Budget 2017: A Hertfordshire perspective on the key issues
PUBLISHED: 16:41 22 November 2017 | UPDATED: 17:04 22 November 2017
Hertfordshire’s overall economic position relative to other areas remains strong with high rates of economic participation, low unemployment, a comparatively well skilled workforce and a growing enterprise base. But there are still some major challenges ahead to meet the demand for skills in a tightening labour market.
One of the biggest barriers to growth is productivity with a traditionally sluggish growth rate measured by Gross Value Added (this calculates the contribution to the economy per hour worked of each individual, producer, industry or sector).
The latest statistics show a slight improvement for Hertfordshire, but long term productivity remains low.
Investing in infrastructure is key to driving up productivity by improving transport connections to help people get to their place of work and delivering faster broadband speeds.
We welcome the Chancellor’s commitment to investing more than £500m “in a range of initiatives from artificial intelligence, to 5G and full fibre broadband”.
Other key factors include the rise of low-paid, low-skilled jobs holding back investment in more efficient working and the big skills and education gap in key sectors such as advanced manufacturing, engineering and technology. These are key priority areas for the LEP. Philip Hammond announced £180 million investment in maths teaching to boost the numbers of students taking the subject after the age of 16.
Hertfordshire needs to plan for 100,000 new homes in the next 15 years, that is equivalent to a town the size of Stevenage, and create 100,000 jobs. We, together with our partners, need to help influence this delivery so that it meets the needs of all of our current and future residents and workforce.
More than £1bn of lending will be available to councils to fund high-investment projects and the Government wants homes built in high-demand areas and around transport hubs, with a commitment to build 300,000 new homes a year, an amount not achieved since 1970.
Hammond says planning reform is also needed to encourage better use of land in cities and towns for housing use.
The county has a growing enterprise base with one of the highest start-up rates for small businesses, but survival rates after one year are below the national average and it underperforms when it comes to scaling up these businesses to achieve a £3m turnover. The lack of available finance for SME investment is one factor impeding growth.
Budget measures that will benefit our small businesses include a VAT threshold for small business to remain at £85,000 for two years as well as faster broadband speeds.
Hertfordshire has strong sectorial assets and in Stevenage life sciences is particularly strong with global pharma giant GSK, Stevenage Bioscience Catalyst and the new £55m Cell and Gene Therapy Catapult Manufacturing Centre all choosing to be anchored here. We welcome the Chancellor’s commitment to a further £2.3bn for investment in research and development.
But the biggest single factor affecting Hertfordshire and the UK as a whole is Brexit. Will the £3bn set aside be enough to prepare for “every possible outcome?”. We can only gaze into our crystal ball…