£366 million investment required to maximise HS2 supply chain benefits, Midlands report says

3 August 2015

Businesses and local authorities from the Midlands are asking the government to contribute to a multi-million investment to help develop the region’s supply chain and maximise the impact of the HS2 rail scheme.

The money is part of a £3.3 billion investment programme identified by the Greater Birmingham and Solihull Local Enterprise Partnership, which it says will create more than 100,000 jobs in the region and deliver a £14 billion boost to the UK economy.

In its report, The Midlands HS2 Growth Strategy, the partnership said it had identified investments needed for the supply chain and business support totalling £366 million to maximise the growth potential of the region’s supply chain and key industry sectors.

This included £1 million for a 'business engagement and diagnostics programme', which would create a “growth hub” to help get the HS2 supply chain “procurement-ready”.

Also, it said £40 million was needed to boost the adoption of Building Information Modelling throughout the HS2 construction supply chain, and develop capability and capacity for SMEs seeking funding for capital expenditure, using “advance technology”, prototype testing, mentoring and training.

Funding of £325 million was needed to develop capability and capacity for larger companies and at scale, the report said. A steering group, made up of public and private sector partners, would develop the approach to delivery for the supply chain and business support package.

The report is in response to the HS2 Growth Task Force and its challenge to local areas to demonstrate how they are going to respond to the opportunities presented by HS2.

The report said: “Our approach is to maximise the opportunities for our supply chains to generate major economic benefit and growth across our economy. This will include packages designed to sustain business growth, invest in innovation, new products and infrastructure, improve access to finance, address skills shortages and access to knowledge, enhance competitiveness and generate jobs accessible by local residents.”

The supply chain investment would be part of a total of £3.3 billion needed to secure the benefits of HS2, the report said. These would include a lasting skills legacy, transformation of the areas around the region’s two HS2 stations, a boost to the economy and attracting foreign direct investment to the region, said the partnership.

The group also said the full benefits of HS2 would only be felt if the Midlands is given more control over education, skills and transport policy. The West Midlands Combined Authority is expected to put a devolution proposal before government later this year. Business leaders from the Midlands have developed a strategy to attract foreign investment from the countries including China, India and the US, and have been visiting those markets over the past few years, using the impending arrival of HS2 as a core part of their pitch.

Andy Street, chair of the Greater Birmingham and Solihull Local Enterprise Partnership and managing director of John Lewis, said the arrival of HS2 in the Midlands was a once-in-a generation opportunity.

“It’s not enough to simply lay tracks and build stations, we must take this chance to create a legacy for the region in terms of regeneration, jobs, skills, economic development and connectivity,” he said. “This is already a hugely powerful regional economy but we can use the benefits of HS2 to drive a 21st century industrial revolution in this region and play an even greater role in powering Britain.”

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