Hertfordshire Local Industrial Strategy

September 2019

SUPPLEMENTARY DOCUMENT 1

- Item 3

Progress made

Continue to gather evidence

Further evidence gathering including UH Productivity Analysis; Social Enterprise and Digital

impact reports both within and outside the LIS process as ongoing LEP good practice

Place roundtables

Letchworth; Broxbourne, UH and St Albans/Creative (planned).

Member and partner events, sector and places based forums/roundtables and a series of

deep dives into specific challenges/opportunities to refine the underpinning evidence base

Briefings

BEIS and local authority leaders; cross-party groups across wider South East geography

Dialogue

Ongoing discussions with newly formed Hertfordshire Growth Board, local and central

Government and neighbouring LEPs on process, progress & emerging priorities

Annual growth rates in key indicators in the

post-recession period (2012-17)

(Source: ONS datasets)

Hertfordshire’s economy today: headline statistics

Hertfordshire England

GVA tbc tbc

Jobs 3.7% 2.3%

Enterprises 5.7% 4.7%

People 0.9% 0.8%

WAP 0.6% 0.4%

Housing stock 0.7% 0.7%

In headline terms, Hertfordshire has:

• GVA: £37bn (current prices)

• Jobs: 725,000

• Enterprises: 62,000

• People: 1.18m

• Working age population: 740,000

• Housing stock: 487,000

In recent years, it has seen growth across all these indicators at a rate that equals or exceeds the average for England…

What was Hertfordshire like in the late 1980s/early 1990s – and now?

Late 1980s / early 1990s Now

Population Total population: 985,000 Total population: 1.2m

Watford The demise of aviation-related manufacturing at Leavesden

Aerodrome left a large, derelict, site near Watford…

…became a major hub in the UK film industry (as home to Warner

Bros) and a key economic driver for south west Hertfordshire

Hatfield British Aerospace’s major activities at Hatfield Aerodrome

were scaled down and then closed altogether…

Hatfield Polytechnic was a post-war technical college

focused on engineering linked to BAe…

…Hatfield Aerodrome site was redeveloped as Hatfield Business

Park – home to Ocado – and as the location for University of

Hertfordshire which now has c, 25,000 students, world class

specialisms and has been identified as a highly entrepreneurial HEI

Stevenage The merger between Glaxo and Wellcome had yet to

happen – but it led to R&D jobs being moved from Kent to

Stevenage (in the mid 1990s) which became the main R&D

site…

Subsequently, Glaxo Wellcome merged with SmithKline

Beecham to form GSK

…GSK continues to have a substantial research presence in

Stevenage and it is the 6th biggest pharma company world-wide

…key developments in recent years include SBC and the Cell and

Gene Therapy Catapult manufacturing facility which is allowing

Stevenage to function more as a hub for open innovation

Transport M25 was officially completed and opened in 1986… …connectivity in southern Hertfordshire relies on a very congested

M25

London Losing population and counter-urbanisation …booming global city enabled by technology

Hertfordshire is an “edge of London” economy: past growth and future prospects must be understood in this context

Hertfordshire’s economy was uniquely engineered by planned responses to the growth of London in the 20th Century:

• the accelerated development of New Towns / Garden Cities

• the designation of an extensive area of Metropolitan Green Belt

Looking ahead, Hertfordshire will be shaped further by responses to London’s 21st Century growth

• Hertfordshire’s New Towns have all grown to (or beyond) the scale initially envisaged for them…

• …adding in Watford and a series of smaller towns, the overall consequence is a polycentric urban form on the edge of London

• Despite the pace of growth – and its overall size – nowhere in Hertfordshire has the scale or function of a city…Yet “city-ness” is what defines vibrant 21st century places

• This is because of:

• agglomeration effects

• governance and resourcing

…and it is critical for the LIS

Explaining the pattern of growth

Productivity in Hertfordshire relative to

the UK, 2007-2017

Hertfordshire’s economy today: Productivity metrics

• Over recent years, Hertfordshire has not struggled to (re-)generate jobs… in fact, figures for jobs growth have been strong, fuelled by rapid population growth

• BUT Hertfordshire has been less convincing with regard to the quality of jobs growth

• These two observations link to its productivity performance…

• Productivity in Hertfordshire has declined significantly compared to the national average over the last decade – and yet it is the poor national performance that precipitated the UK Industrial Strategy White Paper

Source: ONS sub-regional productivity datasets

Foundations of Productivity (1/4)

Consistent with the structure of the Industrial Strategy White Paper, we need to “dig deeper” to investigate the Foundations of Productivity that help to explain performance.

These five are:

Ideas People InfrastructureBusiness

environmentPlace

Foundations of Productivity (2/4)

Hertfordshire performs well in business expenditure on R&D (BERD), driven by major corporate R&D

Over the last decade, it has worked very hard to “sweat” this investment, with some success

• growth of the cell and gene therapy cluster in and around SBC and the Catapult…

Its HE sector is not as strong as elsewhere and its wider ecosystem is underdeveloped

Major opportunities linked to Cambridge and London

IDEAS PEOPLE

• Overall, Hertfordshire has a well qualified working age population

• However, every day, it loses well qualified people, particularly to London… and it attracts a substantial in-flow from areas to the north

• Within Hertfordshire, there is a second narrative, concentrated especially within the New Towns…

• low aspirations

• inter-generational challenges

• low attainment

• There is a mismatch between the skills that are being generated locally and those which employers are seeking – particularly those operating in higher productivity sectors

Foundations of Productivity (3/4)

INFRASTRUCTURE

The strategic road and rail network doubles up as local provision, meaning that:

• radial connectivity is good, but east-west links are poor – and yet these are critical in relation to Hertfordshire’s own “critical mass”

• congestion is a major challenge throughout

• there are pressures linked to motorway junctions accessing major developments – e.g. the Enterprise Zone at Maylands

Hertfordshire has seen a substantial erosion of its employment land provision over the last decade

Digital infrastructure is market-driven and generally adequate for current uses

Hertfordshire’s energy/utilities infrastructure is under some pressure

BUSINESS ENVIRONMENT

• Hertfordshire is a good place to form a business (or at least lots of businesses are set up), but it is a more difficult place in which to grow a business

• The challenges of “scale-up” are acute given a vicious circle of circumstances:

• Hertfordshire has the downsides of agglomeration – as a high cost location in terms of sites/premises and labour

• BUT Hertfordshire lacks the “up sides” frequently enjoyed by cities – e.g. a strong sense of place amongst businesses

• Provision for small and growing businesses is locally-focused but generic in character

• Linking to infrastructure, Hertfordshire lacks high quality office/business park provision

Foundations of Productivity (4/4)

• Across the piece, Hertfordshire is dealing with the consequences of a population which is growing quickly, with pressure on local services and congestion…

• In response, the performance of those places which are accommodating substantial growth will be critical, most especially:

• Gilston-Harlow in the east of Hertfordshire

• Hemel Garden Communities in the west

• In addition, the performance of Hertfordshire’s rural areas should not be ignored – they are central to the area’s quality of life

PLACE

Hertfordshire has a proliferation of places with no dominant urban centre: polycentricity on the edge of London defines it

Its New Towns – without exception – need investment and regeneration

Its London Fringe area is mixed: it is doing well in the west, but struggling in the east, with many of the attributes (and challenges) of an outer London borough. It needs a new economic vision

Hertfordshire 2040

Hertfordshire is highly connected, with a very buoyant but pressurised World City to the south and the Cambridge – Milton Keynes – Oxford Growth Area to the north

This juxtaposition presents challenges and opportunities for Hertfordshire – and it provides the context in which our Local Industrial Strategy will be delivered

What could Hertfordshire “look like” by 2040?

SCENARIO 2: Hertfordshire facilitates London’s growth

Under this scenario:

• Hertfordshire continues to grow rapidly in terms of population, fuelling demand for local services which means that jobs growth continues apace

• Employment land continues to be lost – so jobs are increasingly peripatetic and/or service based

• Commuting to London accelerates – whilst the growing numbers of jobs in Hertfordshire attract in-commuting from areas to the north

• Transport infrastructure is under pressure and congestion is a challenge

SCENARIO 1:Hertfordshire fulfils the potential of the Golden Triangle

Under this scenario:

Stevenage, WGC and Hatfield together define a “science corridor” that plays a complementary and synergistic role to the overheating powerhouses of London and Cambridge

Wider cluster development is encouraged and facilitated, generating a variety of jobs

Skills provision is put in place to equip local people to respond

Major global corporates are retained and encouraged to (re-)invest

Hertfordshire 2040

Key themes…and the outcomes they need to generate

Old New Towns – new

New Towns: Creative and

aspirational communities

for the 21st Century

East/West growth

corridors:

• A414: Hemel, Hatfield,

Harlow

• A505: Luton towards

Cambridge

Unlocking science-base

clusters in the Golden

Triangle: Life sciences and

advanced engineering

“Beyond boundaries”: A

new relationship with

London – with a focus on

south east Hertfordshire

Space to Grow:

From enterprise to

business in

Hertfordshire

Creative sectors and

creative people: from

good to great in south west

Hertfordshire, and

investing elsewhere too

Digital foundations,

frontiers and futures:

Re-inventing peri-urban

connectivity, potential

and prospects

Theme 1: Digital foundations, frontiers and futures

Indicative priorities

• Ensure that digital and data analytics skills are developed as a priority

• Advance the Living Lab venture (likely to be focused initially on Hatfield Business Park)

• Similarly, advance Gilston and Hemel Garden Communities as a joint exemplar of digitally-enabled living

Rationale

Hertfordshire is very constrained in infrastructure terms and it needs to harness the possibilities of digital connectivity

It has some major players in this space with an appetite for innovation

University of Hertfordshire also has strong credentials in relation to data sciences

…AND challenge all other Themes to advance digital foundations,

frontiers and futures

Theme 2: Old New Towns – new New Towns

Indicative priorities

• Continue to deliver the vision for Stevenage Central – and link this to employment provision on Gunnels Wood Road

• Deliver a new economic vision for LGC with a strong focus on enterprise and creativity

• Advance the development of Gilston and Hemel Garden Village as exemplary, enterprising, creative and digitally enabled communities

• Explore the possibility of creating University of Hertfordshire “outposts” in LGC and Hatfield

• Further develop the role of the FECs in the New Towns

Rationale

Hertfordshire’s economic performance and character owes much to New Towns

The older New Towns all have challenges:• infrastructure

• inter-generational deprivation

• mismatch between local jobs and people

• limited cultural offer

Older New Towns need to be reinvigorated for the 21st Century

A series of new New Towns are planned – they need to be delivered excellently – both in terms of built environment and the communities that are created

Theme 3: Unlocking science-base clusters in the Golden Triangle

Indicative priorities

• Develop employment space (especially on Gunnels Wood Road) aligned to cell and gene therapy cluster and the wider supply chain

• Develop a skills plan for cell and gene – probably working with authorities in London and Cambridge

• Provide makerspace within a “science corridor” from Hatfield to Stevenage and LGC

• Develop sector-specific (STEM) strategies with FECs

Rationale

Hertfordshire performs strongly in terms of BERD – whilst its HE assets are limited

It has excelled over the last decade in growing a cell and gene cluster which is of global significance – this must flourish

It has very strong advanced engineering credentials – including in UoH – and these should add depth and breadth if linked to enterprise

Theme 4: East/West growth corridors

Indicative priorities

• Identify the synergies and complementarities between two EZs (and any new employment provision at Hatfield) and promote it as a unified package

• Develop skills interventions in support of an emerging east-west labour market

• Further develop the role of University of Hertfordshire as an anchor institution, emphasising its strategic location on the 3H2EZ A414 Corridor

Rationale

Hertfordshire’s economy is driven by N-S connectivity, but it needs a similarly strong E-W dynamic to garner meaningful agglomeration benefits

E-W connectivity is also key to generating multipliers from planned new development –both housing-related and that associated with two Enterprise Zones

E-W connectivity – and the places that are being connected – must be “digitally astute” from the outset

Theme 5: Space to Grow

Indicative priorities

• Develop the offer provided by Hertfordshire Growth Hub to support micro businesses with the ambition to grow quickly

• Work with local authorities – including potentially through direct investment – to ensure a better supply of grow on space (and to do so in a way that aligns with other LIS priorities)

Rationale

Hertfordshire has a strong track record relating to new business formation and self-employment, but it performs badly in terms of scale-up

Evidence suggests that non-micro (i.e. larger) businesses perform better in terms of productivity and progression

Affordable “grow on” space is in very short supply across Hertfordshire

Theme 6: Beyond Boundaries: A new relationship with London

Indicative priorities

• Develop an intelligent and ambitious vision for Park Plaza in order to redefine ambitions for south east Hertfordshire

• Working with the FE College(s), develop an ambitious skills plan – perhaps in dialogue with Epping Forest and LB Enfield – to upskill local people either side of the M25 in south east Hertfordshire

Rationale

The eastern part of southern Hertfordshire abuts London and is the most poorly-performing part of the county

It is the only part of Hertfordshire to have seen a decline in employment: it is at risk of becoming an “economic wasteland”

Its skills profile is also poor, relatively and absolutely

Theme 7: Creative sectors, creative people

Indicative priorities

• Work with the cluster in south west Hertfordshire – UoH as well as WB, BBC, etc. – to develop a plan for growth

• Support the development of town-level creative/cultural strategies, in part as a route to re-energising high streets (particularly in the New Towns, but also more generally)

• Determine interventions that ensure growth is inclusive and prioritise the empowerment of residents in realising opportunities

Rationale

Hertfordshire has outstanding assets in relation to film and TV; these are concentrated in south west Hertfordshire and are of national significance

The creative/cultural industries are of growing importance in building sustainable places at settlement level: Hertfordshire’s asset is mixed

Hertfordshire needs to (attract and) retain its “cultural class”, recognising its catalytic importance within the economy

Increase productivity

and grow the economy

Achieve growth that

is more inclusive

Build more homes more

sustainably

Improve the efficiency

of resource use – and

adapt to the challenges

of climate change

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Key themes…and the outcomes they need to generate

Old New Towns – new

New Towns: Creative and

aspirational communities

for the 21st Century

East/West growth

corridors:

• A414: Hemel, Hatfield,

Harlow

• A505: Luton towards

Cambridge

Unlocking science-base

clusters in the Golden

Triangle: Life sciences and

advanced engineering

“Beyond boundaries”: A

new relationship with

London – with a focus on

south east Hertfordshire

Space to Grow:

From enterprise to

business in

Hertfordshire

Creative sectors and

creative people: from

good to great in south west

Hertfordshire, and

investing elsewhere too

Digital foundations,

frontiers and futures:

Re-inventing peri-urban

connectivity, potential

and prospects

Ideas

People

Infrastructure

Business

environment

Place

Local Industrial Strategy timeline

Complete

roundtables

Publish business survey

results

Annual

Conference

APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY

Draft strategy and HMG co-

design (tbc)

Further evidence gathering including Productivity Analysis; Social

Enterprise and Digital impact reports

Public

consultation

Final

LIS published

Ongoing learning of local economy (place/sector/themes) LEP business as usual and LIS asks campaigns