MIPIM 2015: Strength in numbers

Leicester and Leicestershire at Mipim 2015: Day Two

Nottingham's headquarters at this year's Mipim. Could they be sharing it with Leicester and Derby at Mipim 2016?

In the run up to this year's Mipim, Leicester and Leicestershire flirted with the idea of combining with the two other major city and county areas in the East Midlands to give all three a bigger bang.

The idea was dismissed as too expensive (being classed as a region instead of a city or county in the exhibition hall sees costs rocket) and politically sensitive.

However, it is looking more likely to happen next year, with Andy Cliffe, managing director of East Midlands Airport, the most high-profile advocate yet for a more unified approach by the region when it comes to attracting investment.

Although Mr Cliffe did not explicitly say he wanted to see a 'Team East Midlands' at Mipim 2016 during his Power of 3 presentation at a Cannes conference hall today, he certainly hinted very strongly at it.

His speech called for the three city/county areas of Leicester, Nottingham and Derby to work closely together to lure inward investment away from London and the South-East and see off the threat of a Government-backed 'Northern Powerhouse' based around Manchester.

His comments make sense, of course. The East Midlands is expected to be the fastest growing economy outside London and the South East this year, having enjoyed the sharpest expansion of any other UK region in the first half of 2014. It is also a well established fact that businesses don't care much for political or historical geographical boundaries.

The region's central location and leading position in hi-tech engineering and distribution means it has a lot more potential for growth, which needs to be exploited thoroughly in a structured and strategic way, states Mr Cliffe. Creating a more formal 'one East Midlands' approach to inward investment is the best way of achieving this, according to Mr Cliffe and many other business leaders, as well as some senior public sector officials.

Whether this means a return to something similar to East Midlands Development Agency - the Nottingham-based economic agency closed down by the Tory-led government and replaced with local enterprise partnerships (LEPs) soon after they took power in 2010 - remains to be seen. A merger of the Leicester and Leicestershire LEP with its Nottingham and Derby counterpart seems unlikely in the short to medium term. D2N2, the combined Nottingham and Derby entity, is currently in the process of creating a more distinct offer for each of the two city/county areas it serves.

Looking more locally, the future of the former Leicester City Council HQ site has been a popular topic of discussion over the past two days. Two businesses have been chosen to develop the 1.8-acre rubble-strewn Welford Place site by the city council. I've heard several different names from various sources over the past 48 hours. An announcement is due by the end of this month.

On the subject of occupiers for the mixed-use, office-led development, one name I was sure was to be a tenant has been shot down in flames by a well-placed source, while I'm finding it hard to get confirmation about another major business name, despite two different people being adamant it will move into the new site. Keep your eye on this blog and the Leicester Mercury newspaper and website for the definitive news on this.

French restaurants are certainly known to be definitive when it comes to the quality of their cuisine, albeit not to everyone's culinary and socio-political tastes. I did my best to reaffirm this stereotype this evening by ordering foie gras for the second night in succession.

Rest assured, no taxpayer coffers suffered as a result.

Computing the cost of big names and new jobs

Handing out big wodges of taxpayers' cash to multi-billion-pound corporations and business people worth in excess of £100 million is always going to cause controversy.

In the past week we've learned that IBM, Hastings Insurance Services and the Tejani family (who made £140 million from making toilet tissue) have been given £1 million each in Government grants to set up major operations in Leicester.

Another £3 million has been spent by Leicester City Council on refurbishing the city centre office block IBM will occupy.

Why? Well for the reason politians always justify subsidising private sector investments - it's for the "greater good".

The argument goes is that this public money - via the Government's Regional Growth Fund (RGF) - has given these three businesses the confidence to make multi-million-pound investments in Leicester using their own money.

And all this investment means hundreds of new jobs for the city.

So that's at least 770 jobs created by these three firms (including the Tejanis' Leicester Tissue Company) at a cost of about £7,800 in public money per each job. Officials say this figure should fall as more jobs on top of those forecast are likely to be created.

But let's look at that £7,800 figure. It seems like a lot. But when you look at the many thousands of pounds of taxpayers' money it takes to get an unemployed person back into work, it doesn't look too bad value. Also, assuming all those employed are paid £16,000 per year, roughly the minimum wage for a full-time worker aged over 21, the Treasury will get at roughly £1,500 of this per annum.

However, things start to look a little more expensive when you look at the total 1,851 jobs created by almost 200 city and county businesses using £21 million of RGF cash over the past two years. It's a cost per job of £13,000. But I'm sure officials would also want to add the 1,005 of jobs which were also "safeguarded" by this funding. That makes it £8,400.

This figure can be quickly justified when you look at taxpayers handing out an individual Jobseekers' Allowance of more than £3,000 per annum.

Subsidising huge corporations and very wealthy people's businesses to help them expand and create jobs is a hardy perennial of a controversy, just like the giving of tens of millions of pounds of subsidies to major transport groups to run our railways, owners of hundreds of acres of farmland and those producing renewable power.

But what's the alternative? One could assume the purpose of "a regional fund" is to stop all successful businesses gravitating towards major cities such as London, Birmingham and Manchester. Perhaps if they had not been given a Government hand-out IBM and Hastings would have gone to one of those three cities.

Instead, with taxpayers cash to lubricate things along, it is understood IBM ended up with a choice between Leicester, Sheffield, Leeds and our neighbour Nottingham. They said they chose us because of the high numbers of quality graduates coming out of the city and county's three universities. They also liked the cut of the jib of those at the Leicester City Council and Leicester and Leicestershire Enterprise Partnership.

Officials have worked hard for the past few months to land these big businesses and get them to create their jobs here. But should these firms not follow through on the job numbers they have promised, they will have to pay money back or see the funds withheld.

Meanwhile, those who are employed by these businesses are going to be spending many thousands of pounds in the city and county each year, giving the economy a further boost.

I may not possess the computer power of IBM, but those sums look to me to be in the taxpayers' favour.

Can Andrew bring home the bacon?

Yesterday, we revealed in the Mercury's the Business that Andrew Bacon, interim chairman of the Leicester and Leicestershire Enterprise Partnership (LLEP), had been given the role permanently.

It followed a long drawn out search for someone to head the county's economic development agency, which involved two rounds of advertising and a row between the city and county councils.

Whether Stephen Woolfe, the senior partner at Harvey Ingram, who had been put forward for the unpaid, part-time role by the city council and business leaders - but whose appointment was blocked by county council leader David Parsons - decided to bow out is not known.

What we do know is that Mr Bacon (pictured), who will retain his role as director of business development at British Gas Community Energy, is a man who is used to dealing with big businesses and politicians. This will certainly form a key part of his role in the coming months and years.

The focus of Mr Bacon and his 14-person board will now be on drawing up a list of key priorities for the city and county. Here is a rough list of what I think they should be;

- Securing enterprise zone status for MIRA near Hinckley

- Ensuring the innovation centre at Leicester Science Park is built

- Ensuring Coalville hi-tech firm Zeeko relocates to the science park

- Ensuring the Eastern Gateway scheme close to Loughborough Railway Station is completed on time and attracts the private sector investment needed to make it work

- A clear plan to tackle the skills shortage which is holding back many growing county firms

- A clear plan for the second phase of the new business quarter, close to Leicester Railway Station, and moves to sign up private sector partners.

Please feel free to suggest your own below ...

UPDATE: July 6, 2011: I've since found out Stephen Woolfe was interviewed along with Andrew Bacon and Andrew was selected because he was felt to have better experience because of his previous role as a board member of Prospect Leicestershire. Only those two were interviewed.