Memorandum by the Department of Trade
& Industry (UWP 115)
DTI'S CONTRIBUTION TO THE URBAN WHITE PAPER
INTRODUCTION
1. This short memorandum highlights the
key areas where DTI's competitiveness and enterprise agendas are
underpinning the government's work on urban regeneration. It also
covers briefly the areas in which the DTI is contributing specifically
to the drafting of the Urban White Paper.
2. One key point pervades: DTI's work across
the board is intended to ensure that conditions exist to encourage
sustainable economic growth across the UK. Our work is of significance
to urban, suburban and rural areas and to all businesses regardless
of their size or location.
3. Our work on the knowledge based economy,
articulated in the Competitiveness White Paper published in December
1998, is a comprehensive programme of action for the improvement
of economic performance across the UK. In the urban context, this
work is about replacing industrial bases which have disappeared
with new economic activities appropriate to today's circumstances.
DTI'S CONTRIBUTION
TO THE
URBAN WHITE
PAPER
4. DTI officials are represented on the
interdepartmental working group on the Urban White Paper and Alan
Johnson sits on the ministerial steering group. Officials have
had a close working relationship with their DETR counterparts
including a joint visit to the USA last December and to various
regeneration sites in the UK as part of the preparatory work for
the Urban White Paper.
5. We are keeping DETR informed of the thinking
underlying those aspects of our Spending Review proposals which
may have a bearing on urban renaissance issues. DTI officials
will be responsible for the drafting of substantial parts of the
White Paper's chapter on economic development. There are some
specific streams of work in place between DTI and DETR to develop
joint policy initiatives for the White Paper.
6. The DTI contribution will draw on some
specific areas of the department's work which are already contributing
to the development of urban areas by seeking to improve our service
to businesses in all locations. These include:
CLUSTERS
7. The Competitiveness White Paper recorded
the Government's view of the importance in the economic landscape
of clusters and other networks. Since then, a great deal of work
has been done in this area, most notably the work of Lord Sainsbury's
biotechnology clusters taskforce which reported in August last
year with a list of ten specific recommendations. Substantial
work has also been set in train by the RDAs in England and the
economic development agencies in the devolved administrations.
8. The Government decided late last year
that a step change in clusters policy to co-ordinate and augment
the rich vein of work already in hand would be appropriate. Lord
Sainsbury announced in November 1999 that three key planks of
process would be put in place to allow a full review of clusters
policy and some new policy initiatives. These were a study to
map existing cluster activity in the UK, a high-level Clusters
Policy Steering group with a remit to recommend new policy initiatives
informed by the results of the mapping study and a working group
of officials from across Whitehall and the developed administrations
to carry out field work and research for the Steering Group. The
contract for the mapping study has been awarded to Trends Business
Research Ltd who will produce their report by September.
9. The work of the official group is on-going
and has included a visit to the USA to study the work of Professor
Michael Porter's team on the competitiveness of inner cities.
Our clusters work will focus on businesses from all sectors and
of all sizes. It is not just about hi-tech businesses or out-of-town
science parks. While these will of course feature strongly, we
will be looking closely at clusters in the urban context, drawing
as necessary on Porter's work and making policy proposals to promote
them. This work will be complementary to both the Urban and Rural
White papers.
THE SMALL
BUSINESS SERVICE
10. A key part of the Government's wider
aim of helping to boost UK competitiveness and support UK businesses
is the new Small Business Service (SBS). The SBS is being set
up:
— to provide a strong voice for small
business at the heart of Government;
— to improve the quality and coherence
of support for small businesses; and
— to help small firms on regulation.
Through the SBS, Business Links and Government
will work together to create a world class service for all small
businesses including those in deprived areas (both urban and rural).
The SBS will be responsive to small businesses everywhere and
will ensure an improved delivery to all areas of services which
must be socially inclusive.
11. DTI has been developing ideas with a
wide range of stakeholders, on the best means of setting up a
Small Business Service (SBS) "Gateway" enabling SMEs
to access a comprehensive portfolio of information and advice
from public, private and voluntary sectors. The SBS Gateway will
not be an exclusive entry point to the SBS. Clients will be able
to access the SBS through multiple, electronic telephone and physical
entry points via the various stakeholders in the Service. Through
the SBS gateway clients will have access to an extensive suite
of business information, advisory and support services across
the public, private and voluntary sectors. This will ensure access
to the most appropriate source of specialist advice and expertise
in, amongst others, Trade Associations, HE and FE colleges, research
and technology organisations, banks, accountants and solicitors.
DTI PROGRAMMES IN
SUPPORT OF
ENTERPRISE AND
ECONOMIC REGENERATION
12. A few practical examples of help the
DTI is providing to businesses including those in urban areas
are:
— The Enterprise and Social Exclusion
report by a cross departmental Policy Action Team links enterprise
and regeneration by setting out a range of measures to support
start up businesses, including support from the SBS and Business
Links and measures to increase financial investment by supporting
community finance initiatives and providing access to Government's
loan guarantee scheme.
— The department has set up a £30
million Phoenix Fund to provide better access to finance and business
support. This will include a new development fund to promote innovative
ways of supporting enterprise in deprived areas, such as business
incubator units; and a national network of mentors to business
start-ups, through a Business Volunteer Mentors Association.
— The DTI, NatWest Bank and the CBI
commissioned research looking into the prospects for corporate
venturing in the UK. This work resulted in a joint DTI/CBI/NatWest
report, launched on 11 November 1999. Representatives from those
organisations are currently working together to consider a forward
programme of events and activities aimed at stimulating awareness
and understanding of corporate venturing.
— A commitment arising from the Competitiveness
White Paper, the £20 million High Growth Start-ups Programme,
aims to provide advice to at least 10,000 start-ups a year by
the end of 2001. The programme is being delivered via the Small
Business Service through local delivery agencies such as Government
Offices, Business Links, RDAs, Enterprise Agencies and other local
organisations.
— Informal investment or "business
angel" activity is critical to the funding of early-stage,
high-risk businesses with significant growth potential. The Government
has been working with the main banks and others to stimulate increased
informal investment activity in the UK. This has included supporting
the creation of a National Business Angels Network (NBAN), and
stimulating the creation of an industry-wide trade association—the
Business Angels Networks Association (BANA)—which will represent
the industry.
— The Government is to consult on a
range of options to help with funding for new knowledge-based
businesses, with no tangible assets behind them. The forthcoming
consultation will give entrepreneurs, banks and other interested
parties the opportunity to express their views on how such a concept
should be developed.
— The EU's SME initiative for England
continues to be delivered through Business Links and encourages
job creation by helping SMEs in areas of industrial decline, or
in rural areas needing development, to increase their export potential
by becoming more internationally competitive.
— The Small Business Service is exploring
ways of encouraging Business Links to provide support to social
enterprises, for example through the development of a webpage
jointly with the British Bankers Association for business advisers
and bankers to widen their understanding of social enterprises
and their business needs.
CORPORATE SOCIAL
RESPONSIBILITY
13. Kim Howells has been appointed by the
Prime Minister as Minister for Corporate Responsibility. This
role will primarily focus on raising awareness within the business
community of the benefits they can gain by maximising their positive
impact on society. As this is a wide ranging agenda, encompassing
for example sustainability, community involvement and education-business
links, both within the UK and on a global scale, it will also
be important to join up to the Whitehall agenda.
AVAILABILITY AND
THE USE
OF DIFFERENT
STREAMS OF
FUNDING
14. We expect to announce proposals for
refocusing Regional Selective Assistance more on quality projects
with the launch of the new Assisted Areas map. Discussions with
the European Commission on the map are continuing. The proposals
are likely to lead to an increase in the Assisted Area coverage
of urban areas. The UK Objective 2 proposals were agreed in principle
by the European Commission on 22 December 1999. We hope the proposals
will be formally agreed very soon.
Competitiveness Unit
DTI
March 2000
| 
