Local Economic Assessment (LEA) Rochdale February 2011

1. Local Economic Assessment (LEA) Rochdale February 2011

2. The LEA: What’s New? • The LEA endorses and reinforces key findings of the MIER … but nearly 2-years on, the LEA also tells us about: • The current & forecast future impact of the recession • The composition & risk profile of the public sector across GM • The spatial dimensions of growth down to local level

3. LEA Timetable • GM LEA incl. Local Authority chapters: • Presentation based on draft final reports • Final version early 2011 – taking into account feedback • Additional Studies: • Advanced Manufacturing – end Feb. • Manchester Airport – end Feb. • Worklessness (Uni. of Oxford analysis of DWP data) – May/June

4. Impact of the recession • GM harder hit but forecast to recover better than UK INDEX 100 = 2008 Source: Greater Manchester Forecasting Model, 2010

5. GM Employment Growth 2003–08 Rochdale – a driver of growth outside the conurbation core Distribution Centre South of Heywood Stake Hill Distribution Centre North of Middleton Conurbation core – main driver of growth Source: ABI, 2010

6. Restructuring continues in Rochdale KEY (1998–2008) (Source: ABI) EDUCATION: 6.9% The biggest employers in the borough are Robert McBride plc, JW Lees & Co. and UK Car Group (Carcraft). CONSTRUCTION: 6.3% LOGISTICS: 7.2% PUBLIC ADMIN: 5.7% Growth Decline High Decline High Growth A growing representation of business administration companies in the borough, such as PC World RETAIL: 10.2% MANUFACTURING: 16.7% FINANCIAL & PROFESSIONAL SERVICES: 10.8% HEALTH: 13.8% FOOD & DRINK: 1.0% LIFE SCIENCES: 2.2% ENGINEERING: 6.7% Source: ABI, 2010

7. Growing private sector 2003-08 • In contrast to many parts of GM North, Rochdale has seen a net shift to the private sector (although overall growth still lags GM and UK). Source: ONS, 2010 NB – data does not separate out voluntary and community sector, which is expected to be of growing importance.

8. Return to growth to be driven by key service growth sectors, such as Professional Services Key growth sectors forecast to be Professional Services and Creative and Digital Industries EMPLOYMENT GROWTH 2010 TO 2020 (PERCENTAGE) BIGGEST GROWTH SECTORS FOR ROCHDALE FORECAST TO BE PROFESSIONAL SERVICES, LOGISTICS, COMMUNICATIONS AND CONSTRUCTION. Even with continued restructuring, Manufacturing forecast to continue to decline Source: GMFM, 2010

9. Above average concentration of high-growth businesses – second highest concentration HIGH-GROWTH AS PERCENTAGE OF BUSINESSES Source: Business Link North West, 2010

10. Rochdale not over-reliant on public sector • Less public sector jobs in Rochdale than most other GM North districts PERCENTAGE EMPLOYMENT Source: ABI (2008) and APS (2009), 2010

11. Rochdale a net exporter of labour – particularly to Manchester, and significant number of residents travel to work outside GM

12. ROSSENDALE 1,000 from Rochdale 1,800 to Rochdale LANCASTER 900 from Rochdale To Rochdale (under 1%) BURY 4,000 from Rochdale 3,000 to Rochdale ROCHDALE 29K residents commute out (44% of working residents) 20K commute in (28% of working population) Net flow = - 10K BOLTON From Rochdale (under 1%) 700 to Rochdale WIGAN From Rochdale (under 1%) 900 to Rochdale OLDHAM 6,000 from Rochdale 4,500 to Rochdale SALFORD 1,800 from Rochdale 1,000 to Rochdale TAMESIDE From Rochdale (under 1%) 1,300 to Rochdale MANCHESTER 15,000 from Rochdale 2,700 to Rochdale TRAFFORD 1,000 from Rochdale To Rochdale (under 1%) Net importer of labour fromRochdale Net exporter of labour to Rochdale Source: ONS Annual Population survey N.B. Only flows of 1% or more are shown. Figures have been rounded. Rochdale a net exporter of labour – particularly to Manchester, and significant number of residents travel to work outside GM Source: ONS (2007), 2010

13. Large areas of Rochdale are attractive to ‘Wealthy Achievers’ Rochdale

14. But worst levels of deprivation in GM North Least Deprived Most Deprived Source: IMD (2007), 2010

15. Severe deprivation focused around the core of the borough

16. Resident skills deficit remains despite recent improvements Source: APS (2009), 2010

17. Examples of recent skills improvements • GCSE (5+ A*-G) have improved and now at national averages. Performance for pupils achieving 5+ A*-C grades, including English and Maths, improved rapidly. • Level 2 and Level 3 outcomes by 19 years of age have been improving year on year – although still behind national averages. • Apprenticeship starts have rapidly increased in 2009/10 (+37% on 2008/09) • Marked improvement for adult skills outcomes, reflecting years of effort to address the skills deficit.

18. Challenges • Deprivation – high levels of unemployment and worklessness amongst Rochdale residents. • Whilst skills are improving, continued resident skills deficit hinders employability and limits quality of employment opportunities available to many. • Restructuring. Rochdale’s biggest sector – Manufacturing – is in decline. • Effects of the recession – Rochdale must continue to support private sector growth in much more challenging economic conditions.

19. Opportunities • Key assets – particularly significant employment sites at Heywood and Kingsway – the most important strategic site in GM North. • Strategic business location – on the main east–west motorway and M60, providing strong external connectivity. • Growing private sector, including high proportion of high-growth firms. Need to continue to support such enterprise and high-value activities. • Quality of life offer – desirable residential locations on edge of Pennines. • Further connectivity improvements (esp. to conurbation core) – supporting Rochdale residents find work and making the borough more attractive as a place to live for commuters. Metrolink will help in this regard (with connection to Kingsway also).

20. The GM LEA including the Rochdale chapter are available at: www.neweconomymanchester.com Dr Alexander Roy Head of Economic Analysis alex.roy@neweconomymanchester.com

21. Building Economic Resilience across Greater Manchester The Emerging Strategic Context Mike Emmerich Chief Executive, New Economy

22. The Coalition has introduced a series of significant changes to the economic development landscape… Comprehensive Spending Review Welfare reform and DWP Work Programme LEPs Local Growth White Paper Transport innovation RDAs SKILLS Localism Bill Regeneration RGF inequality worklessness Skills White Paper Local authority funding settlement Enterprise A new economic development landscape is starting to emerge … designed to reduce costs and increase private sector involvement

23. The emerging landscape in skills & employment shifts primary responsibility to the private sector • EMPLOYMENT: The DWP Single Work Programme incentivises private sector contractors to move people into jobs • Loss of funding and powers for authorities (Working Neighbourhoods Fund) • Public sector role becomes more one of influencing contractors and ensuring integration with other local services and activities – as well as managing the impact of reduced levels of benefit spending in the economy • SKILLS: Primary responsibility for skills provision placed in the hands of the market – to colleges and other providers • In GM discussions are underway to form a three way relationship between providers, businesses and the public sector to ensure skills provision meets the long term needs of businesses and the economy. • The LEP will be pivotal in this arrangement

24. Key responsibilities around business support, inward investment and trade have been centralised • Most RDA responsibilities have been centralised nationally, however much of the delivery of activity will be sub-contracted locally • The LEPs will provide strategic input and leadership but the LEP is not a business support delivery body … the onus is on businesses to use networks and associations to formulate ideas, influence policy and lead economic growth • GM partners are seeking to develop a business support proposition - low-cost, high value-added, private sector-led initiative to ensure GM's businesses have access to the best possible business support services • MIDAS and Marketing Manchester will promote GM internationally, fostering international links and attracting inward investments • Science and innovation is a key priority and GM are seeking to attract a Technology & Innovation Centre

25. The funding environment has changed significantly, requiring an adapted approach • RDA funding will cease to exist - European funding through ERDF will continue without RDA involvement • The Regional Growth Fund provides funding for projects delivering economic growth outcomes • The Evergreen fund requires a strong return on investment - and aims to attract public sector pension fund investments as well as private sector investment, creating a fund of significant scale. • An increased emphasis will be placed on projects delivering a return on investment as well as quantifiable and evidenced economic growth outcomes • A single investment framework is being developed to provide a transparent and consistent means of assessing GM projects

26. In this new policy environment the organisational landscape is changing significantly Mix of national, sub-regional and local activity Regional tier (RDAs) GM Combined Authority & LEP + increased collaborative working Ten local authorities + AGMA & BLC Identified GM Strategic Priorities & produced Delivery Plan Integrating GM organisations to drive delivery of GM Priorities

27. The Greater Manchester Local Enterprise Partnership (LEP) is being established • The GM Local Enterprise Partnership proposal has been approved by government and a Shadow LEP is already in place • The LEP will drive strategy, set direction and identify growth opportunities • Recruitment of the full LEP Board is starting, with national advertisements, in order to be in place from April • The Board will have a private sector Chair and majority private sector membership, alongside AGMA representatives • Private sector members will be selected through an open process, based on skills and experience rather than representation of particular interest groups – application details at www.gmleprecruitment.com • The GM LEP proposal outlines areas of focus for the LEP - however the LEP will have scope to shape and define its own agenda

28. The Greater Manchester Combined Authority (CA) will work in concert with the GM LEP to drive the GM agenda • The GM Combined Authority legislation is currently being finalised, and will be in place from April • The CAwill be the primary accountable body with the potential to take on responsibility for coordinating economic development and regeneration and transport provision across Greater Manchester • While the LEP defines strategy and sets direction the CA can mobilise local authority resources to deliver the GM agenda

29. The GMS continues as the focus of Greater Manchester’s economic priorities • Based on MIER, and other evidence, the GMS identifies the 11 priorities to improve Greater Manchester’s long term economic performance • Agreed by AGMA and with central government … and now endorsed by the Shadow LEP • Individual authorities have a key role to play in achieving the GMS in order to benefit from improved GM economic performance

30. GM economic development organisations need to be aligned and adapted to drive delivery • The GMS provides the focal point and drives the activity of all GM’s economic development organisations • The LEP will become the principal body driving this strategy • An integrated business plan across GM organisations will ensure delivery activity is aligned and resources are used effectively and efficiently • The Combined Authority will offer a similar platform for integration and alignment of local authority activity • It is crucial that these organisations work in concert on these key priorities for Greater Manchester • … as well as offering support to authorities in identifying and addressing specific issues of local relevance and importance

31. Sub-regions in the north west are collaborating to ensure regional priorities and assets are retained • A number of regional transition work streams are underway – with sub-regions and NWDA working closely to ensure critical activity is not ‘lost’ • These groups are accountable to the north west Regional Leaders Board • The groups are focusing on … • Regional ‘case-making’ and lobbying • Identifying and supporting key sectors in the region • Identifying and retaining key assets – people / data / systems • Cost efficiencies in research, analysis economic forecasting

32. In conclusion … • The GMS remains at the core of Greater Manchester economic strategy • The LEP and Combined Authority provide Greater Manchester with new levers to drive forward this strategy • However the policy and funding environment has changed significantly and this presents many challenges … as well as opportunities • Engaging with business becomes ever more important – as does the need for commercial returns on investments • Ensuring that GM level organisations work effectively and collaboratively with local authorities is crucial to achieving our aims