There continues to be contradictory messages about the performance of the region. On the one hand, an unconfirmed report that the North East is second only to Manchester City Region on attracting inward investors over the last year. In contrast, the Ernst & Young attractiveness survey UK 2013 No Room for Complacency is less positive.
It reports that: “The number of FDI (foreign direct investment) projects secured by most UK regions, excluding London, declined in 2012. Investments in England outside of London were 24% below their level in 2010 – a decline that has coincided with the closure of the regional development agencies and the switch to local enterprise partnerships.”
Worryingly, the report highlights that when non-UK investors were asked “Which region in the UK do you see as the most attractive to establish operations?” the answer was that most areas outside of London and the South East have seen their “attractiveness measure” fall – with the North East falling from 10% to 2%.
This does not bode well for the region. Under One North East we used to market ourselves abroad, but the North East Local Enterprise Partnership (NE LEP) has no such mandate. The coalition Government, while pushing a localist agenda, actually centralised international marketing under UK Trade and Industry (UKTI). Clearly, the LEP and UKTI work together up to a point but in my opinion there is a gap which needs to be strengthened.
On the theme of reports, the Centre for Cities’ Small Business Outlook 2013 highlights the important role of small and medium-sized enterprises (SMEs) in city economies over the last decade. This is especially important where the number of FDIs have reduced because of austerity and low demand. It’s another area where the LEP, the local authorities and the putative North East Combined Authority (LA7) need an effective strategy.
To encourage development in external and internal markets, people in my profession can do a lot to help. I have two suggestions. My first is to ensure that the securing of planning consent for development is fast tracked.
The second is that we improve the provision of accommodation for both FDIs and SMEs. If the right commercial and industrial premises are not available when a foreign investor comes to call or an SME wants to grow this will hold back growth.
Thanks to an initiative which started in the private sector, the region is on track to provide a database of information on strategic sites and premises in partnership with the NE LEP.
The next phase is to attract developers and investors and to start building more. Banks claim they have funds to lend and the NE LEP has established an investment fund. Visit www.nelep.co.uk
:: Kevan Carrick, of JK Property Consultants, is the RICS North East Policy spokesman.