Derby and Nottingham Urged to Accelerate Collaboration to Secure £11bn Prize

20th November 2017
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Derby and Nottingham should operate as a ‘metro’ region economically to spur growth, a report says. Historic rivals have complementary economies and should focus on shared priorities and combat government underfunding. Successful collaboration on industrial strategy could generate additional £11bn GVA by 2030.

Their football teams may both have been managed by the legendary Brian Clough, but until recently the idea that Derby and Nottingham had much in common would have been anathema to many of their citizens.

But a detailed study prepared for Derby and Nottingham’s City Councils hails progress by the two cities to develop joint services and recommends extending this into a combined industrial strategy that will enable them to operate as a ‘metro’ unit economically.

By developing a shared industrial strategy that draws on each other’s unique strengths, the cities could boost their output to match average English productivity, reaping an £11bn gross value-added (GVA) dividend by 2030, according to a report from city growth consultancy Metro Dynamics. New joint institutions and a focus on skills and education could encourage more inclusive growth that spreads prosperity, the report adds.

The findings are being considered ahead of the much-anticipated publication of the Government’s Industrial Strategy White Paper. Earlier this year, the green paper consultation stressed the importance of locally-led industrial strategy ‘deals’ based around economic and sectoral clusters as a way of spurring regional growth.

The report by Metro Dynamics, entitled The Economic Case for the Derby-Nottingham Metro, points out that the two cities and surrounding districts already have many of the characteristics of a metro economy, with a population of 1.4 m. Closer together than London’s Olympic and Wembley stadiums, over 80% of residents live and work locally, with 40,000 people commuting daily between the two. Average output-per-head is almost identical [Nottingham’s GVA per head is £27,645, compared to Derby’s £27,259], despite their very different economic structures.

Derby is by far and away England’s most industrial city, with over 30% of its economic output from advanced manufacturing, including big-name firms like Rolls Royce, Toyota and Bombardier. Nottingham has strengths in finance, business and data services and bioscience, with major employers including Boots, Experian and Capital One. These economies, supported by three major universities, are seen as complementary to each other by the report authors.

But both cities face challenges to their economic potential, including low skill levels, below-average school attainment, high proportions of low-wage jobs and pockets of severe deprivation.

Furthermore, the two cities, along with the wider East Midlands, have historically suffered relative underfunding from central government which the report suggests could be due to the lack of a united voice compared to competitor cities and areas in other regions. The report notes that if the area received the same level of government spending per head as Greater Manchester, per person spend would rise by £800, generating an additional £1.1bn for the metro.

The report sets out a 10-point plan to turbo-charge the economy of the metro region, including:

  • Establish a new Metro Growth Board to bring local government and businesses together, in a modern version of the 19th century ‘municipal corporations’ that led the cities’ growth in their industrial heydays.
  • Prioritise delivery of the Toton HS2 station development and surrounding infrastructure as a key transport connectivity and economic driver for the metro region, generating 75,000 new jobs and much needed new housing.
  • Work together for a proportionate share of the proposed UK Shared Prosperity Fund - a post-Brexit replacement for European Structural and Investment Funds proposed by the UK Government.
  • Establish a strategic approach to inclusive growth, bringing in national agencies such as the Education and Skills Funding Agency (ESFA) and Jobcentre Plus (JCP) to work on local priorities.
  • Create a globally significant metro presence by aligning the work of Marketing Derby and Marketing Nottingham to attract foreign direct investment (FDI) and tourism.

Ben Lucas, Managing Director of Metro Dynamics, said:

“The more you look at Derby and Nottingham, the more apparent their underlying economic interdependence becomes. But whilst the area already has many of the characteristics of an urban metro, it doesn’t operate like one, and it loses out as a result.

“We have identified some huge opportunities from a more joined-up approach. The most significant of these is HS2 at Toton. The potential here is enormous: It could be an innovation campus that links Derby’s advanced manufacturing and engineering strengths with Nottingham’s burgeoning digital sector, building on the Midlands Engine Innovation Accelerator plans.

“The big growth opportunities of the future lie in sectoral and locational crossovers between the two cities, such as combining advanced manufacturing with digital skills. No one organisation or place can make this happen on their own.

“If all of the key organisations, City and County councils, Districts, LEPs, businesses, education institutions and local communities can work together in a real spirit of collaboration, then there is a big economic prize to be grasped.”

David Williams, Chair of the Metro Strategic Advisory Group, which has members of the business community from Derby and Nottingham, and Chair of Geldards LLP, said:

“What really stood out for me in this report is the economic parity of Derby and Nottingham. The two cities have businesses and services which complement one another, with a high level of local residents who work in local companies. It is clear we have much more to gain in common than in competition.

“Metro Dynamics tell us maximum economic benefit will come through formal collaboration between organisations covering an area beyond the two cities. They suggest a potential additional economic growth in GVA of £11bn is achievable long term.

“I found myself asking two fundamental questions – firstly, why the perceived rivalry between Derby and Nottingham has been so dominant in the past and, secondly, what has our whole region missed out on as a result?

“This study feels fresh to me. Looking at a ‘metro’ economy is still new, our relationships are still forming; Metro Dynamics’ independent evidence shows that we are already on the right track.

“To progress together and realise our potential we need an approach that is inclusive and pragmatic. We must form a partnership of equals, focus on areas of mutual economic interest, leaving our organisational interests behind. This will be a challenge, I don’t doubt, though what we achieve will be both exciting and rewarding.

“I am genuinely enthused by the idea of a Metro Growth Board and I will talk to business colleagues over the next few weeks about their response to the report and what we can do next, together.”

 

RELATED: CHAIRMAN'S BLOG - METRO DYNAMICS REPORT 


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David Williams

DAVID WILLIAMS

Chairman, Derby

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