The story of the 'Back the South West' campaign

Back in October 2016, the Western Morning News launched its 'Back the South West' campaign, just a few months after the Brexit process lumbered into inaction:
Futures Forum: Brexit: and Back The South West

It has regularly relaunched the campaign:
Futures Forum: Tech Nation >>> "'there's more to the South West than cream teas and cowpats'"

Today there was another relaunch - of something which talks about 'growth' and whose main photo is of a motorway heading into the sunny uplands: 

Forget Brexit - it's the day to #BackTheSouthWest

As Brexit turmoil continues to reign in the UK, we have seized to day to relaunch #BackTheSouthWest

By Hannah Finch
29 MAR 2019

The South West must #BackTheSouthWest

With indecision thwarting today’s Brexit deadline, we say there’s never been a better time for the South West to be crystal clear about its future. What should have been a momentous day for the UK has been scuppered by delay and division. Politics as we know it has been turned upside down and the country’s growth agenda is at a standstill.

While the Brexit debacle slides on, the Western Morning News - in partnership with Pennon Group and support from LiveWest and Womble Bond Dickinson - is set to seize the day to launch the second phase of the #BackTheSouthWest campaign.

Bill Martin, editor Western Morning News, said: “We could stand around waiting for someone, anyone, to tell us what’s going on with Brexit but the future prosperity of our region is too important for that. That’s why it’s so vital to press ahead with our ambitions for #BackTheSouthWest. Our priorities remain the same, we need a transport system, including a railway that is fit for the future. We need digital connectivity, quality housing, skilled jobs and the talented staff to fill them. Our aim is to ensure that the South West backs itself to show Westminster that we are more than ready for investment.”

The #BackTheSouthWest campaign was first launched in August 2016 in response to the Brexit referendum vote. At the inaugural Growth Summit launch event, Sajid Javid, the then secretary of state for communities and local government said there has to be a credible figurehead for economic growth for the Government to be prepared to hand over powers for investment, transport and infrastructure to the region. And he called for the region to have one voice on its plans for economic prosperity.

The campaign quickly gathered momentum, garnering support from some of the region’s biggest businesses, academics and political leaders.

We presented the South West Growth Charter to Downing Street, secured a debate at Westminster and formed a South West Leaders Forum with representatives from across all sectors of the business community.

A second Growth Summit held in 2017 harnessed widespread support for unity in a region that leads the way in the aerospace and creative industries.

Now it is a question of pulling together that enthusiasm and taking that message to the rest of the country and the world.

But despite our efforts, our economy has been held back by infrastructure underspend. Five years on from the Dawlish rail disaster, trains are still being cancelled during bad weather. The M5 remains our only major route into the region and the A303 upgrades have yet to begin. But we have seen progress in the shape of an £80million pledge for rail resilience works at Dawlish and £83million for improvements to the North Devon Link Road.

And crucially, we have seen regeneration throughout the region. From the enlarged Tate St Ives, new hotel plans in Torquay or further investment in Exeter’s city centre, we are seeing great changes that are designed to boost visitor numbers and the viability of our must populated areas.

The new Messenger statue in Plymouth is a bold statement of intent for the city about its creative heritage and vision for the future.

Change happens in stages and as a region, we need the backing to make those changes a future reality.

In February, Sarah Heald, Pennon’s Director of Corporate Affairs & Investor Relations joined South West MPs and Heart of the South West LEP chief Executive David Ralph to take our case to Government.

Under Sir Gary Streeter, MP for South West Devon, MPs from across the region, from Cheltenham to the Isles of Scilly, came together to call on the Government to invest in the Great South West. MPs called on the Government to fund transport improvements, including dualling of the A303 from Ilminster to Honiton, and works to improve capacity on the M5 from Taunton to Bristol.

In closing, Members highlighted the importance of South West MPs joining together to ensure the region receives its fair share of funding, and if we can just get the infrastructure right, the South West’s best is yet to come.

Minister for Local Growth, Jake Berry MP, said: “This is the year of regional growth, and the South West must be at the heart of it.”

As we get set to launch this latest phase of the #BackTheSouthWest campaign, the Western Morning News says: “We could not agree more.”

Forget Brexit - it's the day to #BackTheSouthWest - Devon Live
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Of Brexit bribes, the Strong Towns Fund and Local Enterprise Partnerships

On Radio 4's The Week in Westminster yesterday morning, the Strong Towns Fund was discussed - and the issue of how the cash is to be delivered was brought up [as of 9 minutes into the programme]:
The Week in Westminster - 09/03/2019 - BBC Sounds
BBC Radio 4 - The Week in Westminster, 09/03/2019

As Lisa Nandy MP pointed out, the cash is going to go through Local Enterprise Partnerships rather than through local councils - and so, in the case of her home town, decisions about the future of their high street are not being determined locally:
Lisa Nandy : Labour MP for Wigan
Wigan Council fights for the future of the town - Wigan Today
Place North West | Wigan to sign off town centre transformation

Meanwhile in Grimbsby, a former Chancellor was extolling the efforts of the local council - whilst most of the funding will not in fact be controlled by local councils at all: 

Only on Friday, Lord Lamont, part of the Town Deal team, enthused about the work being done while addressing Hull and Humber Chamber of Commerce’s dinner at Healing Manor Hotel.

He said: “We have every opportunity to make things better, for Grimsby to build itself the future it deserves.”

The teenage town resident who went on to become Chancellor of the Exchequer, said: “The hollowing out of Freeman Street and high streets is common for so many towns. Issues with educational attainment etc. The way in which the council has been tackling this has been very energetic, and I congratulate the chief executive of the council, and the energy put in to work with the private sector.”

Across England, a total of £1 billion will be allocated at Local Enterprise Partnership area level using a needs-based formula, with over half of this share – £583 million – going to the Northern Powerhouse. Another £600 million will be available through a competitive process. Local partners will be encouraged to come together to bring forward ambitious proposals in the coming months.

Grimsby highlighted as £1.6 billion strong towns fund unveiled - Grimsby Live

Yes, that's £600m for 'bidding' between councils and £1bn as determined by central government - via LEPs.

Meanwhile in Devon: 

MP says SW needs reassurance about cash for towns

15:43 5 Mar

A Conservative MP has criticised the government's new Stronger Towns initiative for overlooking parts of the South West. Cornwall North MP Scott Mann said his constituency had areas of high deprivation, yet had not been allocated any of the £1.6bn on offer nationwide.

The pot is split into £1bn, divided in England using a needs-based formula, and £600m communities can bid for. Of all of that, south-west England is to receive £33m, the government says.

Mr Mann said Cornwall had always scored "very highly in terms of social deprivation and funding [to address it]" and he wanted Treasury assurances that his constituency would benefit.

Treasury Minister Robert Jenrick said the announcement "does provide support for the South West" in terms of the direct funding to be paid to local enterprise partnerships.

He added that towns in Mr Mann's constituency "should bid into" the competitive fund of £600m.

BBC Devon & Cornwall Live: 5 March - BBC News

See also:
Futures Forum: Brexit: and "the government not listening to the concerns of the people of the South West"

And:
Futures Forum: "Government announces small bit of funding for something that needs a bigger bit of funding" > 'Stronger Towns Fund' vs local government cuts
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Brexit: and unknown unknowns for East Devon businesses

At the end of last year, local businesses were considering where they were with Brexit:
Futures Forum: Brexit: and the impact on business in the South West

The Herald has put together a Special Report on how businesses see things now: 

East Devon businesses in real life ‘deal or no deal’ over Brexit

PUBLISHED: 13:53 05 March 2019 | UPDATED: 13:58 05 March 2019

Daniel Wilkins

So, what happens to East Devon’s small businesses after March 29? The short answer – unless something highly unlikely has happened since this edition went to press – is that no one knows.

Businesses are in differing states of readiness for the possible scenarios.Some are stockpiling in case there is serious disruption to the supply chain. Some are adopting a ‘wait and see’ attitude.

Unless a delay is agreed on both sides of the Channel, on March 29 Article 50 will be triggered and the UK will no longer be part of the European Union (EU).

In the meantime various parties are angling for a ‘no-deal’ Brexit, a ‘no-no-deal’ Brexit or a second referendum, or ‘People’s Vote’ – though what the question should be is a further debate. Devon MP Sir Hugo Swire wrote in a recent column that this is ‘not going to happen’ as it would only lead to ‘more uncertainty’.

‘Uncertainty’ is certainly something we currently have in abundance.

Would a ‘no deal’ improve that situation?

Her Majesty’s Revenue and Customs (HMRC) is encouraging businesses to take three steps in preparation for no deal.

Business owners should get an economic operator and registration identification number (EORI), consider how they want to make customs declarations and, if they import from the EU, register for new transitional simplified procedures (TSPs).

Locally, East Devon trade leaders say they would need a ‘crystal ball’ to predict the effects of Brexit on traders.

Exmouth Chamber of Commerce chairman Ian MacQueen said ‘no deal’ would negatively impact on business. He suggested that businesses, where they can, stockpile materials as a way of stopping them being held up at customs.

Honiton chamber chairman Tony McCollom said this is not something ‘truly contemplated’ by its members, adding: “There is no doubt that trans-national agreements and boarder controls will have some effect on the manufacture and distribution of raw materials and finished products.

“Large national organisations may consider such things as stockpiling, relocations and bi-located businesses but these are not matters truly contemplated by our members.”

Local enterprise partnership

Heart of the South West, the local enterprise partnership (LEP) for East Devon has remained coy over the impact of Brexit on traders.

However the LEP says it is ‘here to help’ and has created a set of resources for businesses to help them plan for the ‘various scenarios they may face’ through its ‘growth hub’.

David Hynd, programme and partnership manager of the growth hub said: “As well as offering advice for start-ups, we can also offer one-to-one business reviews and support for scaling up. We continually update our Brexit resources when new information becomes available.”

David Ralph, CEO of Heart of the South West said: “Our Heart of the South West Growth Hub has published a set of resources from the government and public and private sector organisations to help businesses plan for the various scenarios they may face.”

Go to www.heartofswgrowthhub.co.uk or telephone 03456 047 047.

Brexit: East Devon businesses in real-life Deal or No Deal game | Latest Sidmouth and Ottery News - Sidmouth Herald
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Financing future energy capacity, including renewables > Parliamentary Committee launches inquiry and asks for evidence: "A bigger shift in our energy infrastructure to a low cost, low carbon energy system is necessary."

There are questions around nuclear energy in the UK:
Futures Forum: The weakening business case for nuclear energy
Futures Forum: Energy infrastructure @ Hinkely C >>> losing control and paying tithes to Direct Foreign Investors

And in parallel, there is more interest in renewables:
Futures Forum: Getting the government to adopt the Community Energy Manifesto
Futures Forum: Small-scale low-carbon generation reintroduced in the UK
Futures Forum: Climate change: the CPRE and renewable energy in Devon

Meanwhile, a parliamentary inquiry into the future of energy has been launched: 

MPs launch inquiry into government energy policy after nuclear setback

August Graham
Friday 1 March 2019 12:00am

MPs are set to review the government’s plans for Britain’s energy sector after a string of major projects were abandoned by international companies.

The Business, Energy, and Industrial Strategy Committee said it would look into the government’s plans to see if they are fit for purpose.

It will examine if the country needs a new approach to speed up investment into low-carbon, low-cost energy and secure supplies in the long term.

The decision comes after Japanese firms Hitachi and Toshiba pulled out of the Wylfa and Moorside nuclear projects, dealing a serious blow to the government’s plans. The committee also said it will investigate concerns over foreign investors in British nuclear. This comes amid worries about Chinese involvement in major projects.

Committee chair Rachel Reeves said: “In the wake of investment decisions over nuclear plants at sites such as Moorside and Wylfa, a giant hole has developed in UK energy policy. With coal due to go off-line, and the prospects for nuclear looking unclear, the government needs to set out how it will create the right framework to encourage the investment needed to plug the gap.

“In this inquiry, we want to examine the government’s approach to creating the right conditions for investment to deliver the secure energy capacity to meet the nation’s needs. A bigger shift in our energy infrastructure to a low cost, low carbon energy system is necessary.

“As a committee, we will want to consider what more the government needs to do to attract greater investment into financing future energy capacity, including renewables.”

MPs launch inquiry into government energy policy after Hitachi and Toshiba abandon nuclear plants | City A.M.

As the East Devon Watch blog comments:

Owl says: Such a shame that our Local Enterprise Partnership – dominated by people with a vested interest in the nuclear industry – has put all our growth and regional investment eggs in the Hinkley C basket!

“MPs are set to review the government’s plans for Britain’s energy sector after a string of major projects were abandoned by international companies” | East Devon Watch

See also:
Futures Forum: Is the Heart of the SW Local Enterprise Partnership delivering value for money? "Its below average performance - from unlocking investment to falling productivity - surely can only be seen as a failure?"

Here's what the Committee has to say on the future of energy: 

Committee explore finance and investment in UK’s future energy infrastructure

28 February 2019

The Business, Energy and Industrial Strategy Committee has today launched an inquiry to examine the outlook for future investment in energy infrastructure in the UK. The Committee will be looking at whether the Government needs a new approach to bring forward investment to deliver a low carbon, low cost energy system and secure energy supplies for the long term.

Inquiry: Financial energy infrastructure
Business, Energy and Industrial Strategy Committee

Purpose of the inquiry

The Committee’s inquiry is launched in the wake of recent decisions by Hitachi and Toshiba to halt new nuclear projects at Wylfa and Moorside and concerns over how the UK’s ‘nuclear gap’ for low carbon electricity can be filled. The inquiry will examine the challenges to raising finance in clean energy technologies such as renewables and storage. As part of its look at the Government’s approach to attracting investment in energy, it is also likely to look at the potential future financing of nuclear power, and concerns around foreign investors in this technology.

Chair's comments

Rachel Reeves MP, Chair of the Business, Energy and Industrial Strategy Committee said:

"In the wake of investment decisions over nuclear plants at sites such as Moorside and Wylfa, a giant hole has developed in UK energy policy. With coal due to go off-line, and the prospects for nuclear looking unclear, the Government needs to set out how it will create the right framework to encourage the investment needed to plug the gap. In this inquiry, we want to examine the Government’s approach to creating the right conditions for investment to deliver the secure energy capacity to meet the nation’s needs. A bigger shift in our energy infrastructure to a low cost, low carbon energy system is necessary. As a Committee, we will want to consider what more the Government needs to do to attract greater investment into financing future energy capacity, including renewables."

Send in your views

Evidence is invited on potential investment across the energy sector, including power plants, system flexibility, and heat decarbonisation.

The Committee is inviting written submissions on the following points:

• How do recent investment decisions on nuclear and trends in low carbon investment affect the UK investment outlook for energy infrastructure? Is there a case for changing the Government’s current approach to delivering a low cost, low carbon energy system? How could the ‘nuclear gap’ be filled?
• How attractive is the UK energy sector for investment compared to other countries? Are there particular technologies which are more – or less – attractive to investors under current arrangements?
• How has Government policy improved the UK energy investment environment over the last three years? 
• What types of investor can we expect to finance future UK energy infrastructure? What are their criteria for investment, including on risks and returns? Does it matter if investors for specific technologies are largely from overseas?
• What role should the Government play in providing financial support and sharing risks for new energy infrastructure? Are existing financing mechanisms, notably the Contracts for Difference, fit for purpose? Are there any practical issues, or potential unintended consequences, that could affect the feasibility of implementing alternative support models (such as a Regulated Asset Base)?
• What further steps should the Government take to increase investor confidence in the UK energy sector? 

The deadline for written submissions is 3 April 2019.

Send in your views for the financial energy infrastructure inquiry.

Committee explore finance and investment in UK’s future energy infrastructure - News from Parliament - UK Parliament
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Is the Heart of the SW Local Enterprise Partnership delivering value for money? "Its below average performance - from unlocking investment to falling productivity - surely can only be seen as a failure?"

You might have heard of the acronym HotSWLEP (!?)

It has over-relied on Hinkley:
Futures Forum: The weakening business case for nuclear energy

It is opaque in its activities:
Futures Forum: Scrutiny and accountability > local government and local enterprise partnerships

It is part of the fabric of talking up 'growth':
Futures Forum: The Greater South West Local Enterprise Partnership >>> of 'mis-speak' and the unrealistic expectations of growth

And it not exactly democratic, despite its considerable powers and budget:
Futures Forum: District Councils must be 'fully represented' on Local Enterprise Partnerships

Here is an excellent overview of 'progress' so far, from the East Devon Watch blog: 

“HEART OF THE SOUTH WEST, OUR LOCAL ENTERPRISE PARTNERSHIP, GETS ITS FIRST SCHOOL REPORT AND IT’S NOT GOOD”

10 FEB 2019

Local David Daniel, a former senior government strategist, who has done much work on the East Devon economy, Heart of the South West Local Enterprise Partnership (HotSWLEP) statistics and forecasts and county growth figures (and presented these to EDDC and Devon County Council) has provided this analysis of the current “achievements” of HotSWLEP.

It must be recalled that HotSWLEP is sucking up vast amounts of money that in the past would have gone direct to local authorities and its board members (apart from a few councillors) have vested interests in housing development, the nuclear industry, commercial banking and Hinkley C recruitment.

Here is the report:

"As a result of the 2017 Mary Ney review of Local Enterprise Partnership (LEP) Governance, a newly formed Joint Scrutiny Committee is to scrutinise Heart of the South West’s (HotSW) annual performance review. This will take place on

Thursday, 14 February, in County Hall at 2.15."

There will, however, be no opportunity for public engagement or speaking and this Scrutiny Committee is not politically balanced but appointed by the very councils that agreed HotSW’s strategy in the first place.

Credit where credit’s due, this is progress! Remember, HotSW was appointed by the Government to act as our “devolution body in waiting” in 2011. It didn’t publish minutes of any meetings in the public domain until 2015. Yet it had already agreed a growth deal with the Government on our behalf the year before, 2014.

It has since published wildly ambitious strategy papers culminating with its Productivity Strategy in late 2017 aimed at doubling our local economy first in 18 years, later revised to 20 years, through transformational growth in the “Golden Opportunity” economic sectors of: Aerospace; Marine; Nuclear; Data Analytics and Healthcare. Economic growth comes from increasing the labour force and/or increasing productivity.

Demographically, the population is set to grow 0.8% p.a. but it is an ageing one and the growth of those of employable age will only be a fifth of this at 0.16% p.a. HotSW intends to “limit growth” in employment to 0.8% per annum and concentrate on raising productivity way above the national average. But even this “limited” growth in employment is five times the trend and will need substantial inward migration.

When this strategy was written, productivity in the HotSW area ranked 7th worst in England. An Office of National Statistics (ONS) report last week said: “The lowest labour productivity in 2016 was in Cornwall and Isles of Scilly. Other largely rural LEPs with relatively low labour productivity included Heart of the South West, Greater Lincolnshire, and The Marches”. The ONS now places HotSW lower at 4th worst, 18% below UK average.

We now have the opportunity to lift the lid and peer into how successful HotSW has been in meeting the targets it agreed, by reading the HotSW annual performance review for 2017, commissioned from Ash Futures.

Investment

HotSW has secured a total of some £245M to date from central government funds, though, when assessed on a per head basis, HoSW has actually received one of the lower allocations across the LEP network. These funds are supposed to be matched by funding from other sources.

LEPs have to be business-chaired and business-led and it was intended that LEPs would unlock private investment. However, the bulk of this matched funding is forecast to come from public bodies including 17% from local authorities. Only 23% will come from the private sector. In regard to this the report says: “Our consultations have also highlighted that the strategic plan is not perceived as having had any significant influence over private sector investment plans.”

Only seven of the 56 funded projects are yet complete in spending terms and so the bulk of the benefits are yet to come. Though this needs to be read in the context of a continuous stream of past funding previously distributed through Regional Development Agencies.

Of these projects, 30 are designed to create conditions for growth e.g. transport and digital infrastructure; 17 are designed to capitalise on distinctive assets in expected high growth sectors such as low-carbon and nuclear energy, marine, big data and photonics; and seven on maximising productivity and growth such as opening up employment space.

Several stakeholders feel that rural areas have been ‘overlooked’ by LEP investments and much of this due to this original identification of urban-based transformational opportunities. However, this should not come as a surprise given the composition of the original HotSW board which was dominated by individuals from a construction/development; defence/nuclear or big education background.

Here are some examples of the sort of projects submitted in the bid proposals:

> £13 million to provide Hinkley C infrastructure and £55 million of pump priming to provide Hinkley housing;

> a Nuclear Training College;

> and one of the deals agreed includes £13.7 million loan funding to three developers to accelerate home building at: Frome, Brixham, Exeter and Highbridge. (You may ask why developers need such funding).

Much is made of the “Golden Opportunity” offered by Hinkley C. This is not the first nuclear power station to be built on the site. Hinkley A was constructed between 1957 and 1965 and Hinkley B between 1967 and 1976. So there should be plenty of historical evidence of the short and long-term economic benefits of such developments. Where are they or are they too insignificant to be found? It is no longer obvious that this is a growth industry.

Economic Measures and Growth

Lack of progress in making any significant changes to our economy are best illustrated by two direct quotes from the review:

“…….the review of economic data leads to the overall conclusion that the HoSW economy, at best, continues to track the ‘baseline’ growth scenario. That is, there is no firm evidence that it is achieving either ‘strong’ or ‘transformational’ growth as aspired to in the Strategic Economic Plan.” [Baseline – continuing to fall behind UK average; Strong – keeping pace with UK average; Transformational – faster than UK average]

“The plan outcome measures and objectives in the current economic environment do not currently look achievable, certainly in the short-term. Some of this is outside of the LEP partnership’s control (with more muted conditions nationally). However, the fact that many of the Strategic Plan outcome measures are expressed in relative terms does means that even if significant absolute improvements have been made to the HoSW economy, they may still never meet their outcome measures given that other areas will grow more quickly, notably London and South East. It is our view that some of the outcome targets, particularly those associated with the ‘transformational’ target, now look very aspirational in their nature.”

The only areas on track appear to be in the delivery of broadband coverage and in housing development density (development rates against existing stock).

Conclusion

For an unelected body that made a pitch to Government eight years ago that it could transform the local economy, including, initially, delivering health and transport, this below average performance from unlocking investment to falling productivity surely can only be seen as a failure?

The review catalogues the “critical issues” (excuses) for shortfalls: the economic context has changed; the expected ‘freedom and flexibilities’ have subsequently been rolled-back by Government; parameters [strings] have been tied around what could be funded; HoSW is a relatively new ‘construct’ and does not naturally represent a functional economic, or political, area as found elsewhere in the UK.

But that’s life. Any worthwhile strategic plan needs have been developed to be robust against a set of likely future scenarios. The “critical issues” listed above shouldn’t have come as surprise and the sensitivity of the plan to these sorts of “issues”, some use the term risks, should have been examined and reported. Another essential component, given the extreme uncertainty of how to improve productivity, should have been the development of a set of metrics and a feedback mechanism. So it is heartening to see that the reviewers make this recommendation:

“Currently, there is no ‘feedback loop’ back to the Strategic Investment Panel to develop its understanding of ‘what has worked well, and what not’ with investments made. Whilst we recognise that many projects are still at an early stage of development, we feel this is a missed opportunity. A better understanding of how investments have developed would lead to better long-term decision-making.”

On the basis of this review, is HotSW delivering value for money (our money)?

SOURCES:

Joint Scrutiny Agenda and Ash Futures Review reports pack:
https://democracy.devon.gov.uk/documents/g3570/Public%20reports%20pack%2014th-Feb-2019%2014.15%20Heart%20of%20the%20South%20West%20HotSW%20Local%20Enterprise%20Partnersh.pdf?T=10

Office for National Statistics latest productivity data:
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/articles/regionalandsubregionalproductivityintheuk/february2018#results-for-local-enterprise-partnerships-and-city-regions

HotSW Productivity Strategy:
https://heartofswlep.co.uk/wp-content/uploads/2018/04/HeartoftheSouthWestProductivityStrategy.pdf

HotSW Strategic Economic Plan
https://heartofswlep.co.uk/wp-content/uploads/2016/09/Non-tech-summary-FINAL.pdf

“Heart of the South West, our Local Enterprise Partnership, gets its first school report and it’s not good” | East Devon Watch
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The weakening business case for nuclear energy

The Japanese energy company Hitachi is pulling out of building nuclear in the UK:
Hitachi scraps £16bn nuclear power station in Wales | Business | The Guardian

One of the alternatives is to allow the Russians or Chinese to build instead: 

The withdrawal of the Japanese conglomerate could leave the nuclear newbuild industry open to Russian and Chinese state-owned companies as Western private firms struggle to compete.

China’s General Nuclear Services, an industrial partnership between China General Nuclear Power Corp (CGN) and French utility EDF (EDF.PA), plans to make a number of investments in Britain’s nuclear power sector, most notably the Hinkley Point C project in southwest England. China’s CGN told Reuters it would bring forward plans to build a nuclear plant in Bradwell, eastern England, helping to plug a potential supply gap.

Hitachi halts UK nuclear project as energy supply crunch looms | Reuters

Perhaps post-Brexit, this would be a good thing:
Futures Forum: Brexit: and the fleet-footed, clever trading nation

But there are national strategic considerations to take into consideration when it comes to who builds nuclear - as the Welsh MP Geraint Davies has just warned:
China would be a fickle and dangerous ally for post-Brexit Britain | The Independent

And as this blog has considered, in the context of the nuclear build in Somerset:
Futures Forum: Energy infrastructure @ Hinkely C >>> losing control and paying tithes to Direct Foreign Investors
Futures Forum: The future of Hinkley: Is the UK government about to invest 'direct public subsidies'? And is China about to 'pull out of the UK, creating an even bigger tax burden'?

Indeed, in these parts, all eyes are now on Hinkley, as outlined by the East Devon Watch blog: 

HITACHI SUSPENDS WALES NUCLEAR PLANT – WHAT IS THE BUSINESS CASE FOR HINKLEY C

17 JAN 2019

Hinkley C is leaking out money from Devon via the Heart of the South West Local Enterprise Partnership, whose board (past and present) includes people with direct and tangential interests in the nuclear industry and that particular site.

Now we hear that Hitachi is suspending work on the nuclear plant it was meant to build in Wales. It is prepared to take a hit of more than £4 billion to walk away.

It begs questions:

> How can the French (EDF) and Chinese – who now own Hinkley C – make a business case for Hinkley C even with the massive subsidy for its (eventual) electricity?

> Just how much of OUR money is propping up these French and Chinese businesses?

> What is the Plan B if one or both of the companies fail; how much of OUR money will be used to plug financial holes?

> What effect has this had on renewable energy sources in Devon and Cornwall?

Hitachi suspends Wales nuclear plant – what is the business case for Hinkley C | East Devon Watch

Others are insisting everything is going very nicely:
Innovation drives Hinkley Point C construction | Feature | New Civil Engineer
Hawk Plant jobs saved as Plantforce acquires Hinkley assets | News | Construction News

Hinkley work progressing well as row over new nuclear erupts - Bridgewater Mercury 

However, there are bigger questions over the future of nuclear power in the UK - and in the wake of Hitachi's decision, these are being asked more urgently, whether it's about:

Climate change:
Why ditching nuclear is bad for climate change, good for Putin - The Scotsman
Climate change: Is nuclear power the answer? - BBC News

Or the alternatives:
Does Hitachi decision mean the end of UK's nuclear ambitions? | Business | The Guardian 

Scrapping of nuclear plant should see UK renewables filling the void

Letters
Fri 18 Jan 2019

An artist’s impression of the Wylfa nuclear plant in Anglesey, which Hitachi has announced it is pulling out of building. Photograph: AFP/Getty Images

The pulling out of Hitachi from the proposed Wylva nuclear power plant is a good thing for energy policy – not a serious blow as said in the article (Hitachi scraps £16bn nuclear power station in Wales, 18 January). Nuclear power is now one of the most expensive form of electricity there is. But beyond the economics, it no longer fits with the digitalising world that we live in. The global energy system is undergoing change similar to that in telecoms and computers over the last few decades. The energy system is becoming smarter and more flexible and it is on the path to being operated in a completely different way than hitherto because of that.

Nuclear – with its huge, inflexible output – is the equivalent of a giant boulder in the middle of a motorway. We, the energy customers of Britain, would have ended up paying way over the odds for Wylva, which would have also undermined the UK’s move to a smart and flexible system – which really is the future. We are already going to do that for Hinkley Point C.

Going down the nuclear route has been a wasted decade for UK energy policy. Exiting from the EU and the loss of flexibility we may end up with because of difficulties to do with interconnectors and market arrangements is a far greater threat to security than some phantom nuclear power plant from a previous age. 

Catherine Mitchell

Professor of energy policy, University of Exeter

Or lack of a Plan B:
The UK could suffer a blackout in 10 years if new a energy plan isn't implemented in the wake of the latest nuclear plant shutdown - The Sun
Will Britain's new nuclear age ever see the light of day? - Telegraph

Or cost:
Work on UK nuclear power plant halted over financing impasse - New Jersey Herald -
Government admits nuclear is far too expensive, but will renewables plug the gap? | The Independent
Hitachi pullout throws UK nuclear policy into disarray | Financial Times 

Why is the government cooling on nuclear?

Simon Jack Business editor

@BBCSimonJackon Twitter

17 January 2019

The previous power station at Wylfa was closed in 2015

There was a time - not so long ago - that government ministers talked enthusiastically about a new nuclear age. A fleet of brand new reactors producing reliable, low carbon electricity for decades to come. Not only that, but the government wouldn't be taking any of the risks associated with financing and building them.

Hinkley, Moorside, Wylfa, Oldbury, Bradwell and Sizewell were identified as the sites for the most significant national wave of new nuclear power construction anywhere in the world.

Of those six, only one is under construction, three have been abandoned, and two face an uphill battle to get the green light.

Under those circumstances, you might think the government would be embarrassed that its energy policy was in disarray. But it's not.

The collapse of the Wylfa and Oldbury projects today (following the abandonment of Moorside) is evidence of some new economic realities that have seen government enthusiasm for new nuclear fade.

High price

The first and most obvious is the cost of building the darn things.

At £20bn Hinkley Point is the most expensive UK construction project to date - HS2 will beat it.

The good news is that the UK government isn't paying a penny of it.

The bad news is that the electricity it will one day produce will be expensive.

EDF, the French contractor that's paying for its construction, could only raise the money to do it by extracting a guarantee from the UK government that it would receive more than double the current going rate - for 35 years.

That's one way to finance it. Let EDF raise the money and take the risk but ultimately foist the cost onto future generations of energy customers.

Who pays?

One of the reasons Hinkley is so expensive is that EDF needed to go out and borrow huge sums for a risky project at interest rates of over 9%. In fact, of the total £20bn bill for Hinkley, well over half of it was the cost of raising the money over the lifetime of the project.

There are cheaper ways to finance a project like this.

The government can borrow money much more cheaply than anyone else. Right now it could get a £20bn 10-year loan at 1.3% and use that money to build the thing itself. There are financial and political problems with that.

First, it adds to the public debt - which successive recent governments have been keen to reduce.

Second, if there are massive cost overruns (and that is almost a rule with nuclear projects), the government foots the spiralling bill, taking commensurate political flak.

Third, if the government is suddenly in the business of building nuclear power stations, why not other things - in fact why not nationalise the infrastructure we have already got? That is not comfortable territory for a Conservative government.

Doing the sums

There is a another way. Pay-as-you-go. Rather than lumber future generations with more expensive energy, get current consumers to pay a little extra on their bills (amount decided by the regulator) during the construction. This removes the need for massive borrowing and means you don't have to offer a juicy price guarantee to the contractor at the end as a reward for taking the operational and financial risk.

This is the model the government now prefers and is testing on the Thames Tideway project. If Sizewell and Bradwell are ever built - this is how they will be financed.

I say "if" because the truth is, the sums for new nuclear have been made very tough by the sharp falls in the cost of renewables. In 2015, the cost of offshore wind was over £140 per megawatt hour. That makes Hinkley Point look cheap at £92.50. The price of offshore wind is now £57.50.

But hang on, says the nuclear industry. The wind doesn't always blow. When it doesn't, you will have to fire up gas or even coal stations to fill the gaps in the depths of winter. You are jeopardising our chances of meeting CO2 emissions targets and threatening security of energy supply.

The government accepts some of this, and that is why Business Secretary Greg Clark said today that he is still open to new nuclear projects. But the government's preferred direction is towards smaller reactors of the type being developed by Rolls Royce, in which the government will contribute research backing, in the hope it becomes a major new export industry.

Future calculations

The UK government is not alone in cooling on big nuclear. One of the reasons that Wylfa, Oldbury and Moorside collapsed was because the Japanese government could not get sufficiently behind the Hitachi and Toshiba projects. After the Fukushima disaster, backing nuclear power - particularly foreign nuclear power - is a pretty tough sell back home.

Whatever it does, the government doesn't feel the need to do anything very quickly. The National Infrastructure Commission has said it doesn't need to make a decision for several years yet, and the National Grid says spare energy capacity is increasing rather than decreasing. Government sources say the resilience of the system to last year's "Beast from the East" also reassured officials.

All this makes life difficult for EDF, which wants to build the follow-up to Hinkley Point at Sizewell. They will argue strenuously that only by adding a second, do you realise the economies of scale. Same design + same process + same skilled workforce + different funding model = quicker and cheaper project. Also, the more you rely on wind, the more exposed you are to its intermittence. The only way to make sure you have a secure, low carbon, reliable "base load" is to double-down on nuclear.

That argument may yet still work but it is now much, much harder to win.

Why is the government cooling on nuclear? - BBC News
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Scrutiny and accountability > local government and local enterprise partnerships

There is a push going on for more accountability in local government:
Futures Forum: District Councils must be 'fully represented' on Local Enterprise Partnerships

And for more financial scrutiny: 

PAC chair seeking ways to beef up local government spending scrutiny

Dominic Brady
17 Oct 18

The Public Accounts Committee chair has been speaking “behind the scenes to persuade various players” to enhance the scrutiny of local government spending. 

Meg Hillier [pictured right] has told PF how local government is spending money needs to be more “transparent” for an increasingly “savvy” British public.

“I think the British public are much more savvy about things - they don’t trust the authority to spend things well,” she said to PF.

Since the Audit Commission was formally dissolved in 2015 “there isn’t the same level of transparency locally”, Hillier said.

Local authority finances “used to be well demonstrated”, she said, “so I think [making them more transparent again] is just something that we need to keep pushing on.”

PAC chair seeking ways to beef up local government spending scrutiny | Public Finance

Which could also have an effect on LEPs:
Finally a way to publicly scrutinise Local Enterprise Partnerships and other quangos? | East Devon Watch

As a recent report from the Institute of Government suggests: 

Strong accountability provides the foundation of a healthy democracy. It ensures a relationship between the public and those in government who have power to shape their lives. People expect performance to be rewarded if good or penalised if poor, and the demonstration that this happens matters for their trust in government. But the rules of accountability also need to enable those in government to learn from failure.

Report: Accountability in Modern Government: recommendations for change | East Devon Watch
Accountability_modern_government_WEB.pdf

But, again, as the East Devon Watch blog suggests, we don't seem to be getting very far:
Local Enterprise Partnership “scrutiny” committee – an oxymoron | East Devon Watch

With a full report from the District Cllr for Seaton: 

An inauspicious start for new Scrutiny Committee for the Heart of the South West Local Economic Partnership

POSTED ON NOVEMBER 7, 2018 

Who would have known? The previously unaccountable quango, the Heart of the South West Local Economic Partnership, which dispenses public money but whose board is made up mainly of businessmen, now has a scrutiny committee all of its own, recently established in some haste to meet newly imposed legal requirements. The first meeting took place five days ago, but little seems to have happened, judging from the minutes. There is currently no opportunity for public participation and no webcast.

The committee will have 17 members, with 13 Tories (11 confirmed – two representatives of Conservative-controlled district councils to be named), 3 Labour members (2 from Plymouth and 1 from Devon) and 1 Lib Dem from Somerset. Thus Independent and Green members have been entirely excluded, while there is only minimal opposition representation. The ruling Tories on the two county councils have used their majorities – obtained with less than 50 per cent of the votes in the 2017 election – to collar three quarters of the county seats, in addition to all those from the districts they control.

It’s worth mentioning that the Heart of the South West (geographic Devon and Somerset – but few local residents will recognise it under its marketing name) also has a Joint Committee of the Councils, with 19 members even more unevenly distributed by party (16 Tories, 2 Labour, 1 Lib Dem, no Independents or Greens).

Will all this bureaucracy give a new steer to the LEP, notorious so far for its bias towards the Hinckley new power station (it is even funding a hotel for officials of the foreign companies behind the project to stay in), its neglect of coastal and rural areas, and its fantastical plans for the South West to overtake London in productivity?

An inauspicious start for new Scrutiny Committee for the Heart of the South West Local Economic Partnership « SEATON & COLYTON matters
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The Greater South West Local Enterprise Partnership >>> of 'mis-speak' and the unrealistic expectations of growth

It's all rather confusing as to what regional business set-ups we have:
Futures Forum: District Councils must be 'fully represented' on Local Enterprise Partnerships
Futures Forum: Can the Devon/Somerset Local Enterprise Partnership 'double' the regional economy in 18 years?
Futures Forum: The picture of 'devolution' in the South West gets murkier

There are the impressive headlines and 'big initiatives', though: 

Leaders call for a Great South West 'ministerial champion'

Steve Hindley, chairman of the Great South West partnership explains the next steps for the campaign

Hannah Finch
17 SEP 2018

Steve Hindley CBE DL has more reason than most to listen closely when the Chancellor, Philip Hammond, reveals his Autumn Statement later this year.

As chairman of the Great South West Partnership, Heart of the South West LEP and Midas, one of the region’s biggest construction firms, he has been at the forefront of a campaign for the South West to get the recognition it deserves with the man who hold the country’s purse strings.

Mr Hindley said: “I am hopeful of getting a mention, they do know that the South West exists,” he said.

Mr Hindley is at the forefront of the Great South West vision. Together with the #BackTheSouthWest campaign, spearheaded by Western Morning News and Pennon Group, it quickly gathered momentum after the first South West Growth Summit in October 2016 - just four months after the decision to vote leave in the Brexit referendum.

It gave rise to The South West Growth Charter, which outlined priorities for the region and was heard in parliament.




Since then, the Great South West committee has been formed.

Now, six months until Brexit actually happens in March, the alliance of business leaders, local authorities and higher education chiefs have officially launched its Great South West vision that aims to put the South West on the UK economic stage.

Mr Hindley said: “Having an identity is incredibly important. The Great South West is our equivalent of the Northern Powerhouse or the Midlands Engine. We have told our MPs that we want them to put the Great South West on the map at Westminster. The Great South West already has an economy twice the size of Greater Manchester’s and the West Midland’s yet we do not share the same level of investment.

“We have got Plymouth and Exeter and in terms of nuclear, we have the largest building project in Europe under way at Hinkley Point C.



“This is essentially us putting forward our business case and it is great news that we have got the business sector in the driving seat.”

The Great South West vision covers the geographic area covered by LEPs in Dorset, Heart of the South West in Devon and Somerset and Cornwall.

Leaders call for a Great South West 'ministerial champion' - Devon Live

But perhaps we need to look behind the 'great news' a little: 

LOCAL ENTERPRISE PARTNERSHIP – PARTNERSHIP: ARISE WESSEX! OR MAYBE NOT …!

17 September 2018

Below is a comment on an earlier post:

Greater South West Local Enterprise Partnership – partnership! | East Devon Watch

... reprinted here as it raises some interesting questions, raised by David Daniel, who so eloquently spoke about the unrealistic expectations of our LEPs growth strategy to a largely uninformed and disinterested majority of Conservative councillors at DCC recently:Watch EDA councillor Shaw and Budleigh resident David Daniel make most sense on LEP “strategy” | East Devon Watch

This now seems to be the THIRD such trial marriage of various south-west LEPs. None of them seem to be made in heaven ……….

“WESSEX here we come!

English devolution is a mess, whether it will evolve into anything sensible is uncertain.

A third of people living in England outside London live in one of England’s nine combined authorities, six being cities with directly elected mayors. These are corporate bodies formed of two or more local government areas to enable decision-making across boundaries on issues that extend beyond the interests of any one individual local authority, like strategic transport planning.

Our nearest is the West of England Combined Authority of: Bristol; North Somerset; Bath and North East Somerset; and South Gloucester. The Government has encouraged the creation of these structures in order to provide the economic scale needed for devolution. These are on the fast track.

County identities are medieval in origin but they continue to lurk in our consciences. We identify with them democratically and historically. The focus of the Coalition 2010 white paper that set devolution in progress was to create administrations based on economic functional areas rather than regions. This has set in train a conflict between perceived economic necessity and community identity and democracy. A few Local Enterprise Partnerships (LEPs) followed county boundaries eg Cornwall and Scilly, and Dorset, but most did not. Some even overlapped.

Following on from the combined authorities, which are all centred on what one might describe as metropolitan areas, we are beginning to see the creation of new concepts by the combination of LEPs into “power” groupings such as the Council of the North, Midlands Engine, Oxbridge Corridor etc.

We now have the Great South West Partnership of: Heart of the South West (HotSW), Cornwall and Isles of Scilly, and Dorset LEPs. Or do we? The reason I add a question mark is because not very long ago (April to be exact) we had the Great South West Partnership comprising FOUR LEPs, including Swindon and Wiltshire “working together” to agree the next steps in implementing the recommendations of a report on Productivity. We were also told that GFirst (Gloucester) and West of England (Bristol) LEPs were also taking an active interest.

In his first interview on Somerset Live the new HotSW Chief Executive, David Ralph said “We’ve set a really big ambition about doubling the size of the economy in this area over the next 30 years.”
Everything you need to know about local enterprise partnerships - Somerset Live

Previously the target had been to double the economy in 20 years. When I asked for clarification I was told it was a mis-speak, not a change of policy to something slightly more realistic.

So who knows where we are going?”

Local Enterprise Partnership – Partnership: Arise Wessex! Or maybe not …! | East Devon Watch
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District Councils must be 'fully represented' on Local Enterprise Partnerships

There is growing disquiet from the normally-quiescent District Councils: 

'District councils must be properly represented on LEPs'

DEVOLUTION AND ECONOMIC GROWTH

13 AUGUST, 2018 BY MARK CRANE

Those of us with the honour to represent district councils understand that better lives depend on our local economies being as strong as possible. As the District Councils Network’s slogan puts it: “Better Lives, Stronger Economies”.

Without busy, bustling high streets, strong rural economies and communities built for business, we cannot stimulate growth in our local areas, curtailing the investment we can attract to them and hampering the essential services our residents need.

A cornerstone of a strong local economy is a strong local enterprise partnership (LEP) working closely with district councils.

In our ‘Transformation in Localities Toolkit’, the District Councils Network outlined what made for the most successful collaboration between LEPs and districts. With 23 out of 38 LEPs in England featuring direct representation from districts, we are grasping this chance to both shape places and boost money flowing into local areas.

It was heartening to see the government recognise in its recent policy paper that economic areas often cross administrative boundaries. But we are concerned about proposals to remove overlaps.

It is vital to ensure that new LEP geographies – including possible mergers – fully reflect functional economic areas across England and that districts continue to influence all LEPs in their areas.

The policy paper set out a requirement that every area have a local industrial strategy. This planning at the local level can ensure that economies reflect local needs, and it’s crucial that districts, as the core housing, planning and local growth authorities, play a central role.

That means we must be fully represented. As such we were concerned about the guidance to reduce the representation of the public sector on each LEP to a third of board members. The business expertise and democratic accountability that district councils bring to the table should be considered.

District councils uniquely understand their areas. By necessity they are of the place and environment in which they are based. This also gives them the insight they need to ensure the correct enterprise and economic measures are put in place to encourage growth.

We now need the government to provide the leadership to support local economy growth.

As devolution minister Jake Berry said in a recent parliamentary debate: “The role of district councils has never been more important in delivering growth across our country, and we need them to be fully engaged with our industrial strategy to ensure that LEPs have the right governance structure, accountability and capability to take a leading role in driving economic growth, and that all local partners, including district councils, have a voice.”

That’s all true. But it’s time for the government to recognise this key role, by ensuring we are equipped with the tools to deliver this economic growth, allowing our local marketplaces to become stronger.

Mark Crane (Con), leader, Selby DC and stronger economies lead for the District Councils Network

'District councils must be properly represented on LEPs' | Opinion | Local Government Chronicle

The East Devon Watch notes how the pressures are mounting: 

GOVERNANCE AND TRANSPARENCY – HOW DOES OUR LOCAL ENTERPRISE PARTNERSHIP MEASURE UP?

30 JUL 2018

A long read, but if you worry about the unaccountability of our Local Enterprise Partnership (and you should) it is a “must read” – note the requirement for LEPs to be scrutinised by council scrutiny committees:

For good or ill the Government has chosen Local Enterprise Partnerships (LEPs) to play a key part in assisting in the delivery of government policies to support local economic growth.

There are 38 LEPs in England. Through the Local Growth Fund, the government has committed £12 billion to local areas between 2015 and 2021; £9.1 billion of this is through Growth Deals with LEPs. The government also sees LEPs as key to its new industrial strategy. But performance has varied as acknowledged in the government’s publication of July 2018 “Strengthened Local Enterprise Partnerships”.

Amongst other things this paper announced that all the recommendations of last year’s Mary Ney review (see below), and this year’s Public Accounts Committee (PAC) report on Governance and Departmental oversight of the Greater Cambridge Greater Peterborough (GCGP) LEP, would be accepted.

Now is the moment to review these three publications which, taken together, amount to a scathing criticism of the way LEP governance arrangements, and government oversight of them, have, to date, been working:
PUBLIC ACCOUNTS COMMITTEE:
https://publications.parliament.uk/pa/cm201719/cmselect/cmpubacc/896/896.pd

MARY NEY REVIEW
https://www.gov.uk/government/publications/review-of-local-enterprise-partnership-governance-and-transparency

GOVERNMENT RESPONSE – STRENGHTENED LEPs
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/728058/Strengthened_Local_Enterprise_Partnerships.pdf 

Other points on topics such as increasing diversity of board members are covered in the previous Watch blog:
https://eastdevonwatch.org/2018/07/27/government-proposes-shake-up-of-local-enterprise-partnerships/

MEANWHILE

The House of Commons Communities and Local Government Committee inquiry into Effectiveness of local authority overview and scrutiny committees was also investigating LEPs and made this recommendation in December 2017 [East Devon Alliance submitted evidence to this inquiry as well]:

“The Government to make clear how LEPs are to have democratic, and publicly visible, oversight. We recommend that upper tier councils, and combined authorities where appropriate, should be able to monitor the performance and effectiveness of LEPs through their scrutiny committees. In line with other public bodies, scrutiny committees should be able to require LEPs to provide information and attend committee meetings as required.”
https://publications.parliament.uk/pa/cm201719/cmselect/cmcomloc/369/369.pdf

Governance and transparency – How does our Local Enterprise Partnership measure up? | East Devon Watch

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