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Colin Skellett: Opportunities from the Economic Recovery

Colin Skellett is Chief Executive of Wessex Water and Chairman of the Local Enterprise Partnership (LEP). Today we talk to Colin about enterprise in the South West…

Colin how did you get involved in the water industry?

“I’ve been in the water industry since 1961 when I left school and got a job in the laboratory at the local sewage works. It wasn’t a burning ambition to work in sewage or even with water. I started in Nottingham, migrated south and came here in the early 1970s. Wessex Water was formed on 1 April 1974. I applied for a management job at Wessex Water and have been with them ever since. I was appointed Chief Executive in 1988 and took the company through privatisation. We had 10 years as a highly successful quoted company, including building one of the country’s largest solid waste businesses, made about 38 acquisitions and were then bought by somebody we’d never heard of called Enron. When Enron collapsed, we were put up for sale by the Enron Creditors Committee. We had 26 interested buyers and finished up out of the blue being owned by a Malaysian group called YTL in 2002, who have proved to be ideal owners”.

Has the emphasis on enterprise been a driver for the recent change from the Regional Development Agencies (RDA) to the Local Enterprise Partnerships (LEP)?

“I was on the board of the RDA for about 6 years. RDAs were very different from the LEPs, they had a much bigger remit and a much bigger territory. The size of the territory made it very difficult for them to be focused, so although RDAs did some good individual schemes I think there was a general view that they weren’t as effective as they could be. LEPs are very different, the total focus is on jobs and economic growth. The engagement of business and universities is at a very different level from the RDAs. Another big difference with LEPs is we have very little in the way of resource, which I think is a good thing because it encourages people to do things differently and to be more innovative.

“Universities are key drivers. If you’re looking across the world at where economic growth is taking place it’s driven more than anything by universities. So the ability within the LEP to have universities on the board together with the public sector and business, is really key to the way it works.

“There are about 700 businesses actively engaged in our various sector groups, enabling business to say what it needs to deliver jobs and what are the obstacles? The role of the LEP is to try to facilitate things happening and remove obstacles”.

How might change be experienced with extra ammunition from the Heseltine review?

“The Heseltine review was incredibly powerful but of course the Government hasn’t implemented the funding levels that Lord Heseltine indicated. The total pot for the LEPs is £2 billion a year, of which about a billion is already allocated to transport and other infrastructure schemes. So you’ve got about a billion that’s up for bid. It’s not insignificant and we would expect to get a minimum of £50 million and hopefully more for this area. It would provide significant additional funding and the added dynamic of encouraging local authorities to work even closer with business. We have a head start because we’ve always had good working relationships between business and local authorities. The single pot takes that further so if we can identify the key things that will help generate growth and work together at it, then we will set the funding. Funding for infrastructure, funding for skills, funding to help promote the inward investment. I think it’s a really effective way of bringing the right parties together”.

The LEP is a smaller entity than the RDAs but there are 39 of them in the country. Do you see a big issue of how LEPs work together on doing things?

“The LEPs are very much a mixed bunch. We’re fortunate in that the West of England LEP covers a natural economic catchment. I suspect the LEPs that will have the biggest impact will be the ones focused around the core cities because that’s where a lot of the economic muscle is. We’ll see LEPs differentiate themselves. I think our size is right, the economic catchment is right and it’s absolutely right that public and private sector work closer together. The important thing for us is to keep it really focussed. We’ve got the enterprise zone and 5 enterprise areas and space for 100,000 jobs. We need the infrastructure to service those, whether it’s broadband, transport or physical infrastructure and a big emphasis on skills, and not just skills at the university level but particularly apprenticeships.

“The final part is selling this area. Promotion and inward investment is key. Universities sell. I’m fascinated by the extent to which universities have contacts throughout the world. Students come from across the world, their families come from across the world. There are so many opportunities to bring all this together. If you take the totality of the marketing effort that goes on within the West of England and harness and focus it then we can get much more out of it. One big issue for us is what are we selling? The LEP is called West of England, but you can’t sell the West of England because nobody knows where it is. So we have reached agreement that we’re marketing Bristol plus Bath and that seems to work. It’s somewhere on a map you can point at”.

The Witty review stimulated healthy discussion about how LEPs and universities could work together. What position do you envisage universities having in delivering the LEP agenda?

“I’m sitting on the advisory group for Witty and we’re about to get the latest iteration of the report but there is absolutely no doubt it is going to talk about the importance of universities in driving economic growth. It’s also going to focus on the role of clusters and bringing the right groupings together.

“We are incredibly fortunate, we’ve got four universities who are highly respected. We need to further increase the engagement and the part they play within the LEP. A lot of effort has gone into now getting the enterprise zone off the ground and the enterprise areas and the infrastructure up and running. The initial focus of the skills agenda has been on apprenticeships. We now need to move into the bigger picture, and universities will play a key part as we develop local growth plans for the next 25 years. We’re getting robust information on the underlying growth and asking key sectors what they can add or need to facilitate more growth and then being encouraged by Government to come up with some big asks. At the moment it looks as though these will focus around green technologies, particularly the energy from the estuary; the enormous opportunity around robotics where the West of England can be a world leader. Universities have a key part to play because that’s where having the academic credibility lies.”

What can universities do to better work with business?

“Universities have transformed their engagement with businesses. Most businesses would probably want to engage with local universities, providing the skill set is there. Wessex Water has just partnered with Bath on a joint venture because it makes sense for us to do so. The fact that Bath was also able to say ‘we can bring in other universities as well’ was really helpful. The LEP has 11 sector groups which are good places for universities to engage. The sector groups provide a conduit to wider groups of businesses. One of the things we’re trying to tackle is how SMEs engage, because a lot of innovative work is going on in SMEs, but SMEs are struggling to find time to engage”.

Is there anything further you would like to mention to the readers?

“Some of the things go across the LEP boundaries so we’re not looking at this just within the West of England. Clearly some sectors, such as aerospace, have a lot of connectivity with other LEPs. We have regular sessions between LEP Chairs to identify common interest.

“There is an opportunity created by the economic crisis, for business to engage in a way that business hasn’t and I think it’s really important that business does play a full part. It’s very easy for business to sit there and say ‘our job is just to look after our interests’ and to be critical of the public sector. The public sector has got a heck of a lot of challenges and partnership is really good for both sides and really good for local economies.

“This part of the world has got enormous opportunity, we’re incredibly fortunate in the range of business we have and in the quality of universities. We need to recognise we are not just competing within the UK. We compete on a world-wide basis. We are the West of England, we’re at the top end within the UK in terms of GDP per head. But we have got much more to do and so much opportunity”.

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