Stephen Catchpole, the recently-appointed managing director of Tees Valley Unlimited, says that while companies have to select their own business positives from the Budget, the good news for Teesside overall is its award of one of the enterprise zones in a new round of 11, ostensibly for manufacturers. Local Enterprise Partnerships (LEPs) such as Tees Valley Unlimited (TVU) are new, but winning an EZ has long been a Teesside goal.
Representatives of TVU and its local authority partners lobbied the Treasury hard last summer; TVU having already existed in another realm for around eight years. Catchpole says: “We lobbied with open eyes, learning particularly from the early ones in the 1980s – some of which were successful, but in reality achieved displacement of activity.
Some of that caused difficulties for town centres in retail and even office areas. We’re keen to ensure the next one doesn’t displace. We want to create an EZ concept for the 21st century.” Prospective sites remained confidential as BQ went to press. But Catchpole does say: “We’re finding out if manufacturing is the only use that can go on them.” The zone could be within any area of TVU’s five partner boroughs – Stockton, Middlesbrough, Redcar and Cleveland, Darlington and Hartlepool.
It could even straddle more than one. “We must ensure with the public and private sectors that we’re united, whatever our approach,” says Catchpole, who had returned from a cruise to the Canaries to learn of publicity in his absence, suggesting fallout over choice of site.
He insists: “I’ve not been here long. But I can say one of the great benefits to working here is an atmosphere of co-operation. It’s one reason why the Government approved us as an LEP. As the boroughs and the private sector have worked together for some time, that gives a bedrock, which is why I’m 100% confident.” TVU helped firms with their bids for a share of first payouts from the Regional Growth Fund (RGF1) and, says Catchpole, the fact that Cleveland Potash, SSI, Nifco, Lotte Chemical at Wilton and AV Dawson’s new rail freight terminal at Middlesbrough all succeeded, means Teesside did extremely well – “a reflection on the strength of our bids and the work our partners put in on them”. Now TVU minds are on RGF2 whose bids close on July 1 and the feeling is that smaller businesses may be helped more this time.
The initial payout from the fund was around £200m more than originally projected. Catchpole reckons that will now leave £1bn or less in the fund, which might therefore be allocated in the second round, eliminating rounds three and four. “We’re girding our loins for another decent run,” says Catchpole. “While round two will include company projects – like round one – it may also be about putting together programmes. A project is for the individual company. A programme can be for many companies, particularly SMEs, so we’re looking at generic schemes to bid, say business support – the sort we feel will have comprehensive business backing.
If successful, that money could be held by us, our partners, or a combination. Smaller firms could apply to us for moneys or activities in kind. “This would get over the first-round hurdle whereby every bid had to be for £1m, ruling out SMEs. There had been talks about banks getting together to put forward packages that SMEs could feature in.
As far as we’re aware, little of that has happened. I think round two was always going to be where you could put programmes together. We don’t rule out working with our local banks on packages. Firms could still come to us individually. Hopefully, some things we propose will again be innovative, practical and attractive to government.
“Teesside SMEs’ biggest issue is access to finance. It’s holding back their growth. Maybe RGF2 offers a route, bringing in experts.” Is Catchpole confident that public, private and voluntary sectors can work harmoniously within a LEP? “I can, hand on heart, say ‘yes’,” he says.
“Our success in RGF1 may be partly due to our organisation having already had a relationship with many of the companies. We weren’t starting from scratch, either on the proposals or on forming a relationship.
“I think we were the only LEP supporting our bids with an overarching statement of why those bids meet our economic aspirations. So we not only support each individual bid, but also give the fund’s adjudicating panel an overarching statement wrapping them together and explaining how they meet our economic policies.
“you couldn’t do that in the frenetic build-up to RGF1 unless you already had good relations and a good track record in partnership. Judging us against a brand new LEP is probably a bit unfair because in many ways we have been something of a LEP for years.” Did Tees Valley’s LEP have the equivalent of a 10 metre start for a 100 metre sprint, then? Well, yes, except that beyond that sprint a marathon looms.
“We must now find new ways to keep in front,” Catchpole admits. The main criticism against the Government’s replacement of regional development agencies (RDAs), such as One North East, by LEPs like TVU is that by comparison they have “nomoney and no power”.
The largesse the Government is doling out through them is only about a third of what the agencies had. TVU itself has taken a hit. In 2010-11 it had a £9m budget, mostly from One North East and the Homes Community Agency. Since April 1, that’s been slashed to £2m.
“We’ve had to go through a very painful staffing review,” Catchpole says. “That’s brought us down from 85 to a core staff of 31 with about eight jobs now on a 12-month transition. If we get no more money, those posts will disappear.” The £2m comes from the five participating boroughs. Catchpole says: “While it’s a quarter of what we had, it’s still significant. Other LEPs don’t have that. We’ve cut our cloth accordingly. The input from the private sector is time, energy and influence. We’ve put together a fairly robust statement of ambition.
From that flow strategies and activities we feel appropriate to the area. We, like everyone, must get used to much less public support in finances. “While we’re not yet able to move away from that completely, we are trying to rebalance the economy so there’s more justification for private investment.” Straitened or not, Catchpole believes two LEPs can work together to the region’s good in place of an RDA. He says, half-jokingly: “As an outsider, I find this obsession with each tribe in the North East peculiar. I understand it and am sure it has all been good fun. But, long term, the entire North East, indeed the North East coast and part of the Northern area, must make a viable proposition together at times to ensure a level playing field with other parts of the world.
“We’re competing globally now. If some inward investment doesn’t go to Gateshead it isn’t going to come to Middlesbrough. If something doesn’t go to Hartlepool it isn’t going to be snatched by Newcastle. The world’s not like that, particularly in new industries like offshore wind and renewables. The wind doesn’t just blow up the Tees or the Tyne. It blows along the entire coast.” Indeed, TVU through Catchpole latterly joined the lobby successful in bringing Hitachi’s train manufacturing to Newton Aycliffe in the North East LEP’s parish.
As he points out, it’s a “stone’s throw” from Darlington where some employees may eventually come from. “I’m looking to co-operate also with Leeds and Humberside,” he says, “and to get them to co-operate with us. With Scotland too – we share coastal strength in offshore energy. SSI’s steel manufacturing is in Tees Valley but you can’t tell me it won’t benefit the rest of the North East and North.
“It’s ludicrous to think of a local economy today as being within a mile or two of where immediate jobs are. You have supply chains that are incredibly complex. Hitachi’s will be enormous, like Nissan’s.” While there’s a third body, a North East Economic Partnership (NEEP) co-ordinated by Andrew Sugden of North East Chamber of Commerce, Catchpole believes the region’s two LEPs will be “perfectly capable” of talking to each other.
But yes, there’s room for a facilitator. Catchpole says: “It helps sometimes to have a forum where you’re not actually three but one and one with some assistance – a forum not to guide but to help. There will be issues and times of talking things out that way, rather than by just two individual bodies.” Catchpole reminds how TVU must ensure that in the world-class industries Teesside is involved in – chemicals and petrochemicals – it must continue to attract foreign investment.
“There are no British companies in that area at the moment,” he points out. “We must attract others and enable them to operate globally as competitively as possible.” So TVU is working with the North East Process Industry Cluster (Nepic) and the Centre for Process Innovation (CPI), bodies progressing those industries. Another goal is to ensure the general economy of its five participant boroughs, and particularly the main towns, grows too.
“Their economies have taken a bit of a bang,” he says. “But there are certain growth sectors where we see improvements. It’s our job to build on that.” Middlesbrough has felt the biggest bang, scarred with the third-worst rating out of 354 council areas in the Government’s index of multiple deprivation. There, unemployment is almost twice the national average, and 14% of townspeople are on benefits, no doubt prompting TVU’s view that, hand in glove with job creation, local people must be upskilled or reskilled to benefit.
Catchpole wants an avoidance of Birmingham’s path over the last 14 years. Its city centre has improved beyond recognition, but only a mile-and-a-half away there are districts devoid of contact where locals lack skills to work there and income levels even to shop there. One of Teesside’s assets, Catchpole has noted, is the good working relations Teesside and Durham Universities share with training colleges, also some excellent specialist training providers.
TVU, which considers Durham Tees Valley Airport a key strategic asset; has met with the Canadian owners and plans to work towards its revival. “I think the owners have realistic plans to improve performance and profitability there,” he says. “I’d say they’re very optimistic and we must stand shoulder to shoulder.
We’re going to work hard with them.” This will include an intensified campaign against present levels of airport charges and promotion of the airport and its door to the world at large, which its Schiphol service in particular represents. “For whatever reason that message has not reached enough people in enough numbers,” Catchpole says. “Global recession has hit foreign travel. But of the top 100 companies in Tees Valley 60% or 70% are foreign-owned. There’s a need for foreign travel.” Catchpole, a Londoner, told North East Chamber of Commerce members at their Tees Valley agm recently that London and the South East promote themselves even when there’s nothing to promote.
“Here,” he said, “there’s an inbuilt modesty which is very fetching but gets you nowhere.”