In a BBC interview with John Humphreys this morning on the Today programme, did Deputy Prime Minister Nick Clegg make it clear that little of the government’s Regional Growth Fund [RGF] is likely to head south?
The interview was prefaced by new research from Experian into which areas of the country will be most resilient to the forthcoming public sector spending cuts. The researchers looked at data for 324 district and unitary authorities across four broad areas - business, people, place and community and considered a range of factors, one of which was the reliance on public sector employment.
When pushed by Humphreys to elaborate on government plans to stimulate private sector job growth as the public sector shrinks, Nick Clegg cited the £1bn [over two years] Regional Growth Fund [RGF] which he said was, “specifically targeted only at those areas that have become over-reliant on the public sector” [our italics].
While it was always known that a function of the RGF was to rebalance the UK economy, this is the first time that a minister has said that it would only be used in areas that have high public sector employment.
So far, the RGF is the sole source of funding that has been identified to support Local Enterprise Partnerships [LEPs] which are intended to be the engines of job creation and economic prosperity in local economies [see earlier stories].
Looking at the map of public sector employment by region this bodes ill for the south east which, together with the east of England, has the lowest average public sector employment at 16.8% compared to the north east and north west on 25.1% and 22.3% respectively. Individual towns and cities have much higher rates. For example the highest rate is 52.6% found in Castle Morpeth in Northumberland.
Of course LEPs will be local not regional and it is important to drill down below the regional headlines. Some places in the south east, like Hastings in East Sussex with 42.6% public sector employment, are comparable with many northern towns. The Experian research also suggests that Hastings has the 11th highest total number of vulnerable employment sectors, and hardly any valuable office space, which may have figured in East Sussex’s decision to go it alone with its proposal for a single county LEP [see earlier story].
Brighton & Hove has a public sector employment rate of 30.3% and it has joined forces with West Sussex and Croydon to form a LEP [see earlier story]. Croydon has a similar rate to Brighton & Hove but Crawley in West Sussex has just 11.7% of workers in the public sector.
ECONOMIC PARTNERSHIP COMMENT
If Nick Clegg really means that RGF funds will only go to areas of high public sector employment it doesn't place Brighton & Hove in a particularly strong position.
The consultation on the RGF only finished on Monday, and there were around 350 responses, which the mandarins must still be wading through. Can Nick Clegg really mean that the RGF will only go to localities where public sector employment is high? Let's hope it was a slip of the tongue.
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