The North East Strategic Economic Plan - Creating more and better jobs January 2019 - North East LEP
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The North East
Strategic
Economic Plan
Creating more
and better jobs
January 2019
1
achieve our 2024 targets. and do business
In 2017, we published a refreshed plan and increased our • A response to labour market needs by strengthening
What is the North East Strategic Economic Plan? focus on distinctive areas of economic growth. We set
out specific programmes of delivery for 2017 and 2018
inclusivity and the pathway into careers.
designed to support our people, businesses and towns, As ever we remain future focused to take advantage of
It is the North East’s plan for growing and developing a more opportunities stemming from economic change and this
cities and rural communities. This work continues to
productive, inclusive and sustainable regional economy. command support across the region and we have made new direction in public policy.
good progress. As Chair of the North East Local Enterprise Partnership,
Contents Foreword Updating our plan at a time of change
I would like to acknowledge the hard work and
commitment of our partners in business, local
government, education and our communities in taking
It is a time of significant change for the global and
forward the priorities set out in our Strategic Economic
national economy. New opportunities in technology and
Plan. Our thanks go to each and every one for their
What does the Strategic Economic Plan want to achieve? areas such as ageing and the management of climate
risks provide potential for economic growth. Changes in
efforts and partnership. We look forward to continuing
working together in the future.
The Plan’s ambition is to increase the number of jobs in the North East public policy as we prepare to leave the European Union
and embrace the UK Industrial Strategy provide a new
by 100,000 between 2014 and 2024, with 70% of these being better context for our activity. Andrew Hodgson,
jobs, defined as managerial, professional and technical roles. Chair, North East Local Enterprise Partnership
Government announced that the regions will have the
opportunity to develop a Local Industrial Strategy to
03 Foreword Our Strategic Economic Plan for the North East demonstrate their contribution to the national Industrial
04 Executive Summary Strategy. The North East’s response will be led by the
The North East region has an economy that is growing North East Local Enterprise Partnership and will be
and that is diverse with passionate and skilled people, a delivered during 2019.
Section one - Our strategy high quality location for business and leisure, and a focus
10 Our region How will the Plan achieve this? What is the on science and innovation. New policy and investment opportunities have been
12 Our offer North East The North East Strategic Economic Plan sets out our
created by a devolution deal and the formation of a
new Mayoral North of Tyne Combined Authority, that
14 Our challenges The Strategic Economic Plan identifies four areas Local Enterprise ambition for the North East as a place of work and includes Newcastle, North Tyneside and Northumberland
16 Our opportunities in our economy where our assets and capabilities Partnership opportunity, an ambition shared by regional business local authority areas.
18 Our plan mean we have a strong opportunity for growth. and its role leaders, local government and education, and supported
by a wider community of partners, whose contribution to The North East Combined Authority will continue to
We want to build on these areas, which are: in delivering its development and delivery are central to its success. support economic growth across Durham, Gateshead,
Section two - Four areas of strategic importance • Digital the Strategic South Tyneside and Sunderland. The two Combined
22 Digital
• Advanced manufacturing Economic Plan? Creating more and better jobs Authorities will work together through a Joint Transport
Committee to oversee regional transport.
24 Advanced manufacturing In 2014, when this plan was first agreed, we committed
• Health and life sciences The North East Local Wider partnerships across the Northern Powerhouse
26 Health and life sciences to fostering new opportunities for our residents and
Enterprise Partnership area, with the creation of Transport for the North and
28 Energy • Energy. businesses by driving forward a modern, diverse and
is a private, public entrepreneurial economy, which is agile in the face of a new NP11 structure of northern LEPs, also create
We have also identified and will work with four and education sector change, competitive, resilient and inclusive. opportunities for our region. The Borderlands Deal will
Section three - Four service sectors to support growth service sectors that support the wider economy and partnership, supported include Northumberland in a new cross-border structure
32 Education offer significant opportunities for more and better We have one clear and simple ambition – to deliver more with four other areas in northern England and Scotland
by a small executive
33 Financial, professional and business services and better jobs for the people who live and work here. to deliver rural growth and development.
jobs in the North East. These are: team that provides
34 Transport and logistics strong, collaborative Between 2014 and 2024, we want to grow the number In 2018 we agreed to update our Strategic Economic
• Education of jobs in the region by 100,000, with at least 70%
35 Construction leadership to support Plan to ensure we can deliver our ambitions during this
• Financial, professional and business services the growth and of the new jobs being better jobs, defined as those in period of change. To do this we have worked with our
managerial, professional and technical roles. regional partners and government.
Section four - Five programmes of delivery • Transport and logistics development of the
38 Business growth North East economy. We have made good progress against this ambition. As The refreshed plan includes:
• Construction. of September 2018, there were 64,600 more jobs than
40 Innovation
We will achieve the Plan’s ambition through five The executive team in 2014, 77% of these being better jobs. • Updated analysis of our opportunities and challenges,
42 Skills, employment, inclusion and progression including an update on the position of our targets
programmes of delivery: works with partners to
44 Transport connectivity We have also identified four targets focused on other
lead and facilitate the long term objectives. To demonstrate our progress • Our plans for programme delivery from 2019 to 2021.
46 Investment and infrastructure • Business growth delivery of the Strategic we aim to reduce or close the gap in our performance
Economic Plan. Four key themes have also impacted the Plan:
• Innovation compared to England excluding London. By making this
Section five - Transparency and accountability , progress comparison in these four areas – employment rate, • Preparing for Brexit: with implications for businesses,
52 Governance • Skills, employment, inclusion and progression It is the economic economic inactivity rate, productivity and private sector residents and funding
53 Assurance framework • Transport connectivity development body that employment rate – we aim to deliver both positive
54 Strategy, policy, evidence and analysis
covers the North East change in our region and help rebalance the national • Preparing the ground for the development of a
• Investment and infrastructure. of England. economy. Local Industrial Strategy
58 Evaluation
58 Impact to date We have made progress in each of these areas but the • The impact of technology and in particular Andrew Hodgson
rate of improvement will need to increase if we are to how the digital revolution changes the way we live
2 3
Our offer Our challenges Our opportunities Our plan
The North East is a great place to live, Our plan is strongly focused on addressing Our global opportunities
Areas of strategic importance
learn, work and do business. our key challenges that include fewer
employment opportunities compared to Significant changes in the global economy
Executive Summary We have a high quality living environment other parts of the UK and improving the present opportunities for the North
East because of our assets, skills and
with historic towns and cities, a varied quality of jobs.
landscape and coastal environment and industries. These include:
strong cultural and leisure offer. Landmarks We also have underlying issues including
lower productivity performance and higher • Our capacity to demonstrate how
include centres for contemporary art digitalisation can transform the economy Digital
and music on Gateshead Quays, the UK’s levels of economic inactivity and exclusion, Advanced Health and Energy
and society through increased digital Specialising in
most popular open-air museum, Beamish, although we have seen improvement in manufacturing life sciences Expertise in offshore
adoption and connectivity, new service software, cloud
the Northumberland National Park and both of these areas. computing, Specialising Excelling in clinical Energy and subsea
and business models in sectors such as
two UNESCO World Heritage Sites – manufacturing and maximising the potential communications, in automotive research, innovation technologies,
Emerging challenges for our region include
Hadrian’s Wall and Durham Cathedral It of our research and business assets. buildings information and medicine in pharmaceuticals, regional energy and
Brexit, volatility in the global economic
is an increasingly prominent location for modelling, gaming. manufacturing responding to an demonstration and
environment and trade. We also face wider Emerging specialisms
international sport and events. • Improving health and responding to an aging population innovation
UK challenges including the productivity include data
puzzle, and rising costs and inflation. ageing population through innovation in
House prices are competitive compared drugs, treatment and public health practice analytics, immersive
Our region to other parts of the UK and the region’s technologies and
is another of our strengths. The North East
transport network, which includes the cybersecurity
already makes a significant contribution to
Tyne and Wear Metro and integrated bus this area through strong clinical research
network, makes average commuting times and our excellent health care system.
some of the lowest in the country. Enabling services
Our geography
• We also have the capability to play
We are the most northerly Local Enterprise Over 80,000 students study at our region’s a leading role shaping the future of
Partnership region in England. Bordering four universities every year. manufacturing. Our strengths in automotive,
Scotland, the North East is a mix of urban, pharmaceuticals and energy have earned
There are 700 primary and middle schools,
suburban and rural areas spanning seven local the region a reputation for quality and
two University Technical Colleges, over
authority areas. It has three major cities, diverse productivity. Innovation opportunities Financial, Transport
170 secondary schools and nine further
towns, four universities and key industrial, in areas like batteries, fuels and energy Education professional and and logistics Construction
education colleges in the North East.
business and innovation sites as well as a large If North East performance technologies, process innovation and digital business services
and varied rural and coastal area. Grade A office space in the North East is, services are key to the future.
on average, 76% cheaper than London
matched England
Our people
and the 1.2 million workforce have strong excluding London we •The UK has committed to tackling climate
change and promoting clean growth.
and improving qualifications. Globally
With almost two million people, the North East connected ports and supply chains add would have We can continue to this agenda by our
to the North East’s business and inward reduction of carbon emissions through Digital transformation
is the ninth largest LEP area by population.
investment strengths. energy generation, sub-sea technologies
1.2 million are aged 16 to 65, with 32% of this
and investment in zero carbon transport.
age group having a degree or equivalent
qualification. People that live in the North East Policy and funding opportunities Programmes of delivery
are friendly, welcoming and proud of their region.
93,000 additional jobs We are at a time of change in the public policy
environment. Publication of the Industrial
Our connections Strategy in 2017 has increased a focus on
Over 80,000 students study
improving productivity and living standards,
As well as selling products and services at our region’s four
whilst there is increasing recognition
across the UK. North East region universities every year. that decision making should be closer to
businesses are strongly integrated into
global markets. The business base includes residents and businesses, with devolution Business growth Innovation Skills, employment,
25,500 additional businesses and the development of new structures at inclusion and Transport
significant international investments from
the EU, US, Japan and India and exports the Northern Powerhouse level both forming progression connectivity
£7.6 billion to the EU and £5.3 billion to part of this shift. In addition, the UK’s decision
the rest of the world. 55,000 people move to leave the European Union will lead to
to the North East every year and half of a new funding environment for delivering
UK students at North East universities growth. All of these changes will provide
1.2 million workforce 40,000 additional individuals new opportunities for the North East and
are from outside the area. The North East
have strong and improving partners will need to work together to
has strong Northern partnerships and qualified to degree-level or above Investment and infrastructure
important transport links.
qualifications capitalise on them.
4 5
Governance Strategy, policy, evidence and analysis Delivery of the SEP 2014-2018 highlights Evaluation Impact to date
The North East LEP Board ensures that Significant capital funding from central Good progress has been made towards
The ongoing development of the Strategic A commitment was made to commission
a robust and transparent governance government has supported the Strategic delivering the headline targets to deliver
Economic Plan is fundamental as it provides an independent evaluation of the progress
structure underpins the work of the Economic Plan programmes. more and better jobs, with 64,600 new jobs
the framework and evidence base for a range made and the role of the LEP is developing
North East. It is business-led and is a of other strategic documents and investment and delivering the Strategic Economic Plan. created – 77% of which are better jobs.
This includes support for 21 Enterprise
private, public and education partnership programmes. Zones with £125 million of LEP investment.
supported by four advisory boards. The Key findings from the first phase show The gap between our performance
To date, £65.9 million has been invested
effectiveness of the governance structure We work closely with government and significant progress has been made in and national performance has reduced
Data across 13 projects with two programmes
is reviewed annually. partners in the region to develop new creating more and better jobs for the following an increase in the North East’s
leveraging £85m from public and
resources and structures that can support the economy. The refresh of the Plan in 2017 employment and economic activity rate.
The LEP also plays a key role in regional Our Economy, North East Data Hub and private funding.
delivery of the shared objectives in the Plan. was inclusive and engaged partners across Progress has also been made in relation
governance, working with the two developing new data sources.
£30.2 million has been invested in 15 the region. to the number of private sector job
combined authorities and seven local Over the next year we will develop a Local
Business Growth projects, including Grade opportunities per head in the North East.
authorities. The governance structure Industrial Strategy with government and The LEP’s programmes of delivery enjoyed
A industrial and office space across the LEP
changed in November 2018 following the regional partners to set out how we will drive success including the pilot of the Gatsby
region and the best performing Growth Hub Following a change in the dataset used to
formation of the North of Tyne Combined productivity improvement and contribute to Good Careers Guidance Benchmarks, which
in England. measure productivity, between 2014 and
Authority. The North East Combined delivery of the UK Industrial Strategy. is now recognised as best practice by
Authority remains focused on economic Skills and Economic Inclusion has seen government and regional partners. 2016 (the most recent data available), the
growth for their part of the region. The North East LEP continues to influence gap has reduced by 13%.
£18.4 million of capital invested across
public policy through its work with partners The report’s recommendations include
eight projects, with a further £28.5 million
The Local Assurance Framework sets out through the North East Brexit Group and other working with partners to ensure data
from public and private funding. These
how the LEP makes decisions and ensures important processes effecting economic policy, monitoring provides a fuller picture
include the successful delivery of the
value for money when investing in projects transport and infrastructure. going forward.
Research Gatsby Good Careers Guidance Benchmarks Together with our partners,
across the North East LEP area.
Each of these activities are supported by a and the launch of North East Ambition, An interim evaluation will be undertaken
strong programme of analysis, research and
North East Economic Evidence Forum and supporting 170 schools and colleges. each year between 2018/19 and 2020/21.
we are working to deliver
Programme of research studies.
evidence development and co-ordination,
The regeneration of the Vaux site in
100,000 more and better jobs
which provide a detailed understanding of the for the North East by 2024.
Sunderland and the construction of the
North East economy.
International Advance Manufacturing
Strong monitoring and evaluation across Park (IAMP) in Sunderland/South Tyneside
our programmes and projects reflects best are just two of the 23 projects to benefit
practice and helps us learn from our work. from £214 million capital investment in
Over time we will use it to build knowledge investment and infrastructure.
and understanding of what works in economic
Transport improvements have been made
development in the region.
across the region with £80.9 million of
100,000
Evaluation capital invested in 17 projects, and one JOBS BY 2024
project leveraging £55.7 million from public
Interim Strategic Economic Plan evaluation, finding. These include enhancements to the
Programme and project level monitoring and Tyne and Wear Metro system and major
evaluation and Contributing to wider understanding transport corridor improvements.
of what works
811,600 876,200 64,600
JOBS IN JOBS IN
NEW JOBS
MARCH 2014 SEPT 2018
49,600 (77%)
of these were better jobs , defined
as managerial, professional and
technical roles
6 7
Section one
Our strategy
8 9
Our people • Of the 55,000 people who move to the North East We are also strongly integrated into global markets:
region every year, about three-quarters come from
The North East has a population of almost 2 million elsewhere in the UK • 4,300 businesses in the North East region exported
people, making us the ninth largest LEP area by £12.9 billion of goods in 2017
population: • Half of the UK students who enrol at North East
region universities come from elsewhere in the UK • 6,000 businesses imported goods valued at £13.2
• With a working population (aged 16-64) of over 1.2 billion in 2017
million, our businesses are able to draw on a large and • There were over 3.7 million overnight trips to our region by
people from the UK during 2017 resulting in a spend of £680 • Businesses in the North East region exported £4.2
diverse pool of workers to fill employment opportunities
million and 82 million day visits, spending £2.5 billion billion of services in 2016
Our region • 32% of the North East’s residents have a degree or
equivalent and the qualification levels are improving. • We are part of wider Northern partnerships, • Foreign owned businesses play a key role in the North
East economy, accounting for 5% of businesses in the
including the Northern Powerhouse, the NP11 that
Our people are friendly, welcoming and proud of their brings together the 11 northern LEPs to promote North East region and 27% of Gross Value Added (GVA)
history. They have a strong and distinctive sense northern growth, and Transport for the North, a new • Over a fifth of the 530,000 visits by overseas
of place, a capacity for resilience, ingenuity, and a deep statutory authority, promoting northern connectivity residents to the North East in 2017 were from Ireland
and shared passion for our landscapes, cities
• A proposal for the Borderlands Inclusive Growth Deal is being and Germany with other key markets being
and culture.
developed, that will build on the connections between Netherlands, Spain and the USA
National and international connections Northumberland, Cumbria and the South of Scotland • Whilst migration rates are low compared to the
• Important transport links include the East Coast national picture, it has played a key role in
We have strong connections with the rest of the UK:
Mainline, with regular services to London in less than maintaining population growth over the last decade
Our geography • Many of our businesses sell their products to three hours and Edinburgh in one and a half hours • A large proportion of the migrants who live here are
customers elsewhere in the UK and/or have supply with onward connections across Scotland. Cross- students – with over 17,000 international students
The North East is the most northerly Local Enterprise Partnership area chains outside the North East country also provides rail services to the Midlands studying at our four universities
in England, located between Scotland, Cumbria, Tees Valley, North and South West. The A1 national highway connects
• Many of our industries operate across regions. For
Yorkshire and the North Sea. At just over 3,000 square miles, we are the the region to London and Edinburgh, with the A68 to • Many of our global connections rely on the North East’s
To Edinburgh, Glasgow, Aberdeen
Principal rail links example, offshore energy businesses work closely
sixth largest LEP in England by geographic size. We have a mix
To Edinburgh, ofAberdeen
Glasgow, urban, Principal rail links the Scottish Borders and the A19 a major freight seaports and airport – with both of these having gone
Port of Berwick
with partners in Scotland and the Humber, Liverpool
suburban and rural areas that span our seven local authority areas Port ofof
Berwick Berwick-upon-Tweed Tyne & Wear Metro route that links us directly with Yorkshire. The A66 through a period of recent growth. Newcastle Airport
Tyne & Wear Metro and Cumbria
County Durham, Gateshead, Newcastle, North Tyneside, Northumberland, Berwick-upon-Tweed
LEP boundary and A69 link us to Cumbria and onward to the West generates more than 20,000 jobs across the region, and
South Tyneside and Sunderland. We have: LEP boundary Holy Island
Motorway of England and Scotland. 5.3 million passengers pass through it every year, to 80
A1
Holy Island
••Three cities: A1 Motorway Farne
Islands Key routes destinations in 28 countries.
Farne
Islands Key routes Enterprise Zones
• Newcastle, that has science, education, culture, digital and service Wooler
Major Freight Flows
Enterprise Zones Ports
sectors and acts as our transport gateway Wooler
North Atlantic Loop digital connectivity 342,000 tonnes 399,000 tonnes
Ports Airports Port of Tyne
to Netherlands from USA
• Durham, that is a leading university, science and tourism centre at the Airports Key Air Routes major international hubs
109,000 tonnes 280,000 tonnes
hub of a large rural county Alnwick
Port of Sunderland
to Germany from Ukraine
• Sunderland, home of Nissan’s UK-leading automotive manufacturing,Alnwick To Scotland
Northumberland
A697
Coquet
Newcastle Airport generates
has education, culture and a well established
To Scotland digital software sector. A697 A68
National Park Rothbury A1
Island more than 20,000 jobs
across the region, and 5.3
million passengers pass
••Diverse towns that provide a mix of employment,National
Northumberland Coquet
housing,
Park education,
Rothbury A1
Island through it every year, to 80
A68
destinations in 28 countries.
cultural and leisure offers, that are well connected to our cities, each
other, the coast and countryside Ashington
AEC-2
••Four universities; Durham, Newcastle, Northumbria and Sunderland Bellingham
A696
Morpeth
Amsterdam
Port of Blyth
Ashington A68 AEC-1 London
••Key industrial sites, business parks and innovationBellingham
hubs, including
A189
Paris
Morpeth Newcastle Cramlington
Airport
Cobalt Business Park, Infinity Park, NETPark, Newcastle Helix, Integra 61,
Whitley Bay
A696
Port of Blyth
North Shields
A68
International migration
Quorum Business Park, the International Advanced Manufacturing Park Newcastle A189
Cramlington
NEWCASTLE
UPON TYNE
Port of Tyne
South Shields in the North East over
Airport
and 21 Enterprise Zone sites Whitley Bay the last 10 years
A69
A69
To Carlisle, Hexham
North Shields Manchester Haltwhistle Blaydon
SUNDERLAND University of Sunderland In-migration
••A large and varied rural and coastal area, ranging from market and
Port of Tyne A1
NEWCASTLE Port of Sunderland Dubai Hong Kong campus
UPON TYNE South Shields GATESHEAD
A69 A692 10,000 to 12,800 per year
seaside towns to the largest Manchester
remote rural Haltwhistle
area in England,
Hexham hosting a
A68
A69 Washington
To Carlisle, Consett A693
Northumbria University
Blaydon Main Export Markets
diverse rural economy. A1 SUNDERLAND
Port of Sunderland
Chester-le-
Street
A1 (M)
A690 Seaham Harbour Sri Lanka campus
Newcastle University
GATESHEAD Asia & North Out-migration
A691 EU Oceania Others Singapore campus
A68
A692
America Newcastle University
Washington
The North East’s communities and economic activities are heavily Consett A693
DURHAM
A19 Malaysia campus 4,500 to 8,200 per year
Chester-le-
concentrated around the coast, the region’s rivers and major transport Street
A1 (M)
A690 Seaham Harbour
Wingate 14% migrants
A68
59% 13% 9% 19%
routes. Reflecting this, the North East’s five ports (Port of Berwick, Port
A691 Spennymoor
came from China
Bishop
of Blyth, Port of Sunderland, Port of Tyne and Seaham Harbour) are key A19 Auckland Sedgefield
DURHAM To Hartlepool
Newton and Middlesbrough Main Import Markets 17,300 international students
assets, alongside Newcastle International Airport. Within the region, we A68 Wingate
Aycliffe
Asia & North
in North East Universities
Spennymoor EU Others
have strong connectivity through public transport, roads, infrastructure Bishop A688
Oceania America
Auckland Sedgefield
and a UK leading digital infrastructure. Newton
To Hartlepool
and Middlesbrough Barnard To York,
Aycliffe Castle Leeds,
London,
Midlands 60% 24% 8% 8%
A688
Barnard To York,
Castle Leeds,
London,
Midlands
10 11
A place to learn and progress A place to do business and invest
We have over 700 primary and middle schools, two University Technical We have a workforce of 1.2 million with a strong and improving qualifications
Colleges and over 170 secondary schools, including pupil referral units profile. Our colleges, universities and training providers are responsive to employer
and Special Educational Needs and Disability provision. Ofsted grades in needs. Employees are loyal, with some of the UK’s lowest attrition rates.
primary schools in the North East continue to be positive and there was an
Our offer improvement in GSCE results in 2018 which is testament to the hard work of We have nationally significant research and innovation centres and adaptable
students and staff in secondary schools and colleges. public infrastructure that provide our businesses with access to cutting edge
knowledge and test beds that facilitate commercialisation and innovation.
Our nine further education colleges offer a diverse and hands on approach to
training, delivering a career focussed curriculum in academic, technical and We have five national catapult centres (Digital, Energy Systems, High Value
professional pathways. Manufacturing, Offshore Renewable Energy and Satellite Applications) and a
range of national innovation centres at Newcastle Helix and NETPark in Durham,
They have strengthened their provision in digital, health and life sciences,
providing over 200ha of public and private innovation focused development.
advanced manufacturing and engineering, construction and financial and
professional business services, whilst continuing to provide inclusive and
A number of regional projects and programmes demonstrate the potential for
balanced education and training.
public infrastructure to provide a test bed for innovation delivery.
There were 16,600 apprenticeships in the North East LEP area in 2017/18, over
half were higher or advanced apprenticeships, contributing to the North East Investment into our new convention and exhibition facilities will enhance our
region having the highest rate of apprenticeships in England. business tourism offer.
A place to live
We have over 80,000 students every year studying at one of our four Building on UK leading levels of superfast broadband across the region we
universities Durham, Newcastle, Northumbria and Sunderland. Both Durham are moving rapidly towards ultrafast, next generation digital connectivity –
Housing Culture and leisure and Newcastle universities are part of the prestigious Russell Group, increasing our competitive advantage and transforming opportunities in the
World’s
research-intensive universities that contribute to the intellectual reputation global data economy.
We have a wide range of housing for renters and Our region also has a diverse leisure offer, from the of the UK across the globe. Northumbria and Sunderland universities are
biggest half
buyers, with everything from affordable homes and Durham and Tyne Dales to the quayside along the Tyne highly respected and active anchor institutions in the North East. Our globally connected ports and supply chains, diverse talent pool,
apartments, through to large executive homes in in Newcastle and Gateshead. The success of the Great development sites, Enterprise Zones, strength in global growth markets,
city centres, riverside and coastal locations, market
towns and rural villages.
Exhibition of the North, the Tall Ships Races 2018 and the
Rugby World Cup demonstrated our ability to deliver large marathon with To recognise the employment and progression opportunities here, our
universities, further education colleges and private training providers are
enhanced access to growth capital, and cost competitiveness makes
the region a great place for the private sector to invest and do business,
House prices are competitive compared to other
international events. We have a thriving sports culture
with Premiership football, rugby (union and league), over 50,000 all committed to ensuring students and graduates can identify routes into alongside a strong track record of delivery of public sector investment in site
participants
work. They are supported through experience and exposure to the world readiness and transport.
parts of the UK. international athletics, cricket and are home to the Great
North Run; the world’s largest half marathon. of work, and following completion of their studies, stay to have successful,
We plan to build 6,000 housing units per year until
2024 to meet demand, respond to demographic We’ve seen significant investment in our culture and every year. progressive careers.
changes and to make sure we have attractive housing tourism assets, including the opening of the Sill in
options for our current and potential residents. Northumberland, the National Centre for the Written Word
in South Tyneside, the development of a vibrant music,
Transport arts and cultural quarter in Sunderland and investment
in culture also featuring at the heart of Gateshead’s We have over 80,000 students
The Tyne and Wear Metro is the largest light In 2018, Grade A office space in
regeneration plans. every year studying at one North East England was £28.20 per
rail system in the UK outside of London, with 60
stations across the region and over 36 million We are home to two iconic UNESCO World Heritage Sites of our four universities sq ft making it, on average,
passengers annually. This is complemented by an - Hadrian’s Wall and Durham Cathedral. Northumberland Durham, Newcastle,
integrated bus network, connecting transport hubs National Park features England’s cleanest rivers, clearest
Northumbria and Sunderland. 76% cheaper than London,
air and darkest skies.
around the region and extensive cycling networks. 65% cheaper than Paris and
North East railway stations are used by over 15 million Our natural environment 40% cheaper than Dublin.
people every year, connecting us directly and frequently The coastline takes in Northumberland including the Holy
to London, Birmingham, Leeds, Sheffield, Manchester Island of Lindisfarne and the regenerated coast of North
and Scotland. and South Tyneside and East Durham with 20 of our 25
coastal waters being classified as excellent in 2018.
Within the region, the Durham Coast Line, Tyne Valley Line
and stations in between Newcastle and Berwick provide We have internationally recognised assets including
important links between communities with local residents Beamish, the UK’s most popular open air museum,
using these to travel to work, study and for leisure. Sunderland Airshow, Sage Gateshead, a landmark
music venue, ta number of theatres hosting national
productions, Lumiere in Durham, and BALTIC Centre £362 million Metro Industrial costs are over one-
Lowest average commuting distance for Contemporary Art – Arts Council, England’s largest
investment for 42 new trains quarter lower than in Glasgow,
investment in the visual arts outside of London.
of 7.7 miles and one of the lowest
We are known for our preserved Roman heritage in and a new maintenance depot almost half the cost in Dubai, almost
commuting times of 24.9 minutes,
compared to the national average. Northumberland through to the coast in the North and secured for delivery in 2021. one-quarter the cost of London, and
South Tyneside. over 80% cheaper than Singapore.
12 13
Emerging challenges
Since the Strategic Economic Plan was published in 2014, a number of new challenges have emerged. Most of these are UK-wide or global in nature but will directly impact on
the performance of the North East economy.
Brexit Global trade
Our challenges The UK is heading towards leaving the The global economy has been growing, with a strong growth in global trade being the main contributor
European Union on 29 March 2019. over the last two years.
Forecasts suggest that the North East will
be amongst the worst affected regions in However, global politics are becoming more volatile, which is undermining confidence with trade
the UK, especially if there is a no deal Brexit. patterns across international boundaries.
The impact will vary across the North East’s Increasing trade protectionism poses a particular threat to the global economy, which is a key risk for
sectors depending on the extent to which: the North East because trade plays such a fundamental role in our economy. Almost 4,300 North East
businesses export, with almost 6,000 having supply chains outside the UK.
• The goods and services they produce are
traded internationally It will be important, going forward, that North East businesses are supported to continue to grow and
Despite being a great place to live, learn, build a career, Collectively, these factors limit opportunities for our qualifications profile, growth in the size and dynamism of develop their international markets.
do business and invest, like all areas, we still face residents and businesses and reduce our attractiveness the business base, success in securing inward investment • Their supply chains are international
challenges. Overcoming these will be critical to ensuring to investors. and increasing availability of housing, industrial and
• The ownership of and/or investment into
the success of our region. commercial property. the sector is international
Our plan has been developed to identify opportunities,
Long-term challenges programmes and interventions that will address these However, we also continue to under perform, compared Productivity gap
• The EU sets the regulatory environment
challenges. to England excluding London in many indicators, that for sector
The North East Independent Economic Review (2013),
set out the key challenges faced by our region. We have also set targets that will measure our progress. still require action, including:
• The EU provides funding for specific sectors UK productivity growth has been weak for over 10 years. Whilst the reasons for this are not fully known,
These have been reconfirmed by subsequent research To create more opportunities for our people and our (e.g. agriculture, fishing, culture, etc.)
it has lead to this trend being referred to as the ‘productivity puzzle’.
and analysis over the past six years and will be the focus businesses and improve prosperity and inclusion, we need Growing the jobs base and increasing the quality
of available employment opportunities • Migrant labour forms important
of continuing analysis. to tackle these deep rooted, underlying issues that are We do know however that factors have included:
component of the workforce.
underpinned by things such as:
The key issues we face are: • Low levels of business investment – limiting growth in capital (e.g. equipment, resources) available per worker
• The productivity performance of our key industries and There will also potentially be a range of
••Too few employment opportunities: we have sectors Ensuring individuals have the skills and wider impacts to exchange rates and to • Limited growth in how efficiently labour and capital are being used.
particular gaps in relation to: perceptions of the UK.
competencies to take up the available employment
• Skills of the workforce opportunities These trends are likely to be further weakened by Brexit and the other challenges discussed in this section.
• Jobs in the private sector – this is reflected in us Reports from a number of sources, including
having fewer businesses per head than other areas • The availability of appropriate, affordable the Confederation of British Industry (CBI) The Industrial Strategy sets out the national response to addressing the challenge of low productivity
business premises and the British Chamber of Commerce, state growth. We are currently working with government to develop the North East Local Industrial Strategy
• Jobs in high skilled occupations including Continuing to grow the business base and
managerial, professional and technical, for example • Access to finance, transport and digital connectivity that the majority of businesses have delayed that will set out the approach we will take to improve the North East’s productivity. This is our
ensure the right support is available for
in knowledge-intensive service sectors, such as preparing for Brexit or making investment opportunity to look at innovative, transformative solutions and position the North East’s economic
financial, professional and business services. • An effective innovation eco-system. businesses to grow
decisions due to uncertainty about the process, assets within a recognised UK context.
••Lower levels of productivity: this has an impact on We monitor the performance of the North East economy the deal and its implications.
the potential competitiveness and resilience of our regularly. Over the last five years, we have made good Investing and innovating to drive improvements
businesses and the potential for higher earnings for The North East LEP established the North
progress in regard to the number of jobs, employment in productivity
the people who work in them. East Brexit Group to provide a collective Costs and inflation
and economic activity rates, improvements in the
regional voice as the UK moves through the
Brexit process. It includes representation
from businesses, education, trade unions,
If North East performance matched England excluding London, we would have: local authorities and voluntary organisations. Businesses and residents have experienced a number of increases in prices over the last few years.
The group has monitored and prepared There have been a number of reasons for this including:
evidence about economic issues, the views,
• Global increases in commodity prices
experiences and responses of these regional
93,000 25,500 40,000 550 additional £685 million
organisations. It will seek to ensure that
future policy in migration, funding and trade,
• Triggered by Brexit, the depreciation of the pound and the policy responses to it, has impacted on the
cost of imported components
additional additional additional businesses additional support the North East economy.
jobs businesses individuals that are spend on In 2018, the North East LEP’s Growth Hub
• Low unemployment has begun to lead to growth in wages.
qualified to innovation R&D by
worked with partners to launch a Brexit Toolkit
that brings together business support, access
As a result, the Bank of England forecasts suggest inflation will remain above its target of 2% for the
next two years. Whilst we cannot as a region influence price levels, it is important that we work to
degree-level active businesses to finance schemes and resources to help ensure the appropriate supports are in place to enable businesses to respond effectively to these
or above businesses with their preparations for Brexit. challenges, for example, by helping them innovate to reduce costs and by taking measures to enable
local property and labour markets to work effectively.
northeastgrowthhub.co.uk/toolkits/brexit-toolkit/
14 15
Policy and funding opportunities
We are at a time of change in the public policy environment. Publication of the Industrial Strategy in 2017 has increased a focus on improving productivity
and living standards, whilst there is increasing recognition that decision making should be closer to residents and businesses, with devolution and the
development of new structures at the Northern Powerhouse level both forming part of this shift. In addition, the UK’s decision to leave the European
Union will lead to a new funding environment for delivering growth. All of these changes will provide new opportunities for the North East and partners
will need to work together to capitalise on them.
Our opportunities
It is a time of significant change in the global economy, which presents both opportunities and Devolution
challenges for the UK and the North East. Industrial Strategy
The first devolution deal in the North East was announced in 2018 for the North of Tyne
We are well positioned to capitalise by using our regional assets and strengths to create and Government published the Industrial Strategy: Building a Britain fit for the future area, that has seen the introduction of a Mayoral Combined Authority, new powers
sustain employment, improve productivity and competitiveness and focus on solutions to wider in 2017. The aim of the Industrial Strategy is to boost productivity by backing in a number of policy areas and a £600 million investment fund available over the
regional challenges. At a point of significant national policy change, and changes in our international businesses to create good jobs and increase the earning power of people next 30 years. This will create opportunities across Newcastle, North Tyneside and
relationships, regional governance and UK policy arrangements, we need to develop new mechanisms throughout the UK with investment in skills, industries and infrastructure. The Northumberland that will benefit the wider region.
for delivering the priorities and programmes set out in this Strategic Economic Plan. strategy is structured around five foundations of productivity:
The North East Combined Authority will continue to support economic growth in the other
four local authority areas and the two Combined Authorities will work together through a
• I deas – the world’s most innovative economy
Joint Transport Committee to oversee regional transport.
•P eople – good jobs and greater earning power for all
Our global opportunities • I nfrastructure – a major upgrade to the UK’s infrastructure
The region is committed to progressive devolution of powers and resources to support
the economy and will continue to seek to extend devolution to the North East.
•B usiness environment – the best place to start and grow a business
Digital transformation
•P lace – prosperous communities across the UK.
The capacity for digitalisation to transform our economy and society is increasingly recognised. It is globalising communications, relationships and Northern Powerhouse
economic activity. There are opportunities for growth and competitiveness through digital connectivity, new service and business models across the It provides the overarching policy framework for Sector Deals between North East partners play an important role, working with others through the Northern
economy and a range of digital sectors. However it brings with it risks of data security and social and economic exclusion. The UK aims to play a leading government and key industries within the UK economy. To date, a number Powerhouse. Research shows the North East has a stronger potential for growth than others
role in global digital transformation. The UK Digital Strategy in 2018 sets out a number of themes that offer opportunities for the North East. These of Sector Deals have been developed and published, setting out priorities in the North between 2019 and 2050.
include the use of smart data, the digitalisation of our region’s transport, energy and wider utilities infrastructure and sectoral change in areas like for growth and productivity in these sectors, with other Sector Deals
forthcoming. A number of these are focussed on key North East sectors 2018 saw the introduction of a new structure that brings together the 11 northern LEPs and
health, manufacturing and construction. The North East has a strong digital eco-system and partners are working together across business, education government, through the NP11, to contribute to stronger leadership and co-ordination across
and the public sector to take advantage of areas of specialisation, providing national leadership and demonstrating areas of digital delivery. Each of including:
the North of England, focused on Northern economic growth.
these offers a way to further grow the North East’s digital sectors and secure investment.
•A utomotive The NP11 will work with others, including Transport for the North, business and political leaders, to
• L ife sciences drive stronger Northern growth in areas such as energy and manufacturing, and to strengthen our
Improving health and responding to population ageing economic infrastructure.
•O ffshore renewables.
Transport for the North and Rail North focus on increasing connectivity and reducing
Across the world, innovation in approaches to drugs, treatment and public health practice are changing the structure of health and care systems Another feature of the Industrial Strategy is that it identifies four Grand journey times across the North.
and improving lives for many people, opening up new potential for the North East. The response to demographic change is an increasingly dominant Challenges for government and the wider economy. These are major
economic theme. The global population is projected to make a fundamental age shift to an older population by 2050, where it is expected there will global challenges that the UK needs to respond to – but that also provide
be 2.1 billion people over the age of 60 globally, an increase of 218% compared with 2017. This necessitates a rethink of systems across economies – significant opportunities for businesses. The Grand Challenges are:
including employment, health care, finance and the structure of communities. The North East makes a significant contribution to the development and UK Shared Prosperity Fund
delivery of drugs and treatments and hosts excellent manufacturing, research and health care organisations with the opportunity for ongoing growth. •A
rtificial Intelligence and data economy – we will put the UK at the
forefront of the artificial intelligence and data revolution The UK Shared Prosperity Fund is government’s proposed funding mechanism that will
Through its science strengths, it has the potential to lead national adaptation to our ageing population and support new economic opportunities. replace current regional funding from Europe and UK sources after Brexit. At the time of
•C
lean growth – we will maximise the advantages for UK industry from the this Strategic Economic Plan’s publication, the scale, scope, timing and design of the UK
global shift to clean growth Shared Prosperity Fund has not yet been finalised.
The future of manufacturing
• F uture of mobility – we will become a world leader in the way people, The North East Brexit Group has developed evidence to demonstrate the impact and
While the UK as a whole has seen industrial restructuring away from manufacturing in favour of business and consumer services, the North East has goods and services move importance of previous regional investment from Europe in preparation for this new
retained a more balanced position. Manufacturing accounts for 15% of our GVA and 11% of employment. We have key engineering and manufacturing resource and will work with government and regional partners to influence the design and
•A
geing society – we will harness the power of innovation to help meet the
sectors in automotive, pharmaceuticals and energy sectors as well as a wider manufacturing footprint. Our capabilities in this area have earned a delivery of this fund, to ensure it is targeted at our regional priorities, set out in this plan.
needs of an ageing society.
reputation for quality and productivity and are unique among UK regions in maintaining a positive balance of trade in goods. Science and innovation
strengths in areas like batteries and fuels, processes and materials are accompanied by a growing reputation in automation and digitalisation of Underpinning the Industrial Strategy are a number of strands of investment,
manufacturing systems. As international markets and products change, and the UK Industrial Strategy focuses on its long-term productivity challenges including the National Productivity Investment Fund. This fund has identified Partnerships
and opportunities in new global markets, the North East has the chance to build its productivity, grow its market presence and supply chains and a number of funding pots within it, including the Industrial Strategy
continue to deliver sustainable, higher value manufacturing processes and practice. Challenge Fund and Strength in Places Fund. Continuing to work with partners in other areas is fundamental to the successful delivery of
our plan. We must look outside, as well as within, the region to progress.
The North East Local Industrial Strategy
Tackling climate change and promoting clean growth Our key partnerships include:
Reflecting the place agenda, the Industrial Strategy sets out plans for all •T he North East Combined Authority
The Katowice Climate Conference in December 2018 was the latest stage in an increasingly urgent global discussion about how the world will work areas to develop a Local Industrial Strategy that sets out how growth and
together to shift towards a zero-carbon economy. The UK has adopted stretching targets to reduce emissions, providing a strong focus for sustained
•T he North of Tyne Combined Authority
improved productivity will be delivered. • The Northern Powerhouse
investment with an estimated $13.5 trillion expected between 2015 and 2030. Key priorities that offer significant opportunities for the North East
include reduction of carbon emissions through shifts in energy generation technologies and investment in zero carbon transport. New markets are The North East Local Industrial Strategy will be led by the North East Local •T he Borderlands Partnership
available thanks to a wider environmental agenda encompassing water management, the sustainability of natural assets and the use of technologies to Enterprise Partnership, together with partners and will be developed during 2019. •T he strength of the working relationships with our business representative organisations
replace plastics and change construction. and education sector.
16 17
The North East Strategic Economic Plan
The Plan aims to create more and better jobs
Our aim is to have 100,000 more jobs in the North East economy by 2024 than there were in 2014 and for
70% of these to be better jobs. We define better jobs as managerial, professional and technical roles.
Our plan Reduce the gap in private sector
employment density by 50% by 2024
Close the gap in the employment rate
for people aged 16-64 by 50% by 2024
Reduce the gap in economic activity
Reduce the gap in productivity by 50% by 2024
for people aged 16-64 by 50% by 2024
Four areas of strategic importance
Key targets Four areas of strategic importance, where evidence
tells us our assets and capabilities provide a strong
This is the North East’s Strategic To measure progress against this ambition, we have set opportunity for growth:
Economic Plan, developed, owned six targets. Reflecting our ambition to deliver more and
Digital Advanced Manufacturing
better jobs, the headline targets are: Digital Health and life sciences Energy
and delivered by the North East
Advanced manufacturing Specialising in software, Specialising in Excelling in clinical Expertise in offshore
for the North East. To increase the number of jobs in the North East cloud computing, automotive and medicine research, innovation in Energy and subsea
economy by 100,000 between 2014 and 2024 communications, manufacturing
Health and life sciences pharmaceuticals, responding technologies, regional
buildings information to an aging population energy and demonstration
For at least 70% of the new jobs, to be better jobs.
Energy modelling, gaming. and innovation
The North East Strategic Economic Plan is our plan A better job is defined as being in managerial, Emerging specialisms
to grow and develop the region’s economy. It is an professional and technical roles Four service sectors that support the wider economy include data analytics,
evidence-based response to our long-term economic and offer significant opportunity for more and better immersive technologies
challenges and opportunities that were identified by the We have also set four targets where we aim to improve
jobs in the North East: and cybersecurity
North East Independent Economic Review in 2013. our performance relative to England excluding London.
Education Four service sectors to support growth and better jobs
The Strategic Economic Plan was initially published Delivery against these will mean we have a stronger
A place that works
in 2014, for a ten year period and demonstrated North East economy, whilst also contributing to Financial, professional and business services
how we would drive forward a modern, diverse and rebalancing the national economy.
Transport and logistics
entrepreneurial economy that was agile in the face of
The four targets are to:
change and will deliver economic benefit to residents Construction Financial, professional
and businesses across every part of the region. Reduce the gap in private sector employment density Education and business services Transport and logistics Construction
by 50% by 2024 Five programmes of delivery that set out initiatives and
The Plan has been refreshed and updated as our projects that will deliver the ambitions of this Plan. They are:
economy and the environment in which we operate has Close the gap in the employment rate for people
changed and our economic base has developed. aged 16-64 by 50% by 2024 Business growth
The shared economic plan Reduce the gap in economic activity for people Innovation
aged 16 – 64 by 50% by 2024 Skills, employment, inclusion and progression Digital transformation
Partners from across the region have worked together to
develop the Plan and there is collective agreement that Reduce the gap in productivity by 50% by 2024 Transport connectivity
our focus should be to deliver more and better jobs and
Five delivery programmes
have a more entrepreneurial economy. The benefits of Investment and infrastructure
Delivering our plan
growth are spread to our regions people and community.
It is the region’s plan and collective agreement to its In addition to the Independent Economic Review, Digital technologies will impact on all aspects of the
ambition was fundamental from the outset. international evidence and examples of best North East economy and society.
practice tell us that economies should always be
There is also a shared commitment that the To reflect this, digital transformation will be considered
built on regional strengths and capabilities, whilst Business growth Innovation Skills, employment,
improvements that bring about these more and better within all aspects of our plan. inclusion and Transport connectivity
acknowledging and addressing challenges.
jobs should deliver a more productive, competitive, progression
resilient and inclusive economy. A coordinated, integrated, partnership approach
We have reflected this in our plan by identifying:
to all of our delivery that reflect the opportunities
and challenges identified is essential to the success
of this plan and our contribution to rebalancing the
national economy. Investment and infrastructure
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