revaluation this will inform the final allocation for each measure.
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Governance Underpinning significant investment in the local area over the next seven years, ESIF funds are an important element in achieving our aspirations. For this to be successful it must be based on local understanding and partner aspiration. Our local ESIF sub-committee brings together partners from across a wide range of sectors and organisations to support and advise on the delivery of the programme.
Governance frameworkOur governance approach must fit with the national programme requirements as set out in the national Partnership Agreement and Operational Programmes. Each LEP area has brought together a local sub-committee to advise locally, supporting the work of the national Growth Programme Board
Consistent with this framework, our North East LEP area ESIF sub-committee has been established, chaired by the private sector, to advise the Managing Authorities on the North East LEP areas strategy. It brings together representatives from:• Business (including specific
representation for small enterprises and social enterprises)
• Central government (BIS)• County Durham
Economic Partnership• Education, skills
and employment• Equalities and
non-discrimination• Further education• Higher education• Managing authorities
(DWP, DCLG and DEFRA)• North East Combined Authority
• North East LEP• Rural areas• Sustainability• Trade unions• Voluntary and Community Sector
The terms of reference set out consistent roles and responsibilities for the sub-committee in advising the Managing Authority on the development of calls and the strategic fit of projects. This ensures alignment with the ERDF and ESF Operational Programmes and the North East LEP area ESIF strategy, specifically the sub-committee role includes:
• Providing advice to the Managing Authority on local development needs and opportunities.
• Working with sectors and organisations they represent so that they engage with and understand the opportunities provided by ESIF Funding.
• Promoting active participation amongst local economic, environmental and social partners to help bring forward activities which meet local needs.
• Providing local intelligence to aid the development of project calls.
• Providing advice on local economic growth conditions and opportunities.
• Contributing advice, local knowledge and understanding to the Managing Authorities to aid good delivery against spend milestones, cross-cutting themes, outputs and results.
• Having regard to the Managing Authority’s statutory duties under the Equalities Act 2010, provide information advice and
local knowledge regarding the likely and actual impact of ESI Funds strategies and plans on persons with the protected characteristics and advice on mitigating measure where adverse impacts are identified.
Fund CoverageThe sub-committee role will cover ERDF, ESF and EAFRD; however the Operational Programme for EAFRD sets out a slightly different role for the sub-committee.
As there is a separate national Programme Monitoring Committee for the EAFRD programme and different approach to project selection and approval, the North East LEP area ESIF sub-committee will not formally be a sub-committee of the EAFRD Programme Monitoring Committee. It will however provide advice to the Managing Authority on relevant activities.
Tools to be usedIn delivering our strategy we will make use of a range of delivery tools to maximise the benefits of the investment to the local area.Whilst each of these fit within the broad approach to ESIF funding, the precise approach to governance will be tailored in each case.
• Open calls – the most common mechanism for accessing European Structural and Investment Funds is through open calls. These are published regularly on .gov.uk and targeted at different elements of the programme. They seek partners to come forward with project ideas and match funding. The local sub-committee with provide advice to the Managing Authority on the content and timing
of these calls and provide advice on the strategic fit of proposals as part of the Managing Authorities assessment. Successful applications will go through a two stage process of outline and full application.
• Opt-ins –the opt-ins provided by the Skills Funding Agency, Big Lottery Fund and Department of Work and Pensions, will support the delivery of the ESF proposals across all strands. These provide the match funding for projects of joint interest. These will be managed according to the individual mechanisms established for each opt-in but will be overseen by the ESIF sub-committee providing advice on the proposed content and the application by the opt-in body.
• Sustainable Urban Development (SUD) – through SUD the North East Combined Authority will take on the role of ‘urban authority’ for this element. The sub-committee will continue to fulfil the function of providing advice and information on development and decision making accompanied by additional expert members to reflect the specific requirements of Sustainable Urban Development. Sustainable Urban Development does not bring additional funding but directs £20.6m from within the overall ‘more developed’ category of region expenditure.
• Community-Led Local Development (CLLD) – CLLD is a bottom-up approach to European funding which engages and empowers local communities through Local Action Groups. These are formed in the successful areas
to develop and finalise a local strategy and make decisions on individual projects. The sub-committee, in line with the overall strategy, will provide advice on the overall approach and priorities for CLLD in the North East LEP area and receive updates on progress.
• Financial instruments – The European Commission has approved a number of financial instruments to enable more effective use of European funding in local areas and reduce market distortion. These instruments can take a number of forms providing repayable finance such as loans and debt finance or a financial stake in the project such as equity which can later be disposed of with financial returns. Due to the potential to secure long-term finance which can be used to re-invest in the local area we have chosen to make use of financial instruments throughout our programme. These will be commissioned in line with the ESI Funds strategy with an organisation in place to make independent, commercial, compliant investment decisions.
DevolutionAs part of devolution deal, the North East Combined Authority will take on limited Intermediate Body status for the European Structural and Investment Funds from April 2016. The detail of this is to be agreed between the Combined Authority and national government, appropriate governance arrangements will be developed as part of this process ensuring these remain complaint with European legislation and guidance and maintaining full partner participation.
National and local governance of the England ESI Funds Growth Programme has been developed to reflect the role of partners and the Managing Authorities agreed in the ERDF and ESF Operational Programmes. The governance text in Annex 1 replaces the description of governance arrangements in this local ESI Funds Strategy
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Contact Us
Working in partnership
Developing the strategyEuropean funding is an essential element in delivering on our local aspiration for ‘more and better jobs’ as set out in the North East Strategic Economic Plan (SEP). The SEP and this strategy represent the culmination of the work of a large number of local partners. The strategy builds on the shared evidence base of the North East Strategic Economic Plan and seeks to put this in the European funding context. Partners have been engaged throughout this process responding professionally and rapidly to external changes to the programme context.
The document represents an evolution from the original ‘Towards a Prospectus’ document produced in 2013 through consultative drafts of the strategy produced in 2013 and 2014. Since this point iterative modifications have been made refining proposals and responding to the finalisation of the national Operational Programmes.
The strategy is evidence-based, drawing on the North East Independent Economic Review and evidence gathered to inform its development. This robust work has been enhanced through targeted studies and research projects on Smart Specialisation, sustainable growth and inclusive growth in the North East LEP area.
Our strategy development process also included engagement and consultation with a wide range of stakeholders. The initial document was informed by three task and finish group which focused on strategic direction,
a pipeline of projects and governance. The work of these groups led to the development of the initial draft strategy which was subject to full consultation in late 2013.
The consultation received 270 responses to the online survey with strong support the approach taken and priorities identified with 74% agreeing with our identification of the key challenges and proposed allocations and 82% agreeing with the proposed objectives.
Over 100 people attended a series of workshops as part of the consultation covering public, private and voluntary organisations addressing each of the themes identified and again strongly supporting the development approach taken.
Following submission on-going communications have been undertaken to maintain understanding of the proposals. Following the establishment of the shadow sub-committee in the North East LEP area in December 2014 the role for overseeing the development has been undertaken through the sub-committee.
Supporting the agendaPartners have a key role in not only developing the approach to European funding, but also in ensuring it successfully delivers for the businesses and people of the North East.
Building on the approach to developing the strategy partners will be engaged throughout delivery, not only through the sub-committee and formal governance arrangements but also through communications, workshops and events and on-going support.
As we set out in the North East LEP area Statement of Ambition for Technical Assistance we are aware of the importance of support to applicants and potential applicants in understanding the opportunities and requirements of European Structural and Investment Funds. Sharing this expertise is essential in successful delivery of the programme by assisting partners to bring forward applications which are eligible and address local strategic need.
To achieve this, partners in the area are developing a joint proposal through the North East Combined Authority bringing together local authority expertise and the North East Local Enterprise Partnership. This will provide a coordinated and integrated approach to support providing both area-wide strategic support and more local project support.
Through this approach partners will be able to access advice and support in developing applications with raised awareness of the programme. This will be achieved through:
• A series of integrated workshops and events to increase understanding and awareness of the opportunities, European funding framework and application process.
• Supporting good practice through publication of consistent information through the North East Combined Authority website and other local partner websites including supporting documentation.
• One-to-one support for project applicants in developing the proposal.
• Regular information provided through questions and answers and e-bulletins.
• Access to networking and sharing opportunities such as the North East Growth Hub portal.
We will develop a local network of Technical Assistance projects working closely with the Managing Authorities to ensure close alignment and shared understanding of the issues and practical solutions. This will lead to more eligible applications, improved compliance and more effective projects.
Particular arrangements will be put in place to ensure partnership engagement and involvement in delivery through the specific mechanisms available. Most particularly through Local Action Groups established for CLLD and in advising and supporting Sustainable Urban Development where additional partners with the required expertise will be engaged as part of the governance structures.
Further details will be available on the
North East Combined Authority website.
northeastca.gov.uk
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Annex A: National Governance National and local governance of the England ESI Funds Growth Programme has been developed to reflect the role of partners and the Managing Authorities agreed in the ERDF and ESF Operational Programmes. The governance text in this Annex replaces the description of governance arrangements in this local ESI Funds Strategy.
Partnership working: governance and roles of ESI Funds Growth Programme Board, its national and local sub-committees, Managing Authorities and local partners.
A national ESI Funds Programme Monitoring Committee (PMC) has been established in England. It is the PMC for the Operational Programmes for the ERDF and the ESF in England and is known as the ESI Funds Growth Programme Board (GPB).
The EAFRD PMC will be the PMC for EAFRD funds within the European Growth Programme.
The GPB is chaired by a representative of the Managing Authorities, who also provide the Secretariat. The membership of the GPB is drawn from representatives of a wide range of partners across the public, private, business, social, voluntary and environmental sectors.
The GPB is supported by a number of sub-committees advising it on relevant policy and operational matters. These sub-committees, which will provide supporting advice in specific policy areas such as innovation, skills and aspects of implementation, will bring in leading experts from their fields and provide an important
resource for the GPB and ESI Funds Growth Programme.
All sub-committees will report to the GPB, to ensure transparency of proceedings. The GPB will not delegate decisions to these national sub-committees though their advice will be important in informing the GPB’s perspective, advice and decisions.
The Managing Authorities will work in partnership with economic, environmental, equality, social and civil society partners at national, regional and local levels throughout the programme cycle, consisting of preparation, implementation, monitoring and evaluation.
At the local level, ESI Funds sub-committees have been set up in each Local Enterprise Partnership area. These local sub-committees in each Local Enterprise Partnership area will operate as sub-committees of the GPB, to whom they will report. Local promotion of ESI Funds projects and their impact will be a priority, as will local leadership of this amongst partners. This will complement the functions of the Managing Authority but not substitute for them.
Each Local ESI Funds sub-committee is therefore chaired by a local partner who, along with other members drawn from business, public, environmental, voluntary and civil society sectors, are advocates for the opportunities and impact of the ESI Funds. Membership of these sub-committees is inclusive and in line with EU regulations and the wide scope of ESI Funds priorities. The Managing Authority is the Deputy Chair of the local ESI Funds sub-committee, except in London.
The role and purpose of these Local ESI Funds sub-committees
is clearly defined in Terms of Reference published on GOV.UK . They are not responsible for any tasks set out in EU regulations for which Managing Authorities are responsible in relation to management of the ESI Funds.
The local sub-committees : • Provide advice to the
Managing Authorities on local development needs and opportunities to inform Operational Programmes and ESI Funds Strategies;
• Work with sectors and organisations they represent so that they engage with and understand the opportunities provided by the ESI Funds to support Operational Programme objectives and local economic growth;
• Promote active participation amongst local economic, environmental and social partners to help bring forward activities which meets local needs in line with the Operational Programmes and local ESI Funds strategies and Implementation plans;
• Provide practical advice and information to the Managing Authorities to assist in the preparation of local plans that contribute towards Operational Programme priorities and targets. Similarly, provide local intelligence to the Managing Authorities in the development of project calls decided by the Managing Authorities that reflect Operational Programme and local development needs as well as match funding opportunities;
• Provide advice on local economic growth conditions and opportunities within
the context of Operational Programmes and the local ESI Funds Strategy to aid the managing authority’s assessment at outline and full application stage;
• Contribute advice, local knowledge and understanding to the Managing Authority to aid good delivery against spend, milestones, cross-cutting themes, outputs and results set out in the Operational Programme and local ESI Funds strategies.
In this way partners at local level will play the important role foreseen in the Common Provisions Regulation and the main principles and good practices set out in the European Code of Conduct on Partnership. Managing Authorities will ensure that partner roles and responsibilities are clearly set out at all levels and that conflicts of interest are avoided.
Where specific Managing Authority functions are designated to an Intermediate Body, that body will seek advice from the relevant LEP area ESI Funds sub-committee in the same way as the Managing Authority would. The LEP area ESI Funds sub-committee will therefore provide advice to the Intermediate Body and/or the Managing Authorities as appropriate and as set out in the written agreement with the Intermediate Body.
North East LEP 1 St James Gate, Newcastle upon Tyne, NE1 4ADTel: 0191 338 7420 | Email: [email protected] | northeastlep.co.uk | @northeastlep
Innovation
Innovation “Our goal is to take our place as a leading innovation hot spot in Europe” Innovation is an engine for growth; put simply it’s about matching what’s needed with what’s possible to create economic value or social good. Today’s new products, services and processes will drive opportunities to create tomorrow’s new jobs and industries. We will focus on what we are good at, giving our economy greater competitive advantage by driving rapid growth and creating more and better jobs.
The North East has a long history of invention and a pioneering spirit - we led the world in the development of rail passenger travel, engineering and scientific discovery in the Industrial Revolution. Today the North East is leading a new industrial revolution, with strengths that allow us to stand out from the crowd. We call these our ‘smart specialisation’ areas: Passenger vehicle manufacture We are leading the way to provide a cleaner, greener, future for all We are looking for innovative solutions to provide a cleaner, greener future for our transport systems, homes and cities – one of the world’s biggest challenges. The North East is ideally placed to meet it. Our aim is to be a leading test bed and demonstration area for low carbon vehicles; they are transforming the way we live our lives, changing the infrastructure of our cities and our impact on our planet. Creative, digital, software and technology We have one of the fastest growing communities in the UK Creative, digital, software and technology pioneers are spearheading the region’s growing reputation as a hotbed of ideas, entrepreneurial spirit and tech collaboration. We will foster an environment for businesses to be more efficient and competitive through digital enablement.
Subsea and offshore engineering Our ecosystem offers world class engineering & manufacturing North East pioneers were among the first to recognise the huge commercial potential of subsea technology in the 1970s. We have built on their revolutionary work, creating a ‘family tree’ of new industrial growth across the region. We continue to find innovative solutions that give us a leading edge in subsea technologies globally. Life sciences & healthcare Our globally significant sectors are strong and growing We produce 33% of the UK’s GDP in pharmaceutical manufacturing and household names such as GlaxoSmithKline, MSD and Piramal Pharma Solutions; all choose to call the region home. A number of our hospitals are globally recognised as centres of healthcare excellence and we host world class universities who lead on cutting edge research and development in this sector. We will build on our position as one of the UK’s leading academic bioscience centres for research, teaching and training.
Other areas of competitive
advantage ----
Satellite
Surface Science
Ageing
Energy Systems
The North East LEP area also faces innovation challenges
£576m spend on research and development Of which £309m spent by business and £250m spent by higher education institutions (ONS, 2013). Despite a rise of £35m compared to the previous year R&D expenditure in the NE is less than half that spent in the next lowest spending region of England. Total R&D spend in the NE accounts for 2% of UK expenditure and 2.3% of England’s expenditure on R&D
1.9% UK average proportion of GVA spent on R&D
1.2% North East proportion of GVA spent on R&D
R&D SPEND COMING FROM UNIVERSITIES
UK AVERAGE: 26.4%
PRIVATE SECTOR INNOVATION EXPENDITURE
UK AVERAGE: 63.9%
LOW LEVELS OF PATENTS 26.5 PER MILLION INHABITANTS
AGED 16 – 64 NATIONAL AVERAGE: 56.4
SHORTFALL IN FINANCE FOR INNOVATING BUSINESSES
(Especially proof of concept funding)
INNOVATION
--- Durham
€20.2m1
Tyne and Wear Northumberland
€38m1
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1A ENHANCING RESEARCH AND DEVELOPMENT
The need The North East LEP area needs to facilitate effective innovation activity by building and developing innovation hubs and incubation facilities that support the development of innovation centric businesses. This in turn will bring more products, services and processes into firms and to the market, which will create growth.
Actions supported
Improve access to appropriate incubation space and test and lab facilities to increase number of businesses innovating & the commercialisation of research and development: • Provide specialist infrastructure and facilities to support smart specialisation areas. • Provide incubation space and incubator programs (for example: idea creation, innovation awareness and open innovation
activities, Intellectual Property strategies, investor readiness). • Improve access to incubation space. • Provide appropriate test and lab facilities.
Future key focus 2
The North East LEP area has a high proportion of capital projects selected, many are related to the provision of incubation space and support which has been identified as a key area of need locally. Moving forward, there will be a need to continue to support incubators by making available future funding under ERDF for this purpose
Durham Tyne and Wear, Northumberland
Outputs
CO25 P1 P2
Number of researchers working in improved research infrastructure facilities Number of researchers working in improved research or innovation facilities Public or commercial buildings built or renovated
15 FTEs 31 FTEs 784 sq metres
CO25 P1 P2
Number of researchers working in improved research infrastructure facilities Number of researchers working in improved research or innovation facilities Public or commercial buildings built or renovated
36 FTEs 71 FTEs 1,818 sq metres
1B SMART SPECIALISATION SUPPORT
The need
The North East LEP area has a relatively low level of corporate, SME and broader public sector innovation. In particular we need to address the following: • Support growth in our smart specialisation areas: passenger vehicle manufacture; creative, digital, software and technology;
subsea and offshore engineering; and life sciences and healthcare. • Support businesses that are innovating, or who want to innovate. • Raise the innovation profile of the area both nationally and internationally. • Build innovation capacity and capability within and across the sectors through open innovation and collaboration. • Increase the network intensity and the integration / joining up of academic networks, catapults, industry and innovation hubs. • Address the low levels of innovation skills (linked to European Social Fund Activities).
Actions supported
Support greater collaboration and open innovation between enterprises, research and public institutions • Support ‘open innovation’ through a single Regional Innovation Network. • Support activity that increases graduate start-ups and spin outs delivering innovation. • Support university research commercialisation initiatives (university/business consortiums). Support bringing more new products / processes to firm/market (with a focus on our smart specialisation areas) • Support to increase innovation in businesses. • Support catalytic competitions - promote innovation in smart specialisation sectors. • Support Grand Challenge projects (address socio-economic challenges through innovation). • Support other innovation and research and development project specific support.
Future key focus 2
We have mapped all the existing projects under innovation and have established a low level of support in place for graduate start-ups and for the development of our smart specialisation sectors: • Graduate start-ups - particularly focussed in the commercialisation of products/processes and services undertaken by
students. • The Grand Challenge - to support businesses seeking to address socio-economic challenges though innovation. • Catalytic competitions - to create SME growth in our smart specialisation areas.
Durham
Outputs
CO01 CO02 CO03 CO04 CO05 CO06 CO07 CO08 CO26 CO28 CO29 P2
Number of Enterprises receiving support; of which: - Number of Enterprises receiving grants - Number of Enterprises receiving financial support other than grants - Number of Enterprises receiving non-financial support - Number of new Enterprises supported Private investment matching public support to enterprises (grants) Private investment matching public support to enterprises (non-grants) Employment increase in supported enterprises Number of enterprises cooperating with research institutions Number of enterprises supported to introduce new to the market products Number of enterprises supported to introduce new to the firm products Public or commercial buildings built or renovated
517 362 27 126 44 437,341 euros 691,527 euros 41 FTEs 280 41 82 223 sq metres
Tyne and Wear, Northumberland
Outputs
CO01 CO02 CO03 CO04 CO05 CO06 CO07 CO08 CO26 CO28 CO29 P2
Number of Enterprises receiving support; of which: - Number of Enterprises receiving grants - Number of Enterprises receiving financial support other than grants - Number of Enterprises receiving non-financial support - Number of new Enterprises supported Private investment matching public support to enterprises (grants) Private investment matching public support to enterprises (non-grants) Employment increase in supported enterprises Number of enterprises cooperating with research institutions Number of enterprises supported to introduce new to the market products Number of enterprises supported to introduce new to the firm products Public or commercial buildings built or renovated
1,113 780 20 272 94 943,015 euros 1,319,229 euros 88 FTEs 601 88 177 481 sq metres
1 Member State ESI Funds allocations and the Operational Programme of each Fund are in euros. ESI Funds notional allocations to LEP areas are therefore also in euros. Sterling valuations of LEP area euro notional allocations will therefore naturally change to reflect ongoing euro/sterling fluctuations. For the purpose of this Strategy euro allocations have been converted to sterling using the following rate €1 = £0.78 current at the most recent revaluation January 2016 2 Please note; this will be subject to review by the North East LEP area ESIF Committee at regular intervals during the lifetime of the programme.
What will we achieve? Through investments made by the European Regional Development Funding we will deliver the
following:
OUTPUT 3 TARGET Durham Tyne and Wear,
Northumberland CO01 Number of Enterprises receiving support; of which: 517 1,113
CO02 Number of Enterprises receiving grants 362 780
CO03 Number of Enterprises receiving financial support other than grants 27 20
CO04 Number of Enterprises receiving non-financial support 126 272 CO05 Number of new Enterprises supported 44 94 CO06 Private investment matching public support to enterprises
(grants) 437,341 Euros 943,015 Euros
CO07 Private investment matching public support to enterprises (non-grants) 691,527 Euros 1,319,229 Euros
CO08 Employment increase in supported enterprises 41 FTEs 88 FTEs CO25 Number of researchers working in improved research
infrastructure facilities 15 FTEs 36 FTEs
CO26 Number of enterprises cooperating with research institutions 280 601 CO28 Number of enterprises supported to introduce new to the market
products 41 88
CO29 Number of enterprises supported to introduce new to the firm products 82 177
P1 Number of researchers working in improved research or innovation facilities 31 FTEs 71 FTEs
P2 Public or commercial buildings built or renovated 784 sq metres 1,818 sq metres 3 The ‘output targets’ reflect those prescribed by Government and are under negotiation. The latest definitions can be found at Https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/462724/ERDF_Output_Indicator_Definitions_Guidance_230915.pdf
Small and medium enterprise (SME) competitiveness
SME competitiveness “Our goal is to create an intelligent business ecosystem that supports and accelerates business growth, productivity and trade” Business growth creates jobs and wealth; the North East benefits from an innovative business environment and a competitive cost base. However, the area has a low business density and reliance on the public sector for employment compared to other parts of the UK.
The North East Local Enterprise Partnership (North East LEP) area has a focus on enhancing business formation and growth, especially in our ‘smart specialisation’ sectors. We will give our economy greater competitive advantage by enhancing entrepreneurship and enterprising skills; boosting prosperity, productivity and profitability, which will lead to increases in wages and employment. Deliver and develop the North East Business Growth Hub We will make the North East a place where it is easy to start and grow a business by helping businesses find and utilise the right information, expert advice and finance to grow and thrive. We will ensure simple, cohesive and integrated access to business development and innovation advice, information and support via northeastgrowthhub.co.uk In delivering the Growth Hub we will support a diverse and cohesive business support ecosystem. Ensure a co-ordinated and integrated business support offer; with clear alignment with the North East Growth Hub and mainstream funded activities. We will support our smart specialisation and growth sectors by addressing their specific business
support requirements where there are gaps in existing mainstream provision; this support will cover entrepreneurship, business start-up and growth support, plus access to appropriate finance. We will further internationalise our economy by attracting direct Investment and tourism from outside the North East LEP area. We will continue to support a thriving rural economy, building on existing economic strengths, assets and networks to create and sustain businesses and jobs. We will develop strategic sites and provide appropriate incubation and grow- on space for businesses, potentially through an urban development fund. Ensure the right blend of finance is available The ability to access finance is important for cash flow; funding business investment, facilitating new business start-ups and ensuring businesses have the opportunity to reach their full growth potential. Inadequate access to finance remains a key risk to survival and growth and there are a number of issues affecting the supply of both debt and equity finance to SMEs. Through Access to Finance financial instrument framework (previously known as JEREMIE 2), we will deliver equity, loan, guarantees and mixed investments to businesses wanting to start up and grow. This will also increase the efficiency of the European Structural and Investment Funds by leveraging additional public, private or social finance.
Strengthen programme governance,
leadership and management
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The North East SMEs also face challenges
49,235 ENTERPRISES (VAT/PAYE REGISTERED - 2015) 87% micro (less than 10 employees) 13% small & medium (10-249 employees) 0.4% large (250+ employees)
£26.40 LOW GVA PER HOUR WORKED
UK AVERAGE: £30.10 AND £28.50 for all LEPs
LOW ENTERPRISE RATE
395 BUSINESSES PER
10,000 HEAD OF POPULATION (aged 16-64)
English average: 613
OVER RELIANCE OF PUBLIC SECTOR EMPLOYMENT
20.7% of public sector employment vs. 17.2% UK
(2015)
SME COMPETITIVENESS
---
Durham
€44.2m1
Tyne and Wear Northumberland
€84.4m1
---
3A ENSURE THE RIGHT BLEND OF FINANCE IS AVAILABLE TO SUPPORT BUSINESS FORMATION AND GROWTH
The need • Market failure in access to finance for SMEs and limited supply of investment finance. • Demonstrated demand at a national and local level for significant access to finance improvements for SMEs across
debt, mezzanine and venture capital mechanisms.
Actions supported
• Work towards creating the best venture capital industry outside of London by developing and delivering an integrated business investment fund, through the Access to Finance financial instrument framework (previously known as JEREMIE 2), and by working through delivery partners to market the availability of funds and to raise levels of investment readiness.
• Communicate to finance partners on business growth successes and generate further interest in the North East Growth Hub.
• Improve access to angel and mentor networks through the North East Growth Hub. • Consider and act on any further needs to ensure the right blend of finance is in place to support business formation
and growth.
3A & D: ENSURE A CO-ORDINATED AND INTEGRATED BUSINESS SUPPORT OFFER, WITH CLEAR ALIGNMENT WITH THE NORTH EAST GROWTH HUB
The need
Our existing strengths lie in advanced manufacturing, our fantastic healthcare system and technologies (such as virtual reality, electric vehicles and advanced materials), pharmaceuticals, energy, low carbon and renewable technologies, logistics, professional services, higher and further education, agriculture and tourism – all of which are showing promising signs of growth. The North East is also emerging as a potential global leader in a number of new and emerging industries. As a world leader in low carbon vehicle technology, the North East will provide a cleaner, greener future for all. We are also known for having one of the fastest growing creative, digital, software & technology communities in UK; thriving subsea and offshore sectors, as well as a globally significant presence in the health and life science sectors. However, the area has the following challenges: • GVA per hour worked is low: £26.40 compared to the UK average, £30.10 and £28.50 for all LEPs. • Enterprise rate is low: 395 businesses per 10,000 head of population (aged 16-64) compared to 613 per 10,000 for
England. An improved entrepreneurial culture including through enterprise, self-employment and enhanced entrepreneurial skills in employment will contribute to structural change in the economy and boost capacity across the SME business base. Entrepreneurship can be supported in appropriate ways - in disadvantaged communities, graduate retention and through social entrepreneurship and enterprise.
• The private sector is underdeveloped: Dependency on large and public sector employers, an under-represented private sector particularly in professional services leading to an overall a shortage of 60,000 jobs in the economy.
• Skills levels are low: Only 29% of the working age population has skills at Level 4 or above. This lags 7 % points behind the English rate.
• Lack of coordinated business support: Whilst it is acknowledged that there may be diverse local needs, business and enterprise support needs to be coordinated with local providers providing a complementary offer to national services and ensuring the full spectrum of demand-led support is available.
• Low productivity: Businesses with high growth potential are under-represented in the business base. • Skills development and targeting of areas of economic strength are essential.
Actions supported
• Increase entrepreneurship and enterprise by promoting skills to start a business/self-employment. • Investor readiness (focus on smaller businesses with high growth potential). • Increase growth, productivity & resilience. • Increase trade & export growth. • Social Enterprise support (pre-start, start-up guidance, advice & business planning). • Digital technologies (SME support to take up superfast broadband and strengthen digital capacity). • Increase inward investment into region. • Developing enterprise learning & skills development. • Provide mentoring for private and social enterprises.
3A, C & D: DEVELOP STRATEGIC SITES AND PROVIDE APPROPRIATE INCUBATION AND GROW-ON SPACE FOR BUSINESSES, POTENTIALLY THROUGH AN URBAN DEVELOPMENT
FUND
The need
• Infrastructure deficit: Further capacity is needed in strategic locations where infrastructural improvements could lead to growth including grow-on and managed workspace, incubation and demonstrator sites, development in support of supply chain growth and growth through inward investment.
• Low levels of innovation intensity: 1.3% of GDP spend on R&D activity in contracts to 1.9% at UK level with a reliance on university activity. There is a persisting low level of patent applications.
Actions supported
• Investment to address identified development need. • Development of strategic locations where infrastructural improvements could lead to growth. • Development of grow on and managed workspace, incubation and demonstrator sites. • Investment may be delivered through loan and other repayable financial mechanisms or financial instruments to
support growth.
1 Member State ESI Funds allocations and the Operational Programme of each Fund are in euros. ESI Funds notional allocations to LEP areas are therefore also in euros. Sterling valuations of LEP area euro notional allocations will therefore naturally change to reflect ongoing euro/sterling fluctuations. For the purpose of this Strategy euro allocations have been converted to sterling using the following rate €1 = £0.78 current at the most recent revaluation January 2016
What will we achieve?
Through investments made by the European Regional Development Funding we will deliver the following targets
OUTPUTS 2 TARGET 3A TARGET 3C TARGET 3D
Durham Tyne and Wear,
Northumberland Durham Tyne and Wear, Northumberland Durham Tyne and Wear,
Northumberland
CO01 Number of enterprises
receiving support 706 949 1,739 2,425 1,043 1,570
CO02 Number of enterprises receiving grants 464 607 1,160 1,574 696 1,048
CO03 Number of enterprises receiving
financial support other than grants 29 111 73 288 44 148
CO04 Number of enterprises receiving
non- financial support 181 236 451 612 271 407
CO05 Number of new enterprises supported 553 851 553 881 332 500
CO06 Private investment matching public
support to enterprises (grants) 2,447,549 Euros
3,203,473 Euros
7,342,646 Euros
9,965,854 Euros
4,842,813 Euros
7,288,525 Euros
CO07 Private investment matching public
support to enterprises (non- grants) 80,515 Euros
137,879 Euros
2,415,463 Euros
4,283,562 Euros
1,610,309 Euros
2,445,086 Euros
CO08 Employment increase in supported
enterprises 289 FTEs 445 FTEs 723 FTEs 1,152 FTEs 433 FTEs 653 FTEs
CO28 Number of enterprises supported to
introduce new to the market products 55 85 0 0 0 0
CO29 Number of enterprises supported to
introduce ‘new to the firm’ products 0 0 276 441 166 250
P11 Number of potential entrepreneurs
assisted to be enterprise ready 2,226 2,914 0 0 0 0
P13 Number of enterprises receiving
information, diagnostic and brokerage 0 0 174 236 104 157
P2 Public or commercial buildings built
or renovated 87 sq metres
113 sq metres
217 sq metres
294 sq metres
130 sq metres
196 sq metres
2 The ‘output targets’ reflect those prescribed by Government and are under negotiation. The latest definitions can be found at Https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/462724/ERDF_Output_Indicator_Definitions_Guidance_230915.pdf
Low carbon economy & climate change
Low Carbon economy and Climate Change “We aspire to become Europe’s premier location for low carbon, sustainable, private-sector led growth making the most of our extensive assets and distinct strengths to drive growth which is both resilient and sustainable”
With key successes in offshore wind technologies and electric vehicles, the North East has been at the forefront of the move towards low carbon economic growth. With a track-record of innovation in energy and manufacturing technologies, a strong academic base and valuable natural assets, our strategy is not only to enhance and commercialise existing strengths but also to bring the next opportunities to market and enable long-term sustainable and resilient growth. Growing Low Carbon sectors We have significant and growing opportunities in low carbon technologies, processes and applications Our low carbon, environmental goods and services sector supports around 20,000 jobs and has underpinned significant employment growth and attracted major investment. We are particularly strong in energy, heat and transport with high proportions of the national employment in offshore wind, geothermal, hydroelectric, and biomass energy, alternative fuels, heat networks and electric vehicles present in the North East. The low carbon economy also links strongly to our innovation base, with overlap with areas of smart specialisation in vehicle manufacture, offshore and marine technologies and data and software. We also have natural assets in our marine environment, coast and upland areas and forests as well as untapped geothermal potential. Our strengths are not only in a strong business base but also world-class research, testing and demonstration sites.
This includes part of the National Offshore Renewable Energy Catapult in Blyth, Zero Carbon Future, NOF Energy and engagement in the Energi Coast and CORE initiatives. These complement the academic strengths of our four universities with offshore wind, energy and energy storage. Achieving sustainable growth Investment in enhancing the sustainability and resilience of our businesses will support long-term competitiveness Although the North East represents a relatively resilient location business growth in environmental terms, investment will enable us to capitalise and protect this advantage. Businesses in the North East have reported challenges around energy and resource efficiency and issues regarding flooding as being significant. This is supported by a Climate North East study, which estimated that without interventions there is a potential cost to the North East of England of £600m per year by 2050. UK climate projections also indicate heat risk may be an issue towards the end of the century. Our diverse landscape, including urban and rural dimensions, and coastal, upland and river valley areas create significant opportunities as well as some challenges. These natural sites and space available for development, provides opportunities for more sustainable and innovative solutions to support long-term sustainable development.
To achieve this change and capitalise on our opportunities we will have identified key areas for activity • Growing the low carbon sector
(including capitalisation on innovative technologies and enhancing supply chains.
• Renewable and low carbon
energy generation, distribution and storage.
• Energy efficiency in processes,
properties and technologies for public, private and voluntary and community sectors.
• Supporting smart places and
future city initiatives bring together innovative, integrated solutions across buildings and places.
• Making sustainable places improving
resilience through green and blue infrastructure solutions.
The North East LEP area also faces Low Carbon challenges
HIGH LEVELS OF FUEL POVERTY In 2003 and 2013, the North East region had the lowest variation across Local Authorities in terms of fuel poverty, however, it had the highest rate of fuel poverty in England in 2003, and the second highest in 2013 % of fuel poor households 2013 11.8% NE vs. 10.4% England
LACK OF BUSINESS READINESS FOR CLIMATE CHANGE & LOW AWARENESS
OF OPPORTUNITIES TO IMPROVE ENERGY EFFICIENCY
RIVER, COASTAL AND SURFACE WATER FLOODING
A RISK, AND PROJECTED TO INCREASE
CONGESTION AND TRANSPORT RELATED CARBON EMISSIONS
ARE INCREASING NEW SUSTAINABLE TRANSPORT SOLUTIONS ARE NEEDED
LOW CARBON
ECONOMY
---
Durham
€23.5m1
Tyne and Wear
Northumberland
€61m1
---
4A PROMOTING THE PRODUCTION & DISTRIBUTION OF RENEWABLE ENERGY
The need
• Renewable and low carbon energy already represents over 6,000 jobs in the North East. In comparison to the overall size of the economy there are particular concentrations in areas related to biomass, offshore wind, hydroelectricity, geothermal and heat pumps.
• There is scope to capitalise on natural assets and renewable sources of energy present. The large supply of biomass includes the largest softwood resource in England in Kielder Forest. The presence of the Stublick Fault providing unrivalled access to geothermal sources of energy. The location on the North Sea coast also provides natural connection to marine energy sources including proximity to Dogger Bank and other offshore wind sites in the North East and the operational testing site at Blyth.
• Strong interest in community energy schemes to target roll out of smaller-scale, local generation schemes with potential across a wide range of renewable sources of energy.
• Smart specialisation capacity recognised in this area drawing on research capacity including in the Durham Energy Institute and Sir Joseph Swan Centre for Energy research at Newcastle, local businesses, the National Offshore Renewable Energy Catapult and engagement in CORE and Energi Coast sites; however continued support and certainty is needed to embed the industries and demonstrate viability of renewable energy projects.
Actions supported
Enhancing access to, and take-up of, low carbon and renewable energy through investment to support demonstration and roll out of small-scale renewable energy. This includes biomass, waste to energy, community owned renewables, solar PV, micro-hydro, offshore and marine energy and geothermal. • Measures to support increased production of renewable fuels and energy, in particular wind energy, solar and
biomass; • Support to build capability and capacity for supply chains in renewable energy; • Demonstration and deployment of renewable energy technologies; • Measures to support the wider deployment of renewable heat, including micro-generation, geothermal, renewable
heat networks or district heating, ground source and air source heat pumps, and biomass systems with associated heat off-take and heat distribution networks along with recycling processing reprocessing and remanufacturing facilities; and
• Anaerobic digestion plants and other biomass or landfill gas schemes.
Durham Tyne and Wear, Northumberland
Outputs
CO01 CO05 CO30 CO34
Number of enterprises receiving support Number of new enterprises supported Additional capacity of renewable energy production Estimated GHG reduction
29 6 4 mw 2,344 Tonnes of CO2eq
CO01 CO05 CO30 CO34
Number of enterprises receiving support Number of new enterprises supported Additional capacity of renewable energy production Estimated GHG reduction
78 16 10 mw 5,925 Tonnes of CO2eq
The focus
of ERDF funding
4B PROMOTING ENERGY EFFICIENCY & RENEWABLE ENERGY USE IN ENTERPRISES
The need
• Businesses continue to report a need to reduce energy and resource costs as a significant element in business resilience. This is particularly relevant for manufacturing and engineering businesses which are relatively energy intensive.
• Investment in advice, guidance and audits is valuable but the greatest need, especially for SMEs is around ensuring the resulting interventions are affordable and the business case for investment is clear.
• SMEs and particularly micro businesses have been found to struggle in implementing energy efficiency requirements due to cost and difficulty as well as lack of comprehensive information.
• Energy efficiency and advisory services provide nearly 4,000 jobs in the North East. • Scope for investment in renewable energy generation and use for businesses to support resilience.
Actions supported
Support a programme of advice to businesses to improve energy efficiency and resilience through enhanced processes and enable the resulting required retrofit, capacity and equipment investment. • Enhanced advice, support, information and action to promote innovation in businesses and how they operate, in order
to deliver best practice in energy management. This will include innovation in energy efficiency and energy cost reduction to improve businesses’ competitiveness and resilience;
• Support to businesses to undertake ‘green’ diagnostics or audits of energy efficiency and potential for renewable generation and energy use, which will be followed by provision of energy efficiency information and guidance, tailored energy action plans and of support to implement the resulting activities.
• Investing in energy efficiency measures, processes and renewable generation capacity to improve a business’ or building’s environmental performance or its resilience to the impacts of climate change;
• Investing in measures to stimulate cost-effective deep renovations of buildings, including staged deep renovations; • Supporting an increase in energy efficiency in enterprises including an emphasis on “whole place” especially through
improving industrial processes, designing out waste, recovery of “waste” heat energy and CHP; • Supporting increased SME access to national and local government procured contracts for energy efficient goods and
services; • Developing low carbon innovation in relation to energy efficiency within enterprises, including through technologies
and engagement practices; • Building retrofit and energy efficiency measures, especially whole building solutions to exemplify, and support the
commercialisation of, next phase technologies which are near to market and low carbon construction techniques to improve the energy efficiency of buildings.
Durham Tyne and Wear, Northumberland
Outputs
C1 C34
Number of enterprises receiving support Estimated GHG reductions
305 1,665 Tonnes of CO2eq
C1 C34
Number of enterprises receiving support Estimated GHG reductions
1,003 4,889 Tonnes of CO2eq
LOW CARBON
ECONOMY
4C SUPPORTING ENERGY EFFICIENCY, SMART ENERGY MANAGEMENT AND RENEWABLE ENERGY USE IN PUBLIC BUILDINGS
The need
To ensure security and affordability of energy supply in the long-term there is a need to move towards whole building approaches, founded on the intelligent use of data, to reducing energy usage and carbon intensity. • Public sector buildings provide appropriate demonstration sites to trial new financial and technological solutions to
reduce carbon emissions and equivalent Green House Gases levels, and to inspire local areas and partners to adopt them as a practical solution.
• Public and community buildings face particularly large energy efficiency issues with large scale use and ageing infrastructure.
• Energy efficiency and advisory services provide nearly 4,000 jobs in the North East. • The North East has an ageing and inefficient housing stock, which needs significant intervention to reduce domestic-
sector emissions • The North East LEP area is at the forefront of technology application of smart systems technology and routes to provide
integrated and intelligent approaches to energy generation.
Actions supported
Invest in innovative approaches and technologies to improve the energy efficiency of energy systems, networks and public, and community sector properties. • Provision of advice and support to increase the use and take up of low carbon technologies, energy efficiency
measures, renewable energy technologies and smart energy systems in housing stock and public buildings; • Supporting low carbon innovation in relation to the integrated ‘whole place’ energy management approach including
energy waste and re-use; • Investing in building retrofit, energy efficiency measures, renewable and smart energy systems deployment, especially
whole building or place solutions exemplifying next phase technologies which are near to market; • Investing in domestic energy efficiency, renewable energy and smart construction techniques; • Investment in the development and wider use of Energy Performance Contracting in the public buildings and housing
sectors.
Durham Tyne and Wear, Northumberland
Outputs
CO31 CO32 CO34
Number of households with improved energy consumption Decrease of annual primary energy consumption of public buildings Estimated GHG reductions
148 143,144 kWh/yr 2,368 Tonnes of CO2eq
CO31 CO32 CO34
Number of households with improved energy consumption Decrease of annual primary energy consumption of public buildings Estimated GHG reductions
443 427,631 kWh/yr 7,075 Tonnes of CO2eq
LOW CARBON
ECONOMY
4E PROMOTING LOW CARBON STRATEGIES
The need
• The interconnected nature of carbon emissions activities requires whole place, integrated responses using innovative technologies, which seek to realise the multiple benefits, e.g. cycle lanes that can generate energy, and help channel water to reduce flood risk.
• In comparison to other areas the North East LEP has higher than average CO2 per capita emissions for industry and commercial and domestic outputs (both higher than the UK figure).
• The figure for transport is lower than the national average reflecting lower car ownership, mileage and a relatively strong public transport infrastructure; however car use is rising rapidly and remains the most common mode of transport.
• Journeys on foot and by bike (which are both sustainable and support healthy lives) are less common than other areas and are lower than comparative areas.
• The North East has pioneered integrated systems including combined heat and power systems and district heating. Recent investment has been successfully brought forward in networks and district heating schemes, but more needs to be done, especially in relation to electricity. Challenges also remain over ageing infrastructure, joining up separate schemes, and the age of some of the original examples such as the ground-breaking Byker Wall scheme.
Actions supported
Investment in integrated, systems approaches to better use data to demonstrate practical solutions for ‘whole places’ (such as smart grids) which reduce carbon emissions and improve place resilience and sustainability. This will include heat, power and transport systems investment for ‘future places’. • Investments in local/regional smart grid demonstration projects, including validation and solving system integration
issues; • Sustainable energy action plans for urban areas, including public lighting systems, smart metering and distribution
through smart grids; • Investments in combined heat and power from renewable sources; • Investments to encourage the adoption of renewable technologies. A strategic approach is particularly important in the area of low carbon transport, whether for sustainable urban mobility, or improving links between urban and rural areas, or connecting dispersed rural communities. Examples of actions include: • Investments in actions aimed at improving the capacity at local level to develop and implement integrated and
sustainable transport strategies and plans (including for example actions related to modelling data collection, integrated transport management, operations and services, public consultation etc) to reduce transport related air pollution, in particular retrofit or replacement programmes for bus fleets, incentive schemes for cleaner transport, improved public transport infrastructure and alternative forms of transport;
• Investments in actions aimed at introducing innovative environmentally-friendly and low-carbon technologies (for example, alternative fuel stations or charging points);
• Investments in actions aimed at developing innovative and multi-modal transport services (for example, intelligent transport systems for travel information and planning, traffic and demand management, smart ticketing, multimodal integrated datasets or cooperative systems);
• Innovative transport pricing and user charging systems; • Cycle paths, walkways and waterways only where part of an integrated approach to GHG reductions.
Durham Tyne and Wear, Northumberland
Outputs CO01 CO34
Number of enterprises receiving support Estimated GHG reductions
250 2,315 Tonnes of CO2eq
CO01 CO34
Number of enterprises receiving support Estimated GHG reductions
1,264 10,910 Tonnes of CO2eq
LOW CARBON
ECONOMY
4F PROMOTING RESEARCH AND INNOVATION IN, AND ADOPTION OF, LOW CARBON TECHNOLOGIES
The need
The North East has a strong asset base to draw on in low carbon and sustainable innovation, with significant expertise and infrastructure around low and ultra-low carbon emission vehicles and offshore wind which have benefited from investment during the last programme. A number of other areas however also provide significant opportunities for future innovation-led growth. With the likes of Nissan, Hitachi Rail Europe, Sevcon, Smith Electric and AVID vehicles all based in the North East LEP area there is a strong business base supporting growth in low carbon transport and vehicle technologies. These not only provide significant employment but also bring to market market-leading technologies. • Investment in related skills around electric vehicles, hydrogen technologies and battery manufacturing through
Gateshead College and Zero Carbon Futures and the Skills Academy for Sustainable Manufacturing and Innovation proved low carbon innovation skills.
• Nissan alone through the LEAF development has created 350 jobs and safeguarded a further 1,000. • The North East has installed over 1,000 charge points as part of the Plugged-in Places programme which has
resulted in the strongest charging point network outside of London and highest take up of low carbon vehicles in the UK. However, this is still a small proportion of overall vehicle usage and needs to be broadened and widened significantly to meet carbon budgets.
• The North East has an established sub-sea and marine engineering business base including companies such as GE, BEL valves, A&P, SMD, Teckmar Subsea and Technip Umbilicals. The siting of the Blyth wind blade testing site and the Offshore Renewable Energy Catapult further enhances this support and provides an opportunity to build on successful previous investments.
• Broader energy development building on expertise and natural resources will benefit from the support to overcome the demonstration and roll out gap for new technologies. Similar to those areas supported in previous programme and investment these can provide significant future jobs growth opportunities and source for exports.
• Despite opportunities the need to demonstrate and commercialise ideas remains a challenge and market failure and local businesses fail to fully understand the opportunities presented and routes to entry.
Actions supported
Assist local SMEs to engage with, and enhance the supply chains making the most of opportunities. These will be particularly focused around renewable energy generation, construction and retro-fit and intelligent and integrated system such as smart grids. Support the development and commercialisation of new and innovative technologies to bring to market and demonstrate responses which reduce carbon emissions and energy use. Particularly targeted at areas of smart specialisation and key sectors (Offshore and marine energy; low and ultra-low carbon vehicles and low carbon built environment. This approach for Tyne and Wear/Northumberland will include an integrated business investment fund, Access to Finance financial instrument framework (previously known as JEREMIE 2).
• R&D, innovation and supply chain work for low carbon technologies and materials, including, wave and wind energy, smart grids, distributed generation, solar and photovoltaics, heat networks, heat pumps and low carbon heat for energy intensive industries;
• Research underpinning carbon capture and storage, taking account of the restrictions laid down in Article 3.3.b of the ERDF Regulation 114;
• Technology centres of excellence and test facilities, including relevant Catapult centres; • Renewable technologies in the UK renewable energy roadmap; • Research, development, demonstration and adoption of technologies and systems that support low-energy
transport and accelerate the establishment of new technologies such as low emissions vehicles (electric, hybrid
and hydrogen); • Knowledge transfer with Higher Education/Further Education institutions and Businesses; • Supporting low carbon tech start-ups and greater commercialisation of low carbon products and processes; • Developing financing methods that encourage the adoption of proven low carbon technologies and generate
long-term financial savings; • Demonstration and deployment of decentralised renewable energy technologies; • Research, development and innovation and supply chain development for low carbon and resource efficient technologies and
materials (including small scale pilot programmes that test the market with new low carbon solutions and the use of secondary materials).
Durham Tyne and Wear, Northumberland
Outputs
CO01 CO05 CO26 CO29 CO34
Number of enterprises receiving support Number of new enterprises supported Number of enterprises cooperating with research institutions Number of enterprises supported to introduce new to firm products Estimated GHG reductions
61 12 6 10 926 Tonnes of CO2eq
CO01 CO05 CO26 CO29 CO34
Number of enterprises receiving support Number of new enterprises supported Number of enterprises cooperating with research institutions Number of enterprises supported to introduce new to firm products Estimated GHG reductions
148 25 12 20 1,910 Tonnes of CO2eq
CLIMATE CHANGE
ADAPTION
---
Durham
€3.6m1
5B PROMOTING INVESTMENT TO ADDRESS SPECIFIC RISKS, ENSURING DISASTER RESLIENCE
The need
• The diverse landscape of the North East, including coastal, upland and river valley areas with both urban and rural dimensions creates unique opportunities and challenges.
• Significant development opportunities and key employment sites are prone to river and surface flooding. Work around key sites will improve sustainability and businesses resilience for those at risk from flooding.
• This includes at major sites including Team Valley, along the rivers Tyne and Wear as well as the city and town centre locations including Newcastle, Durham, Chester-le-Street and Morpeth.
• The North East has opportunities for more innovative and sustainable solutions to flooding using onsite or up-stream interventions which also enhance the quality of the natural and built environment.
• As well as reducing water flows, the use of Blue and Green infrastructure approaches offer a variety of additional benefits for businesses and their employees. Work by Eftec shows it can also increase rateable values, increase the attractiveness of economic centres, improve energy efficiency, and improve air quality (in turn improving employee productivity).
Tyne and Wear Northumberland
€8.2m1
---
Actions supported
Investment in natural flood management and mitigation approaches which reduce flood risk for key employment locations and business development sites. This can be undertaken onsite or upstream and should enhance the quality of the natural environment. Actions which support enhanced green and blue infrastructure development will be particularly welcomed as will those which support improvements across a wider area. Particular actions include: Coastal resilience: • Managed realignment and mitigation of coastal squeeze; • Shoreline re-nourishment, cliff and dune system stabilisation; • Harbour, port and waterfront enhanced protection and adaptations. These investments are not linked to transport; • Improvements to coastal frontages and seawalls; • Strengthening and extensions to estuary embankments.
Fluvial risk management: • Onsite or upstream attenuation and slowing the flow measures; • Diversion channels; • Raising strengthening and/or extending river walls and frontages; • Fixed and temporary barriers and gates; • Stepped back embankments; • Resilience measures for business infrastructure, including for example wet or dry flood-proofing; • River restoration and improved conveyance measures.
Surface water run-off and drainage system: • Integration, including retrofitting, of surface water and run off management measures into urban and commercial
redevelopments; • Innovative measures in contexts where flood risk and land management relies on pumping and inter-relates with
drainage.
Durham Tyne and Wear, Northumberland
Outputs
CO23 P6
Surface areas of habitats supported to attain a better conservation status (ha) Businesses and properties with reduced flood risk
1 1,232
CO23 P6
Surface areas of habitats supported to attain a better conservation status (ha) Businesses and properties with reduced flood risk
3 3,382
1 Member State ESI Funds allocations and the Operational Programme of each Fund are in euros. ESI Funds notional allocations to LEP areas are therefore also in euros. Sterling valuations of LEP area euro notional allocations will therefore naturally change to reflect ongoing euro/sterling fluctuations. For the purpose of this Strategy euro allocations have been converted to sterling using the following rate €1 = £0.78 current at the most recent revaluation January 2016
What will we achieve? Through investments made by the European Regional Development Funding we will deliver the following:
OUTPUT 2 LOW CARBON CLIMATE CHANGE
Durham Tyne and Wear,
Norhumberland Durham Tyne and Wear, Norhumberland
C1 Number of enterprises receiving support 646 2,493 0 0
C5 Number of new enterprises receiving support 19 41 0 0
C23 Surface areas of habitats supported to attain a better
conservation status 0 0 1 ha 3 ha
C26 Number of enterprises cooperating with research
institutions 6 12 0 0
C29 Number of enterprises supported to introduce new to the
firm products 10 20 0 0
C30 Additional capacity of renewable energy 4 10 0 0
C31 Number of households with improved energy
consumption 148 443 0 0
C32 Decrease of annual primary energy consumption of
public buildings 143,144 kWh/yr 427,631 kWh/yr 0 0
C34 Estimated GHG reduction 9,618 Tonnes of
CO2eq 30,710 Tonnes of CO2eq 0 0
P6 Businesses and properties with reduced flood risk 0 0 1,232 3,382
2 The ‘output targets’ reflect those prescribed by Government and are under negotiation. The latest definitions can be found at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/462724/ERDF_Output_Indicator_Definitions_Guidance_230915.
Sustainable urban development
Sustainable urban development Backed by excellence in areas of smart specialisation, innovation and a rapidly developing expertise in areas of low carbon growth, the North East approach to sustainable urban development (SUD) is built around the development, demonstration and commercialisation of new integrated approaches to global urban challenges, becoming a ‘living laboratory’.
Sustainable urban development provides an opportunity to test and develop integrated responses to the key global challenges facing urban areas. This will draw on the capacity and expertise of the full range of partners represented in the quadruple helix of private, public and voluntary and community sectors working with universities and research institutions. Integrated activities that address these pillars will be sought. Sustainable energy systems and networks • Investment in integrated energy
systems and deployment of new technologies in demonstration site(s) to support carbon reduction.
• This will include premises in more
deprived locations to ensure fuel poverty reduction is achieved.
• Includes capacity building for
businesses and citizens to use the systems.
Sustainable infrastructure investment • Ensuring capital and
infrastructure investments supported through SUD respond to and support the need for flood mitigation and biodiversity improvements through green and blue infrastructure.
Lower carbon and more sustainable transport • Investment to support healthier
and more sustainable travel choices.
• Improved information and data
systems to support modal shift and accompanying demonstrator investment in cycle and walking infrastructure to link to key employment sites and transport hubs.
• Investment for low carbon
vehicles infrastructure. • Investment in traffic
management systems and approaches to support smoother and smarter traffic flows to reduce carbon emissions for road transport and schemes to manage loads and address freight flow.
Healthy lives and ageing • Investment in a demonstrator
project for responding to poor health and an ageing population to enable healthier and independent lives.
SUD ---
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SUSTAINABLE URBAN
DEVELOPMENT
--- COVERING SOUTH
NORTHUMBERLAND AND TYNE AND WEAR AREAS
€29m1 ---
4B & C: SUPPORTING ENERGY EFFICIENCY IN ENTERPRISES AND PUBLIC INFRASTRUCTURE
The need
Energy use represents a significant contribution to carbon emissions across both domestic and commercial properties. With older building stock, and low incomes in the domestic sector, and high-demand industries, there is mismatch between supply and demand. The ageing nature of infrastructure means this remains vulnerable to climate change impacts and extreme weather undermines business resilience. However, much of the traditional interventions have been done, and new technologies and financial models are needed to achieve the next round of carbon savings. Building on the strengths in low carbon energy generation and established research and innovative energy and heating networks, sustainable urban development will support a small number of demonstrator projects for integrated energy network solutions. This will address challenges in different types of property and location to reduce energy demand and use, reducing energy poverty and improve resilience to climate change. These investments will include connection to and expansion of systems involving existing domestic and commercial premises to demonstrate possible solutions in retro-fitting properties in addition to investments in new properties.
Actions supported
• Investment in integrated energy systems demonstration site(s) to support carbon reduction and reduce carbon intensity. • Investment in premises and locations, with a particular focus on locations to reduce fuel poverty. • Support activities to embed and enhance capacity to engage with and use the systems
Tyne and Wear, Northumberland
Outputs 4B
CO01 CO34
Number of enterprises receiving support Estimated annual decrease of GHG
251 1222 Tonnes of CO2eq
Outputs 4C
CO31 CO32 CO34
Number of households with improved energy consumption classification Decrease of annual primary energy consumption of public buildings Estimated annual decrease of GHG
266 256,579 kWh/yr 4245 Tonnes of CO2eq
The focus of ERDF funding
4E PROMOTING LOW-CARBON STRATEGIES FOR ALL TYPES OF TERRITORIES
The need
This priority (4e) will support a range of integrated activities, in addition to supporting those areas set out under the other investment priority area, this will focus on integrated activities and bringing these together alongside investment to support improvements in transport networks and systems. As with energy systems, transport networks are fundamental to economic prosperity and inclusion but also represent a global challenge in the face of the need to reduce carbon emissions and address congestion which reduce opportunities for economic growth. Through these areas investment will also support the availability of travel information to support modal shift, reducing carbon emissions by encouraging use of public transport network and encouraging the use of healthier options such as walking and cycling which are low in the North East. In addition to this, investment in data and information systems and availability, hard investments in linked physical infrastructure such as cycle paths, storage and walking routes are required to improve linkages into key sustainable transport hubs including in the urban area building on the Tyne and Wear Metro, major bus interchanges and the larger stations on the East Coast mainline, Sunderland and the Tyne Valley line to Hexham. To enhance the sustainability of transport options in the urban area and encourage more healthy travel options sustainable urban development will invest in schemes which use data to improve road transport flows (which represent that majority of transport options) and considering better management of flows across 24 hours incorporating new options for freight management through improvements to urban traffic management systems. A final element builds on strengths in low and ultra-low carbon vehicles, expanding on work undertaken through the previous ‘Plugged-in Place’ scheme and infrastructure to enable and encourage use of low carbon technologies such as electric vehicles.
Actions supported
• Investment to support healthier and more sustainable travel choices. • Improved information and data systems to support modal shift and accompanying demonstrator investment in cycle and walking
infrastructure to link key employment sites and transport hubs. • Investment for low carbon vehicles infrastructure. • Investment in the traffic management systems and approaches to support smoother and smarter traffic flows to reduce carbon
emissions and improve freight flows and management.
Tyne and Wear, Northumberland
Outputs CO01 CO034
Number of enterprises receiving support Estimated GHG reductions
800 9546 Tonnes of CO2eq
The focus of ERDF Funding
1B PROMOTING BUSINESS INVESTMENT IN RESEARCH AND INNOVATION
The need
Poor health and wellbeing, and an ageing population are two key challenges in relation to the economy. Poor health and wellbeing can have major impacts on economic activity and prosperity and vice versa, and the North East is also facing an ageing population, meaning more people will be in work for longer, and once retired, will collectively gradually increase demand on public services. To address the ageing challenge, infrastructure and processes will need to be more accessible across all age groups and incorporate elements and solutions to improve quality of life as people age. There is therefore a need to promote the development and design of urban areas which accounts for people in all stages of life. Through sustainable urban development, investment will build on the expertise of the Centre for Ageing and Vitality and strong citizen-led initiatives across the urban area. This will support demonstration and trialling of innovative and data-led solutions which improve the accessibility of services and infrastructure enabling healthy choices which reduce energy and fuel poverty as well as improving health outcomes and work readiness.
Actions supported
• Investment in demonstrator project for responding to poor health and an ageing population to enable healthier independent lives.
Tyne and Wear, Northumberland
Outputs
CO01 CO026 CO028
Number of enterprises receiving support Number of enterprises cooperating with research entities Number of enterprises supported to introduce new to the firm products
156 84 25
5B PROMOTING INVESTMENT TO ADDRESS SPECIFIC FLOOD RISKS
The need
Blue and Green Infrastructure, when correctly deployed have the potential to create significant multiple benefits to the economy, society and the environment, over and above addressing flood risk. As well as increasing property values and making areas more economically attractive, they can provide insulation, reducing costs. It also has positive effects on physical health such as through air quality benefits, as well as mental health improvements. From an environmental perspective, in addition to reducing energy use and storing carbon, they also support biodiversity. These issues are all challenges for the long term sustainability of urban areas, and developing integrated approaches offers significant potential improvements in value for money. However there is often a mismatch between investment and beneficiaries, which can hinder investment.
Actions supported
• Ensuring capital and infrastructure investments supported through SUD respond to and support the need for flood mitigation and biodiversity improvements through green and blue infrastructure.
Tyne and Wear, Northumberland
Outputs CO23 P6
Surface area of habitats supported in order to attain better conservation status (ha) Business and properties with reduced flood risk
0.5 800
1 Member State ESI Funds allocations and the Operational Programme of each Fund are in euros. ESI Funds notional allocations to LEP areas are therefore also in euros. Sterling valuations of LEP area euro notional allocations will therefore naturally change to reflect ongoing euro/sterling fluctuations. For the purpose of this Strategy euro allocations have been converted to sterling using the following rate €1 = £0.78 current at the most recent revaluation January 2016
Please note all spend and outputs included under Sustainable Urban Development are NOT additional and count towards achieving spend and output targets under innovation, low carbon and climate change adaptation. The figures included here are estimates on a proportionate basis of total spend. Due to on-going uncertainty these are will require additional modelling in light of latest government guidance and criteria.
What will we achieve?
Through investments made by the European Regional Development Funding we will deliver the following targets:
OUTPUT2 TARGET
Tyne and Wear, Northumberland
CO01 Number of enterprises receiving support 1207
CO23 Surface area of habitats supported in order to attain better conservation status 0.5 hectares
CO26 Number of enterprises cooperating with research entities 84
CO28 Number of enterprises supported to introduce new to the market products 12
CO31 Number of households with improved energy consumption 266
CO32 Decrease of annual primary energy consumption of public buildings 256,579
kWh/yr
CO34 Estimated GHG reductions 15,013,874 tonnes of CO2eq
P6 Business and properties with reduced flood risk 800
2 The ‘output targets’ reflect those prescribed by Government and are under negotiation. The latest definitions can be found at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/462724/ERDF_Output_Indicator_Definitions_Guidance_230915.pdf 3 Please note that this table includes all PA 4 Outputs. For Tyne and Wear and Northumberland a proportion of these will be delivered through Sustainable Urban Development. This is set out in the following section
Community-Led Local Development
Community-Led Local Development Community-Led Local Development (CLLD) provides an opportunity to support social inclusion by working with people from the most deprived and excluded communities to enable them to actively contribute to the local economy through the development and implementation of a local strategy.
Despite the strong performance in improving the overall economic position of the North East since the significant economic restructuring of the 1980s and 1990s, the North East LEP area continues to face particular challenges around social inclusion with communities excluded from, or not benefitting fully, from wider economic growth. We recognise the social and economic value in closing this gap between communities with inclusive growth a key principal in our approach to European funding. Our proposals therefore include support for inclusion activities across the full area but, with pockets of significant and entrenched deprivation presenting particular challenges, a more local and spatial approach is needed to complement these broader activities. Community-Led Local Development can fulfil this need and is based around two key aims: • Building capacity within communities
as a foundation for economic growth
• Delivering additional, localised support to people in particularly deprived areas, so that they move towards or into employment
To make the most of this opportunity partners in the North East LEP believe Community-Led Local Development is appropriate where it realises the full benefits of: • Allowing access to detailed knowledge
of very local challenges to be addressed.
• Enabling mobilisation of local resources
and best use of local assets – people, property, skills and existing monies.
• A well-developed and comprehensive
local development strategy which result in the delivery of a coherent cluster of projects which add value to each other.
• Piloting approaches at a relatively small
scale that can be scaled up and used more widely to connect communities to address social and economic challenges.
• Encouraging a sense of ownership
and commitment to the projects and strategy, and builds capacity within communities which can aid sustainability beyond the life of the project.
Community-Led
Local Development provides an
opportunity to support social
inclusion ----
----
COMMUNITY-LED LOCAL
DEVELOPMENT
---
Durham €2.2m ERDF1
€2.5m ESF1
Tyne and Wear Northumberland €4.2m ERDF1
€9.9m ESF1
---
1A ENHANCING RESEARCH AND DEVELOPMENT
The need
Key national statistics show that the North East is lagging behind in a range of economic activity indictors. The North East has an economic activity rate of 69.9% compared to a national average of 72.9%. Similarly, levels of employment and self-employment are below the national average (7.6% compared to a national average of 6% for unemployment and 7.4% compared to 10.1% for self-employment). Rates for economic activity due to long term sickness show an even greater disparity with 28.5% in the North East compared to 21.6% national average. These lower rates of activity, and wider context, result in sizable challenges around poverty and deprivation. The North East region has only 85% of the national disposable household income level and almost a quarter of people live in households below the poverty threshold. 28% of children live in households below the national average income level and child poverty rates remain almost 5% higher than the national average with over 130,000 children living in poverty. From these statistics there are clearly major challenges for the area if it is to meet its economic growth targets, and for all communities to participate in this. This need is heavily concentrated, although there are pockets of relative prosperity within all seven local authority areas in the North East LEP area. Overall, levels of deprivation (as set out in the 2010 Index of Multiple Deprivation) remain high, with the authorities ranging from 40th to 135th (out of 326) of the most deprived local authorities nationally, with all but two in the worst performing 25%. According to the 2010 data 31.7% of the population live in the 20% most deprived areas. Skills levels remain below the national average at 28.4% compared to 35% nationally achieving Level 4 qualifications. Particular challenges are visible around long term sickness (which is almost 7 percentage points higher than the national average), financial disadvantage (with households only having 85% of national disposable income levels and 28% of children living in households below the national average income level. NEWCASTLE UPON TYNE • Average Score 29.74 • Rank 40/326
GATESHEAD • Average Score 29.48 • Rank 43/326
SUNDERLAND • Average Score 29.46 • Rank 44/326
SOUTH TYNESIDE • Average Score 28.35 • Rank 52/326
DURHAM • Average Score 26.41 • Rank 62/326
NORTH TYNESIDE • Average Score 22.24 • Rank 113/326
NORTHUMBERLAND • Average Score 20.21 • Rank 135/326
According to the 2015 IMD statistics, the North East LEP area remains significantly deprived and is the 10th most deprived partnership area in the country with all seven local authorities being in the most deprived 50% and four within the most deprived 25% of local authorities. This however masks significant differences within areas with CLLD a route to tackle this at the most local level.
ERDF 9D UNDERTAKING INVESTMENTS IN THE CONTEXT OF COMMUNITY-LED LOCAL ECONOMIC DEVELOPMENT STRATEGIES
Actions supported
Enhance capacity within communities for economic growth • Support new/improved Community Hubs delivering community and business benefits. • Support stronger linkages into the wider economy by the strengthening of local supply chains, business networking, and wider
interventions from partners to tackle specific economic issues. • Support interventions which support entrepreneurship and enterprise including pre-start activity, in a holistic manner which
links businesses to local accommodation and support. • Support for new forms of enterprise (including social enterprise).
Durham Tyne and Wear, Northumberland
Outputs
CO01 CO05 CO08 P11 P12
Number of enterprises receiving support Number of new enterprises receiving support Employment increase in supported enterprises Number of potential entrepreneurs assisted to be enterprise ready Public or commercial buildings built or renovated
66 46 50 FTEs 186 158 sq metres
CO01 CO05 CO08 P11 P12
Number of enterprises receiving support Number of new enterprises receiving support Employment increase in supported enterprises Number of potential entrepreneurs assisted to be enterprise ready Public or commercial buildings built or renovated
359 252 270 FTEs 1,007 860 sq metres
ESF 1.5 COMMUNITY-LED LOCAL DEVELOPMENT
Actions supported
Localised support to ensure people from deprived areas can move toward or into employment. • Identify and tackle specific local barriers to employment and skills. • Support social integration initiatives. • Support interventions which focus on connecting businesses and fostering good relationships with local residents to raise their
awareness of local career opportunities, engaging those furthest from the labour market, including younger people and raising the aspirations of people aged 50+.
• Deliver learning, skills and employability activity to build re-engagement of those who would not access this provision through other areas of the European Structural and Investment Fund Programme, mainstream provision or employment
Durham Tyne and Wear, Northumberland
Outputs
01 CO01 CO03 04 05 CO16
Participants Unemployed, including long-term unemployed Inactive Participants over 50 Participants from ethnic minorities Participants with disabilities
1,660 1,160 430 280 190 440
01 CO01 CO03 04 05 CO16
Participants Unemployed, including long-term unemployed Inactive Participants over 50 Participants from ethnic minorities Participants with disabilities
7,870 5,510 1,970 1,490 880 2,270
1 Member State ESI Funds allocations and the Operational Programme of each Fund are in euros. ESI Funds notional allocations to LEP areas are therefore also in euros. Sterling valuations of LEP area euro notional allocations will therefore naturally change to reflect ongoing euro/sterling fluctuations. For the purpose of this Strategy euro allocations have been converted to sterling using the following rate €1 = £0.78 current at the most recent revaluation January 2016
What will we achieve?
Through investments made through Community-Led Local Development we will deliver the following targets:
OUTPUT2 TARGET
ERDF C1 Number of enterprises receiving support 425 C5 Number of new enterprises receiving support 298 C8 Employment increase in supported enterprises 320 P11 Number of potential entrepreneurs assisted to be enterprise ready 1,193 P12 Public or commercial buildings built or renovated 1,018 ESF 01 Participants 9,530 CO01 Unemployed, including long-term unemployed 6,670 CO03 Inactive 2,400 04 Participants over 50 1,770 05 Participants from ethnic minorities 1,070 CO16 Participants with disabilities 2,710
ESF RESULTS
Durham, Tyne and Wear, Northumberland ESF -
CR02 Participants in education or training on leaving 19%
R1 Unemployed participants in employment,
including self-employment on leaving 16%
R2 Inactive participants into employment, or job search on leaving
29%
2 The ‘output targets’ reflect those prescribed by Government and are under negotiation. The latest definitions of ERDF outputs can be found at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/462724/ERDF_Output_Indicator_Definitions_Guidance_230915.pdf
Employment and inclusion
Employment and inclusion “Our goal is to increase employment, ensuring no one is left behind.” Employment is the key route to combating poverty and exclusion. Despite an improving picture in recent years the area has relatively high levels of unemployment and inactivity compared to other areas across the country. Our challenge is to maximise employment opportunities for all. We will overcome barriers to employment by tackling deprivation and addressing the multiple factors that contribute to social exclusion and deprivation. We will support people on their journey to reach their potential, particularly those facing multiple and complex barriers such as age, race, gender and disability. Increasing employment Recognising that employment is the key route to combating poverty and exclusion. Unemployment in the area remains relatively high and employment low in comparison to other areas. This holds back both economic growth and reduces social inclusion. Activities to improve employment, employability skills and opportunities for self-employment are essential. Our aspiration is to support growth by enabling everyone to reach their potential and meeting the needs of key industries. The employability and inclusion programme aims to build on our recent progress in productivity and employment growth, to continue these trends and ensure that no one is left behind. We will achieve this by addressing high levels of
youth unemployment, with a particular focus on 15-24 year-olds; reducing inequalities by addressing multiple and complex barriers compounded by race, disability, age and gender; improving economic wellbeing and by ensuring that growth is inclusive and assists those most distant or disadvantaged in the labour market and areas of persistent and entrenched deprivation. The overall approach to the use of ESF invested in employability is to support and add value to existing mainstream programmes by enhancing and addressing gaps in local initiatives and national programmes to ensure individuals receive the support they need to progress into sustained employment. Promoting and supporting inclusion Ensuring no one is left behind, providing targeted and tailored support to neighbourhoods and groups facing major challenges in accessing training and employment opportunities that let everyone fully share in the benefits of a growing economy. Economic prosperity is built by supporting everyone through their journey towards, into and progressing in work or economic activity boosting engagement and productivity. We will achieve a balanced approach through a complementary inclusion programme that provides targeted and focussed support for those furthest away from the labour market to move towards or into learning and work. This will focus on addressing complex and multiple challenges and supporting progression into skills activities undertaken as part of the Priority Axis 2 ‘Skills’ interventions. This covers - Equal Access to Lifelong Learning and Improving Labour Market Relevance of Education and Training Systems.
The North East LEP Area Also Faces Employment And Inclusion Challenges
883,900 People In Employment 69.4% 16-64 YEAR OLDS GB NATIONAL AVERAGE: 73.4% (Oct 14 – Sept 15)
Lower Employment Outcomes for Certain Groups Including women, black and minority ethnic people, under 25 year olds,
over 50s and people with disabilities.
Employment GAP of those with a long term condition NE 11%; England 8.7% (worse than national average)
Employment GAP of those with a learning disability NE 61.6%; England 65%
(better than national average)
Employment rate of those 50-64, 63.7% Oct 14 – Sep 15 – June 15 v’s overall employment rate 69.3%
98,200 SELF EMPLOYED PEOPLE IN WHOLE OF NORTH
EAST (7.3%)
350,000 EMPLOYED BY SME BUSINESSES IN WHOLE OF
NORTH EAST (60% of total private sector business
employment)
Levels of Deprivation Comparatively High
The 2015 IMD continues to demonstrate higher levels of deprivation in the North East LEP area. The North East LEP overall is the 9th most deprived partnership area (out of
39) with all seven local authorities in the most deprived 50% and 4th in the most deprived 25%. A similar pattern was evident in the 2010 IMD figures.
310,400 PEOPLE INACTIVE 25.1% of Working Age Population
GB National Average: 22.3%
22.6% CHILDREN IN POVERTY (dependents aged under 20)
(18.6% England) 11.8% in fuel poverty,
England average 10.4%
School readiness: % of children achieving good development at the end of reception year NE 55.8%; England average 60.4%
Higher than average levels of those not in employment, education or training (NEET) - 16 – 18 year old
6.7% North East LEP 2014
4.7% England Average
7.6% Gateshead
7.3% Sunderland
6.7% Durham
INCREASING EMPLOYMENT
Durham
€33.4m2
Tyne and Wear Northumberland
€46.7m2
--- PROMOTING
AND SUPPORTING INCLUSION
Durham
€12.4m2
Tyne and Wear Northumberland
€31.1m2
There are two main routes to get ESF activity underway: these are opt-ins and open calls.
Opt-ins
An opt-in arrangement is a mechanism to bring together ESIF funds with key match funding sources from national organisations with large scale programmes and delivery. The North East has chosen to accept the opt-in offer from all three co-financing organisations for ESF – Department for Work and Pensions (DWP), the Skills Funding Agency (SFA) and the Big Lottery Fund. DWP and the SFA will use their existing mainstream programmes to match against ESF, while Big Lottery Fund will provide additional cash match, which will form part of the overall project, from their own resources. In all cases applicant organisations can bid for 100% funding. The SFA will use their significant budgets for mainstream learning and skills delivery, including Apprenticeships, and vocational provision, as match for ESF activities targeted at improving the skill levels of individuals, enabling them to progress into employment, or to a higher skill level once in employment. DWP will use their significant budgets for existing eligible mainstream provision for 2014-20 as match for ESF activities targeted at supporting individuals to progress towards or into employment In the North East LEP area, the Big Lottery Fund’s ‘Building Better Opportunities’ programme will provide £9m of its own money over a three year period, to match against £9.5m1of ESF resources. Activity will be primarily targeted on unemployed and inactive beneficiaries that are furthest away from the labour market. There may also be some provision to support individuals in low paid employment. It will address the four core social inclusion themes of: • Multiple barriers to employment • Health inequalities • Digital inclusion • Financial inclusion
Big Lottery Fund will award grants to delivery partnerships, with the minimum grant award being £2m, and the maximum £10m.
Open calls
Open calls are the most common mechanism for accessing European Structural and Investment Funds - for ESF, due to the scale of the opt-in activity proposed, this represents a smaller, but still significant proportion of the overall programme. Open calls are published regularly on .gov.uk targeted at different elements of the programme seeking partners to come forward with project ideas and match funding. These will be assessed by the Managing Authority and advised by the North East LEP area ESIF Sub-Committee.
1 Up to 5% (£450,000) will be top-sliced off the ESF allocation to cover Big Lottery Admin costs; the exact percentage will depend on the expenditure to be defrayed.
Under priority area 1.1:
Durham
€8.1m2
Tyne and Wear Northumberland
€37.2m2
1.1 ACCESS TO EMPLOYMENT FOR JOB SEEKERS AND INACTIVE PEOPLE
The need
Despite significant improvements in the decade prior to the economic downturn, employment remains lower than in similar areas. Recent employment statistics demonstrate that employment has now risen beyond 2008 levels, and that there are more people in employment in the North East than ever before. Nevertheless economic activity rates and employment levels remain low and activities to improve employment, employability skills and opportunities for self-employment are therefore essential. Individuals face a range of complex and multiple barriers to employment which are highly context-specific including physical and digital connectivity, cost and availability of appropriate training to develop relevant skills, capabilities and qualifications, and access to finance. These issues, combined with limited work experience opportunities, can result in low levels of confidence and work readiness. Similar challenges around poor physical and mental health and digital skills also act as major barriers. The impact and interplay of each of these is complex and varies for each individual resulting in the need for a person centred approach to support progress towards and into work. These factors, although widespread, are particularly visible and concentrated for individuals with particular characteristics resulting in disproportionally poorer job outcomes including those who: • are Employment Support Allowance claimants • are aged 50+ • have a physical or mental health condition or disability • live in a deprived area • are longer term unemployed (including Work Programme completers) • are from a BME background • are women.
Jobseekers and inactive people with these disadvantages are less likely to be able to benefit from local jobs growth and need additional support. Local research indicates those with multiple barriers to work need more intensive and specialist support through integrated service approaches.
Actions supported
• Providing access to labour market, programmes of engagement & employability skills provision supporting unemployed/inactive to participate in activities leading to sustainable employment, including apprenticeships. To include locally responsive and intelligent Information, Advice and Guidance service.
• Support for individuals with health issues, including mental health, target groups and interventions tailored to individuals with protected characteristics.
• Support individuals completing work programme but are not in employment.
A Variety of mechanisms will be utilised to ensure that funding is deployed effectively; open calls and opt-ins with SFA, DWP
Allocation Durham €8.1m Tyne and Wear, Northumberland €37.2m
Outputs
O1 CO01 CO03 O4 O5 CO16 O6 CO14
Participants (54% men, 46% women) Unemployed, including long-term unemployed Inactive Participants over 50 years of age Participants from ethnic minorities Participants with disabilities Participants without basic skills Participants who live in a single adult household with dependent children
6,600 4,620 1,650 1,300 400 1,850 1,160 1,000
O1 CO01 CO03 O4 O5 CO16 O6 CO14
Participants (55% men, 45% women) Unemployed, including long-term unemployed Inactive Participants over 50 years of age Participants from ethnic minorities Participants with disabilities Participants without basic skills Participants who live in a single adult household with dependent children
36,650 25,650 9,160 8,430 1,810 12,600 6,450 4,730
Results
R1 R2 R3 R4 CR06
Unemployed participants into employment (including self-employment) on leaving Inactive participants into employment, or job search on leaving Participants gaining basic skills Participants with childcare needs receiving childcare support Participants in employment, including self-employment, 6 months after leaving
22% 33% 4% 36% 34%
R1 R2 R3 R4 CR06
Unemployed participants into employment (including self-employment) on leaving Inactive participants into employment, or job search on leaving Participants gaining basic skills Participants with childcare needs receiving childcare support Participants in employment, including self-employment, 6 months after leaving
22% 33% 4% 36% 34%
Under priority area 1.2:
Durham
€7.4m2
Tyne and Wear Northumberland
€9.5m2
Under 1.3:
Durham
€18m2
Tyne and Wear Northumberland
€0m
1.2 & 1.3 SUSTANABLE INTEGRATION OF YOUNG PEOPLE
The need
The North East has significant levels of youth unemployment, which has specific impacts at an individual level, including reduced earnings and poorer physical and mental health outcomes, and at a wider level on economic growth and levels of economic inactivity. These issues are more pronounced in County Durham, with particularly high levels of youth unemployment and those not in education, employment or training (NEET). It should be noted that the figures below will underestimate the scale of the issues as there are significant numbers of 18-24 year olds who are not claiming benefits and who therefore are not counted in this data: • The adjusted figure for 16-18 year olds not in education, employment or training (NEET) at January 2015 was 1124 (6.6% of
the 16-18 cohort). • The Annual Population Survey for the period October 2013 - September 2014, showed that County Durham had 8,400
unemployed 16-24 year olds (21% of the population of 40,400 16-24 year olds resident in the county). • The Jobseeker’s Allowance (JSA) claimant count in County Durham at January 2015 had 2250 18-24 year olds claiming JSA.
This was 4.4% of the resident population of 18-24 year olds in the county.
Employers are often reluctant to recruit a young person, especially if they have been disengaged from education or the labour market, and may need additional support to remain in employment. This can result in long-term compounded disadvantage. The labour market in the North East includes a high level of short-term contracting work, with employers more likely to recruit skilled and experienced staff who require minimum support or training to do the job. To help young people to access employment opportunities, including short-term contracts, additional support may be required to encourage employers to recruit a young person, including for short-term contract work.
There has been a reduction in the availability of national support for individuals who are, or who are at risk of becoming, NEET, local systematic support is needed to work with those at risk of becoming NEET and work to drive up opportunities for young people within the SME base.
Actions supported
• Address gaps in provision for young people aged between 15 - 24 that are NEET or at risk of becoming NEET. • Youth Employment Initiative to support young people aged 15-29 who are not in education, employment or training. The
focus will be on where the greatest need has been identified: those aged 15-24 (1.3 - Durham only). A Variety of mechanisms will be utilised to ensure that funding is deployed effectively; open calls and opt-ins with SFA
Allocation Durham €25.4m Inc. €18m for Youth Employment Initiative (YEI) Tyne and Wear, Northumberland €9.5m
Outputs
O2 CO01 CO03 O5 CO16 O6 CO14 YEIO8 YEIO3 YEIO9 YEIO10 YEIO11 O5 YEIO12 YEIO13
Participants (below 25 years of age) who are unemployed or inactive (54% men, 46% women) Unemployed, including long-term unemployed Inactive Participants from ethnic minorities Participants with disabilities Participants without Basic Skills Participants who live in a single adult household with dependent children Participants (below 25 years of age) who are unemployed OR inactive (not in education or training) – 53% male, 47% female Participants (aged 25-29) who are unemployed OR inactive (not in education or training) Unemployed (including long term unemployed) participants (YEI) Long-term unemployed participants (YEI) Inactive participants not in education or training (YEI) Participants from ethnic minorities Participants with disabilities (YEI) Participants who live in a single adult household with dependent children (YEI)
6,070 4,240 1,520 290 590 1,070 420 4,370 1,460 4,370 1,460 1,460 320 580 250
O2 CO01 CO03 O5 CO16 O6 CO14 YEIO8 YEIO3 YEIO9 YEIO10 YEIO11 O5 YEIO12 YEIO13
Participants (below 25 years of age) who are unemployed or inactive (55% men, 45% women) Unemployed, including long-term unemployed Inactive Participants from ethnic minorities Participants with disabilities Participants without Basic Skills Participants who live in a single adult household with dependent children Participants (below 25 years of age) who are unemployed OR inactive (not in education or training) – 53% male, 47% female Participants (aged 25-29) who are unemployed OR inactive (not in education or training) Unemployed (including long term unemployed) participants (YEI) Long-term unemployed participants (YEI) Inactive participants not in education or training (YEI) Participants from ethnic minorities Participants with disabilities (YEI) Participants who live in a single adult household with dependent children (YEI
9,460 6,620 2,370 340 1,030 1,670 460 0 0 0 0 0 0 0 0
Results
R3 R5 CR06 YEI CR01 YEI CR02 YEI CR03
Participants gaining basic skills Participants (below 25 years of age) in employment, including self-employment, or education/ training upon leaving Participants in employment, including self- employment, 6 months after leaving Unemployed participants who complete the YEI supported intervention Unemployed participants who receive an offer of employment, continued education, apprenticeship or traineeship upon leaving Unemployed participants who are in education/training, gaining a
4% 43% 34% 70% 48% 48%
R3 R5 CR06 YEI CR01 YEI CR02 YEI CR03
Participants gaining basic skills Participants (below 25 years of age) in employment, including self-employment, or education/ training upon leaving Participants in employment, including self- employment, 6 months after leaving Unemployed participants who complete the YEI supported intervention Unemployed participants who receive an offer of employment, continued education, apprenticeship or traineeship upon leaving Unemployed participants who are in education/training, gaining a qualification,
4% 43% 34% 0 0 0
YEI CR04 YEI CR05 YEI CR06 YEI CR07 YEI CR08 YEI CR09 YEI CR10 YEI CR11 YEI CR12
qualification, or in employment, including self-employment, upon leaving Long-term unemployed participants who complete the YEI supported intervention Long-term unemployed participants who receive an offer of employment, continued education, apprenticeship or traineeship upon leaving Long-term unemployed participants who are in education/training, gaining a qualification, or are in employment, including self-employment, upon leaving Inactive participants not in education or training who complete the YEI supported intervention Inactive participants not in education or training who receive an offer of employment, continued education, apprenticeship or traineeship upon leaving Inactive participants not in education or training who are in education/training, gaining a qualification, or are in employment, including self-employment, upon leaving Participants in continued education, training programmes leading to a qualification, an apprenticeship or a traineeship six months after leaving Participants in employment six months after leaving Participants in self-employment six months after leaving
60% 38% 38% 60% 32% 32% 15% 30% 3%
YEI CR04 YEI CR05 YEI CR06 YEI CR07 YEI CR08 YEI CR09 YEI CR10 YEI CR11 YEI CR12
or in employment, including self-employment, upon leaving Long-term unemployed participants who complete the YEI supported intervention Long-term unemployed participants who receive an offer of employment, continued education, apprenticeship or traineeship upon leaving Long-term unemployed participants who are in education/training, gaining a qualification, or are in employment, including self-employment, upon leaving Inactive participants not in education or training who complete the YEI supported intervention Inactive participants not in education or training who receive an offer of employment, continued education, apprenticeship or traineeship upon leaving Inactive participants not in education or training who are in education/training, gaining a qualification, or are in employment, including self-employment, upon leaving Participants in continued education, training programmes leading to a qualification, an apprenticeship or a traineeship six months after leaving Participants in employment six months after leaving Participants in self-employment six months after leaving
0 0 0 0 0 0 0 0 0
Under priority
area 1.4:
Durham
€9.9m2
Tyne and Wear Northumberland
€21.2m2
1.4 ACTIVE INCLUSION
The need
Within the North East’s growing economy, there remain areas of disadvantage for individuals and communities. As the recovery strengthens, it is likely that those already closest to the labour market will find it easier to find work, but there is a risk that the most disadvantaged will be left behind and find it increasingly difficult to compete effectively for work. To ensure that these disadvantaged groups are provided with the right level of support tailored to the needs of individuals and businesses in local labour markets, specific action is needed that can be delivered in a way that is accessible and relevant. Some groups are already well catered for through national programmes – e.g. all long term JSA claimants are provided with help through the work programme. However, those with the most entrenched problems, even if they have access to these programmes, can find it difficult to get the most from them. For these people additional support is needed, which is aligned with and builds on national programmes, so that they are better able to benefit. Activities to help the most disadvantaged groups who are a long distance from the labour market are often best served at a local community level by organisations that are familiar with multiple barriers to economic and social inclusion. Active inclusion will therefore help individuals to overcome multiple and complex barriers to employment including exclusion of groups with protected characteristics and cultural disadvantages, health or mental health issues, support to individuals from deprived backgrounds or facing poverty, basic skills including life skills and digital inclusion.
Actions supported
• Address multiple barriers to employment for those furthest away from the labour market. • Build capacity and support the voluntary and community sector and social enterprises to address multiple barriers to
employment. - Provide grants to deliver services for those furthest from the labour market; - Support to develop the capacity and leadership of social entrepreneurs to address need of local community.
• Targeted support for those with protected characteristics. • Addressing long-term imbalances in key sectors e.g. gender imbalances through a package of reinforcing measures across
schools, colleges, universities and employers to provide a strong challenge to sectoral stereotypes. • Specific and tailored support to address additional imbalances, including access for vulnerable groups, deprived areas etc, in
training and employment in key sectors including those STEM related. All activities will facilitate access and progression to mainstream provision. A Variety of mechanisms will be utilised to ensure that funding is deployed effectively; open calls and opt-ins with SFA and BIG Lottery.
Allocation Durham €9.9m Tyne and Wear, Northumberland €21.2m
Outputs
O1 CO01 CO03 O4 O5 CO16
Participants (55% male, 45% female) Unemployed, including long-term unemployed Inactive Participants over 50 years of age Participants from ethnic minorities Participants with disabilities
4,220 2,200 1,730 720 240 1,140
O1 CO01 CO03 O4 O5 CO16
Participants (55% male, 45% female) Unemployed, including long-term unemployed Inactive Participants over 50 years of age Participants from ethnic minorities Participants with disabilities
9,560 5,040 3,850 1,920 460 3,130
Results
CR02 R1 R2 R4
Participants in education or training on leaving Unemployed participants into employment, including self-employment on leaving Inactive participants into employment, or job search on leaving Participants with childcare needs receiving childcare support
17% 14% 27% 36%
CR02 R1 R2 R4
Participants in education or training on leaving Unemployed participants into employment, including self-employment on leaving Inactive participants into employment, or job search on leaving Participants with childcare needs receiving childcare support
17% 14% 27% 36%
1.5 COMMUNITY-LED LOCAL DEVELOPMENT
Please refer to the CLLD section for full details. CLLD outputs are included below.
2. Member State ESI Funds allocations and the Operational Programme of each Fund are in euros. ESI Funds notional allocations to LEP areas are therefore also in euros. Sterling valuations of LEP area euro notional allocations will therefore naturally change to reflect ongoing euro/sterling fluctuations. For the purpose of this Strategy euro allocations have been converted to sterling using the following rate €1 = £0.78 current at the most recent revaluation January 2016
What will we achieve?
Through investments made by the European Social Fund we will deliver the following targets:
OUTPUT TARGET
Durham Tyne and Wear, Northumberland
O1 Participants 10,820 46,210
O2 Participants (below 25 years of age) who are unemployed or inactive 6,070 9,460
O4 Participants over 50 years of age 2,020 10,350 O5 Participants from ethnic minorities 1,250 2,610 O6 Participants without basic skills 2,230 8120 ESF -
CO 01 Unemployed, including long-term unemployed 11,060 37,310
ESF - CO 03 Inactive 4,900 15,380
ESF-CO14 Participants who live in a single adult household with
dependent children 1,420 5,190
ESF - CO 16 Participants with disabilities 3,580 16,760
YEI - O3 Participants (aged 25-29) who are unemployed
OR inactive (not in education or training) 1,460 0
YEI - O8 Participants (below 25 years of age) who are unemployed
OR inactive (not in education or training) 4,370 0
YEI - O9 Unemployed (including long term unemployed) participants (YEI) 4,370 0
YEI - O10 Long-term unemployed participants (YEI) 1,460 0 YEI - O11 Inactive participants not in education or training (YEI) 1,460 0 YEI - O12 Participants with disabilities (YEI) 580 0
YEI - O13 Participants who live in a single adult household with dependent children (YEI) 250 0
Skills for growth
Skills for growth “Our goal is to develop a flexible and skilled regional workforce that is able to meet the needs of our businesses” A skilled workforce is central to sector-led growth and investment in skills will drive the increased productivity of the North East. To support ‘more and better jobs’ we need to move skills interventions up the value chain, ensuring a supply of appropriate skills is available at all levels. The North East LEP area has strong infrastructure to deliver world-class skills and the area has a strong reputation for responding to the opportunities presented by a growing and changing economy. Indeed, the North East boasts the highest proportion of apprenticeships and the highest number of employers taking on apprentices in the UK. We need local people to be fully aware of job opportunities so we can guide them to appropriate training; we must also up-skill and re-skill those already of working age, creating sustainable employment opportunities for all. Provide skills that progress people in work. • Focus on our strengths in
apprenticeships to further develop pre-apprenticeship activity as well as quality apprenticeships at all levels.
• Ensure a local system that has capacity
and capability to address specific skills gaps in workforce.
Develop a demand led system that meets employer needs by engaging with businesses and increasing technical, vocational and higher skills. • Invest in technical and vocational skills
in response to existing needs, skills shortages and emerging demand; created either through new technologies and innovative practice or in response to growth/replacement demand.
• Invest in people through re-skilling and up-skilling the existing workforce to enable sustainable business growth. Create an appropriately skilled workforce, with a focus on higher level skills, supporting business growth, competitiveness and innovation.
Connecting businesses and people by making the education and training system relevant to the North East economy • Create an economic intelligence-led
approach to future workforce planning • For all individuals, especially young
people, support better choices by directly linking industry with the curriculum.
• We will work with employers to build capacity and opportunities for the provision on meaningful encounters with the world of work for those in education at any level.
The North East LEP area also faces skills challenges
351,000 WORKING AGE PEOPLE WITH HIGH LEVEL (LEVEL 4+) SKILLS (2014 DATA)
29% Working Age Population.
National Average: 36%
Nearly 50% of individuals aged 16-24 years have achieved NVQ3+ skills by the age of 24. The qualification levels of younger population are increasing, whilst the older
population have lower levels skills. The NELEP population aged between 25-49 years
have a higher proportion of lower level skills than the rest of England, such as NVQ3 and NVQ2.
⋅ 5 GCSE passes A*-C: 64.2% North East (match national average) 2014/15 ⋅ 5 GCSE passes A*-C including maths and English: 54.4% North East (higher than national average
52.8%) 2014/15 ⋅ A level passes: % of state funded students aged 16-18 achieving at least 2 substantial Level 3
qualifications 84.5% North East (lower than national average state funded sector 89.5%) 2014/15. ⋅ Median annual wage level (all employees): North East LEP region- £20,880 (2015)
⋅ UK - £22,487 (2015)
Apprenticeship data (October 2015) Total starts: North East LEP are
2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15
9,870 9,080 12,130 12,520 13,900 26,140 27,170 26,260 22,500 25,940
Split by LA below
EQUAL ACCESS
TO LIFELONG LEARNING
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Durham
€21.7m1
Tyne and Wear Northumberland
€88.9m1
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THERE ARE TWO MAIN ROUTES TO GET ESF ACTIVITY UNDERWAY: OPT-INS AND OPEN CALLS
Opt-ins An opt-in arrangement is a mechanism to bring together ESIF funds with key match funding sources from national organisations with large-scale programmes and delivery. The Skills Funding Agency will be acting as an opt-in organisation for the skills programme in the North East. The Agency will manage the procurement, performance and payment of contracts for education and training provision and provide the match funding until March 2018.
Open calls Activity not delivered through opt-in arrangements, will be funded through open call arrangements.
2.1 EQUAL ACCESS TO LIFELONG LEARNING
The need
The North East LEP area faces key skills challenges that inhibit business growth. These include a low skilled workforce with insufficient numbers of employed people qualified to level 3 and above, and an ageing demographic creating replacement demand particularly within skilled and technical occupations that underpin priority industries. Delivering industry specific, intermediate and higher level skills within the workforce, to new entrants to the labour market and those often out of workis critical but translating this into economic growth depends on North East businesses utilising these skills effectively through high performance working. Investment in leadership and management skills, enterprising behaviours and innovation is necessary to achieve growth.
Actions supported
• Support skills development for the workforce Develop skills of newly employed, low-skilled, often out of work and those facing or recently made redundant; enabling progress or sustainment in work. Focus on low skilled, tackling barriers to sustained employment. Skills refresh e.g. IT skills/specific qualifications, to address gaps in emerging technologies and replacement demand. Support women to increase skill levels and progress in work, including support for women in non-traditional industries and sectors. Create job growth potential in SMEs by progressing existing employees to higher skills levels.
• Support for management, leadership & enterprise skills Support skills provision that delivers an increase in business starts targeted at the smart specialisation and growth sectors. To include: entrepreneurial skills development; and training for innovators throughout their academic and business careers.
• Employer-led skills provision Focused on SMEs in smart specialisation and growth sectors
• Support for industry specific intermediate and high level skills that respond to employer demand and offer flexible responses to emerging and projected skills needs. Packaged support for companies in inward investment sectors and their supply chains. Skills solutions focused on SMEs in smart specialisation areas and areas of economic advantage.
A variety of mechanisms will be utilised to ensure that funding is deployed effectively; open calls and opt-ins with SFA
Allocation Durham €21.7m Tyne and Wear, Northumberland €88.9m
Outputs
O1 O4 O5 CO16 O6 CO14
Participants (49% male, 51% female) Participants over 50 years of age Participants from ethnic minorities Participants with disabilities Participants without basic skills Participants who live in a single adult household with dependent children
16,120 3,210 730 1,350 2,840 870
O1 O4 O5 CO16 O6 CO14
Participants (49% male, 51% female) Participants over 50 years of age Participants from ethnic minorities Participants with disabilities Participants without basic skills Participants who live in a single adult household with dependent children
81,250 17,980 3,880 8,170 14,300 4,290
Results
R3 R6 R7 R8
Participants gaining basic skills Participants gaining level 2 or below or a unit of a level 2 or below qualification (excluding basic skills) Participants gaining level 3 or above or a unit of a level 3 or above qualification Employed females gaining improved labour market status
11% 25% 8% 35%
R3 R6 R7 R8
Participants gaining basic skills Participants gaining level 2 or below or a unit of a level 2 or below qualification (excluding basic skills) Participants gaining level 3 or above or a unit of a level 3 or above qualification Employed females gaining improved labour market status
11% 25% 8% 35%
IMPROVING LABOUR MARKET
RELEVANCE OF EDUCATION
AND TRAINING SYSTEMS
Durham
€3.9m1
Tyne and Wear Northumberland
€18.6m1
2.2 IMPROVING LABOUR MARKET RELEVANCE OF EDUCATION AND TRAINING SYSTEMS
The need
There is pronounced mismatch between supply and demand in the North East labour market and although many employers actively engage with the education and training system this is often uncoordinated and lacks consistency. Engagement also tends to be with larger companies and SMEs require significant support to navigate education and training, including securing better access to graduates through placements, internships or through hosting graduate projects. Educational attainment and aspiration increases our potential for growth. We have some of the highest shares of pupils on free school meals who have significantly lower achievement rates than other pupils. Performance at KS2 has been a strength for the North East and it compares well nationally, the latest figures for KS3 buck a longer term issue with achievements dipping for older pupils. Ongoing close working with employers is critical to raising young people’’ aspirations, articulating the realities of the modern labour market and the importance of skills and qualifications.
Actions supported
• Support for collaborative projects To include placements, internships or other activities enabling students & graduates to gain industry relevant experience & skills to meet current and future employment demands.
• Enable businesses to engage in skills provision & work directly with education providers to link curriculum with industry Locally relevant activities will align course content with business demand, create increased work placement opportunities and create work-ready, highly skilled employees.
• Business/educator links for business growth To include support to encourage take up of graduates & highly skilled staff; tackling replacement demand and succession planning leading to increased participation in higher level skills.
A variety of mechanisms will be utilised to ensure that funding is deployed effectively; open calls and opt-ins with SFA.
Allocation Durham €3.9m Tyne and Wear, Northumberland €18.6m
Outputs CO23
Number of supported micro, small and medium-sized enterprises (including cooperative enterprises, enterprises of the social economy)
360
CO23
Number of supported micro, small and medium-sized enterprises (including cooperative enterprises, enterprises of the social economy)
1,440
Results R9
SMEs successfully completing projects (which increase employer engagement; and/or the number of people progressing into or within skills provision)
75% R9
SMEs successfully completing projects (which increase employer engagement; and/or the number of people progressing into or within skills provision)
75%
1. Member State ESI Funds allocations and the Operational Programme of each Fund are in euros. ESI Funds notional allocations to LEP areas are therefore also in euros. Sterling valuations of LEP area euro notional allocations will therefore naturally change to reflect ongoing euro/sterling fluctuations. For the purpose of this Strategy euro allocations have been converted to sterling using the following rate €1 = £0.78 current at the most recent revaluation January 2016
What will we achieve?
Through investments made by the European Social Fund we will deliver the following targets:
OUTPUT TARGET
Durham Tyne and Wear,
Northumberland
O1 Participants 16,120 81,250
O4 Participants over 50 years of age 3,210 17,980
O5 Participants from ethnic minorities 730 3,850
O6 Participants without basic skills 2,840 14,300
ESF – CO14
Participants who live in a single adult household with dependent children 870 4,290
ESF – CO16 Participants with disabilities 1,350 8,170
CO23
Number of supported micro, small and medium-sized enterprises (including cooperative enterprises, enterprises of the social economy)
360 1,440
European Agricultural Fund for Rural Development - Rural Growth Programme Funding for the North East
EAFRD “Our goal is to build resilient rural communities with more and better employment opportunities” EAFRD resource is enabling the North East to specifically focus upon and stimulate growth in our rural areas through supporting new infrastructure, business collaboration and business led investments that contribute towards building more resilient rural communities. Our target activities are aligned to, and designed to, complement the national Common Agricultural Programme (CAP) funded programmes including the Countryside Productivity Scheme and Countryside Stewardship scheme, Countryside Stewardship. Plus our four North East community led ‘LEADER’ Programmes.
Rural superfast broadband Our rural communities need a level playing field to compete digitally. EAFRD funding is now required to enable the delivery of alternative network solutions, delivering superfast broadband, to less accessible rural locations. Fibre delivery to more remote locations is challenging and costly. ‘Of the market test pilots’ being rolled out by Broadband Delivery UK (BDUK) as part of a provisional phase three programme, most rely on fixed wireless solutions, with very few offering community-led fibre options. EAFRD aims to enable the learning from the market test pilots to offer innovative solutions, providing a vital superfast broadband connection to our rural businesses and communities Rural business development Through the North East Rural Growth Network (RGN) rural stakeholders are helping to design and co-ordinate rural business support programmes. Experience from the North East Rural Growth Network pilot programme (2012-15) has shown how a collaborative and integrated approach to business support can help reach out and engage rural businesses. Access to finance remains a barrier for many micro and small businesses and through EAFRD and the North East LEP’s RGN Local Growth Fund we will provide a
co-ordinated range of business development grants to meet local demand from growing businesses in key sectors. Tourism development Despite having some of the UKs most attractive protected landscapes and rich cultural heritage visitor numbers remain lower than comparable, more well established destinations. Tourism is a particularly important sector in the rural economy, providing opportunities for farm diversification, the creation of new visitor orientated businesses and more generally contributing to the economic viability of services in small communities. The North East Strategic Economic Plan highlights the opportunity for the rural tourism economy to grow by building upon the area’s natural environmental, heritage and cultural assets. Key linkages and relationships Broadband rollout BDUK is providing capital funding to local authorities to enable the rollout of superfast (24mbps) and improved basic broadband (>2mbps) to premises in the North East. North East Farming and Rural Advisory Network (NEFRAN) NEFRAN provides an important rural forum and voice for our rural stakeholders, helping to inform rural policies and programmes. It will help raise an awareness of EAFRD project calls.
Rural business development The North East LEP is providing Local Growth Funding of £6m over 2015/19 to the North East Rural Growth Network to deliver capital grant support to high growth SMEs and investment in strategic employment sites, enterprise hubs and catalytic tourism projects. Tourism Our partners involved in the County Durham and Northumberland Destination Management Organisations have provided new guidance on the area’s tourism investment priorities. This has been subject to consultation and agreed in 2015 with the North East Farming and Rural Advisory Network (NEFRAN) and is now informing our calls for tourism projects. LEADER Programmes Our four community-led LEADER Programmes will invest approximately £8m over 2015 -2020 in supporting business development, increasing farm and forestry productivity, developing rural tourism, culture and heritage and providing rural services. For further information on the Durham Coast and Lowlands and the North Pennines Dales LEADER Programmes visit: North Pennines and Durham Coast and Lowlands LEADER Programme Northumberland Uplands Northumberland Coast and Lowlands
EAFRD
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NORTH EAST LEP AREA
€13.1m1
---
Rural superfast
broadband €0.62m1
RURAL SUPERFAST BROADBAND European Agricultural Fund for Rural Development will be used to support the following activities
The need
• In our modern day society business and commerce are heavily dependent on broadband infrastructure to enable access to digital services for trade, training, market research and to access business support services. Services are increasingly ‘digital by default’ and rural areas are at a competitive disadvantage without access to affordable, high-speed and reliant broadband infrastructure. Relative connectivity costs are leading to more remote areas to be eliminated from national broadband rollout programmes
• Despite two phases of BDUK investment in Northumberland, Gateshead and Durham, there are a number of remaining rural premises who will be unable to achieve superfast broadband speeds. In Northumberland this equates to >10,000 premises
• There is a risk that the Government’s target of providing access to 95% of communities by 2017 will not be achieved without more innovative local solutions in the rural North East
• Improved broadband connectivity is key to enable more people to work flexibly, including in ‘knowledge intensive industries’ and from home or near home ‘rural enterprise hubs’ and in so doing reducing the need and costs associated with travel to employment bases in urban locations
Actions supported
• Creation of, and enabling access to, broadband infrastructure • Ground equipment (e.g. fixed, wireless, enhanced mobile, satellite or a combination of technological solutions) • Upgrade of existing infrastructure • Laying down passive infrastructure e.g. civil engineering works such as ducts • Costs associated with demand aggregation and stimulation programmes
Initial focus Our initial calls will focus on more remote areas of north and west Northumberland
Outputs
Number of Households passed with superfast broadband Number of households taking up new broadband service Number of businesses taking up new broadband service
300 105 10
Rural business
development €6.25m1
RURAL BUSINESS DEVELOPMENT
European Agricultural Fund for Rural Development will be used to support the following activities
The need
• Evidence from the RDPE-funded 2013-15 North East Micro Enterprise Scheme pilot indicates that micro and small businesses across manufacturing sectors including food and drink, construction, environmental industries and in particular, tourism attractions and accommodation providers more commonly experience challenges in raising finance to deliver capital investments
• Productivity levels in the rural economy are significantly lower than our urban areas. GVA per head in the predominantly rural counties of Northumberland (£13,481) and County Durham (£14,225) are considerably lower than Tyneside with a GVA per head in 2013 of £20,514. There is a need to raise productivity levels in existing businesses and to attract additional higher value / higher skilled business activities into our rural areas
Actions supported
• Building or improving fixed property to enable the business to expand e.g. food processing unit, visitor accommodation • Buying new equipment and machinery
Initial focus
Priorities for the initial project calls are for: Tourism accommodation: • Projects with demonstrable links to attracting more dark skies visitors and/or plug gaps in accommodation on recognised cycle
and walking routes • Projects that are located in the upland areas (including Kielder Water and Forest Park, Northumberland National Park and
adjacent settlements and the North Pennine Area of Outstanding Natural Beauty (ANOB) • High quality accommodation (properties with Visit England 4 star accreditation) with a priority to boutique hotels and inns,
glamping, bunk houses or lodges catering for cyclists, walkers Business growth projects in the following sectors: • Manufacturing, engineering, pharmaceuticals, food and drink, tourism and creative industries
Outputs
Jobs created Businesses supported Increase in Gross Value Added* Increase in overnight visitors* * Targets to be set in each project call
200 80
Tourism development
€6.2m1
TOURISM DEVELOPMENT European Agricultural Fund for Rural Development Funding
will be used to support the following activities
The need
• In 2014 Northumberland and Durham received 143,000 overnight visitors spending over £51m in the local economy. However, this volume of visitors is relatively low, as is the amount spent per visitor, for example in Durham spend per visit is £332 compared to £515 in Tyne and Wear
• To better meet visitor expectations and to respond to the latest visitor trends, there is a need for more investment to improve the quality of the visitor experience; expand visitor numbers outside of peak season and attract higher spending, overnight staying visitors, from outside the area
• Specific priority issues have been identified following consultation by the Northern Tourism Alliance during 2015 include: • Limited tourism attractors and packages to encourage more visitors to stay longer • Seasonality • Low awareness of North East rural offer nationally / internationally – more attention required to develop and promote our ‘USP’ and local distinctiveness • Inconsistent quality of infrastructure with implications on the visitor experience • Fragmented transport services and infrastructure and over reliance on the car to travel around the area
Actions supported
• Investments linking people with the natural environment (for example, access infrastructure – walking and cycle routes). • Investments that provide information on, and develop cultural, leisure and heritage products • Activities that attract visitors, increase visitor spending and benefit the local community • Shops and cafés linked to a visitor attraction • Investments in multi-functional green infrastructure (for example a path which can be used by walkers, cyclists and horse
riders) • Visitor attractions – such as an art gallery, craft centre, water sport facility • Capital infrastructure needed to support events and festivals that build on local heritage and culture • Signposting of tourist sites (excluding brown signs) • Construction and modernisation of tourism information centres, visitor information panels • Construction of shelters and safety facilities linked to soft-tourism e.g. wildlife viewing hide • Create and develop ‘destination’ and ‘place based’ tourism plans for rural areas • Promotion and marketing of rural visitor destinations • Development of new Destination Organisations
Initial focus
Our initial project calls will focus on the following: Improvements in the range and quality of tourism destination facilities that seek to attract more higher-spending and longer-staying visitors from outside of the North East. • Enhancing visitor facilities in connection with emerging markets e.g. ‘Dark Skies’ visitor economy • Development of adventure recreation - walking trails, cycle routes, water sports and climbing • Development of nature tourism – including in our AONBs, National Park and other protected landscapes • Support for heritage attractions – improving access and understanding of our industrial, Christian, Roman heritage
Development of Destination Management Plans and collaborative initiatives between businesses to prepare and implement enhanced plans and associated themed marketing activity that cut across the rural North East and aim to increase the number and proportion of visitors that are higher spending and / or from outside the area.
Outputs
Jobs created Businesses supported Increase in number of overnight visitors* Increase in number of day visitors* Increase in Gross Value Added* Number of destination management plans prepared* *targets to be set in each project call
150 80
1 The allocation of €13.1m equates to £10.5m using an exchange rate of €1 = £0.8. Please note the allocation is subject to final confirmation in light of revaluation this will inform the final allocation for each measure.
What will we achieve?
In summary through investments made by the European Agricultural Fund for Rural Development Fund we will deliver the following outputs:
OUTPUT TARGETS SUMMARY
Jobs created Businesses supported
350 140
Number of Households passed with superfast broadband 300
Number of households taking up new broadband service 105
Number of businesses taking up new broadband service 10
Performance Targets: ERDF Priority Area Indicator or key
implementation step Measurement unit Milestone for 2018 Final target (2023)
Durham Tyne and Wear, Northumberland Durham Tyne and Wear,
Northumberland
1 Promoting
Research and Innovation
Productive investment: Number of enterprises receiving support
Enterprises N/A N/A 517 1,113
Expenditure Euros €8,599,540 €19,429,946 €33,670,656 €76,076,047 Number of enterprises receiving support that has been achieved by partially or fully completed operations Final
Number 127 278 N/A N/A
3 Enhancing the Competitivene
ss of SMEs
Productive investment: Number of enterprises receiving support
Enterprises N/A N/A 3,477 4,934
Expenditure Euros €18,823,635 €43,747,321 €73,702,097 €171,288,349 Number of enterprises receiving support that has been achieved by partially or fully completed operations Final
Number 606 1,389 N/A N/A
4 Low carbon economy
GHG reduction: Estimated annual decrease of GHG
Tonnes of CO2eq N/A N/A 9,568 29,916
Expenditure Euros €9,992,693 €31,242,720 €39,125,406 €122,327,807
Number of enterprises receiving support that has been achieved by partially or fully completed operations Final
Number 104 323 N/A
Please note: Financial figures include match funding in these tables, to maintain consistency with the Operational Programme equivalent tables
5 Climate change
adaptation
Expenditure Euros €1,525,588 €4,186,000 €5,973,292 €16,389,872 Percentage of schemes in place Percentage 11 32 N/A
Business and properties with reduced flood risk Number N/A N/A 1,233 3,382
8
Promoting social
inclusion and combatting poverty and
discrimination
Productive investment: Number of enterprises receiving support
Enterprises N/A N/A 67 361
Expenditure Euros €1,040,570 €2,091,097 €4,074,249 €8,187,486 Number of local development strategies agreed
Number 1 2 N/A N/A
Please note: Financial figures include match funding in these tables, to maintain consistency with the Operational Programme equivalent tables
Performance Targets ESF and YEI
DURHAM Employability and Inclusion (PA1) and Skills for Growth (PA2)
Priority Axis (PA)
ID Key implementation step or indicator
Measurement unit Milestone for 2018 Final target (2023)
Total Men Women Total Men Women
1 ESF
1 Amount of spend Euro €8,708,455 €46,445,093
O1 Participant Number 3,175 1,716 1,459 16,890 9,130 7,760
1 YEI
1 Amount of spend Euro €24,000,000 €24,000,000 O1 Participant Number 5,830 3,100 2,730 5,830 3,100 2,730
2 ESF
1 Amount of spend Euro €8,012,441 €42,733,018
O1 Participant Participant 3,031 1,485 1,454 16,120 7,900 8,220
Performance Targets ESF
TYNE and WEAR, NORTHUMBERLAND Employability and Inclusion (PA1) and Skills for Growth (PA2)
Priority Axis (PA)
ID Key implementation step or indicator
Measurement unit Milestone for 2018 Final target (2023)
Total Men Women Total Men Women
1 ESF
1 Amount of spend Euro €29,182,889 €155,642,075
O1 Participant Number 10,466 5,740 4,726 55,670 30,530 25,140
2 ESF
1 Amount of spend Euro €40,346,046 €215,178,914 O1 Participant Number 15,275 7,484 7,791 81,250 39,81
0 41,440
