1. To update members on including Halton as part of the Merseyside allocation for The North West Fund.
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1 To: From: Subject: EPIC 11 th September 2014 DCLG JEREMIE - The North West Fund - Purpose of report 1. To update members on including as part of the Merseyside allocation for The North West Fund. Recommendation 2. That members note the NW Fund eligible expenditure in will not exceed 10% of the total eligible Merseyside expenditure. Based on a 155m fund size - Merseyside 40% investment target is 62m, therefore investment capped at 10% up to 6.2m. Overview 3. The North West Operational Programme (NWOP) has a ringfenced allocation of 40% for Merseyside as part of the arrangements for the phasing-in of former Objective One areas. 4. The former Merseyside Objective 1 area excludes the Borough of, which is part of the (LCR). The ring-fenced allocation therefore excludes. 5. The NW Fund (JEREMIE) has requested the Managing Authority to allow investments in to contribute towards their 40% investment target for Merseyside. This is on the basis of capacity in Merseyside to absorb 40% investment target, investments benefiting Merseyside and being part of LCR under the programme and any legacy generated would align back to LCR. 6. Merseyside, as a phasing-in area, can use ring-fenced ERDF resources to fund Convergence Objective activities. In relation to EC regulations exceptions to the general rule can be made where the region to which the assistance relates will benefit wholly or partly from an operation located outside that region. EPIC 11 Sep 2014 Item No: 4 Page 1 of 6
2 Figure 1: below shows the location of, immediately adjacent, to the Merseyside phasing-in area. 7. The maximum eligible expenditure of the NW Fund in is determined pro rata to the proportion of the benefits from the operation which it is foreseen will accrue to the region. The benefits have been assessed taking account the economic benefits, demography and workforce of as part of. 8. On this basis the measure of the assistance, the eligible expenditure of the operations will not exceed 10% of the total eligible Merseyside expenditure undertaken by the NW Fund. Based on a 155m fund size the Merseyside 40% investment target is 62m, therefore investment capped at 10% up to 6.2m. 9. The proposal to allow The NW Fund flexibility of the ring-fenced allocation in respect of has been endorsed by Merseyside partners and the LMC. Background 10. has a population of 1.5 million covering the local authority areas of, Knowsley, Liverpool, Sefton, St Helens and Wirral. Most areas have recorded an increase in population since Currently there are over 37,000 businesses. Over recent years the area EPIC 11 Sep 2014 Item No: 4 Page 2 of 6
3 has recorded improvements in its relative economic performance. The City Region is considered to be a functional economic area, with 85% of residents living and working within its boundary. 11. Despite its strengths, faces considerable challenges which highlight the need for co-ordinated intervention and investment to ensure the City Region s latent potential is exploited. 12. Notwithstanding progress to date, resilience during the recession and a recent recovery in growth comparable to other similar City Region areas, s 23.1bn economy continues to struggle to punch its economic weight. Average GVA per head has remained largely unchanged. As a result LCR suffers from an 8.2bn output gap compared to nationally. 13. A number of structural issues drive the output gap with the UK, from demographic characteristics, labour market participation levels to deficits in economic resources that influence productivity in the LCR compared to nationally. Greater globalisation as well as weakened economic conditions as a result of the recession have increased competition and reduced opportunities for growth. LCR needs to maximise the impact of investment and opportunities it has over coming years to reverse underlying structural issues and ensure the exploitation of its latent potential. 14. There is clear evidence that the six local authority areas form a functional economic area, which is a key strength. A functional economic area is not defined by complete and exclusive capture of all economic and market activity, but by strong connectivity in key sectors across all neighbouring areas, and this is more strongly referenced in Travel to Work flows. Contribution 15. Economic Performance currently contributes approximately 11% of LCR s economic output. The inclusion of into the LCR boundary increased the size of the economy by 12.5%. Figures highlight that between 1991 and 2012 experienced the largest growth of any City Region district. Forecast figures suggest will experience the largest growth of any City Region district between 2012 and 2030, also out-performing the North West and UK averages. EPIC 11 Sep 2014 Item No: 4 Page 3 of 6
4 Index, 1981= Index, 1992= Index, 1991= Index, 2012= Item No: 4 Change in GVA Forecast Change in GVA UK UK Source: Forecasts, Oxford Economics Source: Forecasts, Oxford Economics 16. Demography LCR has a total population of 1,512,600 of which 126,000 (or 8.3%) are resident in. The inclusion of into LCR has increased the population by 9.1%. Over the last decade, along with Liverpool, has been the main driver of population growth in the LCR. LCR has a Working Age population of 970,800 of which 80,600 are resident in. The inclusion of into the LCR has increased the Working Age population by 9.1%. Population Change Working Age Population Change Source: Office for National Statistics, Population Estimates Source: Office for National Statistics, Population Estimates 17. Labour Market Workforce Jobs has 598,300 workforce jobs of which 56,600 of which 56,600 (9.5%) are located in. The inclusion of into the LCR has increased the number of workforce jobs by 10.4%. Between 2009 and 2012 the number of workforce jobs in increased by 8.1% compared to a City Region average of -0.3% and national average of 0.5%. EPIC 11 Sep 2014 Item No: 4 Page 4 of 6
5 Proportion of Full-time Jobs Proportion of Private Sector Jobs Item No: 4 has the highest proportion of full-time jobs across all local authority districts in the City Region, 72.6% compared to a City Region average of 64.3%. There are currently 373,500 full-time jobs in the City Region of which (or 10.8%) are located in. The inclusion of into the City Region has increased the number of full-time jobs by 12.1%. Between 2009 and 2012 the number of full-time jobs in increased by 6.2% compared to a City Region average of -2.2%. was one of only two local authority districts that experienced growth over the period, the other being St Helens (2.3%). There are currently 394,000 private sector 1 jobs in Liverpool City Region, of which 45,600 (or 11.6%) are located in. Inclusion of into the City Region has increased the number of private sector jobs in the City Region by 13.1%. Between 2009 and 2012 private sector jobs growth in was higher than both the City Region and national rates, 6.2% compared to 2.2% and 0.2% respectively. Proportion of Full-time Jobs Proportion of Private Sector Jobs 80% 70% Average 90% 80% Average 60% 50% 40% 30% 20% 70% 60% 50% 40% 30% 20% 10% 10% 0% Knowsley Liverpool Sefton St Helens Wirral 0% Knowsley Liverpool Sefton St Helens Wirral Source: Office for National Statistics, Business Register and Employment Survey Source: Office for National Statistics, Business Register and Employment Survey 18. Manufacturing There are currently 44,600 manufacturing workforce jobs in Liverpool City Region of which 92.5% are full-time roles, 7,900 of the manufacturing jobs are in of which 95% are full-time roles. The inclusion of into the City Region has increased the number of manufacturing jobs by 21.6% and the number of manufacturing fulltime roles by 22.3%. experienced 3.3% growth in manufacturing jobs over the last two years compared to a decline of -1.2% in the City Region and growth of 1.1% nationally. 1 Public sector defined as SIC Sections - Public administration and defence; compulsory social security, Education and Human health and social work activities. EPIC 11 Sep 2014 Item No: 4 Page 5 of 6
6 has sector specialism in Manufacturing, Low Carbon, Transport & Logistics, Information & Communication, Construction and Scientific and Technical activities. 19. Business Statistics There are currently 41,500 businesses in LCR of which 3,650 are located in. The inclusion of into the LCR has increased the number of businesses by 9.6%. experienced business growth of 4.1% between 2011 and 2013 compared to 1.7% growth in the LCR overall and only 3.0% nationally. has a higher density of business to population than on average across the LCR and has experienced the largest increase in its density rate over the last two years. EPIC 11 Sep 2014 Item No: 4 Page 6 of 6
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