Roundtable: How can councils attract alternative sources of investment into their area?

• Date: 27 September 2022
• Chair: Phil Green | Executive Director of Growth, Environment and Transport | Lancashire County Council

Welcome and introduction

Phil welcomed attendees and gave his perspective on attracting investment via Lancashire’s regeneration strategy. 

Economic prosperity is one of the top priorities for Lancashire’s place strategy and has the backing of all councils within the county. All successful strategies for economic growth require investment and the five essential components in attracting investment are: 

• developing strategic sites
• place marketing
• engaging business, job creation and skills
• having a clear approach to the journey to work
• renewing the focus on energy and climate.

Attracting alternative investment requires public sector leaders to:

• create a clear vision built around what is distinctive about the local area
• create a targeted intervention strategy
• invest in multiagency, multiskilled partnerships.

To attract alternative investment, Lancashire County Council has:

• created a targeted investment loan fund focused on clean energy
• used targeted grant funding to tackle identified barriers and assist economic recovery
• created a £5 million fund to match investment
• acquired land to drive the economic development strategy and generate a return on investment
• invested in infrastructure, with a return provided via the recovery of business rates.

Main challenges

The main challenges identified as part of the discussion at the roundtable are highlighted below:

• the provision of energy was identified as a key issue, with the time taken to connect the grid and the upfront cost of connection being a key barrier to investment
• knowledge on all potential areas for investment is lacking and there’s a lack of opportunity to find out about these and about digitalisation
• attracting Government funding for sectors seen as low productivity, such as agriculture, is a challenge – these sectors are key local industries but unable to compete with more profitable areas, such as banking, and this don’t attract sufficient investment – this challenge tends not to be recognised by central Government and also doesn’t get investment from there
• issues around affordable housing in some areas highlighted, with this leading to high-paid entry level jobs remaining unfilled, as people can’t afford to live locally
• areas that lack universities and motorways struggle to attract investment, as they don’t have the local skilled workforce and they can be quite difficult to get to
• investment plans having to be signed off by accountancy firms can be extremely expensive and mean these plans cannot be implemented.

Using quality of life to attract investment

How are councils promoting their place and using quality of life to attract investment?

Challenges

The challenges of using quality of life to attract investment were identified as including:

• small marketing budgets can be taken up by other functions such as tourism, leaving little funding for promotion of local areas
• lack of name recognition makes advertising the local area difficult
• internal barriers from marketing teams have been identified, with marketing being used to focus on what councils have done and not promoting the local area
• questions raised around whether the drive for destination management organisations will be used to help promote local areas beyond as a destination for tourism
• working in collaboration with other districts sounds good but can be difficult to sell to members, as districts are judged on what they deliver for their district

• it is helpful to agree, and be clear about, what roles different organisations are going to play within a partnership – this will help streamline activity and avoid partners doubling up on work such as communicating the same message more than once to the same audience.

Opportunities

The opportunities of using quality of life to attract investment were identified as including:

• taking advantage of events where possible to provide more information and show off what makes the local area a good place to live
• working in collaboration with district councils where possible to sell the locality, as this helps the entire area and not just specific districts.

Promoting confidence in place as 'investor-friendly developer'

What are councils doing to promote confidence in their place as 'developer' and 'investor-friendly'?

Investors tend to be more interested in the position on an area, rather than the area itself, so partnerships can be a good way of advertising the entire area for less money.

All development opportunities, both private and public, should be utilised. Even investments that don’t directly benefit the council will still provide benefits via higher employment and recovery of business rates.

Engaging with the Department for International Trade is beneficial for attracting international investment.

Good practice example – Kent County Council

Kent County Council has attracted investment which has transformed a small science park. The council highlighted the need to show the unique characteristics of an area and that the supply chain is in place for the investment. As land supply is limited, it is important to ensure that any investors will add value to the area. A strong focus has been made on reducing the risk to private companies to encourage investment.

Opportunities

Key discussion points

Local development orders (LDOs) have been used effectively to speed up development times, both making the area more attractive to investment and resulting in a quicker payback time.

Local enterprise partnerships (LEPs) have been used in multiple areas to connect with key businesses and further feed into partnerships, in some cases this is just a continuation of what was already being done but has acted as a unifying force.

Emphasis was given to hiding the background information and promoting key unique selling points in each area. Investors aren’t necessarily concerned with boarders in area, so councils should collaborate where possible to promote the area as a whole. Things such as local skills, labour pool, and funding should be highlighted to potential investors.

Emphasis was also given to the need for an effective relationship with the Department of Trade and Industry.

Some areas are finding it difficult to attract international investment in their high potential opportunities (HPOs), despite having good regional contacts.

Good practice examples

Districts within Norfolk have been praised by local developers for their use of LDOs to speed up development and get faster repayment from developments.

Dorset Council has had great success collaborating with the Dorset LEP and the Ministry of Defence to invest in a ‘BattleLab’, with the MoD investing £3.1 million in the local area. It has also been successful in attracting 5G investment, this is being used in both the agricultural sector and for coastal monitoring.

Port of Felixstowe has won a large bid for a 5G trial, which is being used to assist shipping in the area.