Business and Trade Committee
Oral evidence: The performance of freeports and investment zones in England, HC 272
Tuesday 21 November 2023
Ordered by the House of Commons to be published on 21 November 2023.
Members present: Liam Byrne (Chair); Douglas Chapman; Ian Lavery; Andy McDonald; Charlotte Nichols; Mark Pawsey.
Questions 133 - 177
Witnesses
II: Oliver Coppard, Mayor, South Yorkshire Mayoral Combined Authority; Ben Bradley MP, Leader, Nottinghamshire County Council.
Examination of witnesses
Witnesses: Oliver Coppard and Ben Bradley.
Q133 Chair: Welcome to the second session of the Business and Trade Committee here this morning. I am delighted that we are joined today by two of our regional leaders, Oliver Coppard and Ben Bradley. Thank you very much indeed. Would you mind just saying a word of introduction and we will dive straight into the questions.
Oliver Coppard: It is nice to see you all. I am really happy to be here to talk about the UK’s first investment zone, which is indeed in South Yorkshire. We are really proud and pleased that it is there and genuinely grateful for the opportunity to extol the virtues of what that looks like and how we have been working through that problem.
Ben Bradley: Hello. Thank you for the invitation. I am Ben Bradley, Member of Parliament for Mansfield, as well as leader of Nottinghamshire County Council, working through building our East Midlands combined authority and all the integrated parts of that within the region. Hopefully, we will touch on some of those challenges and opportunities over the course of the next hour.
Q134 Chair: One of the contexts for this inquiry is the regional inequalities that have bedevilled our country for a long time. Both freeports and investment zones are in part designed to deliver on levelling up. They are designed to help deliver lots of jobs, lots of businesses and more productivity. They are designed to help us close the gap between regions and the English averages. Oliver, could you just say a word about what you hope your policies around investment zones and freeports will deliver in terms of jobs, productivity and growth?
Oliver Coppard: The numbers around the investment zone are that we hope that it will deliver £1.2 billion of growth and 5,000 jobs over the next five years. They are the headline numbers. We are pretty optimistic about that.
More broadly speaking, that is allowing us to build what has been a regional strength for South Yorkshire for, arguably, not just 20 years but 200 years. South Yorkshire was the first place to mass produce steel, then the world’s first advanced manufacturing innovation district and now the UK’s first investment zone.
What we are hoping that allows us to do is, in the first instance, shout about the fact that we have this regional strength in South Yorkshire that we are incredibly proud of, but then crowd in the investment around that strength—advanced manufacturing, some stuff around health, AI, digital, propulsion and other things—and create that regional powerhouse that helps drive not just the economy of South Yorkshire but the economy of the whole of the north of England, indeed the whole of the country. That is the plan. That is absolutely what we are committed to. We were really pleased that the investment zone allowed us and will allow us to turbocharge some of that growth.
Q135 Chair: When you think about the gaps between your region and where you want to be, how important are freeports and investments zones in helping you close that gap? How do you feel about the impact they are going to make in closing that?
Oliver Coppard: I would describe it as a good starting point. An investment zone cannot be a growth plan for the whole of South Yorkshire. Indeed, we are in the process of developing a growth plan for South Yorkshire, essentially a regional industrial strategy. That is what we are in the process of developing within the combined authority. The investment zone is certainly part of that regional industrial strategy. We are very pleased with that, but we have a number of challenges when it comes to that growth strategy that the investment zone does not address.
For instance, a third of our productivity challenge is related to health outcomes. South Yorkshire has a healthy life expectancy gap of around 20 years from richest to poorest. We have lost about 40% of our bus networks over the last decade alone. We have a number of challenges that the IZ does not address. Therefore, when looking at that through a wider lens about how you might level up this country, you need a proper industrial strategy for South Yorkshire and, I would argue, the whole of the country. The investment zone is part of that but it cannot be the whole game.
Q136 Chair: Ben, how do you think about the goals you are trying to secure through what you have?
Ben Bradley: We have a complex range of structures across the East Midlands: investment zone, freeport, development company with powers allocated in the levelling-up Bill, and an emerging combined authority. It is a complicated picture, but each of them brings its own opportunity.
People often talk about the north-east and other places, but the East Midlands has been the lowest-funded region, in terms of both private and public investment, over many decades. The opportunity to level up, to coin a phrase, is exciting. It is the first time that we, regionally, have felt that there have been significant projects, vehicles or Government investment that has come our way. We very much welcome it.
In terms of the opportunities around drawing in that private investment in particular, we historically have struggled to do that without these kinds of vehicles and incentives. We have a very complex set of local governance.
Chair: It sounds really complex.
Ben Bradley: Yes. Even in a two-tier system, we have struggled to articulate our set of regional priorities and to sell that to Government with a shared view of how all these things work, because inevitably every district council leader has a different view of what they want and where they want it. These things have helped us to co-ordinate and build a plan around growth in the region.
We have a particular focus on some key sectors around advanced manufacturing and clean and renewable energy, in particular, which build on some anchor industries, with businesses such as Rolls-Royce, Toyota and STEP fusion in the north of the county. Investment zone incentives, both in terms of attracting people in that sector to those sites and to build around those hub industries, and also capital investment, to capitalise on things like fusion and put the infrastructure in place, is an exciting opportunity for us.
Q137 Chair: I have a similar question to Oliver. When you are thinking about the gap that you are trying to close, how do you think about the contribution that is made by investment zones or freeports?
Oliver Coppard: We all talked for a long time about higher-skilled and higher-paid jobs in that sense. A lot of our region is characterised by the opposite, by fairly uncertain and low-paid work. From a constituency MP perspective, I have certainly considered, when you look at the jobs in clean energy, for example—future-facing, sustainable jobs that are better-paid and higher-skilled—they are opportunities that my constituents have not really had since the pits shut, in many ways. Those jobs do not really exist, so that is exciting. When you look at the stats around that regional inequality and the challenges we are seeking to address, there are all sorts of figures about GVA and everything else that we can throw into the mix, which will help us to balance some of that up.
I am always acutely conscious as well that you have trailblazer programmes that exist in other places, particularly the West Midlands and Greater Manchester, with which we are still trying to catch up. For all of these incentives and opportunities to deliver more and create more jobs and growth in our area, I am always keen to continue to catch up with those places.
Q138 Chair: Oliver used the phrase “starting point”. Is that language you would use?
Ben Bradley: That is right. I know you have heard from officials. You probably have heard about the positive benefits and opportunities of each of these different pots—investment zones, freeports and others—and the challenge of trying to draw all of that into a coherent strategy when they have different boundaries and different governance. That is our current piece of work. Therefore, it is a starting point. We are not there yet, but I hope that the combined authority, when it comes into place in May of next year, will help bring some much clearer structure to that and help us maximise the benefit.
Q139 Ian Lavery: You have both basically just touched on the local economic growth strategies in the regions. They will be numerous in each region. How do the freeports and investment zones align with the strategies in both of your regions?
Oliver Coppard: The investment zone is essentially just one part of the growth strategy that we are developing for South Yorkshire. Quite honestly, even if we had not had an investment zone, we would probably be doing similar things, albeit with less money and less support from Government. Our strategy is absolutely going to be centred around things like advanced manufacturing, making sure that we make the most of those world-leading technologies that are developed in South Yorkshire and some of those companies that are based in South Yorkshire now, uniquely. For instance, Boeing has its only manufacturing facility in the whole of Europe in South Yorkshire. That is just off Parkway in Sheffield.
We want to create that world-leading centre for those sorts of technologies. The investment zone has helped us to do some of that more quickly, to go further and to go a bit faster, but it is a relatively small pot of money when you look at it in the context of what we need to achieve just to hit national average in terms of jobs. We probably need another 30,000 jobs. We also have those other challenges I just mentioned to the Chair around health and things like public transport. The investment zone is one part of what we are able to now achieve, but it is not going to be the whole answer. We would have probably been doing a lot of that even without the investment zone, albeit we welcome the opportunity to work with Government to design some of those schemes.
Q140 Ian Lavery: Basically, it is supporting the schemes you already have in place.
Oliver Coppard: Yes. To be fair to the Government and to give them some credit, the initial proposal, as it was designed, in my understanding—the one that was first mooted by the Liz Truss-Kwasi Kwarteng Government—was not something that South Yorkshire could have taken part in. It was about deregulation, as far as I understand it, and that is not something South Yorkshire would have wanted to be part of.
The Jeremy Hunt proposal was actually to come to South Yorkshire, among other combined authorities, and talk to us about what sort of scheme we wanted to put in place. I welcomed that conversation with Government. Indeed, that sort of grown-up policymaking, where the combined authority, through the mayor, through my office, was able to work with Government to design that plan around what we needed to advance our advanced manufacturing sector, was a welcome approach to how we could design policy.
Ben Bradley: We are in the opposite position, in that we do not have a combined authority. We are building one as we speak. As I mentioned before, the complex decision-making structure means we have not really had a regional growth strategy before. It tends to be all a bit siloed and all a bit difficult. The investment zones, freeport and other regional significant projects have helped us to start a more joined-up conversation about what our wider growth plans look like and, as Oliver talked about, applying an investment zone to our combined authority plan and what we are trying to do.
We are almost trying to now design a regional growth plan and combined authority off the back of what we are delivering. It helped us to start to just have that conversation and strategy building around what our region is about, what the key sectors are that we want to support and what kinds of incentives and infrastructure we need to deliver that.
I hope that in the future, post May, with a mayoral combined authority in place, you can then start to implement some of the work around things such as what infrastructure we need around these sites when we have additional powers and funds around transport and skills in particular, which should help us to embed that strategy across the whole wider area, beyond the specific sites that are within these incentives.
Q141 Andy McDonald: I would like to just focus on governance for a moment and ask you, as local leaders, how you are linking into the governance of freeports and investment zones respectively, and what opportunities you have both had to develop policies in the area, so that it is effective for your own regions?
Ben Bradley: There has been a real politically led approach to some of the governance. I certainly feel we have had a good opportunity to engage with it. I am slightly unique in the sense that I probably have more access to Ministers than a lot of leaders. I have certainly felt that we have had a good conversation. My council is a member of all of those schemes; it is the owner in some cases, such as in the case of the development company. We have played a really significant part in moving these things along. That has been challenging through Covid and all sorts of other things that have happened in the interim, so it has not been as fast as we would have liked it to be, but it has been positive.
Now, it is the same partners in most cases who are now building a combined authority and trying to pull these things together. You will probably have heard from Tom, from the freeport, earlier on that we are trying to bring these things and the governance of all these things into some alignment now. That is quite tricky, because some sit over different geographies that include Leicestershire and some do not. We are finding that quite a challenge. Again, the combined authority has given us a bit of a deadline and a bit of impetus to sort that out over the next six months in advance of that election.
Q142 Andy McDonald: Are you content with the arrangements around transparency, governance and proper procurement? This is an awful lot of public investment here, and there is quite a lot of trust that has gone out of this place and Whitehall. It is important to make sure that we take the public with us on these journeys for growth. Are you satisfied that is in a healthy position?
Ben Bradley: I think so. I have had many very detailed conversations about things such as procurement, financial risk and others from an accounts perspective, with really significant input into what we are comfortable with, from a local authority perspective, and what risk we are prepared to carry.
A lot of that has been in the public domain. We have published significant papers and council reports into that just a couple weeks ago to sign off the final business case with our assurances as to the financial management of all of that. Our officers—151 officers and others—are comfortable with where we are. As I say, a lot of that conversation has actually happened in a relatively public forum, aside from commercially sensitive elements of it. We have debated it widely across multiple local authorities in a public conversation.
Oliver Coppard: In terms of the formal governance structures, we have an advisory board for the investment zone that includes the local authorities; universities; what we call the Olympic Legacy Park, which is one of our significant assets in the Advanced Manufacturing Research Centre, which Steve, the previous witness, is in charge of; private sector members; and somebody from what is called our business advisory board, which is a formal part of the governance structure of the combined authority. We have just refreshed the combined authority’s governance structure, but ultimately the MCA board, with me as chair of the MCA board, is responsible for the overall investment zone and what we do more broadly.
Your point is the right one, though, which is that absolutely we have to take the public with us on these journeys towards growth. The challenge is that, for a relatively new organisation such as mine, with relatively new structures, mayors included, we have to absolutely win the trust of the public. It is incumbent upon us to do that through this process. We cannot be legitimate if we are not transparent.
Devolution gives us the opportunity to do this in a different way, to do politics differently. I look people in the eye when I make the decisions I make, because I know my region and I know the businesses that we want to invest in in South Yorkshire that are on the investment zone. Through this process, we can do more than just create those formal structures.
I do not argue that we have necessarily got that entirely right yet, but what I am keen to do is lean into that process, so make sure that we are doing that in the most transparent and accountable way that we can, to create the legitimacy we need if we are going to have that successful growth strategy and take our communities with us on that journey.
Q143 Andy McDonald: Looping back into the central Government, you two have had direct experience of engaging with central Government. Does that differ depending on which Department? Freeports were Treasury initially, and then of course investment zones developed in DLUHC. Are there any observations you have as to the qualities or deficiencies in either of those arrangements?
Ben Bradley: They are not always the same, it is fair to say. Just to pick up on what Oliver just said there, the thing we could add in terms of that visibility and accountability is what we are working on, which is that accountable person that we do not have that we are working towards. That will help us with the public conversation.
I have to say that our day-to-day engagement has been largely with DLUHC from a council perspective. The freeport is more of an independent private sector-led organisation, with a different board, so its engagement with Treasury is probably more direct than mine. DLUHC officials have been hugely helpful and we have had a really iterative conversation around lot of these things and how we bring them forward.
The alignment is an interesting one, because Treasury would very much like our regional growth plan to be freeport-led. We have a challenge, as I have described, because the freeport sits across in Leicestershire as well as with us, and the geography is different, so it is a little bit messy. I am not sure that DLUHC and Treasury have necessarily the same or a shared view on how that should work. That is probably one element.
Q144 Chair: How do you mean, Ben?
Ben Bradley: We have a combined authority in the one sense.
Q145 Chair: How do you mean Treasury and DLUHC do not have the same view?
Ben Bradley: We have the combined authority, and the devolution part is very DLUHC-led. We would like, they would like and everybody logically would like a coherent set of geography and boundaries that are all very easily managed. That is tricky when you have a freeport that crosses that border into Leicestershire. It is a very complicated region. We are unique in the sense that all of these other things have gone to an existing combined authority with a clear boundary, whereas we have had all of these things layered over time and then are trying to apply logic to the top of it, if you know what I mean, which we will get to and we will get there. It is a complicated set of arrangements, as it stands at the minute.
Q146 Andy McDonald: Oliver, is this a complex tapestry that is unravelling?
Oliver Coppard: There certainly is a complex tapestry. I would pay credit to officials in DLUHC, who have been incredibly helpful on a number of these issues that we have been working on them with, not just the investment zone but a broader suite of issues.
On the investment zone, Treasury officials were largely helpful. One of the challenges we faced, because at the same time as announcing the investment zone we announced the second phase of our investments from Boeing, is we were talking to different bits of Government NDPBs, et cetera, that were being asked to fund that investment, but there was no single place for us to have that conversation. That was absolutely a challenge.
This goes back to my point in my original answer about an investment zone not being a growth strategy for the whole region. My job is growth. I am intending absolutely to grow the economy of South Yorkshire, to create a bigger and better economy in South Yorkshire, but if I am going to do that, I need to be able to have conversations with Treasury, DLUHC, the Department of Health and the Department for Transport, in order to be able to fit all those pieces of the jigsaw together to create that growth strategy for the region. As mayor, I have that ability, or opportunity at least.
Q147 Andy McDonald: If you do not have a single point of contact with Government to say, “There is my go-to place”, how the hell are businesses going to cope with the complexity of this, if you are struggling to get across all of these different environments?
Oliver Coppard: The Government’s answer to that would be that, through the trailblazer deals, what they are doing—or at least this is the intention—is giving combined authorities such as Greater Manchester and West Midlands those single pot settlements, where they get one pot of money and they get things like business rate retention, and then essentially you go to the combined authority and it works with you on that growth plan.
What we need is a more sensible approach to the way in which a mayor, one person, can work with Government and ideally one Department, which can then work with us on a strategy for growth and design those policies in a way that we have said our people, our communities want to see them done. As mayor, I have that democratic mandate and should be able to have that conversation with Government and to deliver on those promises.
Q148 Andy McDonald: A trailblazer will bring it together, with transparency as well, to boot.
Oliver Coppard: Yes, absolutely.
Q149 Chair: Ben, this is mind-blowingly complicated. You have a mayoral combined authority coming, you have a freeport, you have an investment zone, you have a county council and you have a district council. When you are on the doorstep, how do you explain this to voters? How do you say, “Look, your money is safe”?
Ben Bradley: It is fair to say the implementation is much simpler. You have a freeport with a board, where we all go, we sort it out and we manage it.
Q150 Chair: Let me put it like this. I am a humble voter. You have just knocked on my door: “Hello, Ben. Nice to see you. What is going on with all of these different authorities? Who does what? How are you going to make sure, Ben, that my money is safe when you have five different layers of local authority and five different sets of politicians involved?”
Ben Bradley: That is a slightly separate conversation from the implementation of the investment zones and freeport in itself. We have a multi-tiered set of Government structures. That is not the most efficient way to run local services. That is a debate we have about the nature of two-tier authorities within counties. Most counties around the country are the same in that sense.
What we are trying to do in terms of bringing coherence and understanding to it is, in effect, the combined authority, in the same way that Oliver has described a single accountable person. Whatever the levers, whatever the vehicles for delivery of growth, having a freeport is not an end in itself. It is a vehicle for the delivery of incentives. All of that, fundamentally, from May will be the responsibility of the mayor and the combined authority. That is where we need to get to, to have that clarity.
Chair: That sounds like a long conversation on the doorstep.
Q151 Mark Pawsey: I have a question about fiscal devolution, but I just want to ask something first of all. We have two regional leaders here and a previous panel talking about growth through creating high-value, better‑quality jobs. Where are the workers going to come from?
Oliver Coppard: In South Yorkshire, we are actually over-skilled for our current trajectory around growth. South Yorkshire has two big universities, world‑class universities. Around 10,000 graduates come out of those universities every year. Often, those graduates will stay in employment in their first job, if I am not being too disrespectful to those graduates—I was one of them—happy to live in shared accommodation on relatively low pay. As soon as you want to move up that career ladder in South Yorkshire, that is where the problem emerges. South Yorkshire’s economy is not complex enough. There are not enough tradeable jobs.
Q152 Mark Pawsey: You are losing the skills.
Oliver Coppard: We are losing the skills, because they are going elsewhere to those places that have better growth, more jobs and more opportunity. That is the challenge that we are trying to address through our growth plan, creating those types of jobs, particularly in the service sector.
Q153 Mark Pawsey: That is to hang on to the people who are already there.
Oliver Coppard: To a certain extent, it is hanging on to those people that are already there, and then, over time, bringing in those people who we would also want to come and join South Yorkshire’s economy in order to create that growth. That is the problem Ben mentioned earlier: if we do not see levelling up right across the country, and indeed where we see different deals in different places and a piecemeal approach to that devolution strategy, we are going to end up with certain parts of the country sucking in those graduates, sucking in the jobs and the growth, particularly if you look at the north-west, which has done a great job of growing, particularly Greater Manchester.
The economy in South Yorkshire in the early 2000s was around 99% as productive as the economy of Greater Manchester. At the moment, the economy of South Yorkshire is 90% as productive as the economy of Greater Manchester.
Q154 Mark Pawsey: That is because there are jobs for the graduates to go to in Greater Manchester. Is that what you are saying?
Oliver Coppard: Yes, indeed. We are not creating those jobs for people to progress through their career, and the types of jobs that people stay for, in South Yorkshire. That is what we are trying to do through our growth strategy and certainly through the investment zone.
Q155 Mark Pawsey: Is it the same in the East Midlands, Ben?
Ben Bradley: It is very similar in the sense that we have that flow out of the most qualified people, who tend to go off to university and not come back, which is a source of great frustration. Some of that is in terms of creating that higher-skilled and higher-paid work. It is important to try to tackle that. We have huge areas of potential workforce that are not currently in work, for whatever reason, particularly under-23s and over‑55s. These are national trends.
Q156 Mark Pawsey: Are they going to be sufficiently skilled for these jobs you are about to attract to your area?
Ben Bradley: This is the benefit of tying this into the combined authority and particularly controlling funding around skills, working with our institutions, which we are already seeking to do. Through levelling-up funds, for example, we have significant investment in automation, research, productivity and new sites around the county. There is a lot of work going on with our education providers about how we draw businesses into all of that and how we upskill people or retrain people, in particular. There is all sorts in that kind of space, drawing people back into the workforce. We have one of the highest levels of economic inactivity anywhere in the country, particularly in my own constituency.
Q157 Mark Pawsey: That is my point. Are they going to be ready to take advantage of the new businesses that you are going to attract through your investment zone and freeport?
Ben Bradley: You are not necessarily going to take somebody from years of economic inactivity and make them a nuclear physicist, but clearly all of those industries come with supply chain and with much wider benefit. We have talked very recently about fusion, for example, and we have got probably 1,500 jobs in clean energy, STEP fusion, in Bassetlaw in the north of Nottinghamshire. Maybe 10% of those people are scientists. The first person you will meet is a security guard and then a receptionist. It comes with wider supply chain engagement.
A lot of those businesses exist. It is about connecting the dots between our skills providers, education—colleges and universities—and business in that sense, which is a national challenge we have been trying to tackle for a while. We are certainly able, through these mechanisms and through having a clear strategy now, with levers and funding coming through the combined authority, to have a much better conversation about that and to tie it together.
Q158 Mark Pawsey: Can I just moved on to my main question, which is about devolution? We are the most centralised country in the world. This is a first step to passing over powers from Whitehall into regions. My observation is that local leaders always ask for more powers and then get worried when they get them, because they are bothered about the responsibility that comes with them. What is the opportunity and risk trade-off that you see with these additional powers?
Oliver Coppard: Before I answer that, can I just come back on your previous point to Ben, because you talked about connecting up jobs and opportunity? The example I would point to in South Yorkshire is the Advanced Manufacturing Research Centre training centre. It is a brilliant place. You can go from essentially 16 years old, get an apprenticeship right through to 30‑plus with a PhD, working for a world-class company.
They can take on a few hundred people a year—it is hugely oversubscribed—but without the public transport connectivity between that site and the outer-lying reaches of South Yorkshire that are not connected at the moment, it does not matter how much opportunity is in the investment zone on the advanced manufacturing park. Unless you have the transport connectivity to get people to those opportunities, it is never going to work. That is what I mean about this having to be a bigger growth plan.
Q159 Mark Pawsey: This Committee visited a few years ago under the previous chairmanship; the concern was about the gender mix of the people in the building that we saw. I hope you are addressing that.
Oliver Coppard: We are indeed.
Q160 Mark Pawsey: Going back to my devolution question, what are the risks and rewards?
Oliver Coppard: I imagine I speak for most mayors when I say I did not take this job on because it was easy. Indeed, I took it on because it gave me an opportunity to do big and difficult things, and do things for my region that otherwise would not get done.
I welcome the opportunity to have that responsibility, to devolve more powers to South Yorkshire, to have more fiscal devolution so that we can make some of those decisions in the interests of South Yorkshire, based on what people in South Yorkshire want and need. Coming back to a previous question, that has to be allied to more transparency and accountability, so that those measures are legitimate and indeed come with the content of the public. You would not find a mayor in this country who is not saying, “Give me more powers. Give me more responsibility, because I want to take that on on behalf of my region”.
Q161 Mark Pawsey: Ben, we have already heard that your set-up is a little more complex.
Ben Bradley: Yes. I can talk about the perceived benefits of what we will get. We are not quite there yet; it will be next May. We talked a little bit before about that disconnect in Government silos and Departments and trying to join these things together. I have always been a huge advocate of place-based approaches to things. If you cannot join the dots across Government Departments, you can join them on a place basis, with local devolved funding and more control. That ability to create your investment zone, that big project, that business investment and tie around it the skills and training that you need, and the transport infrastructure that you need, is something that you cannot do here and you have to do locally.
Q162 Mark Pawsey: The risk is you do not have the powers to make it happen, partly because your environment is so complicated.
Ben Bradley: This project as a whole, really, and devolution are about simplifying it, certainly from my point of view. People can make arguments about layers and whatever, but what we have never had is a shared strategy across the region. We have never had a clear set of priorities or a shared economic plan that covers more than half a county, because we have cities and county councils as well. It is a complex mix. If you can do devolution in the East Midlands, given the nature of our current governance, you can do it anywhere. That is the test.
Q163 Chair: Do you want more fiscal devolution?
Ben Bradley: Yes.
Oliver Coppard: Yes, with caveats.
Q164 Charlotte Nichols: I wanted to talk a bit about the anticipated and observed economic impact of freeports and investment zones. My first question is a very quick one. Which sectors of your economy will benefit most from freeports and investment zones within your region?
Oliver Coppard: It is advanced manufacturing. Advanced manufacturing is the sector that we have settled on with Government. Like I say, it was a sector that had been 200 years in the making. It is advanced manufacturing, particularly around power propulsion and production; AI and digital; and then health and medicine. They are the sectors that we think will benefit the most.
Ben Bradley: Similarly, it is advanced manufacturing and clean energy, with a renewable energy focus around our investment zone. Freeport sites vary, but they are similar sectors, particularly around clean energy, carbon capture and other elements of that, building on the flagship big industry where we have a lot of expertise. We have a lot of skills, particularly in those spaces, already. We need to use some of those existing businesses as an anchor to draw in very similar but, as I said before, beyond that, in terms of supply chain, you are looking at construction and all sorts of different elements around the economy.
Q165 Charlotte Nichols: The Government’s policy has focused investment zones on five priority industries: digital and tech, green industries, life sciences, advanced manufacturing and creative industries. They are fairly broad definitions that I suppose you could probably shoehorn most employers into. How wise do you think the Government’s policy of focusing investment zones on those priority industries is? How likely is it that the approach will help generate knowledge clusters and growth?
Ben Bradley: It has been helpful from our perspective. There is always an argument with devolution, I suppose, on how much of this should be mandated. We have had a decent and iterative conversation about what is right and relevant for our part of the world.
As I say, it fits with a lot of the industry that we already have and a lot of the opportunity. It makes a nice political argument, in the sense that many of our north Nottinghamshire coalfield areas have been keeping the lights on forever and we would like to continue to do it into the future. Residents are comfortable and proud of that heritage, so it is a great thing to build on. We also tie in a number of really high-quality research institutions, the University of Nottingham in particular, around those sectors and clean growth. From our point of view, it fits quite nicely.
Q166 Charlotte Nichols: Oliver, how do these priority areas that have been set out by Government fit with your regional growth plan and industrial strategy for the South Yorkshire region?
Oliver Coppard: Let me start with the positive. The positive was absolutely that Government took, with us, an expansive view of what advanced manufacturing meant for South Yorkshire. That was a positive, because we were able to have that conversation in a sensible way when we were designing the policy in partnership with Government.
The challenge, not just for South Yorkshire but for the country and therefore for the Government, is that economies do not work in that way anymore. You do not have purely defined clusters that operate in isolation from the wider economy around them. The advanced manufacturing sector is intimately connected with the creative sector through things like digital and design. Being able to connect up those different parts of our economy in a more complex way and create those tradable, better jobs that we need in order to grow the economy is the challenge that we all face. You cannot take a simply sector-specific approach to doing that.
The Government have leant into that idea, through working with us to take that expansive view around advanced manufacturing, but what we need to do more broadly is make sure that different parts of our economy are speaking to each other, working with each other and that network effect takes place.
There is a second part of that that is a challenge for the Government. Ben has touched on this himself. Ben said lots of the sectors in his economy are similar to the ones in South Yorkshire’s economy. The challenge for the Government is to create those regional industrial strategies that speak to each other, so that we are not competing with each other through a freeport in Ben’s patch and an investment zone in mind. If we can make sure that what Ben is doing in his patch and what I am doing in mine actually are complementary to each other, that is going to make the whole economy work better.
Small modular reactors would be an example. We have a huge number of assets in South Yorkshire, not least Forgemasters and the Nuclear AMRC, which is working on small modular reactors. I know that where Ben is he has his assets too. We could link those up and create those supply chains, but we probably need more support from Government to do some of that work.
Q167 Charlotte Nichols: Both of you have pre-empted where I am going next in terms of talking about devolution and the decision-making in this that needs to be done locally. Oliver, you have mentioned already in terms of issues with transport connectivity in South Yorkshire. Certainly, TransPennine Express currently runs trains less reliably than the trains in Ukraine, despite Ukraine being under significantly greater challenge. That is not something, in terms of trains of view, that you as metro mayor have control over, because of what is within your remit and purview versus the things that are going to be the real barriers to growth and connectivity. How far would both of you say local authorities and combined authorities have the political, legal and fiscal heft to be able to actually maximise the delivery of these kinds of projects?
Oliver Coppard: Absolutely, speaking on behalf of mayors, if I can, we would all want more heft, more weight and more ability to actually drive the changes that we need to see for our communities, and indeed across the north and the midlands, in order to make that growth happen. You talk about transport. Transport for the North is a good example of where we would want more power to be vested in either that organisation or a similar organisation, so that we could drive not just the conversation but the changes we need to see in order to improve public transport across the north of the country.
That is what I am talking about when I say we have to be able to better connect up some of these strategies, approaches and indeed some of our regions. We know what our regions need. I will know in South Yorkshire, Andy Burnham over in Greater Manchester and Tracy in West Yorkshire. When it comes to things like transport, the body that we use to have that conversation is Transport for the North, but we cannot actually drive the legislative changes through TFN. That has to come through DfT. DfT then has separate conversations with all of us and then with TFN as well. It is a complex picture and one that does not join up for the benefit of the people that use the services and the benefit for growth in the economy.
Ben Bradley: We are obviously earlier in the journey in that sense, but there are a number of benefits that we can realise quite quickly through the devolved powers in our deal, not least that, as Oliver has already said, we will boundary with Greater Manchester, Yorkshire and West Midlands, and currently there just is not a person to have a conversation with those areas on a level, with the same shared powers. That will be really helpful and help with some of the crossover that you talked about in terms of the economic connectivity.
On significant transport investment, we have seen recently devolved pots of transport funding, £1.5 billion for the East Midlands region, which gives us some heft to make significant improvements. Although you are right that we are not going to pick up powers over the rail service, for example, there are other very significant areas within our transport network. Everybody uses buses, to be honest. Trying to fill some of the gaps in all of that will be of huge benefit.
The thing that I have come to realise over the course of 18 months now of doing the deal and building this organisation is, even once you have it, as I am sure you would attest, it is still a transition and an ever-growing and emerging process. You have seen that in Manchester and in the West Midlands. I would like, as a region, to get to the place where we have single pots and all of the clout that Andy Burnham and Andy Street have, but I know that will be a process over a period of time.
Q168 Charlotte Nichols: In terms of the difference between the devolution packages for each combined authority, there are some quite substantial differences between competencies in each one. In terms of key dependencies, particularly looking for ones that will be potentially newly established as this devolution journey continues, which ones does a combined authority need in order to be able to deliver this? I declare an interest as a Cheshire MP; we do not yet have a model for our region.
Oliver Coppard: If I look at the things that I would like to be able to do that I currently cannot do, there are probably four that are top of mind and then one that may be a bit more controversial.
Certainly, I am conscious that we are moving towards a place where Great Manchester and West Midlands are likely to get a single pot settlement with less ring-fence around what they can spend their money on and how they can spend it. My understanding is South Yorkshire is not going to be given that opportunity. That is going to create, over time, more of a divide in terms of devolution and levelling up.
Business rate retention fits into that same space. Greater Manchester have had a business rate retention pilot for a while now. South Yorkshire has never had the opportunity to raise the money that we want to then spend and give us those incentives to grow in that same way.
In terms of a mayoral precept, there are some things I cannot do with my mayoral precept, if I were to put one in place, that would seem to make sense from a growth perspective, not least using the precept to fund transport. I am not allowed to do that under the terms of our current deal.
We are working on health devolution. I am chair of the integrated care partnership in South Yorkshire. I am the only mayor to have taken on that responsibility, but I do not have devolution in terms of health in the way that, for instance, Greater Manchester does. Health is one of those areas where, like I say, one-third of our productivity challenge is related to the health outcomes in South Yorkshire. Therefore, we can never address the wealth outcome if we do not address the health outcome.
Last but not least, in the possibly more controversial area, is planning reform. Given what we are seeing in terms of planning, mayors have a big enough political footprint to take on some of those tricky planning challenges in a way that local authorities may not be able to. If we are really going to drive growth, that planning reform might come through combined authorities and, indeed, through mayors. That might be an opportunity.
Ben Bradley: I would agree with that. I have always been of the view that you will never find a national planning framework that suits everywhere, because everywhere is very different, with different challenges. Devolution is a huge opportunity for us to do that in a better way.
The biggest barrier to delivering any of these kinds of incentives across our area, and reflected across county areas around the country, has been the complexity of the governance, particularly around building unanimity around what you want to achieve. Until the levelling-up Bill, we have been unable to create a combined authority in our region for that exact reason. There are 18 different councils and it only took one to say that it did not want to do it and we could not do it. The Bill is helpful now and is driving that forward.
I have been at the County Councils Network conference this week, talking to a number of colleagues who are in the same pipeline to start to create combined authorities. My advice to them has been about building those networks and relationships and consensus in the first instance, because you have to have a shared view of what it is you want to achieve. It seems under any Government going forward that this form of devolution is here to stay. I would imagine it will come to Cheshire at some point in the future.
We are all starting collectively, as a local government family and stakeholders, to think about what those strategies are and what those industries are, in the same way as we are within the region. Everybody is now starting to follow on and catch up.
Q169 Charlotte Nichols: In terms of competencies, which ones do you specifically think that you need to make this a success? It is less about those discussions between, but which things do you think you should have within the East Midlands combined authority to be able to say, “We have what we need to be able to deliver investment zones, freeports and a growth plan around this.”
Ben Bradley: From an economic perspective, we will have the basic things that we need to be able to deliver, in terms of the structure, powers around transport in particular, the investment pot to help us create those new connections around particular sites and particularly around skills. It focuses largely in terms of specific powers around adult skills. I would like to see us be able to get more into an FE and post-16 space. Colleges and our university sector would welcome that, having more local control about how we fund and manage some of that. That is probably one.
Into the future, if you do want to tackle, as Oliver said, the wider inequalities, then there are all sorts of spaces you can dig into. We have health managed by an ICS and other structures, but particularly around public health and, from my point of view as a council leader, youth work and prevention services in communities, I would love to get more into that space, particularly around devolved funding. Colleagues will know about the difficulties of bidding into central pots for these things that are very time-consuming and often quite wasteful in the bureaucracy of it. The more we can just pass funding down to combined authorities to manage, rather than bidding into those pots in public service spaces, that will be really beneficial.
Q170 Ian Lavery: It is jobs, jobs, jobs. How can we measure the success of freeports and investment zones? You look at the past and you look at the old enterprises; they were not very successful at all. There was not much in terms of job creation that did not basically deliver what they said on the tin at all.
We had Professor Fothergill in a session; he is from Sheffield Hallam University. He was suggesting that you can split the projection of job creation into three: displacement, dead weight and net increase in new jobs, as a third, a third and a third. Even sitting, listening to what you said before, Oliver, you are saying there will be 5,000 jobs in South Yorkshire in the next five years. That is fantastic. That is what we want. By the way, it cannot just be highly skilled jobs. It has to be jobs across the piece that fit into the area, so it gives everybody equal opportunities. I am sure you are all aware of that, by the way, but that is very important.
We have seen claims from Teesside Freeport of investment of £3.6 billion. It is suggesting that will create 18,000 jobs in the first five years. This is colossal. It is much needed; it really is, and obviously we support it so much. The question is about where you get these predictions from. What data do you have to say to the general public, to the Government, to anybody, “Based on this data, based on these predictions, we are going to have 18,000 jobs in Teesside, and we are going to have 5,000 jobs in South Yorkshire”. I hope you get double, but the evidence from the past shows that these schemes are a damp squib.
Ben Bradley: There is great potential in what we are trying to deliver. The question about, “What is your arithmetic in terms of working out the numbers?” is perhaps one more for Tom in the previous session than for me. We have dug through that and tested some of that at the outset of the creation of the freeport, in particular.
We have similar numbers: 28,000 jobs, £3.6 billion GVA and all of that. There are softer measures, though. We will all look at GVA figures; Treasury will look at GVA figures. Those hub sites, whether they are freeport or investment zones sites, add up to seven different sites in terms of key hubs around the region, I want to see the creation of a mix and range of jobs focused on those sectors. As you said, there is a wider supply chain. Everything has legal, HR and everything else that comes with it as well. There is a wider benefit to all of that.
The key test and outcome of all of that is two things. One is that it is not seeing things displaced from other places, which is hugely important. There is a lot of international inward investment around some of these things as well, which I would like to see drawn in.
The other bit is, again, softer and will take time. It is making sure we have the right transport and skills infrastructure around it, so that these are genuinely connected, well organised and managed sites around the county. That is quite a soft thing to measure. You will probably look at it in 10 years’ time and go, “Does it look like what we envisaged?” You can talk about x thousand jobs and x GVA from a resident’s point of view. You said, “How do you describe on the doorstep?” It goes over people’s heads, to be honest, does it not? There will be visible local changes, job opportunities, new courses and different ways of managing and funding things locally that will be much more tangible to our residents.
Q171 Ian Lavery: Ben, I know your area fairly well. It is a mining area. Years ago, there were these enterprise zones. Can you tell the Committee how successful they were, or otherwise?
Ben Bradley: The enterprise zone engagement was before my time.
Ian Lavery: My apologies; you are a lot younger than I am.
Ben Bradley: I am aware of the concept and some of the sites. Some were developed and worked quite well, and still work quite well. There were others around my own constituency where, for many years, we still could not get them away, even with enterprise zone incentives.
What is improving now in these structures, particularly when we get beyond May, is that there is a wider strategy being developed around it, and we will have a wider range of powers developed to facilitate it, whereas in the past you can point to that bit of land or that bit of land and it does not join up in the same way from a strategic perspective.
There is also the benefit of a mayor, a devolved single person. From a business perspective, it should be much easier to engage in terms of, “How do I invest in and create jobs in these sites?” You go and talk to that person, that organisation and they will sort it out. We have always looked jealously at Teesside and the West Midlands from that perspective. If you want to come and invest in the East Midlands now, 18 different leaders stick their hand in the air and all tell you contradictory things. We will be in a much better place to manage these incentives as we go forward.
Oliver Coppard: The Advanced Manufacturing Research Centre and park sit on top of Orgreave; it is what used to be Orgreave. We went in South Yorkshire from a place where we had 70,000 jobs and a few thousand students to 70,000 students and a few thousand advanced manufacturing jobs in the steelworks.
The problem that we have in South Yorkshire, therefore, is that we do not have enough tradeable jobs. We know to a certain extent, if we put certain inputs in, certain amounts of money in certain sectors, what is likely to result when it comes to economic growth and in terms of the jobs that are created. The answer is that it is always a guess, but we know, based on the historical measures, what is likely to happen based on a certain amount of money that we put into the system.
I would probably go a bit further, in the sense that you are absolutely right that this has to be all about jobs and the ambition is absolutely right, but I am not sure the ambition is enough yet. If you look at the scale of investment that went into places such as the Dearne Valley, a place you will know well—it is an old coalmining community, and the most polluted place in western Europe when the coalmines left—we would currently be getting around £100 million from objective 1 funding, were we still in Europe. The objective 1 funding that we did get went into places such as the Dearne Valley.
To put the investment zone into context, we get about £80 million through the investment zone as a one-off. We would be getting about £100 million for projects such as the Dearne Valley, indeed projects that were supported on the AMRC through objective 1 funding, that would have allowed us to go further and faster.
I am not sure the ambition is great enough or big enough for devolution for the investment zone itself, because we could do more if we had more money, more investment, more powers, more control and a better and joined-up growth strategy that it was all directed towards. We could create more than 5,000 jobs and £1.2 billion worth of growth, particularly given the assets that we have in South Yorkshire, particularly on Orgreave.
Ian Lavery: I wish you the very best of luck.
Q172 Chair: Thank you very much. We will move to wrap up. Let me just ask you a couple of quickfire questions, just to summarise and crystallise this then. Not a lot of people know this, but the first book I wrote was a history of the English local government system. I have been struggling to understand. It is not a model, is it? It is a bit of a muddle. Is that good for value for money?
Ben Bradley: No, currently. We would like to change it. We have never found that consensus that I talked about before, but I see the combined authorities bringing some coherence to it.
Q173 Chair: Oliver, is the model you have at the moment good value for money?
Oliver Coppard: The model we have and are indeed working towards is good value for money and is a good model.
Q174 Chair: Ben, is your model good for growth or does it need to change?
Ben Bradley: We are very early in the process of creating all of this, but it is good for growth and has brought significant investment that we have not had for a very long time.
Q175 Chair: Oliver, is it good for growth?
Oliver Coppard: Yes, we are going to create, through the MCA, a growth plan that is going to drive jobs, opportunities and wealth in South Yorkshire.
Q176 Chair: If I gave you a magic wand, would you of your own power set up an investment zone and a freeport, or would you choose a different tactic?
Ben Bradley: I would do it. I would like to go back and, as others have, be able to attach it to an existing organisation and strategy, rather than having to retrofit it over the top, but the incentives will be very beneficial.
Oliver Coppard: The investment zone has been a useful tool to focus some of the work that we were already doing and indeed will continue to do. The useful part of that has been the conversation with Government, the money that has flowed in as a result, and the opportunity that we have had, therefore, to shout about what South Yorkshire is already doing around advanced manufacturing.
Q177 Chair: Do you need additional powers over infrastructure, energy, skills, transport, care and possibly planning to unlock the full value of investment zones and freeports?
Ben Bradley: To maximise on everything you could possibly do, yes, more powers and more funding would be beneficial, but the range of powers we have within our initial deal are enough to be able to deliver what we have said we are going to deliver.
Oliver Coppard: Yes, in and of itself an investment zone is not an industrial or economic growth strategy. It is just one part of a wider jigsaw. The more powers and more control you can put into that, the more we would be able to do with it and the more growth that would result.
Chair: That brings us to a conclusion. Thank you very much indeed for your evidence and thank you very much for what it is that you are doing.