This week (20 October) a parliamentary reception about the proposed West Midlands Combined Authority (WMCA) took place. Business leaders together with partners from the education, voluntary and public sector joined Peers, MP's and some of the region's Councillors, to hear more about the rationale behind the proposed creation of a combined authority and its vision for the future.
Ian Austin MP for Dudley North opened the event and shared his support for the creation of the WMCA. He outlined the region's current status and why he considers a Combined Authority is essential to the future prosperity in the West Midlands. This is his speech.
I want to welcome you all to this fantastic event.
It's brilliant to see so many people here from right across the West Midlands involved with every aspect of our region – business, politics, local authorities, education, housing, and transport.
Immediately after my introduction, we'll be hearing from the Leader of Solihull, Councillor Bob Sleigh, Chair of our Shadow Combined Authority and Stephen Towe, the Chairman of the Black Country LEP and head of Hadley Industries, who does so much to improve the economy and education and skills in the West Midlands and the Black Country. Finally we will hear from my colleague James Morris, the MP for Halesowen and Rowley Regis.
I want to thank all of you for being here but most of all I want to thank everyone who is working so hard to put our Combined Authority together and negotiate our devolution deal with the government.
It's easy in the Black Country or in Coventry to make yourself the hero by saying "we're not going to be told what to do by them Brummies", but I think the way the leaders have set all that aside to develop real collaboration and work together for the region as a whole is absolutely fantastic.
And I want to say as well that we all really value the role played by the LEPs and the wider business community. I think the central role of the LEPs gives our bid real strength and sets us apart from other areas.
This is a really exciting moment for the West Midlands. It's not simply about dry bureaucratic arrangements, altering the governance or changing the management. This is about how we get to grips with some of the deep-seated structural challenges facing our region.
The recession hit the West Midlands harder than anywhere else but even before that the region struggled to attract the new investment and new industries needed to replace the jobs lost in traditional industries.
Whilst things are picking up now, the West Midlands is the only region where private sector investment fell during the decade before the downturn.
For almost 40 years before that output in the West Midlands lagged behind the national average – almost 40 years in which we fell further and further behind!
As a result, we had a higher proportion of public sector jobs and jobs in low productivity and slow growth industries than other regions as well as a smaller proportion in business or financial services.
We've seen major investment at brilliant businesses like JLR and Goodrich, but Birmingham and the surrounding area lost 140,000 manufacturing jobs in the decade up to 2007. Around the West Midlands unemployment is higher than the national average – especially long-term youth unemployment.
As a result of all this, wealth per person in the West Midlands is about £4000 a year below the national average.
Closing the output gap between the West Midlands and the rest of the country would increase the size of our economy by £16 billion.
But things are finally starting to look up. The West Midlands is the third largest exporter of all UK regions.
Twice as many people relocate into the West Midlands from London than to Greater Manchester.
We are now the fastest growing part of the country. We out-perform the rest of the country for inward investment and we can look forward to the game-changing investment in HS2 that will arrive in the middle of the next decade.
But it's clear that things have got to change if we are to grasp these opportunities and make our full contribution to the UK economy and that's why I'm so excited about these proposals.
First, transferring powers from Whitehall and Westminster to the West Midlands so that we have the tools and the powers we need to transform the region.
Second, keeping the proceeds of growth in the Midlands instead of handing it back to the government so that we have more of the funds needed to regenerate brownfield sites, support new businesses, boost skills and improve transport links.
Third, a region-wide plan to invest in more housing and faster transport links.
Fourth, a single team campaigning to attract national and international investment in local jobs and businesses.
And fifth, new links between businesses, schools, colleges and universities to improve education, increase apprenticeships and boost skills amongst the adult workforce. This for me is absolutely crucial. The way to make the West Midlands the engineering and enterprise capital of Britain is by making education and skills our number one priority, so we can improve skills, boost spending on science and technology and get universities and industries working more closely together. We've got brilliant universities in the West Midlands but we retain a relatively small proportion of the graduates they produce compared to other regions.
Having more powers over skills would give us the chance to develop a German-style system to improve technical and vocational skills by getting schools, colleges, academies and UTCs working with apprenticeship and training agencies, universities and businesses.
So, for me, the Combined Authority is about a stronger economy with:
- New jobs
- More housing
- Better skills
- And quicker transport links
Let's get behind these plans and pledge that we are going to arrest the decline, so that as we emerge from the recession and as our economy grows again, we won't make the mistakes of the past.
We will not leave any community behind; we'll build a stronger economy, with better skills, new industries and new jobs and open up opportunities for people who live in the West Midlands
Stewart Towe also spoke at the event; he is the Chairman of the Black Country LEP and the Group Chairman and Managing Director of Hadley Industries PLC. His speech stressed the importance of a public and private sector alliance and the real economic benefits that can be achieved from the formation of a combined authority. He also provided statistical evidence to demonstrate the solid economic foundations from which a WMCA can grow. Here is Stewart Towe's argument (in note form), for the creation of the WMCA.
- The WMCA is a genuine public/private partnership with over five years of history of us working together
- The three LEP's working together makes the area unique in the UK
- The West Midlands economy grew faster than the national economy since 2010
- The area is a national leader in attracting Foreign Direct Investment (FDI) and growing our own businesses
- The area has globally significant concentration of leading advanced manufacturing and engineering businesses, in some parts twice the national average
- The breadth of the region's business base is the key to its economic strength both in terms of size of businesses and the sectors across which they operate
- High quality connectivity across the area is crucial.
- The West Midlands has the largest concentration of businesses outside of London – 132,000
- The three LEP areas have a combined GVA of £78bn, 1.9m jobs. 9% of these jobs and 16% of businesses are in advanced manufacturing and engineering compared with 8% and 13% nationally
- In 2014/15 within our region we had the highest number of FDI successes and new jobs arising from FDI out of all LEPs. The West Midlands figures are 129 successes, creating 8,124 new jobs and 1,545 safeguarded
- Businesses in the West Midlands exported £28.6bn worth of goods in 2014 compared to £27bn in 2013; the sixth consecutive year of export growth, while the rest of the UK saw a fall
- The EU was the single largest market for West Midlands exports with 73% of goods in the machinery and transport sector, 10.5% in manufactured goods and 7.4% miscellaneous
- 18,337 new businesses were registered in Birmingham in 2014, the highest of any city outside of London (an increase on 2000 from the previous year)
- Our LEPs are national leaders for product and process innovation
- There are nine universities in the West Midlands Met areas with a further five in the wider West Midlands
- Universities of Aston, Birmingham and Warwick are members of the M6 Group (a powerhouse for joint research projects and leading industrial collaborations)
- 90% of the UK's businesses and jobs are within a four hour journey of the West Midlands
- Our Job Seekers Allowance claimant count has fallen significantly, with only London showing a greater reduction
- Large number of low added value companies in low growth sectors
- High number of people with low skills and in many cases no formal qualifications
- Shortage of housing and employment land
- The Black Country has a massive challenge and contaminated land
Five key themes
- Integrated transport seeking significant devolution of funding and financial flexibilities to support ten year investment fund of around £8bn. This drives forward a transport investment plan and increases development land supply. We also have the HS2 Growth Strategy to drive the region
- Research and innovation using HE/FE and inherent skills and innovation of workforce
- Access to finance using scale of the functional economic area to drive partner provision recognise unique requirements of SME business sector
- Skills development: an integrated new employment and skills system for the West Midlands, supporting school leavers, helping more people into work and providing skills to match the needs of local businesses
- Transforming public services particularly for 'troubled individuals and families', with support for people with mental health issues and reforms to the criminal justice system.
The West Midlands Combined Authority covers a functional economic area and is the most effective vehicle to continue and accelerate the trajectory of growth we are already seeing in the 'manufacturing heart of the country'- The West Midlands!
We need your support to make it happen.