Consultation Paper Summary
Aim
This paper is a summary of a longer document ‘Driving productivity in the Heart of the South West Consultation Paper (Green Paper)’1. It is written for businesses to explain why we need your help in shaping a new Productivity Plan for our area, which you can do by answering four questions via an online form accessed by clicking here.
Background
In January, the Government launched a new national ‘Industrial Strategy’ Green Paper. It proposes that Government should take a more active role in forging a globally competitive post-Brexit Britain, by building on national and regional strengths and tackling underlying weaknesses. It asks ‘what needs to be done to create the conditions where successful businesses can emerge and grow?’ with a particular focus on productivity.
This chimes with priorities within the Heart of the South West (HotSW), focused on creating conditions that enable local businesses to raise their productivity and competing for the resources needed to do this. To take forward these goals, we are developing the HotSW Productivity Plan, which will serve as a tool: to coordinate investment from the LEP, local authorities, national parks and other partners; to enhance businesses’ prosperity; and to improve quality of life in our area. It will begin to set out our asks of Government and will help shape our response to Government on the steps that need to be taken to deliver growth in our area.
The UK and HotSW economies have grown in recent years, delivering record levels of employment. However, the value of the goods and services that each UK worker produces per hour (their productivity) has only just recovered to pre-recession levels. As a result, UK productivity is now 20% below the average for the other G7 advanced economies. The Heart of the South West lags even further, being among the bottom third of England’s LEP areas on this measure.
With an ageing population, potential restrictions on future migration and an economy already approaching full employment, addressing this productivity gap has become critical to our future competitiveness. To succeed in raising productivity, we need to be clear about the assets and opportunities that exist in our region, as well as the weaknesses we need to address. We need to pull together towards a vision of the economy we want to create and the society we want to become, acting across the Treasury’s five drivers of productivity (see below).
There will, of course, be no “quick fix”. Implementing any economic strategy takes time. But, the rewards could be great. If the gap between HotSW and the UK was closed, every household in our area could be £11,500 better off per year. If we matched productivity levels found in Germany, the increase could be even greater, at £20,000 per year.
Read the full summary paper here
