Cautious welcome for additional �67.5m investment in Leeds City Region amid calls for end to �devolution deadlock�

Image: Northern Powerhouse minister, Andrew Percy MP, looking at plans for the Leeds Flood Alleviation Scheme.

  • Additional investment to boost jobs and growth is on top of existing £1bn Growth Deal investment to date – the largest package in the country
  • Over 19,600 jobs expected to be created thanks to total £1.1bn Growth Deal investment in Leeds City Region over the next five years
  • Investment includes £20m for new flood prevention measures in Leeds, Calderdale, Bradford, Skipton and Kirklees
  • Business and council leaders express disappointment however over comments by the Northern Powerhouse minister, Andrew Percy MP today and call for for pragmatic solutions to end the “devolution deadlock” in Yorkshire

The Leeds City Region Enterprise Partnership (LEP) and West Yorkshire Combined Authority have secured an additional £67.5m devolved government funding to boost economic growth in the region and create jobs it was announced today.

Having secured the largest package of Local Growth Deal funding nationally in March 2014, the further funding announced today brings the total Growth Deal investment for Leeds City Region to in excess of £1.1bn. Together, this investment is expected to create over 19,600 jobs in the region over the next five years. When other public and private sector investment secured by the LEP and Combined Authority is factored in, this rises to a projected 36,000 jobs by 2036.

Among the investment, £20m has been secured to strengthen flood defences in Leeds, Calderdale, Bradford, Skipton and Kirklees. Funding has also been secured to support businesses to grow, create jobs and export, attract new firms into the City Region, and bring forward key housing and development sites.

Although welcoming this additional government investment in the region, business and council leaders expressed disappointment over remarks made by the Northern Powerhouse Minister, Andrew Percy MP earlier today, about proposals to explore all available options for extending the benefits of devolution to Yorkshire.

Roger Marsh OBE, Chair of the Leeds City Region Enterprise Partnership (LEP), said: “Through our Growth Deal investment so far, we’re already well on track to create 36,000 jobs here in the UK’s largest city region outside London. I am particularly pleased to see the Government allocate additional investment today to attract new businesses into our region and to help small and medium-sized firms (SMEs) grow and export. The strength of commercial confidence in this region – evidenced by a £10bn-plus investment pipeline – is booming, and has elevated Leeds City Region into the top three areas outside the capital for foreign investment.

“To continue this extraordinary success however, it’s vital that our City Region secures a meaningful devolution deal that will enable us to become a global economic force that competes for the UK alongside London and Manchester. If not, we risk undermining the ambitions set out in the government’s newly launched industrial strategy by constraining the economic potential of one-fifth of the Northern economy. This is not in the country’s interest, particularly post-Brexit, and it’s certainly not in the interest of the 3 million people who live in Leeds City Region.

“I would echo the views express by business leaders that we need to explore all pragmatic solutions to end this devolution deadlock as quickly as possible. For economic transformation, a city region approach to devolution is progressing everywhere except Leeds City Region and I’m at a loss to understand why that isn’t the case here. On the face of it there are no legal barriers to this approach that government couldn’t overcome if they want to make progress locally.”

“As a businessman with over 35 years’ experience of deal-making, it seems as though we need to focus less on doing deals and more on making deals. To local leaders’ credit, they have agreed to explore a number of options in the interests of making a deal. Now they need clarity from government to find a workable, timely solution to this apparent stalemate.”

Councillor Peter Box CBE, Chair of the West Yorkshire Combined Authority and Leader of Wakefield Council, said: “Here in Leeds City Region we’re already having a real impact on our region’s economy as a result of our existing devolved Growth Deal investment. Through the schemes we already have underway or in the pipeline – including an overall £1bn package of transport improvements, world-class college and university facilities and new, affordable housing schemes – we’re beginning to see just what can be achieved through locally determined priorities and genuine partnership working between councils and businesses.

“The funding announced today is welcome, but is really a drop in the ocean compared with what our region needs to deliver the full extent of its ambition. As the country begins its exit from the EU we must ensure this ambition is matched by a sustainable package of investment and the ability to take even more decisions locally so that we can achieve the greatest possible impact for local people and businesses. This will only happen if government listens to local people and businesses, and allows council leaders to explore all options to ensure the 5m people who call our region home can begin seeing the benefits of devolution that their neighbours in Manchester, Liverpool and Birmingham will soon be enjoying.”

The £20m flood prevention investment announced today will put in place additional flood protection for homes and businesses in areas prone to flooding, including Leeds city centre and the Calder Valley, which bore the brunt of the 2015 Boxing Day floods that inflicted over half a billion pounds in lost economic output on the City Region according to a Flood Review published by the Combined Authority in December 2016. This investment is expected to safeguard 11,000 jobs and 1,300 businesses.

Leader of Leeds City Council, Councillor Judith Blake said: “This further investment in the region is welcomed, especially in further flood prevention measures. A year on from the Boxing Day floods, which in our City Region caused devastation and resulted in more than half a billion pounds in lost economic output, this funding is pleasing and we will continue to work with Government on the development of plans for the further comprehensive flood alleviation measures the city and region need.

“A devolution deal focused on the needs of our communities and businesses is one significant way that we can address this. As anyone who watched the devastating scenes following last year’s Boxing Day floods knows, this is about real people’s homes, lives and jobs – it is not a political football. We need to rise above party politics and reach a devolution solution that will genuinely make people’s lives better – not simply one that’s politically expedient.”

New investment to help businesses in the region grow and export is expected to support at least 200 firms overall in the next five years and create 1,200 jobs. It includes funding to extend the LEP’s existing capital grants programme for small and medium-sized enterprises (SMEs) looking to expand or invest in new equipment, and to help a further 50 companies exploit opportunities in overseas markets. The new export support programme is especially important in the wake of Brexit, since 56% of the Leeds City Region’s existing trade is with the European Union – a significant proportion compared with other regions.

The latest Growth Deal investment will also see 300 new homes being built in Halifax and Wakefield, as well as bringing forward development on the City Region’s Enterprise Zone sites in Bradford, Calderdale, Kirklees, Leeds and Wakefield which collectively are expected to provide 6,000 new job opportunities. This includes a new substation on the Leeds Enterprise Zone site to meet current and future power demand by businesses.

The only area of the LEP and Combined Authority’s strategic priorities not to benefit from additional funding is skills investment in new FE college facilities. The LEP’s £79m skills capital investment over the past two years is set to contribute £600m to the region’s economy as well as create new world-class learning facilities to help local young people develop the skills to progress in growing industries.

Councillor Susan Hinchcliffe, Leader of Bradford Council and Deputy Chair of the LEP’s Employment and Skills Panel commented: “I welcome the additional funding for our City Region which the government has announced today. It will help us build on the progress we’ve already made and create invaluable new employment and business opportunities in the region.

“It is a pity that we haven’t secured further investment in new FE college facilities however as a LEP and Combined Authority we have committed to look at how we can use our own, local sources of funding to deliver future improvements in FE college facilities and will continue to work with government to ensure that skills and jobs are at the heart of our region’s response to devolution and the Industrial Strategy..”

The LEP and Combined Authority’s £1.1bn Growth Deal investment is part of an overall package of economic and transport investment – including public, private and secured European funding – that is ultimately expected to create 36,000 jobs in the region by 2036 and add £3.6bn GVA to the Leeds City Region economy.

The initial Leeds City Region Growth Deal, secured by the LEP in March 2014, was the largest Growth Deal settlement of any LEP area in the country. Unlike anywhere else it included up to £420m “gainshare” funding over the next 20 years that has enabled the Combined Authority and local council partners to put in place an overall £1bn investment package to upgrade West Yorkshire and York’s transport network.

The first scheme to benefit from this transport investment – the £33m Wakefield Eastern Relief Road – is set to complete early this year, opening up new development land and job creation opportunities.