Innovacion

Andy Rumfitt's Gearing Up Report launched by SMMT

Our report, published today by the SMMT, has highlighted the need to get capital into the UK’s automotive supply chain to stimulate growth and take advantage of the opportunities created by recent OEM investment announcements. It also explores the mismatch between the banking sector’s current approach and the lending needs of suppliers.

Focusing on the relationship between financial institutions and the domestic automotive supply sector, the report looks for solutions to the lack of consistency and strategic vision in lending today. The study identifies how a more effective working relationship could help to rebuild and rebalance the economy if the industry and finance providers had a better understanding of the workings of both sectors and work together to address the type of finance offered to businesses.

“Improving access to finance and credit has the potential to stimulate growth in UK automotive’s small and medium-sized companies, enabling them to develop facilities, tooling and machinery to take advantage of broader automotive growth,” said Paul Everitt, SMMT Chief Executive. “The UK is recognised globally for its strength in automotive engineering and innovation and we believe that by achieving competitive funding for UK businesses, the UK can take a larger share of the components market.”

The UK has seen a wealth of positive investment announcements throughout 2011 with international companies committing millions of pounds to the country, introducing new models, building new facilities and employing more people. These announcements have included commitments to source more components locally, capitalising on lower transportation costs and high quality output of domestic suppliers.

Despite this wave of positivity, there is still expansion potential in the UK. Earlier this year, the Automotive Council reported that the UK has the capability to supply 80% of the country’s component types, but the Smith Institute found that just 36% of an annual £7.4bn automotive component spend was purchased in the UK.

The potential for the sector is clear, but many suppliers report that financial institutions were wary of the automotive industry despite the UK manufacturing sector performing strongly, exports achieving record levels and recent investment announcements demonstrating the long-term plans to base operations in the country.

The Smith Institute Report was launched at an event attended by the banking and automotive sectors and government representatives.

Download Gearing Up Report Launch Version 081211

Andy Rumfitt appointed to advise the Southwark Housing Commission

Andy Rumfitt has been appointed as part of the Smith Institute team to provide secretariat services to the Independent Commission on the Future of Council Housing in Southwark which will look at housing issues beyond 2015/16. Chaired by the nationally acclaimed housing lawyer Jan Luba QC, the Commission will find innovative and deliverable long-term solutions to the issues created by the unprecedented demand for council housing in the heart of London. While Southwark Council is the largest local authority social landlord in London managing 54,000 homes, the current waiting list now exceeds 19,000. The Commission will invite and hear evidence from key stakeholders, tenants, leaseholders, residents, housing associations and all those who are involved and interested in providing housing across the borough. The Commission will report in October 2012.

 

Dare to Believe...A New Airport for London Part 2

Yesterday the Mayor of London launched his second report examining the economic importance of a new hub airport for London and the UK. What this process is helping to do is make some decisions explicit. And the argument goes something like this. London's success is linked to internationally traded sectors. But London's relative connection to future growth areas like central Chinese cities is declining and it is already falling behind other European airports. Inbound tourism and cargo generate the most potential for the sort of export-led growth that the UK desperately needs now and in the long term. Only a hub airport can provide a comprehensive network of direct long haul routes. Incremental improvements in other airports ('sweating the assets') do not solve the need for a hub airport which is a long term 50 year solution to projected air traffic demand. Regional airports will not be able to operate as a hub of this scale and Heathrow, already at capacity, is suffering 'friction' and resilience issues. High speed rail will only complement rather than replace air travel.  And airports (and to some extent their construction) are good at providing job opportunities at all levels in the labour market. For example we found that there are at least 58,800 air transport and cargo jobs alone in the 15 Local Authorities within a 20km footprint of Heathrow. So with constrained capacity the conscious decision is how much the UK wants to stay in the airport business in the future and how much we are willing to travel via Paris, Amsterdam and Franksfurt if we want to get to the BRIC economies.  As well as some sensible economic arguments there is a sense that a project of this scale will be important to build the UK's ambition and present a confident outward looking face to the rest of the world at exactly the right time.

The London Airport conundrum...

Machiavelli's dictum about the introduction of new things, "There is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage...for the initiator has the enmity of all who would profit by the preservation of the old system and merely lukewarm defenders in those who would gain by the new one."

And so it is with airports in London and the South East. However as the Mayor of London makes clear in his consultation response to the Government (‘Developing a sustainable framework for UK aviation’) something will have to be done and a Thames Estuary airport may be the least worst long term option.

Our economic and strategic development thinking that fed into this work highlighted that a Thames Estuary airport would:

• Support the £532 billion Greater South East economy which is the powerhouse of the UK - though its relative competitiveness is declining.
• Provide the economic catalyst that the Thames Gateway has been missing - and a key part of a long term UK Growth Plan focussed on international trading.
• Give a clearly defined focus and location for economic growth - the UK is now the only NW European country without any national and regional planning.
• Offer a long term rather than a 'muddle-through' response to Heathrow’s inherent capacity constraints - which will require the elusive element of long term cross party political comitment.

Yes it would be expensive but big visionary projects are and the UK's competitors seem to (a) make the business and political case and (b) find the money. Yes it would have engineering challenges but again no bigger than elsewhere in the world. But in the long run airports can have huge regional and national economic spin-offs. Washington Dulles airport and its technology corridor is now home to more telecom and satellite companies than any other place on earth. Stockholm Arlanda Airport has 65,000 associated science city jobs. We have to remember that we are where we are because Heathrow's original growth was unplanned and resulted from a series of incremental decisions.

£36 million for Emirates Air Line: A Taste of the Future of Funding?

In the past when there was money you could have a single objective project funded from a single source. In our new world major projects will look and feel more like the London Cable Car now known as the Emirates Air Line following the airline's £36 million sponsorship of the scheme over 10 years. In an area of London bedevilled by limited and ageing river crossing options the Cable Car, which will move from the design board to ‘all aboard’ in about 2 years, will offer a new way for tourists, event goers and commuters to cross the Thames. As well as adding an important landmark it will go some way to further knit together the emerging range of economic assets and attractions in the Royal Docks and on the Greenwich Peninsula into a vibrant cluster of activity for visitors and residents alike. As well as sponsorship, funding is also planned to be secured from an application for a European Regional Development Fund (ERDF) grant, additional sponsor agreements, retail space rental and fare revenue. While this blending of funding for multi-objective projects works well for major landmark projects in London the question is how viable this approach is for less glossy but equally important projects elsewhere.

Innovacion produced the ERDF application for TfL and we're keeping our fingers crossed for a successful outcome by Spring 2012.

 

Expanding the automotive supply chain in the UK

As a Research Fellow for the Smith Institute, Andy Rumfitt is conducting an initial inquiry for the Society of Motor Manufacturers and Traders into the financial challenges and opportunities for expanding the UK based automotive supply chain, a market valued at £7.4 billion per annum. As well as reviewing a wide range of existing literature, detailed face to face interviews were completed with industry bodies, automotive suppliers, banks and financial institutions and public agencies. The study will be published in October 2011.

Docklands Light Railway extension to Olympic Park opens

It is always a rewarding and comforting day when a large transport or infrastructure project that you have been involved with comes to fruition.  And today is one of those days. With just under a year to go to the London 2012 Paralympic Games the fully accessible Docklands Light Railway (DLR) Stratford International extension opened today (31 August 2011). Costing £211 million, the 3.7-mile expansion from Canning Town to Stratford International forms a key part of the London 2012 Olympic Games transport network and includes four new stations.

Innovacion produced the Statement of Case for the Stratford International Extension which successfully secured planning permission in October 2006 as part of a Transport Works Act Order application. Innovacion also reviewed potential sources of European grants and loans to support the development of the extension and provided bidding advice to DLR. As a result Innovacion produced a successful bid to INTERREG IVB for station enhancements to the DLR extension and secured €1.57 million in EU funds.

More about the extension from the BBC and Transport for London.

Innovacion produce Regional Growth Fund Bid for British Library

Innovacion have been retained to help the British Library to develop a Regional Growth Fund Round Two bid. The project proposes a national roll out of the British Library's successful Business and Intellectual Property (IP) Centres to Birmingham, Leeds, Liverpool, Manchester, Newcastle and Sheffield. The project aims to support the objectives of the Regional Growth Fund by increasing the levels of private sector enterprise and supporting entrepreneurial dynamism in major English city regions. Previously, Innovacion assisted the British Library with early pilot development work for the proposed North East Business and IP Centre.

Innovacion unlocks £1.2 million ERDF for British Library

The British Library's bid for £1.2 million of European Regional Development Funding (ERDF) has been successful and received the green light to start contract negotiations with the London Development Agency. Innovacion provided the British Library with ERDF bid management and application support services.

The British Library’s Business & IP Centre’s ‘Innovating for Growth’ project will provide high quality business and intellectual property (IP) advice and support services to help ambitious SMEs to innovate, to grow and to create new knowledge economy jobs in London. Services will be provided by the British Library’s expert staff and carefully selected delivery partners in the nationally renowned Business & IP Centre.

The British Library's bid was one of only seven ERDF projects that were selected from applications to ERDF Round 3 and Round 4.  Less than one in four bids for ERDF were successful.  The LDA's European Programmes Management Unit (EPMU) received a total of 30 applications for £30 million ERDF.

Regeneration effects of upgrading the Woolwich Ferry

Innovacion are helping Transport for London to develop the best approach to assess the regeneration effects of a range of options to upgrade the Woolwich Ferry. The Woolwich Ferry carries around one million vehicles and over two million passengers a year.

Innovacion advise on a business & IP centre for the north east

Innovacion have been appointed to develop the case and proposed approach for the development of a Business & IP Centre in the north east building on the successful British Library centre in London. Working with Newcastle City Library, Northumbria University and NESTA, Innovacion are reviewing regional demand, identifying the core offer and proposing an initial model to BIS.

National Infrastructure Plan - Beware the strings with private investment.

While the £200 billion outlined in the  National Infrastructure Plan sounds a lot some estimates suggest that the UK needs £300-£400 billion of investment in road, rail and air infrastructure alone over the next 20 years to meet demand and existing power generating capacity is expected to fall by one third in the next decade. And the numbers in the NIP are summing public and private investment. While private investment will have to avoid the dangers of TfL's PPP for the underground it is also likely to come with specific characteristics such as increased tolling of any new roads, tunnels and bridges if we want them. Nothing is free.

 

The Regional Growth Fund - Regional, sure, but Strategic?

The Local Growth White Paper which includes  the Regional Growth Fund (RGF) suggests that the coalition is very much committed to regional rebalancing. The RGF will be deployed along with Tax Incremental Finance (TIF), more local controlled business rates, as yet undefined Growth Hubs and new Technology and Innovation Centres which are to be set up by an expanded Technology Strategy Board. However the first Round of the RGF (£325 million of £1.4 billion) feels like it is being done very much on the hoof (it only has a full application stage) and the workshops in London come almost after the 21 Jan 2011 deadline. Though anyone in London will do well to secure these funds and even the weight of a potential London-wide Local Enterprise Partnership (LEP) may not help much. However the RGF suggests there is a clear desire to stimulate the private sector in areas of high public sector employment dependency and this extends to aspirations for high levels of cash support from the private sector and social enterprise in bids to the RGF (60% is suggested as being achieved in Wales). The assessment criteria are drawn from the Treasury's Green Book on value for money so the first round bids will have to be at a well developed stage and have this detailed financial information easily available. The fund seems to be flexible and include capital and revenue elements but bids from the public sector alone are not permitted. However a number of questions emerge:

• Will this approach actually bring forward the right and the right scale of projects rather than the projects that can meet the RGF criteria? Theoretically middle ranking (and urban?) areas in the regions where there is more private funding available may actually do better if this is a key metric. It may also favour those areas with well established public-private partnerships.
• It is not obvious how a sub-£1 million social enterprise project can genuinely be compared with all the other areas expected to be funded from the RGF including housing and infrastructure? And £325 million may not go very far if there are chunky capital projects.
• Projects with less evidence of tangible financial benefits may suffer from this approach (e.g. social inclusion, sustainability)?
• Is any existing strategy being used to co-ordinate these "competitively assessed" projects?

And the RGF is not to be confused with the Business Growth Fund.  In parallel the £1.5 billion Business Growth Fund (relatively small considering the Goldman Sachs bonus pot is £8.3 billion this year!) that has been pulled together by the six largest banks is providing equity finance (£2m-£10m) to firms with turnovers of £10m-£100m though a programme of free mentoring from former bank employees is being offered.

Innovacion review Extra Care Housing demand in North Yorkshire

Innovacion and Atkins have been commissioned to review the forecasts and assumptions used for a housing need analysis for extra care housing provision across North Yorkshire and its seven Local Authorities. The study is the first stage in the development of an Outline Business Case (OBC) by North Yorkshire County Council to consider the merits of developing further schemes in addition to the existing 12 ECH schemes that have been successfully developed since 2003.  

Getting the big picture right: A guide to large scale urban design by CABE

Andy Rumfitt was a member of CABE's Strategic Urban Design Panel and the summary guide for large scale development and extensive online resources have now been published. 'Getting the big picture right' outlines a new approach to large scale urban design that allows people to shape the places they live or work in, and improve their distinctiveness and quality. It will help those organisations and partnerships – often with a mix of public and private partners – tasked with working with local people to prioritise actions and investment. The new guide is supported by a step-by-step guide to the large scale urban design process.

The CABE summary guide can be downloaded from here: http://www.cabe.org.uk/publications/getting-the-big-picture-right

For the extensive CABE web resource please go to: http://www.cabe.org.uk/strud

Innovacion develop ERDF bid for Business and IP Centre at British Library

Innovacion have been appointed to develop a multi-million pound ERDF funding bid for the highly successful Business and Intellectual Property Centre (BIPC) at the British Library. Since 2006 the BIPC has supported 150,000 innovators, small firm owners and entrepreneurs with business formation and every step of the innovation cycle. The BIPC handles 2,300 business and IP inquiries a month and runs many partner workshops, open evenings and business clinics. The ask an expert service allows aspiring entrepreneurs to get advice from seasoned entrepreneurs, ex-Dragons and an in-house inventor. In 2008 the BIPC was identified as best practice in The Richard Report on Small Business and Government to the (then) Shadow Cabinet.

Office Hubs in London? Innovacion advise TfL

Despite the current recession the future of work and the workplace continues to change rapidly. Following on from our work for the Outer London Commission Innovacion have been commissioned by Transport for London to look at the feasibility of office hub concepts across various locations in London and to consider their high level viability and likely impact on travel demand and carbon emissions.  Implementation roles for the public and private sectors will also be considered.

Innovacion look at funding sources for Croydon Council

Innovacion have been appointed to review traditional and non-traditional external sources for a range of projects in the areas of transport, economic development and sustainability for Croydon Council.

Outer London Commission: Geography matters

So the long awaited final report from the Outer London Commission (OLC) has now been published (25 May 2010). We produced a range of economic policy papers which formed the LDA's input into the ruminations of the OLC. Overall the report generally takes a fairly realistic view of the economic potential of Outer London across a wide range of issues - some of which sit uneasily together. With this wide remit it is inevitable that some areas are covered more convincingly than others. The consideration of the scale and nature of office development in Outer London sensibly concludes that aspirational super hubs are exactly that. Increasing development through public sector investment in higher and further education, hospitals and civil servant relocations by expanding the existing 'star and cluster' spatial structures is a realistic way to try to drive change.  

In other areas the ideas are more debatable. It is not clear why a high value service firm would want to use a local suburban library for meetings, even if it is renamed as an ICT hub. Today's launch of Apple's iPad is likely to be another uptick in what mobile working actually, rather than theoretically, means. Our hunch is that a greater freedom in where you work means that the importance of the other factors that make up desirable places actually increases. The result isn't a levelling the playing field effect but a concentrating effect. Desirable places become even more sought after: less desirable places even less so. While the report also suggests that putting firms together in an innovation park means they will work together these sort of developments have a pretty chequered history in the Capital.  In many sectors service firms will work the firms they need to rather than they are near to. Our survey partner is in Yorkshire. Our IT services come from San Francisco and Lancashire. Our accountant is in Cambridge.  

One overriding feeling remains.  While the OLC chose to look at the different rings around London the bigger and more meaningful economic difference is still that between east and west London extending out from central London and into the Greater South East mega-region.  So while the Crossrail benefits concentrate along an east-west axis they also spill out along radial links into Outer London. You can't change hundreds of years of geography that easily...

Outer London Commission Final Report (Pre-publication, May 2010)

Making sense of community engagement: best practice from CAA Green Flags Local Authorities

Following an increasing policy focus on community engagement and empowerment over the last 5 to 10 years, a new Duty to Involve came into force for all local councils in April 2009. As well as the policy thrust, effective community engagement and empowerment makes sense for councils as it helps to build trust and to improve community relations. Three CAA Green Flag authorities (Lewisham, Wiltshire and East Riding) have been undertaking a range of innovative approaches to develop active citizens, strengthen community groups and improve their partnership working. These have included Area Boards and Local Assemblies, a Resource Advisory Group, long term relationships with the third sector and a Young Mayor programme. As a result increasing numbers of local people and partners have been involved in more devolved budget setting, service planning and agenda setting.

Download the case study produced by Innovacion for IDeA from the Work Together site