News story

Long term economic plan for the Midlands announced by Prime Minister and Chancellor

Jobs, skills, transport, science, and quality of life are at the heart of the six-point long term economic plan for the Midlands.

• From: HM Treasury, Prime Minister's Office, 10 Downing Street, The Rt Hon Lord Cameron and The Rt Hon George Osborne
• Published: 12 February 2015

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Jobs, skills, transport, science, and quality of life are at the heart of the six-point long term economic plan to make the Midlands the Engine for Growth in the UK, announced today by the Prime Minister and Chancellor.

The Prime Minister and Chancellor today set out their six-point long term economic plan for the Midlands showing what has been delivered, what is underway and what more can be done to make the Midlands an engine for growth.

In a speech at Bombardier in Derby, the pair set out the detailed plan as part of a two day tour of the region.

The plan aims to:

1. raise the long term growth rate of the Midlands to at least the forecast long term growth rate of the whole UK – adding an extra £34 billion to the Midlands economy in real terms by 2030, equivalent to over £3,000 per person
2. create 300,000 extra jobs in the Midlands by backing the core strengths of the local economy like advanced manufacturing and engineering
3. put skills at the heart of the economic revival of the Midlands, working with local businesses and the Local Enterprise Partnership on a radical new matching service for local working people and increasing skilled apprenticeships. The government is devolving power over skills, which is currently centred in Whitehall, to the Local Authorities and Local Enterprise Partnerships in the Midlands, on the condition that different areas combine together to produce a strong joint plan.
4. deliver £5.2 billion of investment into new transport infrastructure in the Midlands, upgrading the motorways to four lanes, delivering faster north-south rail connections and east-west links, and make the most of the economic opportunities of HS2
5. back science and innovation in the Midlands, focussing on the plan for local universities to develop an Energy Research Accelerator and support new technology in the world-leading automotive sector
6. improve the quality of life in the Midlands by regenerating run-down estates, investing in the county towns, supporting the construction of 30,000 new homes and making improvements to local education so 150,000 more pupils attend outstanding schools. Government will also support events to commemorate the 400th anniversary of Shakespeare’s death, along with the engineering and military history of the region

There are no quick fixes to achieving these important goals, so the Prime Minister and Chancellor are also setting out a specific timetable to deliver the key concepts of this plan over the five years of the next parliament, and the following decade (see details in notes to editors). As important next steps in the making the Midlands an Engine for Growth, the pair announced a number of new measures to improve skills, transport links, invest in the science, innovation, and energy, and improve quality of life:

• improve skills with a new four point plan including agreement in principle to devolve skills spending to Combined Authorities in the Midlands as and when they are formed
• develop a new approach to matching people with job opportunities with Andy Street, Chief Executive of John Lewis and Chair of the Birmingham and Solihull LEP, working with businesses to match workers with apprenticeships, training opportunities and skilled job, supported by 100 new job coaches
• support the development of a major new university in Hereford - the Chancellor has asked Universities Minister Greg Clark to work with the Hereford team.
• invest £5.2bn to create a modern, interconnected transport network for the UK centred on the Midlands by starting work to upgrade the M1 and M5 to four lanes in summer 2015, and develop the case for electrifying the main rail lines between Bristol and Birmingham and Derby and Birmingham. The Chancellor will also back plans for a High Speed Rail Investment Summit in Birmingham
• build on the Midlands’ world-leading scientific and engineering capability by inviting local leaders, universities and businesses to work together on building a strong case for new science investment in the Midlands, including looking at proposals for a new national hub for energy research
• capitalise the Midlands’ strong heritage in the automotive sector by announcing the expansion of the MIRA enterprise zone in Nuneaton, the UK’s largest Automotive Technology Park
• create four new Food Enterprise Zones in the Midlands in 2015, which will provide a boost to the food supply chain industry and create hubs across the region to attract food and farming businesses
• improve quality of life across the region by supporting the construction of up to 30,000 new homes and improve educational outcomes so that over 150,000 more pupils attend outstanding schools. The Department for Communities and Local Government will also work the Treasury to look at how best we can kick-start estate regeneration in the Midlands.
• celebrate the 400th anniversary of Shakespeare’s death in 2016 by supporting the transformation of Shakespeare’s last house New Place into an exciting, innovative and inspiring heritage site. Alongside this, the Royal Mint will mark the anniversary with a new commemorative coin. Finally, the government will recognise the region’s engineering and military history by supporting a memorial for the first tank which was designed and built in Lincoln

As both the Prime Minister and Chancellor have set out clearly, the only way for the UK’s recovery to be truly sustainable is for it to be truly national. While the challenge is significant, so is the prize ahead. By pursuing this plan, the Prime Minister and Chancellor aim to achieve real outcomes for the people of the Midlands who have already seen faster growth than the UK average under this government.

The Prime Minister and Chancellor will be visiting a variety of businesses and institutions across Midlands to hear how the government’s long term economic plan is delivering for them and what more can be done to support the region.

The Chancellor first made a visit to DHL in Derby to meet with workers on the night shift before joining the Prime Minister to deliver a key note speech at Bombardier. The Chancellor will then meet several of the region’s major employers to welcome significant announcements.

Prime Minister, David Cameron said:

We are building a more resilient economy to benefit hard working people across the Midlands, from its great cities to the stunning countryside of the Derbyshire Dales. We are already seeing more jobs and greater growth in the region, but we want to see more. That’s what our long term economic plan will do – it will help the region build on its success and create new opportunities through massive investment in infrastructure and housing.

Chancellor of the Exchequer, George Osborne said:

Our long term economic plan for the Midlands aims to make it an engine for growth in the UK to ensure that we have a truly national recovery. Under this government, the Midlands has been growing and creating jobs faster than the average for the whole of the UK. The challenge now is to sustain this which is why the Prime Minister and I are here today setting out our long-term plan to create 300,000 new jobs, boost the Midland’s growth by over £30 billion and significantly improve the quality of life.

Further information: Timetable for action – implementation in the Midlands 2015-2030

2015:

Employment and productivity

• new, multi-occupancy facility will open at MIRA, one of the most successful Enterprise Zones in the country. The first tenants will be GKN, Goodyear, Haldex and Continental. Government will cement the Midland’s position as a world leader in automotive technology by extending this Enterprise Zone
• Midlands will begin to benefit from the significant investment in the region through the Local Growth Fund. The first round of Growth Deals have allocated nearly £1.3bn of funding between 2015/16 and 2020/21 to Local Enterprise Partnerships (LEPs) in the region:
  • Derby, Derbyshire, Nottingham, Nottinghamshire LEP secured £174.3m for projects including the expansion of floorspace next to Biocity in Nottingham to accommodate growing firms and allow space for new bioscience start-ups
  • Leicester & Leicestershire LEP secured £80m for projects including a Transport Engineering skills training facility to provide significant training places each year to address skills shortages in this sector
  • Greater Lincolnshire LEP secured £111.2m for projects including a relief road, bridge and connections that will enable housing and employment land to be developed and reduce traffic congestion in Grantham
  • Northamptonshire LEP secured £67.3m for projects including Silverstone Metrology Centre, a high precision measurement facility at a cost that is affordable for SMEs, enabling them to develop new products and processes
  • South East Midlands LEP secured £79.3m for projects including dualling of a stretch of the A421 in Milton Keynes to allow for housing growth in the area without increasing congestion
  • Black Country LEP secured £138.7m for projects including a new state of the art Centre for Advanced Building Technologies and Construction Skills comprising new teaching and workshop facilities to complete the £48m investment in Dudley Advance
  • Greater Birmingham & Solihull LEP secured £357.4m for projects including measures to foster growth in Greater Birmingham and Solihull, including station improvements at Snow Hill, major maintenance of the Tame Valley Viaduct, and a regeneration programme in East Staffordshire
  • Marches LEP secured £75.3m for projects including a transport package for Hereford city centre, including a new link road
  • Worcestershire LEP secured £47m for projects including various transport investments, including the Hoobrook Link Road to enable faster transport links for local business.
  • Stoke-on-Trent & Staffordshire LEP secured £82.3m for projects including the building of a new access from the A500 to reduce congestion and improve access to the Etruria Valley Enterprise Area and the City Centre
  • Coventry & Warwickshire LEP secured £74.1m for projects including delivery of the North-South Rail and Coventry Station scheme, which will improve passenger capacity and secure an increase in train service frequency between Coventry-Bedworth-Nuneaton and a bay platform at Coventry Station
• The Midlands will benefit from its share of the £3.5bn for investment up to 2020 under the Rural Development Programme (RDP) to grow farming, food, the rural economy and protect the natural environment; including £67m already allocated to be spent on local growth schemes in the region. LEP priorities for funding include:
• farm and business development, supporting non-agricultural activities
• support for vocational training, skills acquisition actions and advisory services
  • support for broadband infrastructure
  • support for businesses to improve their energy efficiency
  • co-operation among small operators in organising joint work processes and sharing facilities and resources
• over 450,000 apprenticeships started in the Midlands since May 2010. Government is keen to continue this record and is also supporting local projects such as the development of a programme to develop capital skills projects that address the skills gaps in Worcestershire, delivering 600 new Apprenticeships by 2020 & 3000 Higher Level skills qualifications by 2020. This will be funded as part of Worcestershire’s £7.2m Growth Deal expansion announced on 29 January
• Midlands has received £165m of public funding to roll out superfast broadband and 250,000 premises had been passed by end October 2014. It is expected that Staffordshire and Nottinghamshire will receive higher than average coverage from phase one of the roll out
• Birmingham, Derby and Coventry are taking part in the broadband connection voucher scheme with 600 SMEs having taken vouchers in these cities to date
• by March Birmingham will have free public wifi in 233 buildings, and Derby in 23 buildings. Derby includes Derby Museum which is using the wifi to enhance the visitor experience by interacting more with the collections
• feasibility reports for eight pilots under phase three of the broadband rollout will be published in February

Transport

• Birmingham Curzon Urban Regeneration Company will meet in March for the first time, and will produce a dedicated HS2 Growth Strategy by 30 April, setting out the jobs and growth that HS2 will unlock. The new Company will lead the development of over 140 hectares of land around Curzon Street where the new HS2 station will be located in the heart of Birmingham city centre. The redevelopment could create 14,000 jobs, 600,000 square metres of new employment floorspace and 4,000 homes, contributing up to £1.3bn a year to the local economy. Similarly, Solihull will also produce by 30 April a HS2 Growth Strategy for the new HS2 Interchange Station to the east of Birmingham near the NEC and Birmingham Airport setting out a vision for UK Central to maximise the potential of this major new rail gateway to the north of England. It will also establish its Local Delivery Body by the end of 2015
• work will continue on the headquarters of the new National College for High Speed Rail, which will be located in Birmingham’s city centre Science Park (with another site in Doncaster). The college is expected to create apprenticeship opportunities on top of the 2,000 already expected to be created by HS2 Ltd
• new East Coast franchise, starting in March 2015, will benefit all passengers between London and Edinburgh, with upgraded train interiors being introduced from 2015 to 2017
• Birmingham New Street station will fully reopen by the end of 2015, following a £600m redevelopment.
  • Road Investment Strategy announced at Autumn Statement 2014 will see £15.7bn committed to road improvement schemes nationwide. £2.9bn of that will be spent in the Midlands, creating 145 miles of smart motorway radiating from Birmingham to Manchester and London; new links to Nottingham, Sheffield and Leeds and vital upgrades to the M1
  • smart motorway upgrade between junctions 19 and 16 of the M1 is scheduled to start this summer. This key stretch of strategic motorway connects London to the North and at it northern tip at J19 connects to the M6 which feeds the major conurbations of Birmingham and Manchester in the North West. It suffers long standing congestion impacting on journey times for users and economy of the UK. This investment will support and enhance the role of the M1/M6 as a major national and inter-urban transport artery contributing to national economic growth and supporting local development plans
  • Midlands Connect, a group of LEPs, will use Growth Deal funding to identify strategic road and rail interventions across the East and West Midlands required to become HS2 ready. To support this the Secretary of State will attend a conference to review how Government works with the LEPs in Midlands Connect to implement trans-LEP transport plans
  • M1 junction 24 to A50 - opening March 2015 is a £6 million investment through the pinchpoint scheme to improve traffic flow where the A50 meets the M1 at Junction 24, supporting the creation of 1,300 jobs and 2,750 homes by 2020
  • M1 junction 28 (Mansfield) to junction 32 (Sheffield): upgrading to smart motorway including hard shoulder running; together with existing improvements to the south, this creates a smart motorway link between Derby, Nottingham and Sheffield. Due to complete by early 2016
  • A453 upgrading between Nottingham and the M1 - replacing rural sections with dual carriageway and widening urban sections to 2 lanes in each direction; improving junctions along the route The scheme is due to be fully open in autumn 2015
  • £42m investment in the A14 around Kettering to provide an extra lane in each direction from junction 7 (A43) to junction 9 (A509). This will reduce congestion, boosting the local economy, and facilitate the increased demand in the area which will occur as a result of the Government’s growth agenda to develop 40,5000 homes in the area. The scheme is due to open in 2015
  • East Midlands Airport – which saw its highest ever volume of cargo shipped in 2014 – has pledged that during 2015 it will fill 1,250 job vacancies across the 90 businesses on its site

Science, technology and engineering

• University of Nottingham will benefit from the creation of a University Enterprise Zone and £2.6m awarded to build a new Technology Entrepreneurship Centre at the University’s Innovation Park. This will provide accommodation and intensive incubation support for business start-ups and early stage SMEs, focused on key sectors such as Big Data & Digital, Advanced Manufacturing, Aerospace and Energy
• UK Research Partnership Investment Fund has awarded £59m to support projects at the Universities of Birmingham, Nottingham and Warwick that will boost scientific and engineering knowhow, keeping the region at the forefront of technological developments
  • £20m for a casting and simulation research facility at the University of Birmingham, due to be completed this April and equipped by Rolls Royce.
  • £10m for the University of Nottingham’s Centre of Excellence in Sustainable Chemistry
  • £29m for the National Automotive Innovation Campus and the Advanced Propulsion Research Laboratory at the University of Warwick. Work will continue this year

Quality of life

• government has already opened 1,035 academies, 31 free schools, 7 University Technical Colleges and 9 studio schools in the region over this parliament. This commitment to education will continue with another 210 academies, 20 free schools and 5 University Technical Colleges due to be established. It is estimated that the new free schools and UTCs will provide another 13,511 school places between them
• government will look at how to open up regeneration opportunities on housing estates in the region, looking ‎at the specific challenges of estates in the Midlands to both help kickstart regeneration on those sites, but also learn lessons to inform future estates regeneration programmes
• government’s commitment to building new homes has already seen:
  • £735m of investment to deliver 36,000 affordable homes in the region since 2010
  • £68.2m invested through the Get Britain Building scheme, leading to work starting on 2231 homes (939 of which have been completed)
  • 15,200 households supported into home ownership through the Help to Buy scheme
  • £128m of investment through HCA Land Programmes to support local economic growth and regeneration in local communities has seen work start on 1,215 homes (787 of which have been completed
• this year the Large Sites Infrastructure fund, Local Infrastructure Fund, Local Growth Fund and Builders Finance Fund are considering £289.2m of investment in 48 schemes with the potential to unlock up to 30,000 homes. The first contracts under these schemes are expected to be signed in March
• decision will be made on bids made to the Housing Zone scheme, which will unlock brownfield land to provide viable housing schemes, by Budget. Shortlisted bids include those in Bassettlaw, West Lindsey, Dudley and Sandwell which, if successful, have the potential to provide 4,500 homes
• homes and businesses across the Midlands will be better protected from floods thanks to an unprecedented six-year £2.3 billion flood defence programme, announced at Autumn Statement, providing better protection for at least 300,000 households nationwide by 2021. Approximately £352m of this will be invested in the Midlands with around £52m being spent in financial year 2015/16. The programme will also support economic recovery and growth, working alongside partners including private companies, local planning authorities and Local Enterprise Partnerships (LEPs). Overall, the national programme will help avoid over £30bn in long-term economic damages. A few key schemes are highlighted below:
  • new Boston Barrier is attracting over £73 million in Government funding towards a total cost of £90 million. This scheme will reduce flood risk to 15,129 homes and businesses from flooding and provide an economic boost to the area through regeneration
  • £1.2million will be invested in reducing flood risk in Much Wenlock
  • The Badsey Brook Flood Alleviation Scheme will reduce the risk of flooding to approximately 250 residents living along Badsey and Bunches Brook in Broadway, Childswickham and Murcot
  • approximately £500,000 investment in the Barbourne Brook Flood Alleviation Scheme will reduce the risk of flooding to several large industrial units and residential properties in Worcester City along the brook
  • new Flood Risk Management scheme in Isle of Axholme is attracting £43.8 million of Government funding and will protect around 5,750 properties in the area
  • Perry Bar and Witton, Birmingham which will cost approximately £25 million (including contributions) and protect 1,400 properties in the area, including 950 residential properties
  • approximately £29 million of government Grant for a new Derby flood risk management scheme in the Lower Derwent Valley
  • 2,300 households will benefit from improved sea defences between Immingham and Freshney
  • households and infrastructure will receive a reduction in flood risk from almost £7 million of government investment at Halton and Killingholme Marshes between 2015 and 2021. This forms part of the wider flood risk management measures being provided on the Humber
  • Ongoing investment in essential waste management infrastructure through PFI credits in the Midlands will amount to £93.3m in financial year 2015/16

2016:

Employment and productivity

• region will benefit from £204m allocated through the second round of growth deals, bringing total investment in the region under the Local Growth Fund to £1.49bn.
• as a result of changes announced at Autumn Statement 2013 and 2014 to support young people gaining skills, we estimate that employers of approximately 100,000 young apprentices won’t pay National Insurance Contributions from 2016
• government has committed support for the Future Skills Capital Programme in Greater Birmingham and Solihull LEP as part of a £21.4m Growth Deal expansion which will support additional course provision at colleges including Employability & Enterprise, Maintaining Quality Provision, and Advanced Life Sciences, delivering 3000 – 5000 skills outputs
• part of the Greater Birmingham and Solihull £21.4m Growth Deal expansion will support an extension to the existing Faraday Wharf incubator building at the Innovation Birmingham Campus to provide an additional 445m2 of state of the art enterprise space. This funding will enable local universities to collaborate with business start-ups, creating 1800 jobs and supporting the Enterprise Zone
• some of the additional £7.7m from the Local Growth Fund for the Marches LEP, announced 29 January, will support local businesses by ensuring that super-fast broadband is available across Shropshire, Herefordshire and Telford & Wrekin
• we have committed an additional £15.3m for Coventry and Warwickshire LEP, including funding for an investment programme to bring forward key employment sites for development (e.g. Friargate and further employment land around J12 M40). This project, funded through the LEP’s Growth Deal, will enable business growth and create new job opportunities
• through Leicester and Leicestershire’s £20.3m Growth Deal expansion we are committing support for a commercial workspace programme to develop 20,000 sq. m new floor space; creating up to 300 jobs and attracting up to 60 new businesses within priority growth areas (Leicester, Coalville, Lutterworth and Quorn)
• Phase one of the superfast broadband rollout due to complete, due to reach 90% coverage nationwide

Transport

• construction of the headquarters of the new National College for High Speed Rail in Birmingham’s city centre Science Park will continue. Before construction is completed, the college will identify a network of other providers who will also be part of the National College in a ‘hub and spoke’ model – which will be crucial in delivering the leading edge provision that is needed for this important sector
• September 2016 Network Rail Initial Industry Plan for the five years of funding from 2019 onwards will be informed by a Network Rail study looking at the costs and benefits of electrifying the main line between Bristol and Birmingham and between Derby and Birmingham
• M1 junction 19 improvement: £191m reconstruction of the Catthorpe Interchange to provide free flowing movement at an important interchange between north/south and east/west traffic movements (between the A14 and M6, the A14 and M1, and the M6 and M1). The M6/A14 route is an important part of the Ireland/UK/Benelux Trans European network. The scheme is due to open in autumn 2016
• M1 Smart Motorway link between Nottingham and Sheffield will be complete
• A45-A46 Tollbar End: replacement of the Tollbar End roundabout with a grade separated junction, plus associated improvements to the adjacent sections of the A46 and A45. The junction is located southeast of Coventry and is a key access route to local business parks and Coventry Airport. This £106m improvement is due to be complete by autumn 2016.
• M6 junction 10a (M54) to junction 13 (Stafford) smart motorway. Due to complete in 2016
• government has committed funding through several Midlands Local Growth Deal expansions for the realignment of the rail infrastructure at Market Harborough. This will improve the journey time for non-stop passenger and freight train services on the Midland Main Line
• additional £9m from the Local Growth Fund has been allocated to Northamptonshire LEP, and some of this funding will go to the second phase of improvement works to the A43 Northampton to Kettering link road. This will dual the A43 between Moulton and Holcot/Sywell roundabouts, enabling up to 1500 new homes to be built
• Some of the additional £46.7m allocation to the South East Midlands from the Local Growth Fund has been committed to a road scheme linking the M1 to the A6. This new 1.5km of dual carriageway is the first phase of a scheme that will open up land north of Luton to allow 20 hectares of development land, including around 300 new homes.
• Greater Birmingham and Solihull LEP are investing in a package of public transport, cycling and walking improvements on a major route which provides access to significant development sites including UK Central, Birmingham Airport, and JLR Lode Lane plant. Government has committed to support the project, through the £21.4m Greater Birmingham and Solihull Growth Deal expansion announced on the 29 January
• through Coventry and Warwickshire’s £15.3m Growth Deal expansion we have committed support for the development of a new technology to bring motorway and local road traffic systems together with cloud based systems. This will improve local journey times on important routes, by giving drivers live information enabling them to switch routes and modes

Science, technology and engineering

• part of Derby, Derbyshire, Nottingham and Nottinghamshire’s £22.2m Growth Deal expansion has been committed to an Institute for Advanced Manufacturing at Nottingham University which will train over 3000 manufacturing engineers and encourage future generations of engineers to come to the city.
• to aid delivery of a new Agrifood centre at the University of Lincoln’s Holbeach campus, we have committed support through the £14.8m Greater Lincolnshire Growth Deal expansion
• through the Local Growth Fund we have committed funding for the Vulcan Iron Works Project. This will deliver a Creative Industries Hub of managed workspace in the Northampton Enterprise Zone, supporting creative business in Northampton and SEMLEP, and creating 180 additional new jobs. Government is also discussing the possible use of Public Work Loans Board borrowing to help Northamptonshire LEP support the acceleration of the Vulcan Iron Works Project
• new Technology Entrepreneurship Centre at the University of Nottingham Innovation Park is anticipated to open by Summer 2016 to provide accommodation and intensive incubation support for business start-ups and early stage SMEs, focused on key sectors such as Big Data & Digital, Advanced Manufacturing, Aerospace and Energy
• we have allocated funding through the £46.7m South East Midlands Growth Deal expansion for the development of an open innovation facility at Cranfield University. This will allow for the integrated development of autonomous transport vehicles and related complex intelligent systems, bringing up to 1000 new jobs to the Bedfordshire area
• we have committed investment towards the delivery of the £4.5m Marston Vale Innovation Park on the A421 corridor, through the £46.7m South East Midlands Growth Deal expansion. This will bring 80 businesses, an iLab2 Innovation Centre, and a 12 unit Workshop Cluster into one centre, bringing 1600 new jobs and 600 new homes to the area.
• the National Automotive Innovation Campus at the University of Warwick is expected to be completed in 2016

Quality of life

• Part of Derby, Derbyshire, Nottingham and Nottinghamshire’s additional £22.2m allocation from the Local Growth Fund will be invested in local infrastructure requirements to bring forward development sites along the A46 at RAF Newton, Cotgrave and Bingham. This is expected to create 2,700 jobs and 1,600 houses, and the regeneration of Cotgrave town centre
• Derby, Derbyshire, Nottingham and Nottinghamshire LEP will also benefit from government investment in a bridge and bypass that will allow development of a 12 hectare Employment Park at Drakelow. This will also unlock further brownfield land available for development, which would create 460 jobs and deliver 300 homes
• to ensure the continued operation of Melton Mowbray livestock market on its site, and unlock 17,000 sq. m potential for future development, support from the Local Growth Fund is committed to improvements to the market. This aims to safeguard up to 200 jobs and increase visitor spend
• £15.4m expansion of Stoke-on-Trent and Staffordshire Growth Deal includes funding for a project to regenerate the only large site within Lichfield city centre to create the premier retail and leisure destination in the city
• additional £20.3m allocated from the Local Growth Fund to Leicester and Leicestershire LEP will be invested in an access and public realm improvement scheme in Leicester City centre. This includes 5,500m street and 15,000 sq. m public realm improvements to increase footfall, retail spend, create up to 500 new jobs and unlock the area for future commercial developments
• committed support through the £46.7m South East Midlands Growth Deal expansion for the development of Waterside North in Aylesbury. This is a scheme to bring forward a mixed use development of housing, retail, leisure and public realm, creating at least 300 new jobs
• £24m of additional funding from the Local Growth Fund for the Black Country LEP includes gap funding to deliver a strategic residential site comprising approximately 270 homes in Sandwell
• further schemes being considered under the Large Sites Infrastructure Fund will see contracts signed in March
• key flood defence work is expected to see investment of approximately £51.2m in financial year 2016/17
• ongoing investment in essential waste management infrastructure through PFI credits in the Midlands will amount to £95.1m in financial year 2016/17

2017:

Employment and productivity

• phase two of the superfast broadband rollout due to complete, due to reach 95% coverage nationwide

Transport

• headquarters of the new National College for High Speed Rail, in Birmingham’s city centre Science Park is expected to open in 2017, when construction on HS2 will begin.

Science, technology and engineering

• Advanced Propulsion Research Laboratory at the University of Warwick is expected to be completed in 2017

Quality of life

• 50 schools in the region will have been rebuilt under the Priority School Building Programme by 2017, improving the school environment for around 30,000 children.
• investments under the Builders Finance Fund, which enables SME developers to unlock housing developments, will be complete. 27 schemes in the Midlands have been shortlisted, if selected these could deliver over 2,000 new homes
• key flood defence work is expected to see investment of approximately £59.7m in financial year 2017/18
• ongoing investment in essential waste management infrastructure through PFI credits in the Midlands will amount to £99.7m in financial year 2017/18

2018:

Transport

• Intercity Express programme represents a £2.7bn investment in new trains serving the East Coast Mainline, providing more reliable services, more seats, more luggage space, faster journey times (from 2019), and improved wi-fi and mobile coverage

Quality of life

• key flood defence works are expected to see investment of approximately £61.3m in financial year 2018/19
• ongoing investment in essential waste management infrastructure through PFI credits in the Midlands will amount to £101.8m in financial year 2018/19

2019:

Transport

• improved East Coast timetable introduced from May 2019 featuring faster services, new direct services and improved weekend services:
  • regular weekday services between Edinburgh and London in just 4 hours, calling only at Newcastle, a journey time improvement of around 20 minutes compared with most of the fastest trains today
  • additional and faster services between Leeds and London, many with a journey time under or close to 2 hours, a journey time improvement of over 10 minutes compared with today
  • new direct weekday services between Middlesbrough and London for the first time in a generation
  • two-hourly direct weekday services between Bradford, Harrogate, Lincoln and London
  • new direct weekday peak-time services between Huddersfield and London *improved Saturday and Sunday timetables, with more trains and faster services between Leeds and London, faster journey times between Edinburgh, Newcastle and London, a two-hourly direct service between Harrogate and London, and a two-hourly direct service between Lincoln and London
  • A38 upgrade to full Expressway from North Derbyshire to the West Midlands. The A38 is an important strategic connection between the major economic hub of Birmingham, Derby and the M1 which connects to the North. The scheme is expected to commence construction in 2019 and will facilitate regional development and improve accessibility between unemployed workers and available jobs, as well as reducing congestion and increasing reliability.

Science, technology and engineering

• new Technology Entrepreneurship Centre at the University of Nottingham Innovation Park is anticipated to support 50 new businesses and 350 jobs by 2019

Quality of life

• key flood defence works are expected to see investment of approximately £48m in financial year 2019/20
• ongoing investment in essential waste management infrastructure through PFI credits in the Midlands will amount to £103.6m in financial year 2019/20

2020:

Employment and productivity

• Midlands will have received its share of the £3.5bn set aside for investment up to 2020 under the Rural Development Programme (RDP) to grow farming, food, the rural economy and protect the natural environment
• support through Growth Deals for Worcestershire’s programme to develop capital skills projects that address the skills gaps is expected to deliver 600 new Apprenticeships and 3000 Higher Level skills qualifications by 2020

Transport

• improvements on the M1 will create a Smart Motorway link, initially between Nottingham and Sheffield, then connecting London to Yorkshire. As part of the improvement, upgrades will be made to junction 21 of the M1, improving links to the M69 and relieving congestion on the main junction. This will improve access to Leicester city and support local housing growth. It is due to start after 2019/20
• 1,300 jobs and 2,750 homes will have been created by the £6 million investment to improve traffic flow where the A50 meets the M1 at Junction 24

Quality of life

• key flood defence work is expected to see investment of approximately £45.4m in financial year 2020/21
• ongoing investment in essential waste management infrastructure through PFI credits in the Midlands will amount to £105.7m in financial year 2020/21

2020-30:

Employment and productivity

• first two rounds of Growth Deals will have invested £1.49bn between 2015/16 and 2020/21 to support projects backed by Local Enterprise Partnerships (LEPs) in the region

Transport

• Phase 1 of HS2 is due to open in 2026/27 linking London with Birmingham. This will double the number of seats between London and Birmingham and generate a faster and more reliable service to London, cutting journey time by around half an hour
• Phase 2 of HS2 is scheduled to commence construction in the mid-2020s. Phase 2, joining Birmingham with Manchester and Leeds, represents a £21.2bn investment and will support at least 60,000 jobs in the Midlands and North
• Phase 2 will open in its entirety in 2033, transforming journey times. Travelling to Leeds from Birmingham will take 61 minutes less than it currently does

Science, technology and engineering

• new Technology Entrepreneurship Centre at the University of Nottingham Innovation Park is anticipated to achieve a turnover of £25m by 2021

‘Quality of life

• in addition to the 50 schools completed in 2017, 43 further schools will be rebuilt under phase two of the priority school building programme
• approximately £352m is expected to have been spent in the Midlands as part of the unprecedented, national six-year £2.3 billion flood defence programme which will provide better protection for at least 300,000 households nationwide by 2021

Treasury analysis of the benefits to the Midland’s economy

To calculate the boost in the Midland’s economic output if it were to grow at the same rate as the UK as a whole between now and 2030, we used national statistics from the Office of National Statistics (regional gross value added (GVA) and National population data along with the Office of Budget Responsibility’s economic growth forecasts.

Regional economic output is measured annually by the ONS. The published data estimate the GVA in each region in nominal prices with data available from 1997 to 2013. Therefore this data captures both changes in price and volume over time. The OBR’s forecast period is up to 2019 after which we assume that the Midlands grows in line with UK trend growth.

Between 1997 and 2013 the Midlands grew at a slower pace than the UK as a whole. The average annual growth rate of the Midland’s GVA was 3.7 per cent which was below the UK’s average annual growth rate of 4.2 per cent over the same period.

If between 2013 and 2030, the Midlands was to grow in line with the OBR’s forecast for the UK average growth in nominal GDP, its GVA would be £215,275m higher in 2030 than in 2013.

If over the same period, the Midlands were to continue to grow at its average rate of growth seen between 1997 and 2013, its nominal GVA would only be £167,185m. The difference between the two – equating to the potential benefit of growing in line with the rest of the UK – is £48,091m.

To calculate the real, inflation adjusted figures, we undertook the same calculation, but also applied the national GDP deflator across the regions (regional GVA deflators are not published) to give constant prices at 2013 levels).

If by 2030 the Midlands were to continue to grow at the same rate as between 1997-2013, the Midland’s GVA would grow by £62,036m. If instead it is able to grow at the same rate as the UK as a whole, it would grow by £96,321m. The difference between these two is £34,285m.

The ONS’ regional population projections were then applied to estimate the per capita measures. This showed that growing at the same pace as the rest of the UK would be equivalent to an additional £4,288 per person in nominal terms or £3,057 in real terms.

Employment

To estimate the increase in the level of employment if the region maintains its present rate of employment growth, we extrapolated the monthly average growth rate since the election in 2010.

Latest labour market statistics are available to the three months to November 2014. Total employment has grown by 5.2 per cent over this time period, equivalent to a growth rate of 0.09 per cent per month. Extrapolating this growth rate over the 5 months left in the current parliament and the five years (60 months) of the next parliament gives an employment level of 5.1 million, an increase of 299,916 on the current level.

Published 12 February 2015