LDA drives new approach to inner city growth

London Development Agency Chief Executive Michael Ward today welcomed Chancellor Gordon Brown's backing for London City Growth Strategies, a radical new approach to bringing jobs, wealth and opportunity to the inner city which is being driven forward by the LDA.

Mr Ward also made a strong appeal for higher levels of infrastructure investment in London and a review of welfare to work policies.

City Growth Strategies is a major departure from traditional, centralised regeneration programmes where much of the investment and business support was planned and run by the public sector.

Instead it uses a business-led approach to creating jobs and enterprise in the inner cities. London's City Growth Strategies focus on the economic advantages of its four pilot areas (the City Fringe, Heathrow City, Haringey and London South Central,) to attract new companies and investment as well as supporting the growth and retention of existing firms.

Mr Ward was speaking at the national launch of City Growth Strategies at the Café Royal, London,  alongside Chancellor Gordon Brown MP and Professor Michael Porter, whose Initiative for a Competitive Inner City has pioneered the new approach in the USA.

Mr Ward said: "At the London Development Agency we see enormous potential for the City Growth Strategies approach. We are strongly committed to the ideas it is based on and to making sure that it interlocks with the programmes the LDA already has in place to revitalise the inner city.

"We have the great advantage of businesses being close together, of a skilled, or potentially skilled, workforce and of property being available.

"London has a highly confident business class and a very strong combination of  world status corporates and successful SMEs. Businesses in London have a very clear understanding that for their businesses to be successful, the districts in which they are based need to be successful.

"They understand that to stand apart as the neighbourhood struggles to pull itself up is ultimately bad for business.

"London is  a prosperous, booming city, home to some of the world's wealthiest people and some of the world's highest property prices. At the same time, inner London has the highest concentration of child poverty anywhere in Western Europe.

"London is the most exciting, cosmopolitan, diverse city on earth, with highly competitive, high skill industries - financial services, the creative and media sector, ICT, bioscience, tourism, manufacturing. Living right next to this economic success story are hundreds of thousands of Londoners who are not able to share in it -  through a combination of poor education, low skills, chronic poverty, discrimination on the basis of ethnic background, and lack of childcare.

"Everyone in public policy has to face up to the fact that the current approach to bringing wealth to the inner city has not been effective enough.

"The inner city is full of untapped business opportunities which are not being capitalised on sufficiently. In London the obstacles to success are under-used development sites and premises, misconceptions about suitability of labour, a slowness in acting on cluster opportunities, and a failure to meet demand for new retail.

"The London region has the second highest unemployment in the UK and high numbers of the economically inactive.   But we also have more job vacancies than anywhere else in the UK. There are many, many reasons for this - but one is the effect of benefit policy and welfare to work , which has not worked so well in London. The benefit trap is still a reality in London because of  the high cost of living and the size of the city - high transport costs, housing costs and the higher cost of leisure activities.

"This also affects training - it costs far more to prepare someone for working in London compared with the rest of Britain. This is something that a new policy could directly address.

"There is another missed opportunity in the lack of recognition for the  immense economic potential and opportunity for London represented by the black and minority ethnic population. The LDA's own research show that London's black and minority ethnic-owned businesses are now turning over £40 billion a year and employing 800,000 people.

"We also experience reluctance from many companies to invest in the deprived inner city because of the almost unbelievable misconception that viable business opportunities just don't exist.

"The advantages and opportunities for business growth in inner city London are potentially greater than in any other international location.

"London's population is expected to grow from 7.3 million to  above 8 million by 2016.  What we cannot be certain of is the extent to which business growth will keep pace with the rise in population. But a substantial proportion of that business growth must be met in the inner city.

"Areas that are under-performing will only pull themselves up in the long term by having a network of  active, successful businesses.

"We welcome the emphasis of CGS on businesses themselves taking the lead responsibility for improving the economic health of the areas in which they are based.

"It requires an awareness of their interdependency as well as serious research into the economic networks, potential markets, and constraints on growth so that action is based on the best available evidence.

"It has been the LDA's responsibility to commission this research area by area, and we are pleased to be able to provide our practical and financial support to the  work that is happening now to get the City Growth Strategies going.

"At the LDA we have a vision of a vibrant, prosperous, socially-cohesive inner city that can - at last - participate fully in London's success.

"We are committed to making the tough, strategic decisions on where our investment can best be used, to best effect.

"We want to work with the private sector, overseas investors and the Government to ensure that London gets the major investment we need in transport and communications infrastructure, in schools and hospitals, and the public realm.

"Much more of that investment is needed if London is to maintain and improve its international competitiveness - and if the fruits of its growth are to be felt in the disadvantaged inner city as much as in the established business districts and comfortable residential areas."

Ends

NOTES TO EDITORS:

1. The LDA is the Mayor's agency for business and jobs.
2. Since summer 2002, four City Growth Strategy pilot areas have been running in London with LDA funding and co-ordination.  These are:
• London South Central -  Elephant & Castle, Southwark, The Borough, Vauxhall, Bermondsey - led by the Pool of London
• City Fringe -  Tower Hamlets, Hackney, Camden & Islington - led by creative industries and with Deutsche Bank in the Chair of new City Fringe Partnership
• Heathrow City' -   Southall, Hayes, Hounslow - led by BAA
• Haringey -  Tottenham, Wood Green - led by a group of local businesses
3. The development of the private sector led London City Growth Strategies. Over the past 18 months, each of the four London CGS areas - led by the LDA- have been developing its own City Growth Strategy and action plans (based on each individual area's own unique economic opportunities and competitive advantages) aimed at:
• growth & retention of existing business/firms
• creation of new quality businesses
• creating jobs & preparing local unemployed to compete for jobs 
• entrepreneurialism/new business formation
• attraction of new businesses/companies into the area
• maximising the area's economic potential
• businesses & regeneration partners working together effectively
• wider economic  regeneration of the local area
• creation and/or enhancement of  local business leadership.
4. The role of the London Development Agency. The LDA has overall responsibility for leading on the development and project management of the London CGS.
   
   This includes providing strategic direction and co-ordination to the London CGS, and ensuring that each of the four London CGS areas produce a "City Growth Strategy" in addition to an implementation plan for their area.
   
   The LDA provides research findings and other regional economic evidence to local CGS projects , and provides significant funds and staff resources to develop CGS for London. The LDA is also responsible for ensuring joint working between the Small Business Service, Business Links, Government Office for London and other government departments, the private sector and the ICIC.
   
   It also ensures that CGS can work alongside and have access to other LDA-led programmes, strategies and investment. The LDA leads London CGS Network meetings, attended by all the local CGS project managers for the purpose of sharing information, ideas and discussing common problems.