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Dorset councils – working together
Dorset Leaders’ Growth Board
Review of
Economic Evidence
February 2015
Review of Economic Evidence
Contents
Preamble
3
1.
Background
3
2.
Making Local Growth Sustainable
3
3.
Current Economic Conditions
5
4.
Major Investments to Accommodate Business Growth
The New Economy in Dorset
Strengthening Rural Economies
Characteristics of the Dorset LEP Area
The Dorset Ambition as stated in the Dorset LEP Economic Plan
Transport & Connectivity
11
11
11
12
12
12
5. Evidence of a Functional Economic Market Area
Labour Market
Wider Sub Regional Relationships
Dorset Housing Market & Planning
14
14
16
18
6. Governance Changes & Arrangements
19
7. Conclusions
21
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Preamble
This Economic Review aims to provide evidence as part of the review of governance
arrangements for strategic economic and transportation matters in Dorset. It does not
purport to be an economic strategy, nor the evidence base for a revised economic strategy
for Dorset. This review will be considered by the local authorities along with the
Governance Review and views of stakeholders when decisions are made later in 2015. A
summary of this document is included in the Governance Review.
1. Background
1.1 This Review provides the evidence base for the key economic issues to be considered as
part of the Governance Review and draws upon work undertaken for the Dorset LEP
Strategic Economic Plan and its final publication: ‘Transforming Dorset’. The experience of
establishing strong local partnerships and Combined Authorities in some of the major
conurbations in England has been considered and useful lessons learnt. Some key issues
addressed are therefore as follows:
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How local policy intervention contributes to securing sustainable economic growth at
the local level.
The economic conditions in Dorset and why they provide a rationale for policy
intervention.
The Dorset region as a ‘functional economic market area’ and why it constitutes the
'best fit' in terms of future governance.
The possibility within Dorset of the establishment of an Economic Prosperity Board for
economic development or a Combined Authority for economic development and
transportation, amongst the constituent local authorities.
The importance of addressing future economic issues and needs through collaboration
at the Dorset level, the political commitment to growth and prosperity and the key
factors influencing future governance models for collaboration and joint operations and
delivery; all aimed at improving business development and the strength of the local
economy over the coming years.
2. Making Local Growth Sustainable
2.1 Previous Economic Reviews have highlighted that there is significant national and
international evidence available to demonstrate the potential of the sub-national scale of
operation, cooperation and partnership working, to promote and support the search for
economic growth and resilience.
2.2 Whilst local growth derives from both national and local factors, successful economic
development and regeneration in both urban and rural areas is dependent upon on local
sources of innovation and entrepreneurship, current and predicted levels of employment
and the quality of local skills and training, as well as locally distinctive environmental assets.
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These are all important factors and can have a significant impact in supporting and
encouraging investment in transport, housing and the wider economic environment. The
Organisation for Economic Cooperation & Development (OECD), estimates that whilst
national factors have a crucial impact on regional growth, more localised factors largely
determine an area’s international performance and in those areas that have seen an increase
or decrease in their relative GDP performance, local or regional factors had been
responsible for about 25% of the overall change.1 Therefore local, as well as national and
global economic, factors are important drivers of economic performance.
2.3 Within the Dorset Local Economic Partnership (LEP) area (the administrative County of
Dorset and the unitary council areas of Bournemouth and Poole), there is recognition that
it is a functional economic market area and there has been a strong track record of joint
working and partnership working over many years in relation to:
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Strategic planning for housing, the economy, transport and other issues
The previous work of the Bournemouth, Dorset & Poole Economic Partnership
Joint inputs into past South West Regional planning exercises
Most recently, the work of the LEP where both the private and public sectors have
played pivotal roles in developing future strategies and growth plans.
2.4 Compared with many other LEP areas in the wider region e.g. Swindon/Wiltshire; Heart
of the South West and West of England, Dorset is a relatively compact area in terms of
geography or population. This has positive benefits and has resulted in close working
relations at both business and political levels, with common understandings of problems and
policy objectives. However this is not to ignore that there are also important economic
links to the east, along the South Coast, as well as to the north and the west that can
contribute towards the potential for growth.
2.5 All of the local authorities within the Bournemouth, Dorset and Poole areas have
economic development officers and teams that provide a diverse range of local services to
existing businesses, to potential inward investors and through informal joint working and
bidding for external funding. The authorities have worked in an integrated manner for many
years, through their economic development teams, and in supporting the development of
the Dorset LEP’s Strategic Economic Plan – ‘Transforming Dorset’, in identifying priority
economic sectors, as well as the preparation of the Dorset European Structural and
Investment Funds Strategy 2014-2020.
2.6 The Dorset local authorities therefore have a track record of collaboration that is
particularly relevant to the work of the Dorset LEP and any proposals for a Combined
Authority. This includes economic development, transportation planning, spatial planning,
housing and environmental management. It is recognised that all of these issues are
interrelated. The Dorset economic development officers have had a strong working
network group for many years and they have a good, mutual understanding of the economic
issues facing all parts of the Dorset area. However, the opportunities to make a greater
1
OECD Regions at a Glance 2009, IV, Key Drivers of Regional Growth, pp.121-138. See also Promoting Growth
in All Regions: Lessons from Across the OECD, March 2012 and the March 2009 Policy Brief, Organisation for
Economic Co-operation and Development (OECD).
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contribution to economic growth through the LEP and the local growth deal as well as the
potential for revised governance arrangements are fully recognised. A Combined Authority
or Economic Prosperity Board could enable local authorities to increase their commitment
and collaboration, whilst recognising and responding to the increased financial constraints
that local authorities face in the current climate.
2.7 The Dorset Growth Board, comprised of political leaders from all nine councils, has
already been established to complement the LEP Board, and therefore provide a mechanism
for local authorities to co-ordinate, collaborate, enable and manage activity to drive
economic growth.
3. Current Economic Conditions
3.1 The Dorset Region refers to the area currently served by Bournemouth Borough
Council, Borough of Poole Council and Dorset County Council. This is the same area
covered by the Dorset Local Economic Partnership (Dorset LEP). The Dorset LEP area had
an estimated population of 754,463 in 2013 of which 55% lived in the area served by Dorset
County Council (the DCC Area), 25% in Bournemouth and 20% in Poole.2 The Travel to
Work Areas defined for the area include: Bournemouth; Poole; Dorchester & Weymouth;
Bridport & Lyme Regis & Shaftesbury & Blandford Forum, with some parts of West Dorset
also being within the Yeovil & Chard TTWA reflecting local communities of interest for
work.
2
Office for National Statistics Mid-year population estimates, 2013
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Dorset facts at a glance
Area
1,025 square miles3
Population
754,4634
Employees
295,3745
Business base
30,4006
GVA
£13.4bn7
3.2 The area administered by the County Council and District/Borough Councils clearly
comprises the largest single area by population and area. However in economic terms, the
‘conurbation’ (including Bournemouth, Poole, Christchurch and parts of the East Dorset
and Purbeck Districts) is home to some 466,200 people and provides some two-thirds of
the jobs (196,700) across Dorset. 84% of these jobs are in the service sector, reflecting the
predominance of the finance and banking sectors, retail, health and social work, as well as
tourism, leisure and hospitality, and the public sector in general. Within Dorset, 80% of jobs
are in the private sector and 20% in the public sector, although there is a higher level of
public sector employment in the western part of Dorset.
3.3 The conurbation is home to many nationally or internationally known businesses
including JP Morgan; Siemens; Cobham; Meggitt; Nationwide; Barclays; Wartsila Hamworthy;
Merlin Entertainment; Sunseeker; Liverpool Victoria; Lush; Kerry Foods. Educational
institutions play an important role. Bournemouth University; the Arts University
Bournemouth; and Bournemouth and Poole College all provide training and education in
sectors very relevant to a sustainable economy, including environmental management;
science, technology, engineering and mathematics (STEM); financial services; and digital and
creative media. Bournemouth University is home to the recently established Green
Knowledge Economy Centre and the National Centre for Computer Animation. Elsewhere
in the County some key companies include: Amsafe; Clipper (part of Kallo); CPS Tetrapak;
Jordan Ryvita, including Dorset Cereals; Palmers; Atlas Elektronik.
3.4 Research and analysis undertaken by the University of Exeter in March/April 2013
addressed the key economic sectors within Dorset; namely:
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Advanced manufacturing
Adult social care and health
Construction
Environmental Goods & Services
Financial Services
Food & Drink
Retail
Tourism and Leisure
Creative & Media
3
Dorset Skills Plan 2014-2016, p.5
Office for National Statistics Mid-year population estimates, 2013
5
Dorset Skills Plan 2014-2016, p.5
6
Ibid.
7
Dorset County Council (Dorset LEP area figure) and Office for National Statistics (ONS)
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The reports provide useful and detailed background information about the performance of
Dorset businesses in these sectors as well as future expectations and predictions.
The Exeter Economic Assessment of the LEP area undertaken in 2013 states:
In 2010, the Gross Value Added (GVA) 8 of the Dorset LEP economy was
£13.07 billion. Despite the adverse economic conditions, GVA rose by 3%
between 2008 and 2010 (2% for England). Growth in the Production, Real
Estate and Agricultural sectors outstripped growth nationally during this time
but GVA fell in three important sectors - Construction, Information and
Communication and Business Services.
Looking at measures such as the GVA per resident. In 2011, BournemouthPoole had a GVA per resident of £21,218, just below the national average,
whilst the Dorset CC figure was significantly worse, at £16,538. This gap has
widened over the past decade and is accounted for, in part, by different
population structures and commuting patterns, but in the main reflects the
differing industrial structures of the local economies, with the BournemouthPoole area characterised by more higher value-added sectors. Productivity9 is
also lower than the UK average, and when compared with other parts of the
South West and with comparators such as Southampton/Portsmouth and
Hampshire.
3.5 The different economic sectors draw upon established strengths within in the area and,
whilst the concentration of population is within the wider conurbation area, the Exeter
reports clearly demonstrate that, with the exception of the financial services sector,
businesses are very much spread throughout the Dorset area, confirming the need to
examine and address the diversity of economic issues in a holistic manner across the whole
area.
3.6 Employment projections with these reports provide an indication of future job numbers
in different sectors and the latest forecasts covering the period 2010-2020 by the UK
Commission for Employment & Skills Working Futures Project are highlighted below. These
indicate that the number of jobs across all sectors in the Dorset LEP area will grow by
23,000 or by 6.6% within this period, which is a slightly faster rate of growth than that
projected for the South West or England as a whole. However some sectors such as
Construction, Adult Social Care, Environmental Services, and Creative and Media are
predicted to grow at a much higher rate of up to 48% and 53% in some cases.
8
Gross Value Added is the value of all goods and services produced less the cost of raw materials and other
inputs used in production and can therefore be used as a standard measure for both efficiency and productivity.
9
As measured by Output per Hour Worked
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Dorset
County
Bournemouth
Poole
UK
Average
£15,723
£20,537†
£20,537†
£21,674
£470
£466
£516
£520
Educational Attainment (%
pupils getting 5 A-Cs at GCSE)
58.9
63
62.3
59.2
Employment Rate
78.4
68.7
75.5
72.3
16 – 24 Unemployment Rate
15.9
23.3
17.8
17.4
16 – 24 Claimant Rate
26.5
20.5
25.4
24.3
Long-term Claimants
18.2
23.8
18.1
29.9
Average earnings, £ / week,
residents
£496
£510
£519
£518
% of working age population
(16-64) with NVQ L4+*
36.3
32.8
32
35
% of working age population
(16-64) with NVQ L2 & below*
36.5
34.9
38.7
38.2
£18,237
£16,777†
£16,777†
£16,791
Business density per 10,000
working age population
878
570
733
640
Business start up rate
10.7
13.7
12.8
14.1
Business 3 year survival rate
63.3
58.1
57.9
58
Gross Value Added
Weekly Wage
Average household disposable
income per head
*
The source of this information is the Annual Population Survey. This is a sample survey and is therefore subject
to sample error.
†
Statistic is for both Bournemouth and Poole combined.
3.7 The Dorset LEP area has a high economic activity rate at 80% with only 1.1%
unemployment. However Gross Value Added is lower that the UK average of £21,674 with
Bournemouth & Poole performing at £20,537 and the rest of Dorset much lower at
£15,723. Similarly weekly wage levels are lower than average, which for the UK is £520,
with locally Poole being £516; Bournemouth £466 and the rest of the area £470.
Educational attainment as measured by 5 GCSEs is 63% for Bournemouth, 62.3% for Poole
and 58.9% for the rest of Dorset almost matching the average for England of 59.2%.
3.8 Other important characteristics of the business sectors are:
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The relatively large number of smaller companies of less than 10 employees; notably in
the wider Dorset and rural areas.
Recruitment difficulties in some sectors, notably for those with higher level qualifications
and in some key sectors; a characteristic that is currently common in parts of the public
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sector, which, despite the financial situation, is having difficulty in recruiting high quality
and well qualified staff, for certain professional roles.
Skills shortages and training needs within existing workforces.
The importance of focusing on job opportunities for young people and addressing the
needs of those Not in Employment Education or Training (NEET).
Lower than national average median wage levels.
The area is not as productive as it might be, with Bournemouth-Poole having a GVA per
resident head lower than the national average and wider Dorset area significantly lower.
These are important factors that will influence future action and priorities.
3.9 With regard to young people Not in Employment Education or Training, the following
table taken for the Exeter Economic Assessment illustrates the situation:
16-18 year old NEETs, Dec 2014
Area
Bournemouth
DCC Dorset
Poole
Dorset LEP
England
16-18 year olds
known to the
local authority
5,056
13,175
4,372
22,603
1,730,873
16-18 year olds NEET
Estimated number
%
% whose activity
is not known
274
522
278
1,074
75,899
5.7%
4.1%
6.0%
4.8%
4.7%
6.6%
4.1%
3.1%
4.5%
8.8%
Source: DfE, based on data provided by local authorities
The proportion of NEETs rises between ages 16 and 18, increasing from 2.2% of Dorset
LEP's 16 year olds, to 5.2% of 17 year olds and 7.5% of 18 year olds. The proportion of 'not
knowns' also rises with age. The NEET rate for the Dorset LEP is comparable to the
average for England, but the proportion whose activities are not known is much lower in
the Dorset LEP area than the average for England for all ages in the 16-18 year old range.
3.10 In the critical area of skills and training needs, the Local Enterprise Partnership has
established the Dorset Employment and Skills Board and has published the ‘Dorset Skills
Plan’ that aims to provide a clear framework to achieve the aims of ‘Talented Dorset’ – the
Local Enterprise Partnership’s commitment to increase the skills levels of the workforce and
to raise aspiration, employability and entrepreneurial opportunity. This builds on existing
evidence, links closely with the Strategic Economic Plan and European Structural and
Investment Fund Strategy, and has been informed by primary research undertaken with key
stakeholders from across the LEP area.
3.11 The plan will be implemented locally, with the delivery of the actions tailored to reflect
the needs and priorities of Dorset’s local economies. Local employer led skills and
economic groups, the Dorset Employment and Skills Board and the Local Enterprise
Partnership will all have an important role to play in ensuring that the plan translates into
positive change for learners and employers alike. The importance of good quality transport,
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to enable people to access post 16 training centres is a critical factor, notably in more rural
areas in northern and western parts of Dorset.
The Exeter Economic Assessment illustrates the skills shortage issue in 2011:
Skills Gaps by Occupation, 2011
Occupation
Managers
Professionals
Associate professionals
Administrative/clerical staff
Skilled trades occupations
Personal services staff
Sales and customer services staff
Machine operatives
Elementary staff
All Employees
% of employees with a skills gap
Dorset LEP
England
2.6%
3.1%
1.8%
4.0%
4.9%
5.1%
5.0%
4.8%
9.3%
5.6%
5.1%
5.5%
6.6%
8.5%
5.6%
6.0%
8.2%
7.7%
5.1%
5.5%
Source: UKCES Employer Skills Survey, 2011
Base = All employment
3.12 The LEP’s measure of success of the plan - and of Dorset’s skills system more broadly will be determined by measurable improvements in performance, such as:
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Fewer hard to fill vacancies
A more highly skilled workforce
Lower youth unemployment
Amongst others, these are all areas in which targets have been set and where progress will
be tracked. Importantly, improvements in these areas will also have a positive impact on
productivity and economic prosperity.
3.13 Partners in Dorset from the private, voluntary and public sectors are committed to
addressing these issues and to ensuring that Dorset can meet the higher than average
employment and GVA growth suggested by the latest economic forecasts. Dorset LEP’s
Strategic Economic Plan aims to ensure that the area makes a leading contribution to the
local, the south coast and UK economy as a whole.
3.14 The Dorset LEP Strategic Economic Plan builds on Dorset’s strengths as a leading
financial centre in the south of England, with strong specialisms in advanced engineering and
marine engineering, and its emerging leading role in the new economy through digital
industries. These provide the platform for supporting and accommodating growth based
around a modern, diverse and competitive economy.
3.15 Dorset has an exciting range of economic opportunities that can make a significant
contribution to national economic growth and the quality of life for the local working
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population. These opportunities combine both scale and quality, capitalising on assets such
as Bournemouth Airport, major Ports and two Universities. These investment areas offer
the opportunity to strengthen the economies of the conurbation, coast, market towns and
rural areas, building a competitive and talented Dorset.
4. Major Investments to Accommodate Business Growth
4.1 Bournemouth Airport: owned by Manchester Airport Group, with the potential to
provide a strategically important business park of some 59 hectares with the capacity to
accommodate 10,000 new jobs. This builds on some £50m of private sector finance already
invested in the airport, with plans to create an aerospace centre of excellence.
4.2 Proposed infrastructure around the Port of Poole and Poole Regeneration Area, the
second largest regeneration scheme on the south coast, which will provide a mixture of
office, retail and housing developments and create 5,000 jobs and 2,000 homes, creating 500
new jobs at the Port. Supporting the creation of a Marine Centre will boost tourism and
provide economic benefits. This builds upon the £37 million invested by the public sector
to open up development land via the Twin Sails Bridge.
The New Economy in Dorset
4.3 Silicon South: an exciting new business led initiative to accelerate the digital economy in
Dorset, building on a number of outstanding high growth companies and the latent talent in
the two Universities.
4.4 Joint Universities Business Campus: Bournemouth and Poole are some of the UK’s
leading creative/digital centres, benefiting from the co-location and expertise of
Bournemouth University and the Arts University Bournemouth. Plans are being progressed
to accommodate the development plans of both Universities, and to examine business
developments in adjacent land.
Strengthening Rural Economies
4.5 Modern Market and Coastal Towns: building on a Dorset LEP commitment to work
with rural partners, DEFRA and other local agencies to secure resources from all three
European funds and other sources to develop local led plans to re-invigorate market towns
in Dorset. It has recently been announced that rural Dorset is to benefit from £3 million for
the EU LEADER funded, South and North Dorset Local Action Group programmes’ project
that will boost economic growth specifically in rural parts of Dorset.
4.6 Unlocking Potential Fund & Growing Places: an investment fund to unlock a number
of key sites/locations, many in rural areas, which require initial investment to release
significant housing and industrial/commercial development. The Growing Places fund is also
available and has been supportive.
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Characteristics of the Dorset LEP Area
4.7 The Dorset LEP area consists of a range of distinct geographical areas, each of which has
a key role in the economy:
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The Conurbation (Bournemouth, Poole, Christchurch and parts of East Dorset and
Purbeck) containing the majority of Dorset’s population and employment. It benefits
from an airport, a major port, two universities and a strong business services and visitor
economy.
The Central Area based on the twin towns of Dorchester and Weymouth and their
immediate hinterland, around which major employment sites, two ports and county
wide services are based.
Rural Dorset, which is characterised by coastal and market towns, including
Blandford, Shaftesbury, Gillingham, Wareham Swanage, Portland, Bridport, Sherborne
and Lyme Regis, as well as the wider countryside; all of which accommodate a diverse
range of businesses in manufacturing, technology, tourism, retail, accommodation and
food services.
The ‘Jurassic Coast’ between Swanage and Lyme Regis (and beyond into Devon)
has World Heritage Status and serves as a major attractor of visitors to the area.
The Dorset Ambition as stated in the Dorset LEP Economic Plan
4.8 In economic terms, the Dorset ambition is to:
1. Provide a business environment that accommodates up to 40,000 additional jobs by
2021, with annual employment and GVA growth consistently above the UK average.
2. Prioritise key sectors and high growth companies which strengthen the knowledge
based economy in Dorset and provide higher paid and higher skilled jobs capturing
national and international opportunities for Dorset’s businesses and supply chains.
3. Strengthen economic growth by continually improving connectivity through investment
in transport infrastructure and services and new generations of digital infrastructure.
4. Maximise the contribution of talented people and businesses throughout Dorset, linking
education and training systems to the needs and opportunities of a growing economy.
5. Ensure a sustainable housing market, that meets the needs of residents and incomers,
contributes to and does not impede economic growth.
6. These economic ambitions have been set within the context of Dorset LEP’s original
vision based on Competitive Dorset, Talented Dorset, Connected Dorset, and Responsive
Dorset.
Transport & Connectivity
4.9 There are currently three local highway authorities delivering transportation services
within the area: Dorset County Council and the two Unitary Authorities of Bournemouth
and Poole. By definition transportation issues of all forms cross administrative boundaries or
have cross boundary implications and are closely related to economic development
requirements. Appropriate consideration therefore has to be given to integration of
strategic transportation issues as part of any changes to overall governance arrangements so
that there are clear benefits.
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4.10 These issues were also addressed in some detail in the LEP Strategic Economic Plan.
Transport and connectivity development investments approaching £180 million, including full
implementation of commitments to Superfast broadband, would underpin this rapid growth.
Transport-based investments unlocking employment land and driving productivity across the
region are fundamental and urgently needed. Major developments such as those at Poole
Harbour and the Airport are dependent on growth funding to support the planned
transport infrastructure improvements. Investment here will leverage the kind of growth
that local regeneration projects of this scale can have on the national economy.
4.11 Challenges for the area from a strategic transport perspective include the fact that
there is no motorway within Dorset and that access to the M27/M3 to the east is far from
ideal. At a more local level access for training in main centres via public transport can be
problematic and a more integrated and coordinated approach to these issues would be
beneficial.
4.12 The recently announced improvement to the A303, just outside the Dorset boundary
to the north, will have important spin off benefits for parts of the Dorset area, with
resulting enhanced road connectivity towards the markets in the south east as well as to the
Midlands and further afield.
4.13 Well-targeted transport interventions form a major component in the LEP’s proposal
for growth. These infrastructure projects will make a difference and form part of the
planned transformative economic development.
4.14 With further upgrades to broadband across Dorset, the area will be well primed to
fully capture the momentum already gathering, especially in the growing creative and digital
sector, which is predicted to grow at a significant rate over the next five years. The aim is
that with the right level of support there is real potential for enhancing creative industries,
so that Bournemouth becomes a compelling digital destination, attractive to global
companies clustering around the energy and expertise of Silicon South and drawing upon
development, a live talent pool and the international level Research and Development in
animation at the Universities. Enhanced broadband service is also essential to businesses on
Rural and Central Dorset employment sites.
4.15 At the same time the business connectivity and productivity of the rural economy and
market towns will improve more rapidly, providing that broadband development reaches
planned full scale in the region – with 100% Superfast coverage a realisable ambition, despite
some real challenges in securing this in some of the more isolated rural areas.
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5. Evidence of a Functional Economic Market Area
5.1 As the North East Combined Authority Governance Review (NECA GR) notes:
The importance of institutional capacity at the right level to co-ordinate
across… key factors, capable of recognising and responding to the distinctive
economic circumstances of an area, is clear and there is a growing consensus
that the right scale should be at a level at which the economy functions.
5.2 One of the key functional scales is the labour market - which is the scale at which most
day to day economic interactions take place and which lends itself to policy interventions in
areas such as transport, housing and the provision of labour market support. But there is
also recognition in the literature that there are other important forms and scales of
functional economic linkage including the enabling of supply chains, the supply of natural
resources, and management of environmental risks such as flooding, which also require coordination.
The issue of Dorset as a functional economic market area was fully addressed when the
establishment of the Dorset Local Economic Partnership was proposed and approved by
government. It was recognised that whilst, like all LEP areas, there is diversity within Dorset,
it does function as a specific business location with its own identity and as an economic area,
whilst also having links to the wider locality and their economies.
Labour Market
5.3 Though the five current Combined Authorities in England have had to make the case for
economic integration for traditionally separate sub regions (mainly around urban centres
such as Liverpool, Sheffield, Manchester etc.), for the Dorset area the economic case is
comparatively straightforward to make. As one of the historic counties of England, Dorset
has long been conceived of as a functional economic market area and as a single economic
sub region. This is recognised locally and nationally through the formation of the Dorset
LEP, whose Strategic Economic Plan notes “the economic area is relatively self-contained. Some
93% of those employed in Dorset live in the area whilst 89% of those residents also work in the
Dorset LEP area”.
Further statistics demonstrating the close relationship between living and working locally in
Dorset is set out below in 5.4 and 5.5. This reflects a productive cohesiveness in the area. It
is therefore more accurate to see the Dorset economy as operating like a large
conurbation, wrapped around by a diverse hinterland, comprised of market and coastal
towns, as well as a more rural envelope, whilst also recognising the economic links outside
the area, to for example Southampton and Portsmouth to the east and Salisbury and Yeovil
to the north.
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The arrows indicate in and out commuting to and from the Dorset LEP area.
5.4 Examining these characteristics in more detail shows that on average across Dorset and
including home workers 53% of people, as a percentage of working residents, live and work
in the same local authority area. Poole, West Dorset and Christchurch have net in
commuting of workforces, whilst the other districts and boroughs have net out commuting.
Home working as a percentage of working residents range from 10%-18%.
5.5 This degree of self-containment of the Dorset area is a statistic of some significance in
considering the operation, promotion and economic development of Bournemouth, Dorset
and Poole and as a single economic and functional area. During the last growth cycle (19982008), the employment increase in Dorset was impressive and in terms of new jobs created
(approximately 44,000 in the private and public sectors) the area was ranked fourth of the
39 LEPs in England.10
10
Dorset Skills Plan 2014-2016, p.5
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Review of Economic Evidence
Total Employment Growth 1998-2008
310,000
300,000
290,000
280,000
270,000
Employment Peak
c.303,000 Jobs
260,000
250,000
240,000
230,000
1998
1999
Dorset LEP
2000
2001
2002
2003
England - Trend Line
2004
2005
2006
2007
2008
South West - Trend Line
Source: Annual Business Inquiry11
Wider Sub Regional Relationships
5.6 Although Dorset is relatively self-contained in terms of jobs and residence, which has
clear sustainability benefits, nonetheless the conurbation in particular looks both eastwards
towards the Southampton/Portsmouth conurbation, as well as to the northeast, towards
Salisbury and Wiltshire in respect of rail links, colleges and health facilities. The central area
most notably relates northwards; to the Yeovil and South Somerset area, whose businesses
and economic activities are strong influences and provide important cross boundary linkages
for West Dorset. Figures for the LEP area indicate that approximately 5,500 people work in
South Somerset, 3,900 in Wiltshire and 19,000 in the South East in general. To a lesser
extent the western part of the area looks further west, towards Exeter, Devon and to the
Taunton/M5 corridor area. Clearly therefore Dorset is well placed, within this wider sub
regional environment, to benefit from business relationships, as well as capitalising upon its
coastal and tourism strengths and attractiveness that serve these hinterland locations.
5.7 Whilst the Bournemouth and Poole conurbation provides strong business focus within
the LEP area, it is important that the strength of the central area, incorporating both
Dorchester and Weymouth and the rest of the more rural parts of the area, are not
overlooked as they also act as important service and employment centres in the wider
Dorset area.
5.8 Dorchester as the ‘County Town’ has significant public and administration functions and
employers and land at Poundbury. Whilst Weymouth and Portland, with the largest town
outside the conurbation, has a focus on tourism, marine businesses and companies that have
diversified away from previous Ministry of Defence related work following the closure of
11
ONS Annual Business Enquiry 1998-2007, 2008
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Review of Economic Evidence
the Portland Naval Base, Naval Air Station and Research Establishments in the 1990s when
the area lost 4,500 jobs. Recovering from these major job losses (21% of the workforce at
the time) means that economic diversification and regeneration have since been priorities;
with important development on sites such as Granby and Mount Pleasant.
5.9 The hosting of the London 2012 Olympic and Paralympic Games Sailing Events in
Weymouth and Portland Borough helped raise the profile of the Dorset area and there are
current initiatives and future ambitions to build upon this legacy within the LEP Strategy.
Key Sites
5.10 Key sites in the area:
Dorset Green Technology Park
The former Winfrith Atomic Energy Research Establishment is a strategic 50-hectare
business park centrally situated in South Dorset within a landscaped campus setting which
benefits from high level of security. The site is the base for two of the County's lead marine
sector advanced engineering companies, Atlas Elektronik and QinetiQ. The site is the
County’s greatest opportunity for science park development particularly focused on the
defence sector, as well as opportunities for digital media innovation facilities.
Holton Heath Trading Park
One of the County’s fastest growing business parks containing many successful advanced
engineering and composite manufacturing companies such as Heatric, GSI Westwind, and
Norco. The site has capacity to expand by a further 10 hectares, providing growth for
existing companies as well as others seeking to relocate to the site from constrained sites in
the conurbation.
Portland Port and Osprey Quay
Both Portland Port and Osprey Quay have been redeveloped following the closures and
redevelopment of the former Naval Base and Air Station sites. The Port has continued
potential for marine/port traffic and business opportunities if Navitus Bay Windfarm and
other renewable schemes develop, whilst Osprey Quay has developed not only as the
National Sailing Centre and marina but also with businesses focused on the other marine
and related sectors, with further opportunities for new development.
Other Strategic Sites
Other key sites that are available for employment development include those at Gillingham,
Poundbury, Barton Farm, Mount Pleasant in Weymouth and Gore Cross in Bridport.
5.11 Within the other more rural areas and growth towns, the Dorset LEP Economic Plan
expresses a commitment to work with rural districts, DEFRA and other local agencies to
secure resources from all three European funds and other sources, to develop local led
plans to respond to socioeconomic changes and re-invigorate local towns to be the ultimate
expression of a modern blend of heritage and culture with the digital age and live/work
lifestyle. As highlighted above, businesses in rural Dorset have the potential to benefit from
funding from the next round of EU LEADER South and North Dorset Local Action Group
programmes project, which will boost economic growth in these areas.
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Review of Economic Evidence
5.12 One of the Dorset LEP Growth Fund key projects being progressed is ‘Jurassica’ the
proposed visitor centre described as “a landmark development to orient tourism around a
UNESCO World Heritage Site", on the Isle of Portland, where the Feasibility Study into its
potential is now underway. If developed this would be an iconic tourism project for Dorset
and enhance the reputation of the area as a tourist and visitor destination, supporting this
important economic sector.
5.13 The Dorset area therefore provides a great diversity of opportunities for business
development and growth, from the conurbation through to thriving coastal, rural and
market town environments. The Dorset Local Nature Partnership is working closely with
the Local Economic Partnership to ensure that Dorset’s high quality natural environment is
recognised as being a great asset to business and is committed to working proactively with
the LEP and constituent local authorities, to ensure that new economic development can be
developed in the area, in the most sustainable manner possible. It has developed a Planning
Charter and the Local Nature Partnership is also committed to supporting green and
environmentally focused technologies, as an important aspect of the economic strategy for
the area. There is scope for greater involvement of local authority leaders through revised
governance arrangements.
Dorset Housing Market & Planning
5.14 The Dorset housing market is subdivided into the different areas referred to, focused
around: the Bournemouth/Poole Conurbation, the Central (Dorchester/Weymouth) axis, as
well as more localised markets based upon the other coastal and market towns and their
rural hinterlands. However it is widely recognised that housing development and growth are
integral to a successful economy and that without housing development, local economies
are less likely to grow and develop. The significant expansion of Dorchester in recent years
as a result of the Poundbury Development on the western fringe of the town is a good
example of how a mainly long-term housing development can boost the local economy and
status of a town as a retail, service and business centre, and where due to this catalytic
effect demand for further development and investment continues.
5.15 All local planning authorities in Dorset have developed, or are actively progressing,
their statutory Local Plans through to Examination and Adoption, thereby ensuring that
sufficient housing land is allocated to meet expected demand across the whole area, as well
as meeting the need for a range of house types. As is the case in many localities, affordable
housing is a key issue for Dorset as the house price/wage level disparity is very significant.
The Dorset LEP area has a significant lack of affordable housing. House prices are generally
above average and earnings below average.
Addressing this is key to enabling young people to live in the area and help maintain the
necessary skills pool to develop the economy and to provide the future workforce for local,
expanding and incoming businesses.
5.16 Revised governance arrangements that enable the local authorities to jointly engage
with the Homes and Communities Agency (HCA) in a coordinated manner would be
welcomed. This would mean support for bids for funds on strategic housing projects and
helping ensure that the HCA's input into the area was supportive of overall regeneration
needs and objectives.
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Review of Economic Evidence
5.17 In order to ensure that business development and planning applications are given top
priority, all local planning authorities in Dorset have signed up to an agreed ‘Planning
Protocol’ with the Local Economic Partnership that commits them to providing speedy
responses to enquiries and dealing with business-related planning applications in a positive,
proactive and solution focused manner, so that any key issues or problems are identified
early on in the process. This ensures that economic development is given priority and
potential investors are given clear and unambiguous guidance, so as to avoid unnecessary
expenditure and delays.
5.18 Due to the close interrelationships, it is important for successful governance
arrangements to ensure broader strategic land use planning issues that influence economic
development, strategic transportation priorities and the general well-being of the local
community, are being addressed in a coordinated manner across Dorset. There is an
important democratically accountable role, in supporting and potentially resolving any issues
linked to the ‘Duty to Cooperate’ related to land use planning, as required by the Localism
Act 2011 and National Planning Policy Framework 2012. However, the formal statutory
planning policy functions of local planning authorities and the determination of individual
planning applications would remain with each constituent local authority in any revised
arrangement.
6. Governance Changes & Arrangements
6.1 The Local Democracy, Economic Development and Construction Act of 2009 [LDEDC
Act] in Part 6 enables the creation of Combined Authorities to support the effective
delivery of sustainable economic development and regeneration, as well as the coordinated
delivery of transport infrastructure. Economic Prosperity Boards, which exclude transport
functions, are another possible entity.
6.2 Within the Dorset LEP area there are currently nine local (principal) authorities. With
the LEP there are therefore ten organisations that have some form of economic
development function and role, in addition to Chambers of Commerce and similar
organisations. There is therefore scope for lack of clarity and ambiguity over decision
making with no single democratically accountable body that oversees economic
development and transportation. However all of the Councils’ Economic Development
Officers have worked closely together for many years and have shared knowledge, ensuring
that their respective Councils are fully informed about strategic economic issues and
projects.
6.3 Given the case set out above that Dorset functions as a single economic unit; albeit with
variations and diversity within its boundary, the nine local authorities have committed to
greater joint working and have agreed to a review of governance arrangements before
deciding if an alternative such as a Combined Authority or Economic Prosperity Board
would lead to ensure greater efficiency, as well as more effective and coordinated delivery
of economic priorities and projects.
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Review of Economic Evidence
6.4 It is recognised by the Dorset Growth Board, whose members represent the
constituent local authorities and LEP at senior political level, that tackling economic
development of the whole LEP area as a single entity is now essential, rather than simply
seeking to address strategic issues and potentially compete internally for businesses, in what
is a national and global market.
6.5 The Dorset authorities have in the past considered the establishment of a joint
economic development unit, and the creation of revised governance arrangements could
provide the catalyst to make this a reality. There is scope for pooling the economic
development teams from within each authority to maximise the benefit for the whole
Dorset area, thereby reducing fragmentation of effort through more combined working.
There would be significant potential for economies of scale to be achieved, for example in
commissioning specialist studies. The opportunities for improved strategic coordination of
financial and staff resources, along with joint work with the LEP, to a shared growth focused
agenda would enhance collaborative working and maximise economic development
opportunities. This would result in more efficient delivery of service to businesses and the
community, as well as better value for money for taxpayers.
6.6 The existing governance arrangements for the delivery of economic development,
regeneration and transportation are not likely to be as clear and easily understood by
business as they should be, with lack of clarity over roles and responsibilities in respect of
major and strategic decisions. Revised governance arrangements would benefit the whole
County area and would be good for business, for the authorities and the Dorset LEP.
6.7 The Dorset authorities and LEP are well aware that other authorities and LEP areas in
the wider area and nationally, are moving forward with greater coordination and that there
is limited merit in operating and addressing strategic economic regeneration and transport
issues and trying to deliver priorities, at a local, district level. It is therefore imperative that
the strategic priorities across the whole Dorset Region are addressed collaboratively.
6.8 The development of revised governance arrangements with additional institutional
capacity would allow the Dorset area to demonstrate its capacity to take on more functions
and responsibilities and provide the governance framework for a single approach to
investment supporting economic growth across the area. Working closely with the LEP,
governance arrangements must have the potential to take a strategic approach towards
future funding, in support of the economic growth ambitions for the whole of the Dorset
LEP area. A coordinated and efficient use of shared resources would also deliver an
economic intelligence and analysis function as a basis for strategic planning and coordination.
In practice this would mean a seamless approach across all local authorities and the LEP for
economic development spend and functions underpinned by a clear set of integrated
priorities, an understanding of strengths and weaknesses, as well as the area’s competitive
advantage and shared economic ambitions.
6.9 The aim of strong governance arrangements would therefore be to enable all authorities
to work closely together to improve the economic and social well-being of the Dorset area,
its businesses and local communities. Strong arrangements based on the functional
economic area of Dorset would enable strategic decisions to be made on future economic
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Review of Economic Evidence
priorities, bidding for funds and other actions quickly and efficiently by the democratically
elected leaders from each authority.
7. Conclusions
7.1 In summary, a number of key conclusions can be drawn in the light of the above analysis
and discussion:
!
Effective governance arrangements for economic development and transportation are
essential if appropriate and deliverable intervention is to take place in order to support
long-term sustainable growth for the Dorset economy.
!
Governance arrangements in relation to economic development and transport planning
are currently somewhat fragmented.
!
Dorset is a Functional Economic Market Area. It is relatively self-contained in
employment terms, with the concept of the Dorset FEMA being reinforced through the
establishment of the Dorset-wide Local Economic Partnership that embraces the
conurbation, the central area, as well as rural, coastal and market towns.
!
In a global economic environment, where competition for inward investment is strong, it
would be a significant improvement to have a single economically focused body for
promotion, negotiation and delivery of services to potential business investors, rather
than the current fragmented approach.
!
The review of governance arrangements therefore represents an unparalleled
opportunity to improve the delivery of strategic economic development and
transportation infrastructure in a coordinated way, working in an integrated manner
with the Local Economic Partnership, to boost business and the economy.
!
A Joint Committee is able to take on any powers that the nine principal councils wish to
give it. This could include decision making powers around economic and transportation
matters. This is likely to assist in accountability for the delivery of strategic economic
projects and outcomes and meet agreed priorities, linking with and helping to deliver the
Dorset LEP’s Strategic Economic Plan and Growth Fund priorities. However a Joint
Committee is not a separate legal body and cannot hold property, employ staff or be
financially independent. Any of the constituent councils could withdraw their consent to
take decisions on their behalf (subject to appropriate notice being given).
!
An Economic Prosperity Board is a separate legal entity and would bring together
strategic decision making powers, statutory functions and investment priorities relating
to economic development, but not transportation matters. This is likely to assist in
accountability for the delivery of strategic economic projects and outcomes and meet
agreed priorities, linking with and helping to deliver the Dorset LEP’s Strategic Economic
Plan and Growth Fund priorities. However many of the economic priority investments
for Dorset involve transport infrastructure and an Economic Prosperity Board is not
able to deal with these matters.
!
A Combined Authority is a separate legal entity and would bring together strategic
decision making powers, statutory functions and investment priorities relating to
economic development, transportation and other initiatives throughout the established
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economic functional area, minimising the potential for incremental approaches. This is
likely to strengthen accountability for the delivery of strategic projects and outcomes
and meet agreed priorities, linking with and helping to deliver the Dorset LEP’s Strategic
Economic Plan and Growth Fund priorities. Having a single Combined Authority would
reduce the potential for multiple decision making, thereby improving speed of decisions
and efficiency, with resulting greater clarity for the business and wider community, who
are primarily focused upon delivery of services and investments ‘on the ground’.
!
A combined growth unit to support the democratic arrangements would result in
greater efficiencies for all constituent authorities through the deployment of staff and
their resources into a single function and management unit, working in a more
integrated manner with LEP staff, but still responsible and accountable to the elected
members.
!
This is likely to result in economic development maintaining its high priority, whilst at
the same time allowing for efficiencies and savings, through greater joint working,
reductions in duplication of effort and enhanced delivery of projects for the good of the
wider community.
!
Together with the LEP, a single accountable governing body is likely to assist with future
competitive bidding from national, government and EU funding sources, by
demonstrating a coordinated and more strategic approach to the economic priorities
and their delivery.
!
Having a single accountable governing body and combined growth unit is likely to
improve relations with the business community by providing a single point of contact,
with statutory decision makers to match that of the LEP Board. This is likely to add
credibility to the private/public partnership and joint objectives of growing Dorset’s
economy and delivering strategic priorities and projects within the respective parts of
the Dorset area, where local distinctiveness and priorities will still need to be
recognised in planning and implementing policies and action.
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