We are requesting 70.5m from Growth Deal 3, and in return offer to Government;

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2 The Government has invited Local Enterprise Partnerships to bid for investment via the Local Growth Fund. 1.8bn capital is available to LEPs for projects in the period 2017/ /21. This document is the final submission from Greater Cambridge Greater Peterborough Enterprise Partnership (GCGP) to Government for investment and is the third in a series of Growth Deals. We are requesting 70.5m from Growth Deal 3, and in return offer to Government; 10,000 jobs (+35,000 longer term) 2,700 homes (+9,300 longer term) Outcomes in skills, apprenticeships and training 1 subject to Area Review Match funding of 90m Leverage of 500m investment. This offer reflects early engagement with partners and if most funding is only released 2020/21. GCGP sees the ability to use investment from the Local Growth Fund as an essential complement to the proposed Cambridgeshire & Peterborough East Anglia Devolution Deal 2. The LEP is also working closely with neighbouring Devolution Deals to the north (Greater Lincolnshire) and east (New Anglia). This Growth Deal proposal has been developed in the context of our economy s national and international role, the needs of businesses (both large and small) and Government s agenda for change. It has the full support of all local authorities and universities. GCGP has engaged with a wide range of partners and stakeholders in the preparation of this submission, including the business community and colleges of further and higher education. GCGP has been awarded 109.1m to date through the Local Growth Fund, being 71.1m through its first Growth Deal announced in July 2014 and 38m in January The GCGP economy is a world leader in life sciences, ICT, and knowledge intensive industries, with an international role in food & drink, logistics and advanced manufacturing. There is a well-established supportive business ecosystem covering innovation, sources of capital, legal and Intellectual Property advice and specialist commercial property. There is significant demand for business growth, particularly concentrated on Cambridge. However, business growth is not uniform, with lower levels of growth and productivity outside of the key hubs. Over the last twenty years (and more) the growth in this economy has required a constant increase in the workforce across all skill levels, attracting new households and more via in-commuting. This has 1 Investment in skills infrastructure subject to outcomes of an Area Review which will begin in November The Devolution Deal for Cambridgeshire and Peterborough is currently open for consultation 1

3 been planned positively, with Peterborough, Cambridge and surrounding areas regularly topping the table as fastest growing cities in the UK. Despite this, essential infrastructure and housing delivery are failing to keep pace, and the benefits of growth are not being sufficiently spread. Growth Deal 1 set out a transformational strategy to: spread the innovation cluster more widely beyond Cambridge; enhance Peterborough as a premier business location; and raise productivity in the wider rural area and market towns. Growth Deal 2 developed this further by tackling delivery barriers through construction skills and site viability. Under the Growth Deal, the GCGP area has seen job and business growth, a rise in apprenticeships, is in the top five LEP areas for scale of housing delivery, and experienced a boost to investment in R&D. However, businesses are telling us that there are still problems recruiting a skilled workforce, innovation is not reaching its full potential, housing affordability is getting worse and productivity challenges remain. Growth Deal 3 is transformational because: 1. It stimulates housing through new models of delivery and support to smaller housebuilders; 2. It boosts productivity through higher level skills provision including a new university and through capital investment in R&D; 3. It translates innovation into commercial businesses; and 4. It supports business growth through new commercial space, and opening up new locations to the market. These interventions are also designed to maintain business and consumer confidence in the post-eu Referendum period, and seek to capitalise on GCGP s global role. The existing Local Growth Fund proposals, other GCGP activity, Greater Cambridge City Deal and wider Government investment combine to deliver significant change in the GCGP area. This bid builds upon earlier investment to lever and accelerate economic growth. GCGP has been a fundamental part of Devolution discussions for Cambridgeshire and Peterborough, and this Growth Deal bid has been developed to run alongside the potential Combined Authority investment. It also builds upon our experience in delivering previous investment and maturing partnerships and relationships. 2

4 Greater Cambridge Greater Peterborough represents a crucial area of the UK economy that consistently delivers economic growth and is fundamental to the UK s role on the world stage, particularly following the EU Referendum. GCGP is already delivering an ambitious programme of activity that has seen its economy grow by 13% since 2011 to 35bn, and is seeking additional Local Growth Funding of 70.5m to underpin further growth to The UK Government should invest in GCGP because: Greater Cambridge Greater Peterborough is a premier asset for UK plc GCGP is delivering high growth and exports now but we can do more Our key sectors are recognised as priority with Government and have world class ecosystems Innovation here delivers across the UK, technology developed here underpins many of the world s digital systems Local area embraces growth and is streamlining bureaucracy The economy has shown it will deliver. 3

5 The economic geography of Greater Cambridge Greater Peterborough is complex and diverse. Extensive Travel to Work Areas are formed around the economic centres of Cambridge and Peterborough, as well as around other market towns (GCGP contains eight TTWAs in total). There are strong links to the boundaries of the LEP and beyond (to the east, northwest, south and west) in what is a fluid, flexible and generally well-connected labour market. GCGP s economy has national and international strengths in life sciences, information and communications technologies (ICT), creative and digital industries, cleantech, high value engineering and manufacturing, with excellent connections to national and international transport networks. Outside our two cities, we are a predominantly rural area with a network of market towns and some of the most valuable and productive agricultural land in the country. Our region is a high net contributor to the Exchequer and our two cities are amongst the fastest growing in the country. However, this success has not been achieved across all areas and we have areas of significant deprivation that must be addressed. For example, Fenland Council has four wards in top 10% most deprived nationally (and is ranked 80 th most deprived a decline since 2010). The carrying capacity of our environment is being stressed, and we have a legacy of underinvestment in key infrastructure necessary for sustainable growth. 4

6 GCGP ranked 10 th out of 39 LEPs for GVA per hour worked in GVA per filled job was 48,700. However, sub-regional figures reflect the varying economies within and overlapping GCGP. Lincolnshire is indexed the lowest at 87.0 through to Cambridgeshire (UK Index of 100). On average a filled job in Lincolnshire delivers 42,506 GVA, whilst in Cambridgeshire its 50,535. The 63,000 businesses in the GCGP area are characterised by a high proportion of SMEs, often chasing a tight labour market particularly in key sectors around Cambridge. GCGP monitors job vacancies and has evidence of key skills shortages. Connectivity challenges make it difficult for the labour market to respond locally. The area is lacking apprenticeship offer/take-up in key skill areas. In the northern part of GCGP there is a lack of take-up in Higher Education. A well supported priority is the University of Peterborough project. A successful university would fundamentally change the economy in the northern LEP area from Replicator to Innovator because a significant barrier to high end inward investment (the skills gap) would be tackled. This would unlock the economic potential of Peterborough and beyond, attract high GVA new business, deliver world class education to a global market and support existing businesses that need higher skills levels to grow. It would reverse the Peterborough / northern GCGP brain drain and drive growth into every aspect of the economy by creating a knowledge market (as opposed to a labour market ) that requires support industries. The key immediate responses to Brexit for the GCGP economy are: Retain market confidence in GCGP as a global location Build on our success by exploiting export growth further utilising our Global brand Reduce impact on knowledge economy (particularly EU research funding) Support businesses that rely on specialist skills of non-uk EU nationals (again particularly the knowledge sector) Understand impact on Higher Education institutions as a location for study/research Address reliance on migrant labour supply - food & drink, care / NHS, and tourism sectors Maintain confidence in construction and housing sectors. GCGP is currently the sixth largest LEP by area, at some 7250 sq. km. It is in the least densely populated quartile of LEP areas, and in population terms, ranks 17 th. However it is growing rapidly - GCGP s population is forecast to increase by around 300,000 by This represents a 21% increase and is the highest percentage growth of any LEP area in South-East (excluding London). Adopted and emerging local plans have a higher level of planned housing (163,000 over 20 years) than that suggested by national household projections. GCGP had 594,000 dwellings in By March 2015 this had increased by 2.2% (13,220 homes), putting GCGP in the top five of LEPs for scale of housing delivery. 5

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8 Source: Adopted and Emerging Local Plans 2014 Figure: Large growth locations (over 1000 dwls) in GCGP area 7

9 GCGP welcomes growth. A dynamic workforce is critical to meet the needs of our expanding sectors, as is the availability of commercial space. However rapid growth places pressure on our road and rail infrastructure, particular in areas already suffering congestion. In part this has been recognised, with the Greater Cambridge City Deal and with the recent welcome announcement of major investment in the bottleneck of the A14 between Cambridge and Huntingdon (along with GCGP and local partners financial contributions). However, delays in the new Rail Franchise announcement, key rail improvements moved back post-2019, and other congested routes are concerns. The GCGP area also has the most studies underway on nationally-controlled routes of any LEP (including Cambridge to Oxford Corridor by the National Infrastructure Commission; Cambridge to Oxford Expressway, A1(M), A428 all by Highways England; West Anglia Main Line Improvements Taskforce, East Coast Main Line Study, A47 Taskforce, A14 Taskforce, Ely North Junction/Soham, Wisbech to March) as shown below. *diagrammatic and not to scale. Only some corridors shown and excludes locally-led studies. Do not represent actual or proposed route alignments. 8

10 In 2013 our businesses told us that skills, connectivity and supporting innovation were key barriers to future growth. This was backed by evidence around a tight labour market (yet with deprivation in parts of the area), congested or missing infrastructure, and lack of translation of patents/innovation into growth businesses. The growth bid was also developed in the context of the emerging Greater Cambridge City Deal (which provided 100m of transport investment to help deliver 34,000 homes and 43,000 jobs in Greater Cambridge) and the ESIF Strategy (which prioritised 35m support on innovation, ICT, SME competiveness and low carbon, plus another 35m on access to employment, upskilling and inclusion). Growth Deal 1 prioritised seven Intervention Packages: Deliver a Growth Hub to support business growth (including translation of innovation from start-up to commercialisation; entrepreneurship and growing existing businesses) Respond to existing pressure for the growth and retention of businesses by facilitating the provision of additional commercial space Remove the skills barriers to continued growth (including aligning skills provision with business demand and facilitate Centres of Excellence for key skills shortages) A transport network fit for an economically vital high growth area To be the UK s exemplar area for digital connectivity Delivery of Alconbury Weald Enterprise Campus (including to help cement core vision of the Enterprise Campus by attraction of high technology businesses as early adopters of the site) Encourage the delivery of long-haul flights from Stansted Airport to key international locations via a temporary Air Passenger Duty exemption. The outcome of Growth Deal 1 was support totalling 71.1m (as this was less than bid for the digital connectivity package was not taken forward). The Air Passenger Duty exemption was not supported. Although housing affordability was recognised as a key factor at the time of Growth Deal 1, it was not a specific theme. In part this was due to the City Deal support for Greater Cambridge, but also the LEP Board s desire to prioritise business growth interventions at the time. Growth Deal 2 revised the spatial approach, and addressed the need to support housing delivery more directly. An extension to the Growing Places Fund Programme formed the key ask in Growth Deal 2. GCGP also secured the Cambridge Compass Enterprise Zone, a network of sites outside Cambridge, to meet our strategic priority of securing more investment and growth around the City of Cambridge, rather than simply within the city. This spatial and sectorial approach can be summarised as: Our spatial approach Fostering and spreading the Cambridge phenomenon Establishing Greater Peterborough as a premier location 9

11 Addressing challenges of rural areas and releasing the potential of the Market Towns. Our sector approach Life Sciences Food and Drink (Agri-Tech) Aerospace, Automotive and Defence Clean-tech Digital and Creative. We have reviewed our priorities set out within the Strategic Economic Plan. Our businesses and other stakeholders told us that our overall strategy remained sound and that we should broadly continue with the investment themes identified in GD1 and GD2. In shaping the bid we have also looked at leveraging the impact of our current investments, national investment, Devolution and the potential impact of the Referendum. We are proposing a package approach, backed up by our pipeline of proposed projects. This allows us to integrate our interventions with the emerging Combined Authority, other investments, and to drive further value out of the proposals (using our experience from GD1 and GD2). An overall bid of 70.5m allows us to be focused, is realistic about the size of the national fund we are bidding into, and reflects capacity to deliver if most funding is only released in 2020/2021. A package approach allows us to tackle different types of intervention and act as a catalyst to private investment. Our pipeline of proposals suggest each of our proposed programmes would be over-subscribed, showing the level of demand for interventions. Our programmes look to build upon the successes and projects of Growth Deal to date, and other investments. So for example we have project proposals in the pipeline that, if prioritised, would unlock development around the confirmed investments in Cambridge North Rail Station, Ely Southern Bypass, our Enterprise Zones and in East Peterborough. We are proposing delivery via five programme themes (all of which underpin Innovation and Growth): Housing Delivery Transport Innovation and Business Growth Skills Infrastructure Enterprise Zones Connectivity is fundamental to growth so transport solutions will be part of delivery across the other programmes as well the Transport programme. 10

12 The bulk of the bid is split across Innovation, Housing Delivery and Transport. Innovation support is particularly important given the nature of the GCGP area, and is essential if this Growth Deal is to be truly transformational. The Housing and Transport pipelines are currently heavily over-subscribed compared to the size of the programme submitted. However, the Growth Deal will complement the investment plans of the proposed Combined Authority as we work within the Combined Authority to deploy the Devolution Deal s 170m for housing and 80m for infrastructure over the next four years to 2021, so schemes will also be brought forward through that funding. Without Devolution, this Growth Deal would need to be significantly increased in quantum. A programme bid is made for investment in Skills Infrastructure, based on business-led demand although the full scale of need will emerge from the completion of the Area Review of Skills Provision. Finally, a smaller scale of investment is identified for the Enterprise Zone programme. This reflects difficulties in securing business investment to spread the innovation cluster following the Brexit decision. 11

13 This programme theme will focus on the following; Support for specific sites with remediation or infrastructure requirements, and acquisition / land assembly whether via grant or loan investment alongside other public and private sector partners, for example Homes and Communities Agency (HCA) Delivery of smaller sites in town centre locations, on brownfield sites, railway land or via public assets in line with One Public Estate / Making Assets Count (MAC) [1] Working with non-transport strategic infrastructure providers including water, power, broadband, renewable energies to develop models to accelerate delivery of homes where there are identified challenges and / or market failure Support for small and medium sized developers to access opportunities from planned growth Support for innovative construction solutions e.g. off-site manufacture. The Housing Delivery Programme Theme will include transport infrastructure where specifically identified to provide new homes, or deliver mixed sites where housing is a substantial element. This programme theme will have a close relationship with programme theme two: Transport throughout the Growth Deal period. GCGP is one of the best performing LEP areas for housing delivery (% increase in homes). It is the fifth LEP for scale of housing delivery since Absolute numbers are also high. There are already four new settlements under construction or in local plans, in addition to the major expansions of Peterborough and Cambridge. Over 40,000 homes are planned in the five years to However, this masks different levels of achievement within the area and even though delivery rates are very high they are still not keeping pace with forecast substantial growth in households. This has implications for affordability, particularly in Greater Cambridge (Cambridge City and South Cambridgeshire). Cambridge is also an extremely popular focus for overseas investment, not just for the rental market but also buy-to-leave where apartments are bought off-plan yet remain empty for overseas capital growth reasons. Cambridge has the highest average house price outside London at 410,200 3 and the third highest year on year growth after Bristol and London at 13.4%. The impacts of this are felt across the Greater Cambridge commuting area into South Cambridgeshire, East Cambridgeshire and West Suffolk in particular. [1] owth/

14 In other parts of the LEP area, average house prices are not as high, but IMD levels are higher and workers still struggle to get onto the housing ladder. This, combined with higher benefit claimant rates, means there is unmet demand for social and affordable rent, and shared ownership homes. Devolution will provide Cambridge Housing Delivery Agency (CHDA) with 70m to provide new affordable homes. The proposed Combined Authority will also have a 100m housing and infrastructure fund to help deliver infrastructure for housing and growth and at least 2,000 affordable homes. Even with this investment, it is unlikely that the Combined Authority will be able to bring forward all strategic infrastructure that has been identified to support housing growth this will be further tested in the development of a Strategic Infrastructure Plan for the area. While the proposed devolution deal highlights transport infrastructure required to unlock the largest new communities in GCGP, it is likely that there will still be opportunities for the LEP to provide support for specific sites with remediation or infrastructure requirements and to support land assembly whether via grant or loan investment. We are working with local authorities and developers for the following large sites to articulate infrastructure requirements, the best use of public money (considering Value for Money and Market Failure) and any LEP role in housing delivery; Wyton Airfield (former MOD site) potential infrastructure requirements to enable 4,500 homes which will include Starter Homes, as well as access to improved A14 building on upgrade investment Waterbeach new settlement (former MOD site) a range of new infrastructure requirements including new station and improved sustainable transport routes directly into Cambridge, providing 10,000 new homes (beyond Growth Deal period) Alconbury (former MOD site) transport infrastructure and utilities requirements to serve 7,000 new homes at Alconbury Wisbech lower average house prices mean that there is potential for a high proportion of Starter Homes and Shared Ownership homes in new developments in and around Wisbech, either as part of a potential Garden Town expansion or via individual developments. Further details of schemes proposed as part of devolution can be found within Additional Information. As the Growth Deal investment pipeline has grown, reoccurring themes have emerged, one of which is strategic non-transport infrastructure aligned to GCGP s internal key growth corridors and include power, water, renewable energies and broadband. In some cases, this is a problem of regulated utilities investment cycles being out of step with both local planning and the pace of development. As part of the devolution work on the strategic infrastructure plan these issues will be explored. We are working with non-transport strategic infrastructure providers including water, power, broadband, renewable energies to develop models to accelerate delivery of homes where there are identified challenges or market failure. This may involve capital projects coming forward under this programme theme. 13

15 The LEP has received proposals both from local authorities and developers in respect of infrastructure to enable and accelerate delivery at major housing sites. Where sale prices are higher than the 250k threshold (Cambridge and immediate vicinity) then Starter Homes are more likely to be apartments in mixed use developments. The LEP is working alongside the Homes and Communities Agency (HCA) to explore opportunities to provide loans or equity for site purchases, and is looking for smaller sites unlikely to receive support through Combined Authority funds, in particular in town centres or former brownfield sites. Larger sites outside Cambridge will have potential for higher proportion of Starter Homes particularly in the north of our region. Peterborough has seen high rates of housing delivery and this is expected to continue. It is likely that Starter Homes will feature significantly on new city centre sites and we are exploring this as part of a Railway Land Rehabilitation project. LEP Growth Deal funds can assist with supporting infrastructure, unlocking sites and improving viability. Housing deliverables supported by Growth Deal 1 & 2 are 10,000 homes (3,000 from A47 Junction 20; 3,000 from Ely Southern Bypass; 1,000 King s Dyke Level Crossing; 350 Bourges Boulevard; 2,650 Growth Places Fund). GD is funding transport improvements that lead to these housing outcomes. For example, Ely Southern Bypass which has just been successfully tendered is providing 1.7km of new road relieving significant congestion in Ely, supporting 4,500 jobs and 3,000 new homes. Additional housing is being unlocked by the Greater Cambridge City Deal. GCGP has also been working with private sector developers and institutional investors to explore new models of delivery. GCGP will continue to work with its partners as other former MOD and brownfield sites become available linked to the Government s One Public Estate programme. The LEP is already contributing to visioning work for RAF Mildenhall in Suffolk in anticipation of US Air Force withdrawal in The Growth Deal Housing Delivery programme will enable; - Working with non-transport strategic infrastructure providers including water, power, broadband, renewable energies to develop models to accelerate delivery of homes where there are identified challenges or market failure - Support for specific sites with remediation or infrastructure requirements, and acquisition or land assembly whether via grant or loan investment alongside other public and private sector partners, for example the Homes and Communities Agency (HCA) - Delivery of smaller sites in town centre locations, on brownfield sites, railway land or via public assets in line with One Public Estate and Making Assets Count - Support for small and medium sized developers to access opportunities from planned growth - Support for innovative construction solutions e.g. off-site manufacture. 14

16 - Accelerated delivery of a further 2,600 homes. This programme theme will focus on the following; GCGP engagement with strategic transport projects of national and regional importance Adding value to major transport schemes / key growth corridors as identified in the proposed Devolution Deal Unlocking major employment sites Sustainable transport schemes relating to jobs and growth Helping employers implement sustainable travel plans and relieve congestion. The Housing Delivery Programme Theme will also include transport infrastructure where specifically identified to provide new homes, or deliver sites where housing is a substantial element. These two programme themes will have a close relationship throughout the Growth Deal period. Closely linked to housing infrastructure, GCGP does not currently have an effective fully integrated rail and rapid transport network that can meet the enormous demands placed upon it by the area s growth. A network that connects its main centres with quick frequent passenger services, and provides effective links for both passenger and freight between Cambridge, Peterborough, our network of market towns and the rest of the country is urgently required. By delivering this, there will be better utilisation of the local labour supply and reduce pressure on house prices in the cities providing opportunities for housing and employment across the wider LEP geography. There will be a reduced impact on the environment, improved air quality, reduced carbon emissions and improved road safety. The resulting network will enable more efficient movement of goods to support businesses to connect to supply chains, key markets and strategic gateways, unlocking economic growth and regeneration locally but also in other directions. 15

17 In part Government has recognised this, not least in the context of the nationally-led transport studies that are including the GCGP area (as set out in Section 1). GCGP is working with local partners to consider how best to establish a Sub-national Transport Body (STB) to ensure that Cambridgeshire and Peterborough and its neighbouring areas, notably Norfolk, Suffolk, Lincolnshire, Northamptonshire, Rutland, Essex, Hertfordshire, Bedfordshire and the Cambridge-to-Oxford arc, can best work together to influence strategic national transport investment. This includes making the case for East-West Rail, in line with the STBs being progressed in other parts of the country, such as Transport for the North (TfN) and Midlands Connect. The LEP already has agreed ways of working with other LEPs, for example GCCP is a member of a Taskforce for the West Anglia Main Line along with Hertfordshire, South East and London LEPs. Similar groups exist for other spatial and thematic priorities for example the Oxford 2 Cambridge Arc and London Stansted Cambridge Consortium. GCGP engagement with strategic transport projects of national and regional importance The Growth Deal provides opportunity for GCGP to support studies and technical work on key growth corridors which link the area to national infrastructure priorities and other areas of significant growth eg., West Anglia Main Line Task Force. There are also opportunities to provide better sustainable transport or rapid transport solution to help people access train stations along major routes. Adding value to major transport schemes / key growth corridors as identified in the proposed Devolution Deal Investment via the Combined Authority will provide support for accelerating strategic transport projects, in particular through revenue funding for feasibility and design work. This is likely to be targeted towards key growth corridors and larger new communities as a priority. Our Growth Deal Programme Theme One: Housing Infrastructure will provide investment for infrastructure to deliver specific housing sites, or add capacity to devolution infrastructure funds where these are insufficient (most likely in Year 4 of Growth Deal funding ie 2020/21). Unlocking major employment sites and sustainable transport schemes Within its Transport theme, GCGP s Growth Deal programme will add value through focused investment where it will unlock jobs growth. Growth Deal investment will also aim to support sustainable transport solutions, again where jobs growth will be clearly enabled through investment. GCGP is therefore proposing that the Transport programme will deliver 7,000 jobs by Access Fund Capital GCGP is proposing that a proportion of its transport programme be aimed at helping employers implement sustainable transport solutions and will provide capital funding for on-site improvements. This kind of activity is proven to reduce existing and future vehicle trips on the network for example over the period the Travelchoice programme in Peterborough 4 achieved a 9% reduction in

18 car use whilst the subsequent Local Sustainable Transport Fund programme over the period achieved a 6% reduction in car use through specific workplace interventions. The delivery of this work with employers will require revenue investment to engage businesses and raise awareness of the benefits of sustainable transport projects, therefore a separate submission will be made for Access Fund revenue to Department for Transport (DfT). In Greater Cambridge, investment via the LEP will complement activity already in delivery via the Cambridge City Deal. Large Local Transport Majors (LLTMs) In parallel with development of this Growth Deal submission, the government has invited applications for funding to support work towards Outline Business Case (OBC). The aim of the Local Majors fund is to provide funding for those exceptionally large, potentially transformative, local schemes that are too big to be taken forward within regular Growth Deal allocations and could not otherwise be funded. Government defines this as schemes over 59m for GCGP area. Three proposals for Large Local Transport Majors (all for Outline Business Case Funding) were received from GCGP partners. The Local Transport Panel considered the three proposals and the recommendation of the Panel was to submit two schemes - the A505 Transport Study (Cambridge/Royston) and the A15 Dualling Study (Peterborough/Market Deeping). A505 Transport Corridor Study CCC 1) A strategic transport and growth study which will incorporate an Options Appraisal Report and an Appraisal Specifications Report covering the Large Local Major Transport Scheme, and potentially several further Local Major Transport Schemes; 2) Outline Business Case development for a A505 Duxford to Granta Park scheme and for any other schemes that emerge from the strategic study. A15 Dualling PCC The scheme comprises two lane dualling of the A15 Glinton Northborough Bypass in each direction from Junction 23 (at grade roundabout with the A15 Werrington Parkway / Paston Parkway) to the north of Peterborough to Junction 26 (at grade roundabout with the A1175 / B1525) to the west of Market Deeping. 17

19 This programme theme will focus on the following; Strategic Economic Plan (SEP) priority Spreading the benefit of the Cambridge phenomenon by exploring opportunities to support scale-up activities and encourage disruptive innovation in key sectors Supporting business growth through investment in infrastructure, premises or equipment where there are clear gaps in market provision in line with LEP priorities to develop Peterborough as a premiere business investment location or in GCGP s market towns and rural areas Expansion of the successful Agri-Tech Growth Initiative which is currently available across GCGP and New Anglia LEP areas to include Greater Lincolnshire LEP area. Proposals for business centres will need to be able to demonstrate a clear need and projects should also make best use of existing vacant premises or brownfield sites. Spreading the benefit of the Cambridge phenomenon Cambridgeshire and Peterborough s economy has national and international strengths in life sciences, information and communications technologies (ICT), creative and digital industries, cleantech, high value engineering and manufacturing. This includes: a. Nearly 300 biotech and life sciences companies (including Napp Pharmaceuticals, Amgen, Bespak, Nestor and Medimmune) supported by internationally renowned NHS Trust university teaching hospital Addenbrooke s and the Cambridge BioMedical Campus, home of the new Medical Research Council Laboratory of Molecular Biology, Cancer Research UK and GlaxoSmithKline. Astra Zeneca is also moving its global HQ and main UK research facility there. b. An internationally significant ICT, software and telecoms cluster including ARM, the world s premier semiconductor IP supplier and Autonomy. c. 350 Cleantech companies and organisations with 6,000 jobs and a 600m turnover. d. High Value Manufacturing including global engineering firms such as Perkins, BAe Systems and Marshall Aerospace. e. UK market leaders in food processing and agribusiness sector, including British Sugar, Premier Foods, Nestlé Purina, Hilton Food Group and Produce World Group. 18

20 f. Technology-based creative companies turning over more than 1billion per annum in the area, including Cambridge University Press, Sony Computer Entertainment s Cambridge Studio, Supreme Being (urban fashion) and Bauer. Our Enterprise Zones (see Programme Delivery Theme Five) provide locations for investment which capitalise and positively exploit the innovation and technology cluster of the Greater Cambridge economy. These are supporting and accelerating planned high quality business space, beyond Cambridge s constrained Green Belt and are more readily accessible to affordable homes and a skilled labour supply in the market towns, planned new communities and rural communities. However, there is a compelling argument to provide intermediate or grow-on space from our R&D communities, in particular to test the manufacturing processes enabling specific technologies ability to scale-up. Greater Cambridge is reasonably well served for incubation and innovation space on its science parks, however demand for these facilities is fierce, with many overseas investors opting to invest outside of the UK if they cannot find local space. From our discussions with partners there is potential for targeted move-on accommodation within specific sectors. The life sciences cluster to the south of Cambridge is a core strength of the economy and is of international significance. The cluster has experienced significant growth over recent years and there is further jobs growth potential for over 11,200 jobs subject to planning. Agents and partners have indicated a lack of move-on or scale-up facilities within Greater Cambridge which will, in part be met by the Cambridge Compass and Alconbury Weald Enterprise Zones but the LEP is exploring whether there is a particular need for intermediate or specialist space which could be provided through later stages of this Growth Deal to facilitate a whole lifecycle approach for the Cambridge Innovation Ecosystem in particular, to retain talent, skills and GVA within the LEP area. Supporting business growth through investment in infrastructure, premises or equipment where there are clear gaps in market provision in line with LEP priorities to develop Peterborough as a premiere business investment location or in GCGP s market towns and rural areas As a growth location, demand for business expansion is strong but this is not evenly spread across the LEP area. GCGP experiences challenges over the provision of the right amount and quality of commercial space, which is a risk to the area s plans for growth. Some parts of the GCGP area lack quality accommodation in particular smaller market towns and rural areas. The case for innovation centres Innovation centres create a focal point for the aggregation of all the necessary components in support of the establishment and catalysing the early growth of SMEs. Many of these companies go on to provide high value job opportunities and a high proportion is driving the UK Knowledge Economy. Innovation centres are increasingly corner-stoning activities on wider science and technology parks nurturing interactive communities that drive innovation, entrepreneurship and enterprise. Over the last few years, science parks and innovation centres have faced major challenges posed by the economy and changes to the national and local political landscapes. Science parks deliver at a regional level and in the past worked regionally to secure funding to drive SME-directed initiatives. With the move to a national strategy and delivery mechanisms there is now a need to reconnect the science park movement such that the parks can deliver local translation of the national programmes. 19

21 Our first expectation would be that the market would respond to these demands in an economic environment such as GCGP. However, this has not been the case. Since 2008 traditional lenders for UK property have moved away from commercial property. There remains a strong case for GCGP intervention in our cities where there is pent up demand for innovation and incubator space and also in our wider LEP area where we are seeking to encourage businesses looking for space of this type to locate beyond our city centres. Innovation centres and science parks can provide supportive environments with the following characteristics all of which help SMEs grow: Open innovation communities help the translation of world leading research into innovative products for the global market Shared spaces, formal and informal, provide neutral locations for this sharing of information, skills and expertise Support a range of projects that deliver innovation and incubator space across the LEP area Create a fund mechanism for the period of the SEP that will allow greater flexibilities on the use of this funding to support innovation and incubator space Address both refurbishment and new-build issues Target research, innovation and follow-on space Encourage the expansion beyond Cambridge of technology businesses. Expansion of the successful Agri-Tech Growth Initiative which is currently available across GCGP and New Anglia LEP areas to include Greater Lincolnshire. The Eastern Agri-Tech Growth Initiative invests in the development and commercialisation of agricultural research and development, SME and supply chain development generating employment, and essential skills development. 5 It has helped to create or safeguard 469 jobs to date. As this programme has gathered momentum and is becoming better known, GCGP has received enquiries from companies beyond its geography and we are unable to help them at present. We are therefore proposing to expand the current programme, which is currently available to companies across GCGP geography plus Suffolk and Norfolk, to include Greater Lincolnshire. Greater Lincolnshire are reflecting their inclusion within their own Growth Deal. Exploring opportunities to support scale-up activities and encourage disruptive innovation in key sectors GCGP has the potential to be the world s leading region in the science of scale-up. Already it is recognised for the outstanding success of the Cambridge phenomenon. Key to this will be the successful commercial exploitation of new materials, technologies and processes, including disruptive technologies. GCGP is therefore exploring potential for dedicated scale-up facilities to provide a bridge for to the world-class science and technology being developed in the region s universities. GCGP will also continue to provide grants and finance to businesses through its Signpost2Grants 6 and Growing

22 Places Fund programmes, which help support the emergence of new and potential disruptive innovations and technologies. Incubation, Innovation and Managed Workspace The provision or enabling of new business space is not currently mentioned within the current devolution deal. The Growth Deal will therefore add value through support for incubation, innovation or managed workspace where there is evidenced gap in private sector provision, demand of need and it supports the SEP priority themes and / or key sectors. Agritech Growth Initiative A continued and expanded Agri-tech Growth Initiative will provide a significant boost to GCGP s food production, agriculture industry and research cluster by investing in new market and supply chain development, essential skills development and the development, application and commercialisation of R&D. The Agri-Tech Growth Programme aims to create 700 jobs over four years, starting from April This is based on performance from the current Agri-tech programme delivered by GCGP. 21

23 This programme theme will focus on the following; Strategic Economic Plan priority Changing the culture of skills provision to become more business responsive and to provide a steady flow of highly skilled workers to support our fastpaced growth by supporting private and public sector investment in infrastructure, premises or equipment where there are clear gaps in skills provision, particularly for higher level skills. Proposals will need to be informed where appropriate by the Skills Area Review, respond to business needs, and make best use of existing sites or vacant premises. There are challenges for our fast-growing businesses in finding the right skills mix for their needs, with a shortage of applicants with the necessary technical, practical and job specific skills and experience, particularly areas such as software and engineering. Addressing the area s skills deficit and employment issues is therefore a priority. This can, in part, be resolved by improved infrastructure and housing affordability, but also requires more proactive skills strategies aligned to employers needs. Growth Deal 1 set out to address this, and by doing so tackle some of the significant differences between some communities in the north and south of the area. Levels of economic inactivity for South Cambridgeshire and Huntingdonshire are very low (around 15%) as are unemployment rates (around 3%). The share of the population of South Cambridgeshire with no qualifications is as low as 4%. In contrast, Peterborough has 30% of its population economically inactive. 10% of Fenland, Peterborough and East Cambridgeshire s population have no formal qualification. Devolution provides another opportunity to drive the skills agenda in a way that supports local needs and priorities. There are a number of key strands under devolution that create exciting opportunities for learning and skills, which will also require input from the Growth Deal. Growth Deal 1 is supporting new models of business-led higher skills provision. GCGP Enterprise Partnership through its own funding is supporting important work in developing the skills of local people further, including funding local skills services and promoting Apprenticeships. It is also funding work on the feasibility stage of the University of Peterborough. Higher Education Peterborough sits within the country s biggest Higher Education cold spot. The city is the largest conurbation in the UK without a university. This restrains economic growth by perpetuating a high end skills shortage, deters future investment by technology-based industries in the northern LEP area and drives an outward migration of academic talent. The university project is a long-term undertaking; 22

24 based on the experience of the University of Suffolk in Ipswich, this will require a combined public and private investment in excess of 60M over a twenty year period. By 2035, Peterborough will have a thriving, independent, campus-based university with an undergraduate population of 12,500 students. The university will be a powerhouse for economic and intellectual growth, outward-looking but rooted in the ingenuity and diversity of its people. Adult Skills and Further Education Cambridgeshire and Peterborough s Area Review of post-16 education and training will start at the end of November 2016 and will enable us to refine our skills strategies to ensure post 16 providers are delivering the skills local employers require. The LEP and its partners have deliberately delayed completely defining the skills infrastructure for Further Education so our programme can reflect the conclusions of the Area Review. Apprenticeships Greater Cambridge Greater Peterborough is increasing the delivery of apprenticeships from 8,880 residents undertaking an apprenticeship in 2013/14 to 10,120 last year. The nature of the economy with a significant proportion of SMEs means that increasing take-up is more challenging. The Greater Cambridge City Deal is also focused on driving up the number of apprenticeships. This part of our geography faces a different challenge with significant focus on graduates and high level skills, therefore building a broad understanding of apprenticeships is central to our Skills strategy. Growth Deal is supporting apprenticeships through the creation of imet which will open in late 2017 and is anticipated to provide training for around 600 new apprentices per annum. GCGP, Urban & Civic and Huntingdonshire Regional College on imet site at Alconbury Weald Major planned new settlements at Alconbury, Wyton, Northstowe and Waterbeach require a stepchange in provision of construction skills, ensuring young people and local jobseekers can access opportunities afforded by growth. In GD 2 the LEP funded an Institute of Advanced Construction 23

25 project to provide specialist equipment at the CITB national centre for construction skills, and a Highways and Civil Engineering Academy at West Anglia Training Association (WATA) to provide skilled labour for transport schemes. We are in discussion with training providers and landowners of new settlements to increase these kinds of activities, hopefully on the growth sites themselves. Growth Deal has funded facilities for safe off-site motorway construction skills training, with other materials like gantries sourced from civils companies a potential national model. The Growth Deal skills programme aligned to devolution will enable; - technical studies, site remediation or purchase of land for the new university for Peterborough - investment in skills infrastructure, providing new facilities and equipment to help resolve the disconnect between skills provision and the needs of local employers - in the context of supporting pathways to employment in key LEP sectors, we will look to increase the number of higher level apprenticeships and close key gaps in specific areas, for example technicians. We need to increase the number of apprenticeships in IT to responds to high level of job vacancies in the Digital and Creative Sectors this is the sector with the highest vacancy rate across our patch. 24

26 This programme theme will focus on the following; Opportunities to support site infrastructure or public realm which develop our Enterprise Zones as great places for people to work Support construction of individual business premises subject to State Aids via loan or grant Opportunities for new Enterprise Zones, particularly in the north of GCGP area. This programme theme will have a close relationship with Programme Theme Three: Innovation and Business Growth throughout the Growth Deal period. Where Enterprise Zones are located in or near major new settlements the programme will also have a link to Housing Delivery and Transport themes, thereby taking a spatial approach across a number of themes within Growth Deal. Alconbury Weald at the intersection of A14 and A1(M) above Huntingdon was awarded Enterprise Zone status in 2014 and focuses and Advanced Engineering, ICT, Industrial Biotech and Low Carbon Industry. Alconbury will also be home to imet advanced technical skills centre funded through GCGP s Growth Deal. Cambridge Compass Enterprise Zone went live on 1 st April 2016 and expands the reach of Cambridge to surrounding market towns, new communities and rural areas. It includes sites in Cambourne, Ely, Haverhill, Northstowe and Waterbeach. While the Enterprise Zone status associated incentives are attracting interest to these locations, since the UK s decision to leave the European Union there has been insecurity in making decisions to invest. We therefore anticipate opportunities to support companies wishing to locate to Enterprise Zones with loans and / or grant subject to State Aid. GCGP is working with existing Enterprise Zones to explore potential site infrastructure improvements which may include public realm or communal facilities creating genuinely enjoyable environments for people to work. GCGP will also explore opportunities for new Enterprise Zones, potentially in same vein as the Cambridge Compass, in particular in or near Peterborough and its network of market towns building on continued city centre regeneration plans, and in Wisbech in the context of proposals for a Garden 25

27 Town. We are also working with Heritage England to explore potential Heritage Action Zones. Working with a range of other local partners and networks, GCGP has a growing track record of jointworking to achieve shared goals, through mechanisms such as local authority partnerships including the Greater Cambridge City Deal, Opportunity Peterborough and innovative projects led by district councils. We have secured significant funding through our Greater Cambridge City Deal and managed to secure funding for the 44m Cambridge North Station and the 1.5bn upgrade of the A14. However, many of these projects, due to partners funding profiles, have not been able to be agreed and delivered at the scale, speed or level to which such a fast-growing area needs. Devolution of powers and funding from government should provide the ability and capacity to address this. This third Growth Deal submission is made in the context of Devolution Deals proposed between central government and local areas in England. The deals include objectives to support economic growth and rebalancing of the economy, public service reform and improved local accountability. The Cities and Local Government Devolution Act 2016 underpins the devolution deals. GCGP and Local authority leaders are proposing a Devolution Deal for Cambridgeshire and Peterborough. Devolution will enable delivery of substantial economic growth and will accelerate delivery of 72,000 new homes over the next 15 years. Public consultation is currently underway. GCGP will have senior representation within the Mayor s Cabinet. In turn, the Mayor will also be a member of the LEP, alongside the other members of the Combined Authority, recognising the importance of the LEP role and the private sector in growth strategies or delivery. The proposal to government includes; A new 20 million annual fund for the next 30 years ( 600 million) to support economic growth, development of local infrastructure and jobs 170 million for affordable housing which includes a specific 70 million fund to meet housing needs in Cambridge 26