Increase house-building rates and spend on on infrastructure, says Cambridgeshire and Peterborough Independent Economic Review

More devolved powers needed to meet target of growing area's economic output from £22bn to £40bn in 25 years, says commission

Local authorities need more devolved powers and funding to address infrastructure and housing deficits - and house-building rates need to speed up significantly, according to the Cambridgeshire and Peterborough Independent Economic Review (CPIER).

The Cambridgeshire and Peterborough Independent Economic Commission (CPIEC) published its final report today (Friday, September 14), which confirms the significant contribution the area already makes to the UK economy but warns that to ensure this prosperous future, a number of risks and challenges need to be overcome.

The continued success of the region is of national importance, the review says. It will be one of the key centres of the national Industrial Strategy, can attract investment and jobs that may otherwise be lost to the UK entirely, and offers significant returns from increased levels of productivity.

The review, which follows an interim report in the spring, found that local authorities need the powers and funding to address accumulated infrastructure and housing deficits, and to plan appropriately for future growth.

It adds that companies need to boost their efficiency and pay more attention to the health and well-being of their workforce.

Recent high employment growth, which CPIER data suggests could be as much as 3.3 per cent per annum, will prove unsustainable, unless these changes are made.

Dame Kate Barker, chair of the CPIEC, said: “This area has been growing significantly – faster we believe than official figures indicate. But to continue this robust growth, both from homegrown businesses and from attracting international firms, major improvements in infrastructure and increased provision of housing of all types will be required.”

She continued: “We believe that the Combined Authority and local authorities need to work together to build the strong case for more powers and funding to be devolved to the local level, in order to improve the economy while improving the quality of life right across the area.”

The report identifies three distinct economies – the Greater Cambridge area, Peterborough and the Fens, and highlights the need for policies and delivery arrangements to be tailored to meet the needs of each, while developing mutual strengths.

The mayor’s Devolution Deal with the government included a target to increase economic output by nearly 100 per cent in the next 25 years, from £22bn to £40bn.

The report highlights the actions needed to achieve this and secure a productive, equitable and prosperous future for the region.

The commission calls upon central government, the Combined Authority, local authorities and businesses to accept and implement its recommendations and believes this area could become an exemplar of devolution for the UK.

The recommendations include:

• Infrastructure

Rising costs from an infrastructure deficit that has built up over time threaten the ongoing success of the Cambridge Phenomenon, which represents 67 per cent of the region’s output.

Infrastructure issues are most urgent in and around Cambridge and must be dealt with as a first priority if the Gross Value Added (GVA) target is to be reached. Additionally, upgrades across the region are to deepen links between the three economies – rail upgrades, and the full dualling of the A10 and A47, are likely to be especially important here.

The report recommends that a range of sources of income for financing infrastructure, including land value capture, should be brought together in an investment fund to leverage private sector investment.

• Housing

The supply of new housing should be increased, at a minimum to make up for an accumulated backlog. To achieve this, higher delivery rates which may need to be up to twice the current level will be required to allow sustainable high-pace growth, using a spatial strategy which allows growth to draw from the economic strengths of the cities, while improving transport links.

This would see current housing targets rise from around 4,700 to somewhere between 6,000 and 8,000 per year. Natural capital in the area must also be enhanced and new developments should be designed to improve existing communities and enhance quality of life for all.

• Productivity-driven growth

Brexit and other demographic factors threaten the availability of labour at all skills levels. It is essential that local businesses work to improve productivity alongside innovation as an engine of growth.

Companies can address productivity in part through working to improve their employees’ skills and health, and deepening networks across the area could spur innovation.

• Skills

To better respond to local needs across the three economies, full devolution of skills funding needs to be brought forward at the earliest opportunity.

• Health

Health and well-being was found to be a serious issue in many places, with a real knock-on effect for productivity. The report recommends establishing an opportunity area for health in the north of the region to address this.

• Market town masterplans

These must tie into a local industrial strategy, with companies in these areas being better integrated into the supply chains of Cambridge’s high value businesses. It is estimated around a quarter of the region’s population live in market towns and their vitality will be critical if the region is to meet the goal of doubling GVA.

The commission also noted in the review that any Brexit deal should ensure the greatest possible ease for those workers needed for Cambridgeshire and Peterborough’s businesses and public services. In addition, facilitating trade in goods and services is a high priority.

It will now be up to the Combined Authority and constituent councils, businesses and central government to decide whether or not to take the report’s 14 key recommendations and further 13 subsidiary recommendations forward.

The CPIEC will continue to engage as required to ensure Cambridgeshire and Peterborough can fulfil its aims.

MP warns Cambridge’s ‘future prosperity is not guaranteed’

Daniel Zeichner, the Labour MP for Cambridge, said: “This is a serious and weighty report produced by a group of highly-respected independent economists and thinkers from across the political spectrum . I very much welcome the key findings as they highlight serious concerns about the future economic success of Cambridge and the wider region, concerns that I have voiced for some time. The recommendations are clear: future prosperity is not guaranteed and if action is not taken soon on transport, housing, infrastructure and skills then there will be adverse effects for Cambridge, the wider region and ultimately the UK. They rightly highlight the need to spread wealth more fairly, and to protect all that makes Cambridge so special – growth isn’t just about more, it is about doing things better and improving the quality of life for everyone.”

“There are some very stark warnings in this report. The concern that employment growth could slow by 2021 and reverse by 2031 as a result of businesses moving away from the area is serious. A skilled workforce has very much been the driving factor in Cambridge’s success and with uncertainty around our future relationship with the EU, failure to make the right investment in skills and infrastructure could lead to internationally focused businesses looking elsewhere.”

Who is on the commission?

The commission is chaired by Dame Kate Barker and her deputy is serial entrepreneur Dr David Cleevely. On the panel are Professor Diane Coyle, Dame Carol Black, former science minister Lord David Willetts, Warren East, former CEO of Arm and now chief executive of Rolls-Royce, Professor Andy Neely, the university’s Pro-Vice-Chancellor for enterprise and business relations, Matthew Bullock, master of St Edmund’s College, Sir David Arculus, who was chairman of O2, Mark Dorsett, global HR director for Caterpillar, Prof Alan Hughes, professor of innovation at Imperial College Business School, London, and John Shropshire, chairman of the G’s Fresh group of companies.

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