The Strategic Economic Plan (SEP) sets out the vision, objectives, strategy and actions to improve the quality of life of everyone who lives and works in the West Midlands. It has been developed and agreed by a wide partnership of people, organisations and businesses who share a pride in, the region. It sets the context for the WMCA’s devolution agreement with government and explains how devolved powers and resources will be used.
Birmingham city centre is at the heart of the region, but the SEP involves the whole of the West Midlands. The cities of Coventry and Wolverhampton are well placed to build on their significant potential and the surrounding areas of southern Staffordshire, north Worcestershire and Warwickshire bring complementary strengths in terms of business, housing and leisure offers.
The area’s vibrant cities and towns are complemented by villages and countryside that are easily accessible to, and enjoyed by, millions of people; the patchwork of urban and rural environments stretching across the West Midlands add to the area’s unique qualities and characteristics and all play an important role in shaping the area’s future prosperity.
The skill levels of local people will match and then exceed the national average, employers will have the right support so their employees have the skills they need and people of all ages will have access to the best education and training, along with improved housing.
The plan will improve the life chances of everyone who lives in the West Midlands, especially those facing multiple disadvantages. Transformation is about improving the quality of life for everyone in the area.
The core of our economic strength is in advanced manufacturing and engineering but a number of growing dynamic sectors, including creative, digital and life sciences, are playing an increasingly significant role in the area’s successes. The West Midlands also has the potential to become a destination for European HQs in financial services and become an internationally significant e-commerce and logistics hub.
High quality rail, road and air links are a significant competitive advantage, which will be strengthened by the arrival of HS2 and the further development of Birmingham Airport as an international gateway with an increasing number of long haul flights. The UK Central growth corridor – linking Birmingham, Solihull and Coventry - is already playing a part in delivering success and HS2 has the potential to underpin the re-balancing of the British economy. With travel time from London to Solihull of just 37 minutes it will transform the West Midlands and the WMCA will ensure that HS2’s potential is fulfilled as part of a wider transport strategy, set out in the West Midlands strategic transport plan “Movement for Growth”.
The WMCA is not a super council and it is not about building additional layers of management and cost. WMCA has a transfer on day 1 of approx. 380 colleagues, formerly from Centro (our transport body) and our approach is to use the talent, capacity and capability from across the local authorities and LEPs to add to this as and when the programme of delivery requires – so we will be fleet of foot and manage the resource as we need it – not to build a big structure for the sake of it.
Despite all our strengths, forecasts suggest that on current trends the output gap between the West Midlands and the rest of the UK will widen between now and 2030. This is partly down to the large number of low value companies in low growth sectors, the low business birth and survival rates in some areas, and the comparatively high number and proportion of residents with low skills and, in many cases, no formal qualifications. Productivity is constrained by poor life chances caused by issues like poor mental health, worklessness in households and complex needs.
Devolution and the creation of the WMCA means these issues can now be tackled more effectively, more coherently and at a greater scale than ever before.
This SEP complements and supports the LEPs’ work rather than replaces it. It focuses on action of strategic importance across the whole area.
The eight priority actions are: new manufacturing economy; creative and digital; environmental technologies; medical and life sciences; HS2 growth; skills for growth and employment for all; housing; and exploiting the economic geography.
Sovereignty for planning issues including greenbelt and land us remains with the local authorities and does not become within the power of the WMCA. But clearly the SEP and Land Commission will point us to the need to think very differently about how we build new homes at scale and connect people to the new jobs that are being created across the WMCA.
The WMCA will track progress in achieving its vision. Performance against SMART objectives will be used to inform future priority actions, interventions, including future devolution deals and policy needs.
By 2030, average earnings of the working age population will be 13% above UK averages. The proportion of people qualified to NVQ4 or above will have increased by 36% to match the national average and the number with no qualifications will have fallen by 9% to match the national average. The unemployment rate will be below the national average
The West Midlands is home to some of the most innovative businesses in the UK and they are supported by the skills and resources of universities, science parks and research institutes. We will extend the use of this infrastructure to more businesses, building on current success in developing manufacturing and engineering excellence. University expertise will also help drive public service reform. Institutions like the Manufacturing Technology Centre and the Warwick Manufacturing Group will also be involved, along with university and business partnerships.
We have a vibrant business rate. Start-up Britain recently reported that 18,337 new businesses were registered in Birmingham in 2014, the highest in any UK city outside London. This includes growing digital, life science and creative and cultural sectors. The economy of the West Midlands grew faster than the national economy between 2010 and 2013. On many counts, it is calculated to be the most prosperous area outside London and the South East. In 2014 businesses in the area exported £28.6billion worth of goods. This was the West Midlands’ sixth consecutive year of export growth – up from £27billion in 2013 – compared with a national fall over the same period from £299billion to £287billion.
Many West Midlands businesses cite the skilled workforce as a key factor in their success, particularly in high value manufacturing, and increasingly in other sectors such as digital and creative. Major businesses, most notably JLR, are actively contributing to that skills base and LEP initiatives such as the Black Country Skills Factory are helping employers to increase the skills of their workforce.
Too many major West Midlands businesses are reliant on foreign located supply chains, often because local businesses cannot meet their quality standards. The challenge for the area is to recapture a significant proportion of the supply chain, such as in the automotive industry.
In parts of the area, most notably the Black Country, there is an urgent need to improve the level of business births and survival and there is a particular issue in enabling the continued growth of medium-sized businesses.
By 2030, we aim to create more than half a million jobs – 504,000. This is almost 50,000 more than under current plans from the LEPs.
We believe the population will increase by 32,000 people by the year 2030.
The WMCA has established three commissions to support work in key strategic areas highlighted in the vision:
The chairs and officers of the Black Country, Greater Birmingham and Solihull and Coventry and Warwickshire LEPs already meet as part of a well-established West Midlands LEP chairs forum. This has created a strong and confident foundation for WMCA development and has helped support close joint working between local authority and business leaders.