Independent Economic Review considers region’s future with no magical thinking to distort the facts

The interim report from the Cambridge & Peterborough Independent Economic Review (CPIER) is an astonishingly articulate document which offers a granular description of the area’s economic geography.

The review has been jointly funded by the Cambridgeshire and Peterborough Combined Authority, the Greater Cambridge Greater Peterborough Local Enterprise Partnership – renamed The Business Board on April 1 – and Cambridge Ahead.

The Cambridgeshire and Peterborough region, lest it be obscured, is a dramatically different beast from any other equivalent in the UK. Comprising 3,400sq km with six local authorities and 1.6million people, it has three economic hubs under its roof rather than just one – and each hub is independent in its own right. There’s the tech/life sciences ecosystem in Cambridge and South Cambridgeshire, the manufacturing/services city of Peterborough and the largely agricultural sector in the Fens. Taken together, the region is enmeshed in a Devolution Deal with the government whose aim is to nearly DOUBLE economic output in the next 25 years – from £22billion to £40billion. How that might work is what the CPIER was tasked to consider.

It must be said that the composition of the CPIER team is such that on their own they account for economic activity which many smaller nations would envy. Chaired by Dame Kate Barker, her deputy is serial entrepreneur Dr David Cleevely CBE, and on the panel are heavyweights including Professor Diane Coyle CBE; 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; and Mark Dorsett, global HR director for Caterpillar.

The team is assessing the case for greater fiscal devolution and powers which will unlock the delivery of major infrastructure as the region gears up to double its economic output. Ultimately it needs to unite local stakeholders behind a common strategy. The group’s final report is due later this year, so the update published this week offers an opportunity to assess progress so far.

The stakes really couldn’t be higher, but don’t be thinking this independent economic commission is a ‘Vote for me, my magical thinking is more magical than anyone else’s’ exercise. There’s no snake oil on sale here, just the facts and a brief outline of where realistic progress might be made.

Here are a few simple points and questions which emerge from the report published this week:

There is no shared labour market between Cambridge and Peterborough. Do we want one? How would that be achieved?

The differences between house prices across the region suggest that there is more than one economy in operation. Is that oaky, or should we intervene?

Some politicians want Cambridge firms to expand into other parts of the region. Fine, but the potential of many market towns is being held back, “for instance by poor internet connections which dissuade firms from moving there”. Who’s going to fix that?

It’s not a good idea to try and pressurise firms to move into other areas (i.e. through legislation, taxes, etc). Politicians know that Cambridge and South Cambridgeshire has many firms with global footprints, but if Cambridge becomes too expensive, they won’t move to Wisbech. They’ll move to Canada or the US or the EU or South-East Asia. Or London. Game over.

The authors insist that we must maintain the unique character of the ecosystem if we are to stay ahead of other global hubs.

It’ll take time – and investment – to improve the economies in areas that are lagging behind.

The release of green belt land has helped growth.

There’s much to reflect on in this hugely welcome analysis, including a very refreshing overview to the vexed questions which lurk at the edges of this most successful of cities.

“It is also important to note that the economic growth of an area as a whole does not imply an absence of poverty,” the authors write. That is a most welcome aperçu. So why is that, and how can the schism be repaired?

Another salient concern are the region’s flood zones. Ambition is good but if you’re under water that’s going to be problematic – and much of the Fens is classified by the Environment Agency as being in flood zone 3. The authors suddenly get very delicate about this matter, confining themselves to merely saying: “This presents challenges to local economic development.” Aha, the joys of understatement!

And, of course, in the background, foreground and generally blocking out the sun is Brexit. There’s good news of a kind.

“Since the EU referendum there has been a sharp fall in the numbers of EU citizens coming to the UK without a job to go to, while numbers with a definite job to go to have remained historically high.”

So, as much as there is huge positivity about the region’s future, there’s a hollowing-out process to fret about. Certainly the region – and especially the tech and life science success stories of Cambridge and South Cambridgeshire – needs lots more higher level technical skills in the workforce. With no Brexit, overseas workers want to come to our world-class hubs. With Brexit, we’ll have to upskill the next generation, and the generation after that. But we should have had a decade or two to prepare for such a scenario.

Daniel Zeichner said: “This is a substantial and important piece of work which, crucially, identifies that the Combined Authority contains three distinct economies – and warns that continued prosperity in and around Cambridge is at risk given current housing and transport constraints.”

“One of the key findings of this Interim Report is that “the largest economy is expected to start to falter in the foreseeable future”. This should be a wake-up call to Government. They must allow Cambridge and the wider areas, which make up the Greater Cambridge Partnership, the fiscal freedom to respond to the clear needs of our local economy, or they risk damaging one of the most dynamic and successful parts of the UK economy.”

Councillor Lewis Herbert, leader of Cambridge City Council said: “We welcome the Commission’s recognition that Greater Cambridge is a distinct and special sub-region, and that future growth here needs to be sustainable. And we agree that future plans have to be fairer for the thriving city we live in. Further action is clearly needed to increase new build affordable housing, reduce inequality by better paying people on low incomes and win further Government investment.

“I hope people will take the time to read the Commission’s analysis, including that increased growth and new housing in adjacent areas of Cambridgeshire and West Suffolk are essential too. That way, one of Britain’s fastest growing city regions will share its prosperity out across a much larger area, as well as address the specific local challenges that Cambridge faces.”

There’s no doubt that the Cambridge Phenomenon is at a crossroads – but then so is everywhere else. How we adapt is at the heart of the city’s future progress, and the commission assembled at the Cambridge & Peterborough Independent Economic Review have made an excellent start, and it’s great they’re not pulling their punches about the sort of future we ought to aspire to.