1. …help yourself to some lunch!

2. EMC Technical Assistance Project Andrew Pritchard Director of Policy & Infrastructure

3. Introduction What is it all about? Some background Your mission today…

4. What is it all about? A technical assistance project led by East Midlands Councils to provide an evidence base for future EU funding To make sure that we maximise the potential of EU investment across the East Midlands Strong support from DCLG & Council Leaders for the project

5. Localisation of EU funding Establishment of a national ‘EU Growth Programme’ LEPs to develop EU investment strategies Each LEP to be given a ‘notional allocation’ of EU funding to prioritise Option to ‘buy-in’ to national programmes Payments to be made centrally Notional allocations will be reviewed against performance from 2017 onwards

6. “Show me the money” EU Growth Programme = €6.2 billion UK Local Growth Fund = £2 billion

7. In and around the EM D2N2: €249.7 GLLEP: €133.5 LLEP: €126.3 NEP: €55.0 SEMLEP: €88.3 GC&GP: €75.5

8. UK Local Growth Fund New Homes Bonus£400m LA Major Transport Scheme £819m Local Sustainable Transport Fund£100m Integrated Transport Block£200m Further Education Capital Fund£330m ESF Skills Match Funding £170M

9. Emerging UK Priorities Innovation SME Competitiveness ICT 60% + of ERDF Employment Skills Social Inclusion 80% + of ESF Climate Change Environment Sustainable Transport No Minimum spend Low Carbon Economy 20% + of ERDF

10. Also… Minimum 20% of combined ESF/ERDF on ‘social inclusion’ Gender equality, equal opportunities & non- discrimination Sustainable development

11. Programme Timescales 7 October 2013: Draft LEP EU Investment Strategies January 2014: finalise strategies March 2014: new EU Programme starts 2017 – first review of notional allocations

12. Current Experience Spend under the current ERDF Programme has been slow Too many small projects - difficult to see a strategic impact Original operational programme did not fully meet local needs - e.g. Broadband

13. Future Challenges 1 region replaced by 7 LEPs – 4 overlapping Pressure for early spend on projects that will deliver clear outcomes LEP notional allocations to be reviewed in 2017- under-performance could be penalised

14. Threats v Opportunities

15. What are we going to do? Facilitate a series of consultation events Develop an evidence base (or ‘socio- economic framework’) to inform both the UK Growth Programme and individual LEP Strategies – working with NTU. Highlight potential areas of collaborative activity that can maximise strategic impact and reduce ‘transaction costs’

16. Events Diary 1 st July: Greater Lincolnshire LEP 5 th July: Leicester & Leicestershire LEP 9 th July: Competitiveness Round Table 16 th July: NEP/SEMLEP 22 nd July: D2N2 25 th July: Green Economy Round Table

17. Project Timescales End of July 2013: Interim Report September 2013: draft Framework December 2013 – final Framework January - June 2014 Awareness raising

18. Key Outcomes “It’s the economy, stupid” More Jobs Less Worklessness green V

19. Your mission today… To think about how best EU funding could be used to develop the green economy. To highlight areas or issues where wider collaboration might be helpful. To ask if you do not understand.

20. East Midlands PA3 Project Socio-Economic Evidence – Low Carbon Thematic Objective East Midlands Regional Roundtable 25 th July, 2013 Chris Lawton Nottingham Business School

21. Project Rationale and Objectives The project aims to provide socio-economic evidence to help identify synergies, linkages and common challenges across LEPs within or overlapping the East Midlands Emphasis on the 5/6 Thematic Objectives (out of 11) prioritised by UK Government: Innovation, Enterprise, Low Carbon, Skills, Employment/tackling worklessness To identify opportunities for collaboration between LEPs The UK Government would: “like to see Local Enterprise Partnerships working with each other to deliver a bigger impact… and achieve economies of scale wherever possible” Source: HM Government, April 2013. ‘Technical Annex: Preliminary guidance to Local Enterprise Partnerships on development of Structural & Investment Fund Strategies.’ paragraph 2.8, p. 4.

22. Contains Ordnance Survey data © Crown copyright and database right, 2013. Local Enterprise Partnerships within or overlapping the East Midlands Region

23. Chart 1: UK GDP Growth (NIESR modelled monthly estimates), 2008-present compared to previous recessions Source: NATIONAL INSTITUTE of ECONOMIC and SOCIAL RESEARCH, November 2012. ‘Monthly GDP Estimates’, www.niesr.ac.ukwww.niesr.ac.uk Economic Context

24. Source: ONS Crown Copyright, 2013. ‘Annual Population Survey’, January-December 2008 and January-December 2012. From NOMIS [accessed 24 th June, 2013]. Chart 2:Employment rate (% working age residents), 2012

25. What is the ‘Low Carbon’ EU Thematic Objective 4? Separate, but complimentary to EU Thematic Objectives 5 and 6, ‘Climate Change’ and ‘Protecting the Environment & Promoting Resource Efficiency’ in Europe 2020 Emphasises activities in the green/sustainable development agenda that enhance: – Job-creation – Development and adoption of low carbon/ energy efficient technologies amongst SMEs – Development of ‘whole place’ solutions in urban design, transport planning, energy management, climate change adaptation etc. – Supply chain and knowledge transfer enhancement for development and production of low carbon goods & technologies, services and processes Implication of UK prioritisation of Thematic Objective 4 but not 5 and 6 – projects/programmes will be favoured if they have a strong emphasis on the job and output-generating potential of low carbon, sustainable and energy efficient technologies, products, services and practices

26. Why is Low Carbon an important Thematic Objective? A ‘cross-cutting’ Thematic Objective, linked to the over- arching EU 2020 cohesion objectives of sustainable, ‘innovation-led’ recovery and ‘smart specialisation’ Key part of the UK Government’s emphasis on growth: – Job creation and reducing worklessness (Objectives 8 and 9) – Increased demand for (and incentivising investment in) workforce skills from employers (Objective 10) – Innovation (Objective 1) – Enterprise and SME Competitiveness (Objective 3) – Output - impact of increased demand from households and supply chain customers for low carbon products and services will ‘spillover’ to benefit other sectors/activities – Productivity - more efficient ways of utilising existing resources and shift towards higher value-added activities

27. What are the barriers and market failures? Availability of workforce skills Information failures and risk/uncertainty – On benefits to SMEs and potential investors, and also due to time-lags between up-front costs and future benefits – On available support and areas of excellence – For household consumers and supply chain customers (demand) Investment/access to finance Infrastructure (including knowledge infrastructure) Externalities (where some of the costs or benefits ‘spill-over’ to affect parties other than those involved in the original activity) Externalities can provide a disincentive to investment in all kinds of innovation (including in low carbon technologies), as the party making the original investment may not be able to recoup a sufficient share of the benefits

28. Defining the Low Carbon ‘Sector’ A combination of products, services, practices, technologies and opportunities The BIS ‘Low Carbon and Environmental Goods and Services’ (LCEGS) definition includes: – Environmental solutions (such as control of air, noise and water pollution, waste management and recycling) – Renewable energy technologies (e.g. wind, tidal, geothermal and biomass) – Emerging low carbon activities (such as road transport emissions reduction, nuclear energy, energy management, carbon capture and storage, etc.) With the exception of energy generation and water/waste, most of these activities occur across many sectors – including Construction and Transport Equipment Manufacturing

29. Profiling the Low Carbon ‘sector’ BIS define LCEGS in terms of goods/services produced and/or traded, supply chain activities, and R&D and training activities – rather than SIC In all English regions, LCEGS account for between 3.0% (Yorkshire & Humber) and 3.7% of employment (North East and London) LCEGS accounts for 62,500 East Midlands jobs, which is 3.1% of BRES 2011 work-place employment in the region – Renewable Energy is over-represented in East Midlands, accounting for 34% of total LCEGS employment, compared to 29% in England – Low Carbon accounts for the largest share in both the East Midlands and England (49% compared to 50%) – Environmental is the smallest LCEGS sub-sector in both the East Midlands and England (17% and 21% of total LCEGS employment) All East Midlands LCEGS employment is 7% of UK total EM share of UK LCEGS employment is similar to the East of England, the South West, the West Midlands, and Yorkshire and the Humber Greater share of LCEGS in London (20%), the North West (10%), and the South East (12%)

30. Low Carbon Sub-Sectors Source: K Matrix, on behalf of BIS, 2012. ‘Low Carbon Environmental Goods and Services: Report for 2010/11’. Chart 3: Employment in LCEGS Level 1 categories and Level 2 sub-categories (% of LCEGS total), 2011

31. Employment in SIC 35: Power Generation and Supply (%), 2011 Source: ONS Crown Copyright, 2012. ‘Business Register and Employment Survey, 2011.’ Data accessed from NOMIS [17 th June, 2013] and analysed under Chancellor’s Notice Ref NTCBRES11-P0537. Contains Ordnance Survey data © Crown copyright and database right, 2013.

32. Low Carbon Assets Significant power generation sites – includes 2 co-firing stations near Retford in D2N2 (as well as nationally important coal-fired site at Ratcliffe-on-Soar) – and E-ON and EDF energy offices R&D intensive manufacturing related to power generation equipment: includes Cummins in NEP and Alstom and Siemens in Greater Lincolnshire Lower proportion of renewable generation in the region, but hydro, wind and biomass capacity increasing Sector specialisation in Transport Equipment (D2N2 and LLEP) includes international leaders in low carbon/fuel cell technologies (Rolls Royce, Toyota etc.) and HE research links Centres of excellence include: – British Geological Survey (D2N2) – The Energy Technologies Institute (ETI) (D2N2, LLEP and Coventry & Warwickshire LEPs)

33. Summary Points Cohesion Policy 2014-2020 presents Low Carbon as an integral part of a sustainable, innovation-led recovery UK emphasis on potential productivity, innovation, employment and skills outcomes of Low Carbon projects/programmes Projects/programmes could address similar barriers/market failure to those that affect innovation more generally – with some specific skills, information and investment issues & opportunities The East Midlands has some key comparative advantages, notably related to power generation and transport equipment – but also alternative fuels more widely and building technologies Opportunities for collaboration between: – D2N2, LLEP and Coventry & Warwickshire LEPs (low carbon technologies related to transport equipment and high tech engineering more widely) – Greater Lincolnshire, D2N2 and NEP in power generation and energy efficient technologies for the power generation sector (e.g. gas turbine technologies, wind turbines) – Renewables in rural areas across the EM (e.g. biofuels) – Collaborative opportunities in green urban planning (Nottingham, Leicester, Derby?) – The LLEP event identified EM-wide opportunities in the Green Deal for low carbon outcomes in both household and commercial properties (new build and retrofit ) – Opportunities to link or support EU-funded economic development projects/programmes with adaptation investments (i.e. through the National Adaptation Programme) – e.g. improving the viability of development in an area affected by flood-risk

35. How Can we use EU Funding to… Move SMEs in all sectors towards a ‘low carbon’ economy Adapt to climate change and reduce/manage the associated economic risks Improve resource efficiency and protect the environment? Boost SME growth in the wider ‘green economy’

37. Thank you for coming and have a safe journey home!