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
Business Secretary Vince Cable will speak at the launch of The People’s Business report today in Westminster.
Tuesday 9 July 2013 READ REPORT
New figures published today in The People’s Business report reveal a thriving social enterprise sector in the UK that is attracting a wave of entrepreneurs. UK-wide research  carried out for The People’s Business shows that social enterprise has three-times the start-up rate of the mainstream SME sector . Close to a third of all social enterprises are three years old or younger.
The report, released by Social Enterprise UK and supported by The Royal Bank of Scotland Group, says that social enterprises are much more likely to be led by women than mainstream businesses. Thirty eight per cent of social enterprises have a female chief executive, compared with 19% of SMEs, and 3% of FTSE 100 companies .
The figures show that people are gravitating from mainstream business to carve out a career in social enterprise. More people are moving from the private sector than any other sector to work in social enterprise (35%, compared with 33% from the public sector and 17% from charities and the voluntary sector).
The report also reveals a promisingly diverse sector. Almost a quarter (23%) of social enterprises are run by younger leaders aged 25-44, while one in ten (13%) are led by ‘silverpreneurs’ – people over the age of 65. And social enterprises are twice as likely as mainstream SMEs to be led by someone with a Black, Asian or Minority Ethnic background.
There are currently 70,000 social enterprises in the UK contributing £18.5 billion to the UK economy and employing almost a million people . These businesses with a social mission include The Big Issue, Pants to Poverty, Belu Water and Jamie Oliver’s Fifteen.
Social enterprises out-performing traditional SMEs
Findings in The People’s Business point to social enterprises out-performing mainstream businesses. In the last 12 months, 38% of social enterprises surveyed saw an increase in their turnover compared with 29% of SMEs. More than half of social enterprises (56%) developed a new product or service, compared with 43% of SMEs. Two-thirds (63%) of social enterprises expect their turnover to increase in the next two to three years, almost double the number of SMEs (37%).
Creating jobs and tackling deprivation in local communities
The research shows that social enterprises are creating jobs and stimulating local economies where they’re needed most. More than a third (38%) of all social enterprises operate in the UK’s most deprived communities, compared to 12% of traditional SMEs – and half of social enterprises (52%) actively employ people who are disadvantaged in the labour market, including ex-offenders, people with disabilities and the long-term unemployed.
The majority of social enterprises (57%) draw 100% of their workforce from the local areas in which they operate, and a greater number of social enterprises are planning to grow their staff teams over the next 12 months than two years ago (33% expect to employ more people, compared to 26% in 2011).
Access to finance is main barrier to growth
Social enterprises say that access to finance is their single biggest barrier to growth and sustainability. Hungry for finance, twice as many social enterprises as SMEs sought capital in the past 12 months (48% compared with 24%). The average sum applied for by social enterprises was £58,000, suggesting a need for smaller-scale lending than is currently available to the sector from social investment sources.
In 2011, just 8% of social enterprises cited the economic climate as a barrier to growth – in 2013 this figure has quadrupled to 32%, the second biggest barrier for social enterprises to grow and become sustainable.
For social enterprises who mainly trade with the public sector, there has been an increase in the number who report prohibitive public sector commissioning and procurement as a major barrier to growth and sustainability. In 2013 the figure stands at 34%, up from 25% in 2011. That this situation has worsened rather than improved since the last survey should be of concern for policy-makers, says Social Enterprise UK.
The report makes a number of recommendations, including that:
- Government should implement the Public Services (Social Value) Act to its full effect to public service markets with genuine plural provision in which smaller social enterprises can compete.
- Policymakers and investors should recognise that grants and ‘softer’ social investment (which is patient and risky) remain critical parts of the mix for many social enterprises, and design financial products and support programmes to reflect this.
Against the backdrop of low growth and prolonged austerity
the LEPs face a formidable challenge, especially in places where
structural unemployment is already a problem. However, as
the perspectives in this monograph demonstrate the 39 LEPs,
although arguably still in their infancy, are working hard to find
local solutions which draw in extra investment and utilise local
skills and expertise…….
Please follow Link to full document
Make skills and back to work schemes work for local economies, urge MPs LINK TO FULL REPORT BELOW
A cross-party group of MPs and peers has urged the Government to give Local Enterprise Partnerships (LEPs) a greater role in shaping skills provision and back to work schemes in order to boost local growth. Download the full report above
The All Party Parliamentary Group on Local Growth, Local Enterprise Partnerships (LEPs) and Enterprise Zones, chaired by Caroline Dinenage MP and James Morris MP, is announcing a call for evidence on the leadership capacity of Local Enterprise Partnerships. Click title link for more info.