LGF and EZ Programmes Interim Evaluation

The Local Growth Fund (LGF) and Enterprise Zone programmes are two flagship initiatives delivered by the North East Local Enterprise Partnership (LEP), designed to transform the economic infrastructure of the North East and make a key contribution towards levelling up the regional economy.

Since 2015, over £270m LGF investment has been committed to supporting c.100 projects spanning strategic transport improvements, brownfield site reclamation and innovation infrastructure schemes. Over a similar timeframe 21 Enterprise Zone sites have been established, including nationally significant clusters in offshore renewables around Blythe Estuary and the automotive sector around Nissan HQ and the International Advanced Manufacturing Park.

Steer ED was commissioned by the North East LEP to undertake an interim evaluation of the flagship LGF and EZ programmes in order to assess progress in delivery and identify priorities, moving forwards.

Our programme of work included:

• Logic model development for both programmes;
• Analysing performance monitoring data;
• Undertaking six deep-dive case studies including: Blythe Estuary, A19 Corridor (IAMP), Newcastle Helix, Gateshead Quays & Baltic Quarter; NET Park; and Sunderland City Centre & Riverside.
• Consultations and workshops with strategic partners and an assessment of the Strategic Added Value and wider impacts of the programmes ; and,
• Economic impact analyses to calculate net additional jobs, GVA, and programme-level benefit-cost-ratios.

The Interim Evaluation has highlighted the complex and challenging nature of driving forwards economic development across the sub-region and the high level of ambition across local partners and the assets, opportunities and capabilities for driving growth, locally. A huge amount of progress has been made in bringing forward projects and sites that have the potential to deliver a truly transformative impact across the sub-regional economy. However, there is still a long way to go with significant risks around achieving programme targets.

This interim evaluation has provided evidence of progress to Government, help inform any related future funding rounds and provide a reference point and framework for the Final Evaluation of the programmes, scheduled to be undertaken in 2025.

Indicative VfM calculations indicate that based on current output projections, both programmes could deliver strong VfM outcomes. 

Several key findings were made, and appropriate recommendations formulated. These conclusions included that:

• The rationale for both programmes is still appropriate as the same market failures persist, particularly around bringing strategic brownfield employment sites back into use. The shifts in the macro context (e.g., COVID-19, Brexit and Net Zero), brought the need for these types of intervention into sharper focus;
• The LGF programme used a novel business rate borrowing mechanism which has been critical in unlocking investment on Enterprise Zone sites. The LEP’s pooling mechanism has enabled local authorities to invest in projects that have delivered better VfM and would otherwise could not have come forwards;
• Indicative VfM calculations indicate that based on current output projections, both programmes could deliver strong value for money outcomes at their completion. The actual VfM outcomes from the programmes will need to be interrogated more thoroughly as part of the final evaluation.

The final outputs (a report and presentation) of the study assessed in detail the overall progress of the programmes to date, allowing appropriately for the effects of the COVID-19 Pandemic. The study’s report informed the case for follow-on funding locally, and lay the ground foundations for final evaluation work to be undertaken in 2025, coinciding with the end of the North East SEP’s 10-year monitoring period.

Download │ LGF and EZ Programmes Interim Evaluation: Executive Summary