Surrey connects

Local Enterprise Partnership - expression of interest

surrey economic partnership

The Rt Hon Vince Cable MP and Rt Hon Eric Pickles MP

Department for Business, Innovation & Skills

1 Victoria Street

London SW1H 0ET

Dear Sirs

We strongly welcome the invitation to submit an expression of interest to form a Surrey Local Enterprise Partnership. After

reading our expression of interest we hope you agree it is critical that we are fully endorsed as a Local Enterprise Partnership.

We are proud of Surrey’s achievements to date and of the invaluable contribution we make to the Exchequer. Surrey has

a strong track record of growth and expansion based on our existing platform of success. We have a GVA of £26.5billion,

contribute £5billion net per year to the Exchequer and within our economic geography, we have six of the top 25 most

competitive districts according to the UK competitiveness index 2010.

We must continue to invest in Surrey’s success to ensure the whole of the UK continues to benefit from our powerhouse

economy. We must also support Surrey to ensure its economic success does not stall in relation to the rest of the world.

In order to maximise our Local Enterprise Partnership’s potential we need to leverage full resource participation from

central government to meet the challenges that our businesses have already set. Our expression of interest is strengthened

by research undertaken by Oxford Economics which showed that a £1billion investment in the South East would yield

significantly more return in UK GDP (some £160million), relative to the same investment in the Midlands (£119million), and

the North (£76million).

It is in areas such as Surrey, therefore, that investment for economic growth will prove beneficial to the Exchequer.

With your support, we are aiming for a target of an extra £1billion contribution to the Exchequer.

Surrey’s Local Enterprise Partnership will continue to drive strong outcomes, particularly in three main areas:

• infrastructure (with initiatives such as digital inclusion meaning 100% super fast broadband coverage for Surrey)

• business development (including higher business survival rates and a target for new business start ups)

• skills and workforce (which involves increasing the number of people ready for employment at all skill levels)

Surrey is uniquely placed in the heart of the South East and has close links with areas such as Buckinghamshire,

Hampshire, West Sussex, East Sussex, Kent, Bracknell Forest, Reading, Slough, Wokingham and Windsor and

Maidenhead, as well as the London boroughs of Croydon, Hounslow, Hillingdon, Kingston upon Thames, Richmond

upon Thames and Sutton. As outlined in the following expression of interest, we will continue to work collaboratively

with other Local Enterprise Partnerships in the spirit of our vision of ‘Surrey connects’.

Rosco Paterson Andrew Povey

Chair Leader

Surrey Economic Partnership Surrey County Council

surrey economic partnership

1 September 2010

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Surrey has a strong, well-connected, knowledge-driven and wealth-creating

economy. It supports a diverse business base of local, national and global

companies. Surrey has the potential to drive a world-class regional

economy. As significant net contributors to the UK Exchequer, some

£5billion net per year, Surrey partners recognise that they must continue

to work together. The partnership is already strong, and we will build on

it further, by establishing a Local Enterprise Partnership.

The intent is to maintain and grow a local economy that is outward

looking and well positioned, to support the future economic growth of the

UK. The nature of its business base gives Surrey a central position, driven

by its location, as a functional economic area. Surrey’s enviable geographic

location, environment, history and cultural assets continue to play an

important role in shaping its economy. But latest evidence warns us that

Surrey’s economy needs to be nurtured. To progress a Local Enterprise

Partnership in Surrey presents a significant opportunity to

help secure local and national prosperity.

Critical to the successful establishment of the Surrey Local Enterprise

Partnership is the leadership taken by business in developing this

Expression of Interest. This is key to the Local Enterprise Partnership,

as ultimately it is business who deliver economic development outcomes;

creating jobs, innovating, investing in research and development, buying

goods and services and paying taxes. Surrey acknowledges that it has

to adopt a high-growth strategy for business to achieve these aims.

The Surrey Local Enterprise Partnership will be governed by an

independent private/public board and business chair - reflecting business

needs and balancing strategy and delivery requirements with business and

enterprise at the centre. It will utilise available public resources to unblock

barriers to business growth.

Taking advice from key partners in Surrey and neighbouring areas, the

emerging Local Enterprise Partnership vision can be articulated as follows:

‘Surrey connects’:

Surrey’s pivotal position at the centre of major corridors of growth means it can optimise enterprise opportunities that link the region together.

Surrey’s unique location and superb communication networks connect us, and our neighbours, to the rest of the world and global opportunities.

1. Surrey Local Enterprise Partnership

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It will be a partnership led by businesses, able to tackle their needs and

help the economy grow, while at the same time strong and articulate

enough to reach out to work with surrounding functional economic areas:

• through continued joint working with West Sussex deliver the priorities

of the Gatwick Diamond Initiative1 which the Surrey Economic

Partnership established

• with West London and Berkshire harness the inward investment and

supply chain spin-offs of Heathrow airport

• with Hampshire along the Blackwater Valley grow and maximise the

strengths of the Aerospace, Defence and IT sectors.

The Surrey Local Enterprise Partnership will seek ‘pragmatic coalitions’

with these and other surrounding areas, to solve common problems and

issues, and to maximise the opportunity of key transport corridors and

the airports. More can be achieved by working together than alone.

Tackling issues such as super fast broadband, transport infrastructure

and needs of small businesses are better dealt with on a wider scale

by cooperation between Local Enterprise Partnerships.

Surrey’s Local Enterprise Partnership will build on the established private/

public partnership model of the Surrey Economic Partnership. This

provides a sustainable strategic vehicle, and harnesses a significant business

network. Surrey Economic Partnership is chaired and led by business,

with the direct involvement of global and local businesses, working with

business representative organisations (Confederation of British Industry,

Institute of Directors, Federation of Small Business and Surrey Chambers

of Commerce), the County Council, Surrey Local Government Association,

three universities (Surrey, Royal Holloway and the Creative Arts) and the

community, voluntary and faith sector.

Ultimately, the challenge for Surrey going forward is not to be complacent

(ie to rely on past success), but to build on inherent strengths to ensure

Surrey’s competitive future and continued high levels of contribution to

UK plc.

1 Established in 2003 the Gatwick Diamond Initiative is already a successful collaborative business-led private/public partnership. It aims to facilitate, coordinate and lead actions necessary to create the right environment for business growth in the area surrounding Gatwick airport – an area covering three districts in East Surrey and three in North West Sussex.

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Surrey exhibits many of the downsides of success; congestion, high house

prices, pressures on infrastructure and growing socio-economic disparities.

It is vital that private and public sector partners have a shared vision for

the spatial and economic needs of Surrey formed within a strong and

accountable structure. Surrey’s Local Economic Assessment2 identifies a

number of key challenges for the Surrey economy:

• comparator economies are catching and overtaking Surrey’s economic

performance

• increasing pressure on economic infrastructure

• rising unemployment from a low base, especially for young people

• growing importance of the relationship with London

• large reliance on employment in the public and financial services

sectors

• increasing environmental pressures

• the need for an appropriately skilled workforce

• contraction of the working age population.

2. Tangible outcomes

Infrastructure

• Digital inclusion - 100% super fast

broadband coverage for Surrey

• Airtrack delivered

• Redevelopment of Gatwick airport station

• Improved road access to the 70 acre Surrey

Research Park

• Development of low carbon economy

Business Development

• Higher business survival rates

• Higher rates of R&D spend

• Support for innovation agenda

• Stimulation of business creation

• Active stimulation of inward investment offer

• Increase Business Angels and venture captial

availability

• Sector specific support ie tourism, digital

Skills and Workforce

• Increasing the number of people ready for

employment at all skill levels

• No NEETs by 20203

• Maximise university, education and

business linkages

• Develop social enterprise models

Tangible outcomes sought from Surrey’s Local Enterprise Partnership

2 Surrey County Council in collaboration with Surrey Economic Partnership Ltd, Surrey’s Local Economic Assessment Draft for Consultation, July 2010, Surrey’s Local Economic Assessment Emerging Findings, June 2010 www.surreycc.gov.uk

3 People Not in Education or Training reduced to 2% by 2015, and full participation in education, training and employment by 2020 (at 19 years by 2015).

In response, Surrey’s Local Enterprise Partnership will take forward the

concept and action to establish a ‘New Business Plan for Surrey’, engaging

partners to deliver real change and a focus on outcomes. The main

towns will be the focus for development of the core knowledge-based

Surrey economy. Building on Guildford’s continued strength as the

UK’s most competitive location outside of London, its innovation base,

entrepreneurial flair and location for major international companies will

increase the contribution to the Exchequer by growing the economy.

Surrey’s partners have identified key actions required to support the

delivery of business critical infrastructure, business development and

to ensure we have the right skills base for business to thrive.

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3. Developing Surrey’s Local Enterprise PartnershipIn developing Surrey’s Expression of Interest for a Local Enterprise

Partnership, business and the public sector have held many conversations

and business meetings across Surrey and with its neighbours. Surrey

Economic Partnership has hosted significant workshops with large

numbers of business leaders and other partners to develop a shared

vision for our Local Enterprise Partnership proposal. Discussions have

been supported by innovative use of networking media channels led by

Surrey Economic Partnership.

Once ‘Surrey connects’ is approved as a Local Enterprise Partnership, we

will confirm the mechanism to deliver the vision and objectives, within the

parameters of available funding.

Following consultation with partners, we propose a Local Enterprise

Partnership to the current administrative boundary of Surrey, with an

explicit intention for collaboration with other areas, due to Surrey’s

pivotal location and excellent business connectivity. Many of the issues

that we face overlap with those of our neighbours, such as supporting

innovation and enterprise, raising skills at all levels, maximising inward

investment, and capitalising on the global economic links provided by

Heathrow and Gatwick airports. The Surrey Local Enterprise Partnership

will collaborate with the surrounding areas of Buckinghamshire, Hampshire,

West Sussex, East Sussex, Kent, Bracknell Forest, Reading, Slough,

Wokingham and Windsor and Maidenhead, as well as the neighbouring

London boroughs of Croydon, Hounslow, Hillingdon, Kingston upon

Thames, Richmond upon Thames and Sutton.

It will build on existing strong business relationships, coupled with a robust

economic research and intelligence function, developing the existing strong

private sector led private/public partnership, and working on the following

strategic objectives:

• economic competitiveness with world-class aspirations and capitalising

on Guildford’s competitiveness ranking

• stimulate the culture of local entrepreneurship creating new businesses

and jobs for sustainable and diverse business growth

• deliver sustainable economic infrastructure: SMART growth, super-fast

broadband, roads, rail, and a world-class business support mechanism

• support a ‘can-do’ response from the public sector on spatial planning

and getting the most out of new investment, such as the Local

Investment Plan

• raise productivity and innovation with a focus on open innovation,

SMEs, social enterprises, and emerging technologies, tackling barriers to

growth

• maximise inward investment building on the existing strong locational

opportunities with the provision of world class facilities

• ensure a skilled workforce and capitalise on existing education strengths.

Governance

Surrey Economic Partnership (with a private sector approach and strategic

focus to economic development) has operated successfully since 1997,

bringing private and public sector partners together to set the shared

vision for the economic needs of Surrey. It has also brought resource into

the county for broadband, innovation, inward investment, skills and getting

people back into work.

By using an established base, and transitioning to the Surrey Local

Enterprise Partnership, this approach will be able to take advantage of

new opportunities that emerge from the universities, the social enterprise

sector, the 2012 legacy, the two international airports, and the significant

environmental and leading edge technology, and R&D activity being shaped

within Surrey.

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Surrey Local Enterprise Partnership - delivering for the UK

Where are we now

Identification of resources to be re-focussed on Surrey

Needs to be business focused - rebalancing the economy

Surrey’s GVA grew by 32% between 2000-07, but GVA per capita stagnant

Increasing strain on Surrey’s infrastructure impeding its ability to attract investment, drive economic growth and sustain tax revenues

Surrey LEP . . . the future

Surrey’s GVA in 2008 = £26billion, 15% of the south east’s GVA. Surrey largest net contributor to the Exchequer after London - some £5billion a year

Need to keep the engine room of the UK economy oiled

Surrey enabled for quicker and greater marginal return on government investment

World class business location - easy access to two international airports and strategic road network

Strategic response

Activities for future wealth creation

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Implementing the LEA

Strategic/business critical infrastructure

Economic research and intelligence

Innovation in action

Inward investment

Economic resilience

Global competitiveness

Business focused projects

Skills for wealth creation

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Annex 1 - why Surrey?Surrey’s success comes from geographical proximity to London and two

international airports (Heathrow and Gatwick). It has a diverse global

business base, three universities (Surrey, Royal Holloway and the Creative

Arts), highly qualified residents, and a high quality natural environment.

It is an attractive environment for international businesses and has a

strong culture of enterprise and innovation.

Surrey is well recognised as one of the powerhouse economies of the

UK, with Gross Value Added (GVA) of £26.5billion (around £24,000 per

head of population). Surrey has the largest sub-regional economy in the

South East, accounting for 15% of regional GVA, and has an economy

comparable in size to that of Birmingham and Liverpool combined4.

Surrey is the most densely populated shire county in the South East

with a current population of 1.1m. The core county area is home to

over 61,000 businesses, of which over 250 are global companies (the

largest concentration in the UK outside of London).

The World Knowledge Competitiveness Index (2008), shows that the

South East of England was ranked 74th out of 145 global regions (down

from 40th rank in 2004) – London is now 102nd down from 46th

in 2004. The South East region has also slipped within the European

Competitiveness Index (2006/07) being ranked 16th among 118

European regions (down from 12th in 2004). If the relative rank of the

South East economy is falling, then it follows that Surrey’s is also falling,

although within the UK Competitiveness Index (ranking 12 regions),

for the first time the South East has displaced London into 2nd place.

According to the UK Competitiveness Index 2010, six Surrey districts

are within the top 25, and the county town of Guildford is deemed the

most competitive ‘city’ in the UK (outside London). Surrey also has three

districts within a previously identified growth point, the Gatwick Diamond,

within its administrative boundaries.

Overall, Surrey demonstrates strong performance in a number of areas

(relative to comparator areas). It has a high proportion of jobs in

knowledge-based industries, business start-up rates and residents with

high-level qualifications – all of which are important drivers of productivity.

As a result, resident and workplace earnings, as well as total GVA, are

generally higher in Surrey than the rest of the South East.

4 The size of Surrey’s economy is similar to that Birmingham and Liverpool (England’s second and third largest cities by population) combined (based on 2007 data - £26.5bn vs combined total of £27bn respectively). Surrey’s economy is also comfortably larger than that of Liverpool and Leeds (third and fourth largest cities combined (£26.5bn vs combined total of £25bn respectively).

Surrey connects

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Annex 2 - challenges and opportunitiesLike many local economies in the 21st century, Surrey is increasingly

affected by external events and competition on a global scale. Despite

Surrey’s past economic successes, in relative terms Surrey is slipping in

the competitiveness stakes. We need to focus attention on aspects of

the regional, national and international economy where we can have a

tangible influence.

The largest employment sector in Surrey is currently finance, business

and insurance. The sector with the biggest losses of employment in

Surrey 1998 – 2008 was manufacturing, transport and communications.

Now a re-balancing from the public sector to private sector is implied.

This is welcomed, but given the public sector accounts for 24% of Surrey’s

employment base, we need to ensure opportunities for employment

in the private sector arise in response to avoid unnecessary and costly

worklessness.

We need to generate significant added value and maximise our returns

on both public and private sector investment in Surrey. Collectively we

can make much more of the economic development resource in Surrey

across the private and public sectors. Together we can also champion the

dialogue with government on key business barriers that are stifling growth.

In championing this dialogue with other local enterprise partnerships, we

can also look outwards to maximise opportunities from emerging markets

in China and India, and the transition to a low carbon future. Since growth

follows communications corridors, connecting our activity will maximise

benefits for all, whether they are NEETs or commuters, owners of urban

or rural businesses, micro or multi national, home-grown or from overseas,

as well as social enterprises and the voluntary sector.

Our vision recognises that some connections needs to be faster, bigger

and better, such as fast speed broadband, and connectivity by rail

(including freight), air and roads. We recognise the opportunity for high

growth among our large base of small businesses5, so they can reap

the benefit of international supply chains, and continue to enhance the

county’s reputation for entrepreneurship and high growth potential.

5 In Surrey 99.5% of businesses are small and medium enterprises. Of these Surrey has a relatively low level of medium-sized businesses, with only 2.3% of its businesses falling into the 50-199 employees category.

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Designed by Surrey County Council Communications CS1901/AS/09/10

Mark Pearson

Chief Executive

Surrey Economic Partnership Ltd

T: 01483 685230

E: mark@surreyeconomicpartnership.org

Susie Kemp

Assistant Chief Executive

Surrey County Council

T: 020 8541 9008

E: susie.kemp@surreycc.gov.uk