Recommendations relating to LEPs by Sir Andrew Witty:
6. LEPs have up to €1 billion of European Structural and Investment Funds to invest in innovation. They should look to direct a large share of innovation funding towards excellent universities and research centres in order to nurture sustainable growth founded in comparative advantage, including through universities supporting innovative SMEs in their localities. LEPs should do this within frameworks which relate funding to economic outcomes. They should collaborate, and support university collaborations, beyond their own areas wherever these will deliver an economic or research benefit.
7. Ministers should write to the chairs of all LEPs with universities in their areas setting out the expectation that these LEPs should have a university presence on the Board. Where a LEP is participating in an Arrow Project led by a university in its area then it may well be appropriate for the university to provide co-chairmanship of the LEP. University members should be prominent in, and may often chair, LEPs’ Innovation or R&D and Innovation sub-committees.
8. The Government should ensure that all the funds available to LEPs to invest in Innovation and R&D are spent on these areas. It should establish an authoritative advisory capability to advise it and LEPs and other relevant decision-takers on how strongly LEP proposals are based in a sound assessment of comparative advantage, and to identify and communicate the best practice of the most effective of LEPs so that the Government and LEPs can work to bring all LEPs up to the level of the best.
See link for full report. All LEP Chairs should read.
A new round of the Regional Growth Fund opened 11th October as the Deputy Prime Minister Nick Clegg called on businesses across the country to bid for a share of the £300 million cash pot.
The Deputy Prime Minister praised ‘home grown and British-based businesses’ for their crucial role in Britain’s economic recovery.
So far £2.6 billion from the first four rounds of the Regional Growth Fund has supported over 400 projects and programmes, which will create and safeguard hundreds of thousands of jobs over the long-term and stimulate £14.7 billion of private sector investment.
Round 5 will be open to private sector bidders seeking £1 million or more. The government is calling for companies planning high quality projects that will generate significant private sector investment and sustainable jobs. Businesses will be able to submit their bids until noon on 9 December.
Deputy Prime Minister Nick Clegg said:
“This fund has so far helped over 400 projects and over 3,000 SMEs across the country to boost our economy – expanding, improving, innovating and helping secure our economic recovery.
“The economic recovery is starting to bloom – we’re seeing very encouraging signs that we are turning a crucial corner on our road to recovery. Home-grown and British-based businesses are leading that charge for a stronger economy. The Regional Growth Fund is a helping hand from the government, but I pay tribute to the people who are working hard to fuel our recovery.
“My message to businesses in every region is clear – if you’ve got a project that needs a boost, bid for cash from the Regional Growth Fund.”
To help bidders on their applications, road shows and expression of interest days will be held throughout the country from today to provide advice on how to make a successful bid. These will be in the following locations:
- 11 Oct – Newcastle, North East (launch event)
- 14 Oct – Loughborough, East Midlands
- 25 Oct – Huddersfield, Yorkshire and Humber
- 05 Nov – Plymouth, South West
- 13 Nov – Liverpool, North West
- 14 Nov – Birmingham, West Midlands
Business Minister Michael Fallon said:
“Round 5 requires minimum bids of £1 million but smaller bids are also supported by the fund through programmes. That is why I am making sure that local and national programmes are available to small to medium-sized businesses from as little as £5,000 in some areas all the way up to £1 million. Since the Fund started, over 3,000 grants have been given to SMEs through programmes.
“We expect there will be stiff competition, so companies should take time over their application and demonstrate the benefits that support will bring. We want more businesses to benefit so that they can achieve their ambitions.”
Round 6 of the Regional Growth Fund will be launched in the summer of 2014 so that any companies who will not be ready to apply by December can start planning for applications in 2014.
1. The Regional Growth Fund is a flexible and competitive fund operating across England. It supports projects and programmes that are using private sector investment to create economic growth and sustainable employment.
2. Round 5 of the Regional Growth Fund opens on October 11 and will close to applications on 9 December at noon. Bids will be appraised as quickly as possible.
4. Local Enterprise Partnerships (LEPs) will no longer be required to make separate bids to the Regional Growth Fund. In September 2013, BIS announced it will be making available an extra £100m for the Local Growth Fund in the period 2015-2017. This will provide extra flexibility to support priorities that LEPs will identify in their Strategic Economic Plans.
5. LEPs still have an important role to play in RGF Round 5 by supporting or endorsing private sector bids they feel will help them achieve their priorities for economic growth as well as delivering existing programmes.
The government will only agree growth deals with Local Enterprise Partnerships if ministers are confident that the funding and powers devolved will be exercised robustly, cities minister Greg Clark has warned.
Clark, who is also financial secretary to the Treasury, told a Conservative Party fringe event that there would be no automatic striking of deals with LEPs.
Under the proposals, which have emerged from Lord Heseltine’s review of local growth, LEPs will be able to bid for additional powers and a share of funding from a £2bn annual single pot.
It had been thought that all 39 LEP areas would come to an agreement with Whitehall. Government guidance stated that a ‘growth deal for every place’ would be reached to ensure nowhere is left behind.
However, there would be ‘vigorous negotiation’ between LEPs and government when the pacts are being discussed, and it ‘is not automatic’ that agreements for all areas would be reached.
‘If there are places taking on substantial budgets and powers currently vested in central government [and] if there isn’t the confidence that they’re going to be exercised well and robustly, then no deal will be done,’ he said.
‘It has to be a serious city or a county that will say, “We have the capacity, we have the ability, we have the vision, to do these things that are currently exercised by central government, and to do them locally”. And if that is demonstrated, we will say yes.
‘So it’s going to be a vigorous discussion, and a lot depends on it, and the one thing you can count on is my desire to do these ideas if it is in the interest of both parties.’
All of the New Homes Bonus funding intended to encourage councils to approve housebuilding should be given to Local Enterprise Partnerships to ensure construction of new properties is coordinated between authorities, the CBI has recommended. (from http://www.publicfinance.co.uk)
The business group said duties in the National Planning Policy Framework intended to ensure councils cooperate on housebuilding had not yet been effective.
The next regeneration report, undertaken with consultants EC Harris, said LEPs therefore needed ‘to play an active role, working with local authorities to plan for housing to support the whole local economy’ to support cooperation.
Councils should pool the money they receive through the NHB at the LEP level, so they are ‘incentivised to work more closely with one another to plan for sufficient housing’. This would also ensure the funding is invested in shared priorities for the local economy, the report stated.
Katja Hall, the CBI’s chief policy director, said pooling would ‘deal with some of the frustration we’ve pick up on about local authorities competing for relatively small pots of money, and try to look at how we can encourage local authorities to coordinate their activities’.
She added: ‘We’re suggesting that [the government] should route the New Homes Bonus through the LEP to encourage greater cooperation.’
The NHB is paid to councils to match the additional council tax raised on new homes for six years. Many authorities had included the cash in their indicative budgets, but the Treasury has already announced that £400m of the bonus would be top-sliced to create the Single Local Growth Fund. This has led to fears that vital infrastructure projects such as rural broadband and transport schemes could be put at risk.
The CBI report also called for a new partnership between public and private sectors to support regeneration and economic growth across the country. Among the recommendations was a call for annual business rate increases to be capped at 2% while a review of the system is undertaken.
Planning changes have also been recommended to make it easier to convert empty shops into homes, while the public sector balance sheet should be used to kick-start developments.
In particular, the government should lift restrictions on the use of Tax Increment Financing schemes by councils, the report stated.
Under the government’s localisation of 50% of business rate growth to local authorities, councils are able to borrow for infrastructure schemes that will unlock development, and pay back the loans with increased rates.
There are currently two different types of schemes. ‘Tif 1’ will see the increased rate revenue included in the localisation system of levies, top-up and tariffs, which means the extra income could be lost to councils when the system is reset in 2020.
‘Tif 2’ allows councils to hold onto all of the business rate growth for a period of 25 years outside the resets. However, the value of schemes that can proceed under this system has been capped at £150m.
This longer time period should be available for all Tif schemes, the report stated.
When thinking of Local Enterprise Partnerships (LEPs) it is unlikely that until recently one would be likely to bring to mind such phrases such as social inclusion, social innovation or “community lead local development”. Anyone attending The LEP Network conference in April 2013 – a gathering of the key influencers in the “LEPiverse” would have heard Mark Prisk MP talking about the role of LEPs in developing strategies for the allocation of European Funds[i]. Interestingly following this a panel of Chairs of LEPs was asked by an audience member what LEPs were intending to do for the Voluntary Community Sector (VCS)[ii] organisations. The stark answer from the panel was “nothing”.
It was clear that at this time many involved with VCS organisations really didn’t understand what a LEP was and that conversely many involved with LEPs were unaware of the full implications of complying with European guidelines regarding development of an “inclusive economic growth” plan. Among these were EU and Government strategic priorities including:
- Promoting social inclusion and combatting poverty
- Investing in education, skills and lifelong learning
- Promoting employment and supporting labour mobility
- Enhancing the competitiveness of SMEs
- Ability to address – social innovation, sustainable development, equality and anti-discrimination
The problem has been a deep misunderstanding by each party – VCS organisations and LEPs – of what the others can do, or are capable of doing and a possibly even bigger misunderstanding of the language used by the other. Yet the reality is that if VCS organisations can learn to communicate in terms LEP board members understand then now is the time that LEPs should be willing to listen. According to Ted Ryan of RAWM[iii] the support agency for voluntary and community organisations in the West Midlands area 20% of EU funds must go to social inclusion projects and these must be match funded. Who better to deliver this than the bodies which are already addressing these as part of their core competencies and have proven record of finding the match funding from various sources including Big Social Capital and the Big lottery Fund.
At a recent conference in the Black Country, Chris Handy of Black Country LEP and Group Chief Executive of housing organisation the Accord Group told Social Enterprise representatives that in their presentation to LEPs they needed to understand that they cannot make out that they are a “special case” but must understand that often they will be dealing with “hard-nosed” LEP representatives who will want to be shown the ROI as a priority and possibly will be “turned off” at a sob story. Clearly VCS organisations need to learn to speak the language of growth that LEPs need to hear – after all that is why LEPs were set up on the other hand LEPs need to understand that some VCS organisations can be valuable partners in delivering their strategic plans.
One VCS organisation that has really got to grips with this is UnLtd[iv] the leading provider of support to social entrepreneurs in the UK. In a report[v] due to be released soon they state they on average they provide support of £100,000 grant investment and £25,000 of staff resource per LEP. They have developed a proposal explicitly addressed to LEPs to enable LEPs to work with Social Enterprises. For those VCS organisations wishing to receive support from LEPs there can be no better advice than to follow the lead shown by UnLtd – make your proposition simple and focus on the ROI
Tony Bray of BIS stated recently that in 2012 Social enterprises (including housing associations) showed growth of 57%, and a 58% growth in 2012. According to the same UnLtd report “Social Enterprises in the UK employ nearly 1 million people and contribute £18.5 billion to the economy”. Surely these statistics if nothing else should be a wake-up call to LEPs. Whilst of course there are other parties besides those in VCS in the mix that can help LEPs meet the requirements to successfully implement their strategies for EU funding, there is little doubt that if LEPs and VCS organisations learn to communicate and work together there can be tremendous benefits for both in achieving their strategic aims.
My thanks and appropriate credit for their contribution to the following in producing this brief article: Ted Ryan [vi] of RAWM and Helen Ryman of UnLtd
[i] Following from the announcement November 2012 by The Department for Business, Innovation and Skills (BIS) that EU structural funds for 2014 -2020 were to be directed through Local Enterprise Partnerships.
[ii] VCS organisations are broadly defined as the following: Civic Society, Civil Society, The Third Sector, Non-Government Organisations (NGOs), The Voluntary Sector, Social Enterprises, Charities, Community groups
[v] See link for copy of “Mobilising the Social Economy: Promoting inclusive and sustainable local growth”: https://www.dropbox.com/s/471obm3c5mtaihk/Core%20Proposal%20-%20UnLtd%20LEP%20Partnership%20Proposal%20August%202013%20%283%29.pdf
Cookin’ in LEPland
During the summer, LEP kitchens have been cooking up EU Strategic Plans and blending local Growth Deals, the catalysts that should help us win the global economic race. Blockages are being identified that need help from Whitehall to be cleared away, so growth can be released and the jobs can flow. See cartoon history >
Reasons to be Cheerful (part 2)
UKTI and LEPS: The PM has called for closer links between UKTI and LEPs in our shared ambition to win the global economic race. The 39 LEPs are therefore now actively bringing UKTI, TSB and others into a closer relationship with the LEP Chairs.
Now that times are tough we surely need more efficient, more aligned, more collaborative, more effective Government. This places a spotlight on those LEPs where every Local Authority is not fully committed to a home LEP. 16 of the 39 LEPs have overlapping areas. Should we not avoid too many cooks occupying the economic kitchen
|LEP||% of establishments with a skill-shortage vacancy||Skill-shortage vacancy density|
|Coventry and Warwickshire||3||28|
|South East Midlands||4||28|
|York and North Yorkshire||2||20|
|Leeds City Region||3||19|
|Greater Cambridge & Greater Peterborough||4||18|
|Heart of the South West||3||18|
|Coast to Capital||4||17|
|Thames Valley Berkshire||5||15|
|Leicester and Leicestershire||4||14|
|Stoke-on-Trent and Staffordshire||2||14|
|Swindon and Wiltshire||2||13|
|Buckinghamshire Thames Valley||4||12|
|Greater Birmingham and Solihull||2||12|
|West of England||3||12|
|Cheshire and Warrington||4||11|
|Derby, Derbyshire, Nottingham and Nottinghamshire,||3||11|
|Sheffield City Region||3||11|
|Liverpool City Region||2||8|
|Cornwall and the Isles of Scilly||2||7|
For full data http://www.ukces.org.uk/assets/ukces/docs/supporting-docs/local-data/leas.zip. N.B. Darker areas show greater skills shortage per available position.