Tees Valley Newsletter – Spring 2019

Message from the Mayor 

The year has got off to a flying start – literally – as my election pledge to bring back Durham Tees Valley Airport back into public ownership was backed and an operator put in place.

The £40million deal to buy back Peel Holding’s 89% shareholding in Durham Tees Valley Airport, plus 819 acres of land with planning permission for 350 homes, was unanimously approved in a Special Meeting of the Combined Authority Cabinet.

And just days ago, I was able to announce that the new airport operator would be Stobart. It brings a wealth of experience and expertise, and a track record of success at Southend airport, sharing my vision of a thriving, popular and profitable regional airport. It’s the latest vote of confidence in our region from Stobart, whose energy division opened a wood management site in Stockton late last year.

Another landmark came when I signed, sealed and delivered the deal to buy back more than half of all the developable land at the South Tees Development Corporation site from Tata Steel.

While this was the culmination of 18 months of blood, sweat and tears, I couldn’t have got to that point without the incredibly hard work of everyone on the South Tees Development Corporation Board. I want to take this opportunity to thank everyone for everything they’ve done in getting it over the line.

On a different note, the past three months has seen a wealth of massive events confirmed for our region. It was revealed that the BBC Radio 1 Big Weekend is set to take place in Middlesbrough’s Stewart Park, we’ve been named as a venue for the Rugby League World Cup 2021, we had some top athletes in the area to help launch Stockton’s Great North CityGames and we’re hosting the finals for National Premier League Tennis!

These are huge coups, which will get Tees Valley on TVs and radios across the country, if not the world, showing the best we have to offer.

We’ve got Development Corporation land lined up for businesses, we’re putting on bigger and better events to drive up visitors – and now we’ve got an international airport so investors and tourists the world over can see what all the fuss is about.  Tees Valley’s about to take off in a big way.

On Friday, March 15, we also held our last Combined Authority Cabinet meeting before the elections – the final Cabinet with our current membership. We paid tribute to the hard work and dedication of the long-standing public servants that are stepping down, such as Middlesbrough Mayor Dave Budd and Stockton’s Chief Executive Neil Schneider. They have been pivotal to the setting up and continued success of the Combined Authority and I want to echo what my colleagues said in wishing them a long and fulfilling retirement.

Below, you can read about some of the Combined Authority’s latest achievements.

Stobart Announced as Durham Tees Valley Airport Joint Venture Partners

Stobart Group has been revealed as the joint venture partner at Durham Tees Valley Airport following its purchase by the Tees Valley Mayor and Combined Authority.

Bringing back the airport into public ownership was a major election pledge for Mayor Ben Houchen, and a deal with former owners Peel Holdings was approved by the Combined Authority Cabinet in January, as part of a £588million ten-year Investment Plan.

The deal has seen Peel’s 89% shareholding in the airport and 819 acres of surrounding land, including a site with planning permission for 350 houses, transferred to the Combined Authority, which the Mayor has confirmed has been scrapped.

The announcement means that Stobart will be responsible for the oversight and strategic development of the airport, to attract new routes and airlines to increase passenger numbers over the next ten years.

Infrastructure and support service company Stobart has extensive aviation experience, recently acquiring regional carrier Flybe with Virgin Atlantic, making it the only airport operator in the country that has its own airline.

Stobart has a proven track record having successfully run London Southend Airport since 2008, which has seen an immense turnaround; growing passenger numbers from 1,596 in 2010 to nearly a million in 2018. According to figures by aviation analysts OAG it is one of the fastest expanding airports in the UK.

It also owns Carlisle Lake District Airport and last June signed a £300million deal with Ryanair, providing 13 routes to eight European countries, including six new destinations for London Southend. Warwick Brady, CEO of Stobart Group was also previously Chief Operating Officer at EasyJet.

£588million Ten-Year Tees Valley Investment Plan Approved

A ten-year plan to transform the Tees Valley economy was approved by the Tees Valley Mayor and the Leaders of the region’s five councils in January.

The Combined Authority’s refreshed Investment Plan 2019/2029 outlines how £588million worth of spending over the decade will support the creation of 16,785 jobs and an additional £1.48billion to the area’s economic output.

It sets out how our economy will be transformed through major investments across six key themes including: transport; education, employment and skills; business growth; culture and tourism; research, development and innovation and investment in our towns and communities.

The plan also includes £20million for a major transformational project based in each of the five Local Authority boroughs, and an Indigenous Growth Fund of £50million to improve and revitalise towns and communities.

And it approves the Combined Authority’s purchase, from Peel Holdings Limited, of 89% shareholding in Durham Tees Valley Airport and an adjacent piece of land with planning permission for 350 homes for a total of £40million.

Deal Signed to Secure Half of All Developable Land at Redcar Steelworks Site

1,420 acres of land on the former Redcar steelworks site has been acquired by the South Tees Development Corporation after Tees Valley Mayor Ben Houchen formally signed off the deal.

The site that has been acquired represents half of all developable land, and allows the Development Corporation to kick-start further negotiations with potential investors and press ahead with projects that are already earmarked for the site.

The most advanced projects looking to base themselves on the site are expected be on Tata land – the most immediately developable section of the South Tees Development Corporation site. Work could begin as early as this year with the potential to create hundreds of jobs for local workers.

Since it was launched in August 2017, the South Tees Development Corporation has already seen more than 100 enquiries from around the world, with a potential first-phase investment pipeline of £10billion, as it aims to create 20,000 jobs over the next two decades.

 

New Tees Crossing Plans Unveiled

A public consultation has been launched on proposals for a New Tees Crossing, to take pressure off the existing A19 Tees Viaduct.

At an event at Middlesbrough’s Riverside Stadium Cllr Stephen Harker, Tees Valley Combined Authority Cabinet Member for Transport, outlined the plans which involve two options, the likely preferred £200million-£250million Tees Viaduct Capacity Enhancement Option and the £300million Tees Viaduct Option.

The first would see a new two-lane bridge built parallel to the existing A19 viaduct to carry traffic travelling northbound and the existing structure widened to allow for an extra lane of southbound traffic. The alternative solution would be to construct a new four-lane bridge parallel to the existing A19 viaduct for north and southbound traffic.

A series of four events will run across Hartlepool, Middlesbrough, Redcar and Cleveland and Stockton-on-Tees, where residents and businesses will be encouraged to give their feedback on the plans. Copies of the consultation documents will be available in municipal buildings across the five Local Authority boroughs and a virtual consultation will be available online until it closes on 17 May 2019.

The preferred route will be announced in autumn and following confirmation of funding from Highways England, construction is set to take place from 2023 to 2027.

Big-Ticket Events Confirmed for Tees Valley

Over the past three months, there have been a raft of announcements on major cultural and sporting events set to come to Tees Valley, with support from the Combined Authority.

Funding has been pledged toward BBC Radio 1’s Big Weekend, after it was announced this year’s festival is set to take place in Middlesbrough’s Stewart Park. The two-day event, being held on May 25 and 26, will see top artists such as Miley Cyrus and Little Mix perform to a crowd of 64,000.

Just last week, it was revealed that the final of the National Premier League for Tennis would take place at Tennis World, Middlesbrough, and David Lloyd Teesside, Stockton.

The competition attracts international standard tennis players and will run between Thursday, 25 April and Sunday, 28 April.

Athletics legend Brendan Foster CBE also visited Tees Valley to get this year’s Great North CityGames off the starting blocks.

Former long-distance runner Brendan, an Olympic bronze medallist, ex-BBC broadcaster and founder of the Great North Run, was joined by gold medallist sprinter Richard Kilty and former Olympic long jumper Chris Tomlinson to announce that entries are now open for the Simplyhealth Great Tees 10K.

The event, which includes the Simplyhealth Great Tees Junior and Mini run for children, is being held alongside the Great North CityGames, a world-class athletics event set to take place in the heart of Stockton for the first time on Saturday 7 September and broadcast live on BBC One.

The Great North CityGames is being brought to Tees Valley thanks to a partnership between the Great Run Company, Tees Valley Combined Authority and Stockton-on-Tees Borough Council.

And in January, it was confirmed that Tees Valley will be one of the host venues for the Rugby League World Cup 2021.

The Riverside Stadium will host part of the major international competition for the World Cup in autumn 2021, following a successful bid led by the Tees Valley Combined Authority alongside Middlesbrough Council, Darlington Borough Council, Middlesbrough Football Club, Mowden Park RFC and MFC Foundation.

The bid could give the region an economic boost of up to £8million, attracting tens of thousands of global rugby fans to the area.

All of these exciting events will also work in support of Tees Valley’s application to be named UK City of Culture 2025, which will be submitted in 2021.

Hydrogen Vehicles and Refuelling Stations Coming to Tees Valley

Hydrogen vehicles and refuelling stations will soon be coming to Tees Valley after it was announced that a £1.3million bid to Government had been successful.

The bid, made to the Office of Low Emission Vehicles, will see two refuelling stations built in Middlesbrough and Redcar, plus a fleet of cars which use hydrogen technology for long-range travel (300+ miles) and fast refuelling capability.

The joint bid, led by the Tees Valley Mayor, Combined Authority and the Materials Processing Institute, is part of a £14million national programme which will deliver five new hydrogen refuelling stations, 73 fuel cell passenger vehicles and 33 fuel cell buses across the UK.

Tees Valley produces more than half of the UK’s hydrogen – which is currently stored in caverns before being transported out of the region to other areas across the country. Hydrogen is used daily by many large-scale industries in the production of petrol, chemicals, food and electronics.

Figures from a draft report commissioned by the Combined Authority and produced by KPMG suggest that exploiting the opportunities of the hydrogen economy could add up to £7billion to the region’s economy by 2050, with the creation of as many as 1,000 jobs.

Government Confirms £29.5million Adult Education Budget Devolution

Government has confirmed Tees Valley will control a £29.5million adult education budget as the Mayor and Combined Authority take responsibility for the region’s post-19 education delivery.

The budget, which will be devolved from August 1 this year, will be used alongside other powers which encompass adult education delivery, funding and performance management for Tees Valley residents.

The Tees Valley devolution deal, signed in 2015, agreed that this budget would be permanently devolved to the region and allocations agreed on an annual basis.

LEP Update – From Paul Booth

As chair of the Tees Valley LEP, I’m often asked how bosses can add real value to their companies and there’s one simple answer that I come back to again and again – hire apprentices.

I know the value of apprenticeships first-hand. I started my working life on a four-year mechanical engineering apprenticeship with ICI, which then sponsored me to do an HNC at Constantine College of Technology – which became Teesside Polytechnic and later the uni. This led to a degree at Manchester and then an almost 50-year career in the chemical industry, ending up as chairman of SABIC UK.

In December, the Combined Authority made changes to its Apprenticeship Support for Employers scheme. They introduced a sliding scale of support related to the level of the apprenticeship created and priority sectors expanded to include construction and care for the elderly.

The Combined Authority has already done a lot to support apprenticeships, awarding more than £2.3million in grants to local businesses, supporting the creation of more than 1,100 apprenticeships. But we can do even better.

The opportunities on offer to grow and advance your workforce are too strong to ignore. You can encourage hard-working, dedicated and loyal staff and teach them the skills that your business needs.

It’s great for the apprentices too, giving workers practical, real-life industry experience and the confidence to go far.

So I’d tell anyone to take a look at what grants are available and consider hiring an apprentice – you could end up training the next generation of industry leaders.

PAUL BOOTH

*Businesses can find out more information and apply by visiting teesvalley-ca.gov.uk/apprenticeship-support

Policy Update

Tees Valley Economic Assessment

The Tees Valley Economic Assessment 2018 has been published and is the core statistical document related to economic development in Tees Valley. It is based upon data and analysis in relation to key areas that contribute towards growth in our economy including:

  • Economy and Productivity (economic conditions, the business base and key sectors)
  • Skills and Labour Market (attainment, employment and future demand)
  • Growth Enablers (connectivity, education, place and culture).

Headline metrics for Tees Valley:

  • Total population in 2017 = 672,500
  • Working age (16-64) population in 2017 = 415,600
  • Economically active population aged 16-64 in 12 months to June 2018 = 299,200
  • Economically inactive population aged 16-64 in 12 months to June 2018 = 110,800
  • Employment (employed residents aged 16-64) in 12 months to June 2018 = 280,300
  • Jobs (people employed within Tees Valley) in 12 months to June 2018 = 279,400
  • Median gross annual full-time wage as of April 2018 = £26,030
  • Number of businesses in 2018 = 17,230
  • Economic output / Gross Value Added (GVA) in 2017 = £13.1bn
  • Productivity in 2017 = £30.50 per hour

The Economic Assessment is updated annually and reflects the priorities in the Tees Valley Strategic Economic Plan and in 2019 it will inform the development of the Tees Valley Local Industrial Strategy.

The Economic Assessment sets out the key economic messages for the Tees Valley which include:

  • Labour demand issues, including the relative lack of Tees Valley jobs. Additionally, Tees Valley has consistently recorded some of the highest economic inactivity and unemployment rates in the country. However, economic output per job is close to national averages and above the North of England average, demonstrating that there are well paid and productive jobs in the region with the opportunity for further growth.
  • Tees Valley has significant sectoral strength and relatively high employment in a number of higher productivity sectors such as Chemical & Process, Energy & Circular Economy and Advanced Manufacturing. Construction sub-sectors including civil engineering and specialised construction are also well represented.
  • The area has a relatively aged population profile and, as with many other areas, an ageing population. There has been slow population growth over recent years, below national increases and future projections suggest that labour supply constraints will increase i.e. potential for there to be a lack of enough local workers in the future.
  • A key constraint on the Tees Valley economy is the relatively small size of its private sector, reflected by its low business density at less than two-thirds the size of the UK average. Assuming that the Tees Valley public sector broadly mirrors national public sector trends, this means that Tees Valley private sector growth has to significantly out-perform UK private sector growth just to keep up with aggregate UK GVA growth rates.
  • Tees Valley is home to the single biggest development opportunity in the UK in the form of the South Tees Development Corporation. This significant opportunity means that Tees Valley’s private sector business and economic growth potential is amongst the greatest in the country.

–  To read the full assessment, including national figures, please visit Tees Valley Economic Assessment 2018

Local Industrial Strategy (LIS)

Work on the development of the LIS continues, working towards local sign off in May 2019. Stakeholder engagement sessions have taken place in January and February 2019 to inform its development, policy choices and priorities.

  • Sector Challenge sessions were held in January 2019 with public and private sector representatives to test the existing evidence base of the following key sectors: Advanced Manufacturing, Business and Professional Services, Chemical and Process, Construction, Digital, Energy and Circular Economy, Health and Biologics, Logistics.
  • Policy Prioritisation workshops took place in February 2019 and were based around the foundations of productivity: People, Place; Business Environment, Infrastructure and Ideas. The workshops were extremely popular, with over 200 attendees from the public, private and voluntary sectors, and explored emerging policy priorities.

Detailed discussions will take place with Cabinet members and private sector LEP members, Local Authorities and other key stakeholders throughout March and April, to refine policy priorities.