EY Midlands Engine Devolution Survey

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1 EY Midlands Engine Devolution Survey The Midlands Engine: your views on how this should work Driving Midlands Growth

2 Executive summary Over the coming years, the region s political and economic structure will change dramatically as the Midlands undergoes fundamental change through devolution. The government s ambition for the Midlands Engine to reach economic growth of 34billion by 2030 will no the region, but also some uncertainty. The West Midlands Combined Authority (WMCA) brings together seven urban councils and three local enterprise partnerships that represent four million people and an 80billion economy. The devolution deal will unlock an 8billion investment plan funded from a 30 year revenue stream which will mean that the West Midlands will get the power to make its own decisions on local investment priorities. The EY Midlands Engine Devolution Survey was conducted West Midlands. We wanted to hear from local businesses what devolution means to them and what should be the region s focus areas in the long and short term. There was a wide breadth of responses from a variety of sectors, types of businesses and roles. is required on what the term Midlands Engine actually means, suggesting that the breadth of the geographical areas and how the diverse areas within the Midlands clearer. Many are also unsure of the extent of the powers to be devolved to the Midlands region and whether it will have greater responsibility over areas such as jobs, skills, infrastructure and housing. The Midlands saw a 40% increase in the number of foreign direct investment projects, with 129 new projects attracted to the region in 2015, according to EY s Midlands Engine Attractiveness Survey. 84% respondents said inward investment should be a top priority and more should be done to attract FDI. Almost 42% felt that much more is needed to help local businesses expand globally by promoting overseas trade. The shortage of skills is not a new dilemma; the skills gap has been an issue for many years and more needs to be done to help bridge this. The survey provided a few ideas on how this could be improved, with the majority of respondents saying that the emphasis should be placed on improving links between schools, universities and industry. Infrastructure is key, 88% suggested that this is an area that requires focus and, in particular, roads is where urgent improvement is needed. Many of the respondents from our survey felt that engagement with private businesses is minimal and the private sector should have a voice and opportunity to be involved and shape strategic plans not be considered simply for consultation as an after-thought. The majority of respondents commented that there is a need for the region to be joined up as a single body, rather than many separate bodies which are not working collaboratively to achieve the same goal. This requires coordinating development as a whole not fragmenting responsibility down the chain. It s clear to see from our results that we have some way to go to ensure the structure of local authorities are streamlined and well-organised. The new authorities will have to prioritise focus areas and ensure the levels of power and integration between cities and towns is strong. Overall, many feel that in order for devolution to work, local authorities and government need to work with businesses to understand their needs and to truly set the Midlands region on a global stage. With Brexit on the horizon, we are operating in a period of prolonged and uncertain change: to regulations, migration and trade, also to global social and geo-political factors. Businesses need to be resilient and agile in the current environment of uncertainty and adapt to the shifting landscape. The Midlands Engine is not only open for business; it remains attractive, competitive and connected. Government and business should work together to ensure this continues. to be an integral piece of the global jigsaw. New trade deals will provide access to key markets and create working around the world with businesses, government and industry bodies to help them answer their most challenging questions in order to shape a successful and Sara Fowler Senior Partner, Midlands, EY

3 The response Top role response percent Top business size response percent Top business type response percent 26.6% Director/Partner 10.9% Chief Executive 37.9% 100m+ 35.9% up to 5m 25% Financial services 14% Manufacturers Top business based response percent 10% Wolverhampton 50% Birmingham 9.4% Coventry 3.1% Walsall 3.1% Worcester 3.1% Solihull

4 The results Do you understand what is meant by the term 'Midlands Engine'? 21.9% is needed on certain aspects 73.4% Yes 4.7% No is needed, what aspects need highlighting? The geographical area to be covered & types of business / services to be included How investment will be evenly spread across the region Greater clarity required on what the Midlands Engine will have responsibility for vs central government Is there enough collaboration between the West Midlands Combined Authority, the Local Enterprise Partnerships and the private sector? If you answered No, what else should the various parties be doing? Working together is the most effective way to build engagement and collaborations that are sustainable Greater incentives and collaboration on encouraging local development of business expansion 50.8% No 18.6% Yes 30.5% Don t have a view The WMCA should agree and publish a joint core plan with objectives and all assertively push it forward in everything they do What do you think should be the main priorities of the West Midlands Combined Authority? 1 = Highest priority 2 = Important focus 3 = Develop at a later time 4 = Of less importance 5 = Least important A B C D E F G H A To promote growth areas B Focus on regional obstacles to economic growth C Highlight the needs of local business D Target development funding E Encourage inward investment and promote overseas trade F Set the regional agenda G Create a clear and agreed plan for the region H Develop and retain a skilled workforce

5 What should be the main focus areas for the West Midlands Combined Authority? 1 = Highest priority 2 = Important focus 3 = Develop at a later time 4 = Of less importance 5 = Least important Are there any other areas that should have more focus? The new authority will have to prioritise everything that central government does not control Becoming an authority like London with same level of powers and integration. London assembly, GLC etc. A B C D E F G H Road infrastructure is a huge problem and wastes a massive A Skills & Education B Employment C Transport D Supporting and attracting business E Finance and funding F Infrastructure G Businesses H More and better homes amount of time and money. A big reason to not be Midlands based! Do you feel that Local Enterprise Partnerships and Local Authorities are working in collaboration and effectively? 40% Don t have an opinion 30% No 30% Yes If you answered No, what more could the parties be doing? Coordinating development as a whole, not fragmenting responsibility down the chain landgrabbing A massive step up in local collaboration is required to enact a successful devolved industrial when resources where distributed for purpose Improved journey times between Birmingham and London The boost to inward investment Growth of a new development corridor Tourism The opportunity to upskill a new generation of engineers (National College for High Speed Rail) = Don t have a view

6 Which Midlands transport sectors are in most need of improvement? Rail Buses If you wish to expand on any of your answers, please do so here Modes of transport are not integrated. We should be able to buy tickets that cover rail/bus/tram. An oyster card system must be a priority together with expansion of tram routes Roads Airport Trams and metros Local train services between local centres are more important than point to point HS2 with limited interfaces with existing services. Cost in disruption to region when being built will be enormous and not currently costed required 2 = Some improvements required 3 = Review at a later stage 4 = Of least importance What do you think should be done to develop skills and eradicate the skills gap in the Midlands? A B C D E 1 = Highest priority 2 = Important focus 3 = Develop at a later time 4 = Of less importance 5 = Least important Are there any other measures that should be considered? Lifetime training is vitally important to the success of the region. Skills need to be appropriate to the requirements of the region Reduce school holidays and increase focus on numeracy and on rational and creative thinking A Invest more in training facilities B Improve links between schools, universities and industry C Have mandatory apprenticeship schemes D Clarify the arrangements surrounding the Apprenticeship Levy E Appoint a dedicated Skills Minister for the region Does the region have a robust and balanced economy? Where else should be a focus? 41.7% 22.9% 18.8% 12.5% 4.2% A B C D E A Yes B More emphasis should be placed on the manufacturing sector C More emphasis should be placed on the service sector D More help should be given to social enterprises E Don t have a view Tourism and visitor economy Creative industries and their relationship with manufacturing Need to have a balanced economy plus also need to up skill the workers

7 Is enough being done to encourage and help Midlands businesses to export and trade overseas? 39.6% Don t have a view 18.8% Yes 41.7% No What else could be done? The government needs to ensure that their new export support are quickly implemented without detriment to the current support services available Need to advertise the service and either have a dedicated person or a department that works across all levels More support to trusted business intermediaries to promote export opportunities. Tax credits for exporting to new countries Is there enough support available to business in the region? struggling B Yes C Don t have view D More support would be welcome especially given the demise of Growth Accelerator and the Manufacturing Advisory Service 10.4% 8.3% 18.8% A B C D 62.5% What other support should be provided? The problem is the publicly funded business support is given priority over privately funded support Energy consultation and grants supplying the energy for their own needs, reducing bills and creating jobs Focused industrial policies on High Value Advanced Manufacturing With the West Midlands mayoral election set for would provide the best candidate to address the needs of the region? 79.2% 6.3% 2.1% 8.3% 4.2% With this in mind, who would be A business leader who understands how to get things done not a politician following an ideology Needs to be someone with charisma that can galvanise public, business etc behind them A B C D E A Business B Political C Academic D Independent E Don t have a view

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