Memorandum submitted by Norfolk County Council (EE 06)

 

 

Summary

· Frontline agencies are working hard to deliver the programme, however more products which could be offered directly rather than signposting would improve the offer for business.

· Agencies are working well together, particularly around sign posting. One example is the recent Eastern Daily Press (EDP) insert setting out the help available for individuals and business from all agencies.

· The most significant issue for business remains access to funds to maintain cash flow.

· Measures that could assist with sustainable economic growth include a coordinated approach to the application of the Future Jobs Fund, to maximise targeting to areas most in need and investment in further training based on future economic growth sectors.

· Instant economic impact for the sub-region could be achieved by giving the go ahead to the Postwick Hub CIF project in Norwich, giving early ground to the Northern Distributor Route (NDR) position.

The Government's programme has had some impact in some areas, eg more time to pay the tax bill, however other areas have not been as effective, for example Enterprise Finance Guarantee.

In terms of detail, the Committee is interested in receiving evidence on the following topics:

1. The nature and extent of the Government's programme in the East of England to tackle the recession

2. The role of front line agencies in delivering this programme

3. How the various agencies are working together to deal with the current climate and also to prepare citizens and communities for the future upturn

4. The impact of economic aid to the region

5. The measures which could be taken to provide sustainable economic growth.

The following paragraphs therefore cover each of these topics in turn, including comment on government policies and details of best practice taking place in the County.


1 The nature and extent of the Government's programme in the East of England to tackle the recession / the impact of economic aid to the region

It is not easy to separate these two issues, so the comments below broadly cover both points. The two key areas are help with business finance and help with managing business.

 

1.1 Help with business finance

1.1.1 Enterprise Finance Guarantee. We still have serious concerns about this scheme. It appears that it is still not working effectively and reaching the business community. We have received a number of anecdotal comments from businesses suggesting that even though the Government provides 75% backing, the banks are still only interested when projects are fully viable. In other words, the same stance they would have taken if there was no guarantee in place. Indeed, most propositions coming forward are not for expansion but for distress.

1.1.2 This view would seem to be supported by bank governor Mervyn King who said. "It is likely that the supply of credit will continue to be restricted for some while, with banks being risk averse and aiming to raise capital ratios" and " ... banks-some of which have been propped up with billions from the taxpayer- were displaying an "extreme level of risk aversion" when lending to businesses and households". With RBS being provided with 50% of total lending through the EFG (out of a total of 22 lenders in the scheme) it suggests that RBS might be the key obstacle and primary target of Mr King's and other anecdotal comments. Why not spread the funding to those banks that are converting the highest proportion of enquiries?

1.1.3 Regional loans. The Solutions for Business Guidance refers to the possible availability of Regional Loans but we are not aware of any formally established mechanisms. This could relate to initiatives such as Foundation East, which does provide loans to businesses and has been operating successfully. Indeed, Norfolk County Council recently met with FE and learned that with more resource they could provide significant additional lending to businesses with growth potential. The County Council is exploring this avenue.

1.1.4 The Capital for Enterprise Fund (which provides equity investment, with the Government providing £50m of this £75m fund and the remaining £25m coming from RBS, HSBC, Lloyds TSB and Barclays) is sed to pay off existing debt or for business investment. We have had no feedback on its effectiveness, although it does seem to be widely promoted.

1.1.5 Provision of more time to pay the tax bill. This seems to be working well and is widely publicised. However, without knowing the criteria it is difficult to avoid the conclusion that when payback time does occur, many businesses may end up in default, with the result that many more closures may occur.

1.1.6 Business Debtline. We have no appreciation of how well it is being used or how effective it is.

1.1.7 Business Rate Increase Deferral. All that is being offered is the deferral of a tiny element of the full rates bill (3% of the 5% increase) to the following two years. Although inflation is very low currently, there may be a blip in September, causing there to be other increases to absorb. Surely business rates should be treated in a similar way to tax deferment, with deferment of a larger amount? 

 

1.2 Help with managing business

1.2.1 Health check for businesses-a free review of business performance with a professional business adviser for hands-on advice and help accessing the full range of government help. Business Link has seen significant increases in take up. In some cases, the contact has been of immense value, in others businesses have questioned the value. Perhaps expectation needs to be managed better, with the type of support that may be available better presented up front, to avoid raising expectations. Additionally, Business Link could perhaps be enabled/funded to develop more support products to respond, rather than having to simply signpost. Also, promotion needs to be stepped up with careful consideration over the message that is presented. Many businesses refuse to accept they have a major problem until it's too late. Early intervention is vital and that is the key message.

1.2.2 Train to Gain. It was announced in January that the scheme's rules would be relaxed, to enable training which may not lead to a qualification to be funded. However, the impression that businesses have is that this is a bureaucratic and inflexible scheme and there are also reports that funding is running out. We are aware of one training provider in the region who has learners they are unable to put through for TtG funding due to a shortage of funds.

1.2.3 Dealing with redundancy. Having two schemes in the region-R2R and Rapid Response is helpful as they broadly complement one another. This is assisted by the establishment of the Norfolk Redundancy Support network, hosted by JCP, which sees good integration of the local and regional services. However, neither scheme is really helpful to middle and higher level professional/management staff and more people from those levels are finding themselves unemployed. They will also be less likely to have looked for and received support before and will need flexible, targeted, support, such as that provided. This is partly being dealt with by the Higher Education Funding Council for England (HEFCE) funded Economic Challenge Investment Fund project, successfully bid for by the UEA and supported by ourselves with £100k, which now has substantial funds to support middle management and professionals threatened with redundancy. More support is needed however.

1.3 Other support measures

1.3.1 Reducing waste and saving energy-a key area of activity that the County Council has intervened in over the past five years, through the full time employment of an advisor. Over 1000 businesses have been supported, leading to substantial business benefits. However, demand exceeds supply and with more resource deeper interventions could be enabled (in particular through the close collaboration we have with the globally renowned Low Carbon Innovation Centre at the UEA) and more clients supported.

1.3.2 Help with exporting. Both the Chamber and East of England International report a substantial increase in requests for support for export documentation, research and advice. With more resource, businesses could be encouraged and supported to develop overseas markets thanks to the weak value of sterling.

1.3.3 Jobcentre Plus support. From April Jobcentre Plus (JCP)-nationally-has introduced a number of extra measures to support those impacted by downturn. These include:

· extra support for people being made redundant via the Rapid Response Fund for training

· a one day support session for those newly unemployed, delivered by a contracted provider covering CV completion, job interview techniques, job search etc

· a one day session for newly unemployed professional and executive level customers, delivered by experts in that field

· extra support for individuals, via the Adviser Discretionary Fund, by Jobcentre Plus Advisers, to support moving people into work

· access to a 'national volunteer broker' to enable people to update/retain their skills in the volunteer sector

· extra support for those wishing to start self-employment, via Business Link

· £60 week support for 16 weeks for those unemployed for six months or more, who move into self employment

· extra training opportunities, funded by the LSC, with three Norfolk colleges, for those six months employed

· Recruitment subsidy of up to £1000 for employers who take on a person who has reached six months unemployment (this is enhanced by up to £1500 in Train to Gain funding via LSC, if eligible)

 

2 The role of front line agencies in delivering this programme

· Although JCP has a lead role, partnership working is key, based on existing links with LSC, local authorities (LAs), employers, training providers, colleges etc.

· JCP chairs the countywide Norfolk Redundancy Network, which includes LAs, providers and Business Link and has delivered significant coordinated support to a number of companies across the county in the last few months. Over 4000 individuals have received some form of support from these interventions in last 12 months, ranging from general advice to re training.

· Colleges are in the process of working with JCP/LSC to deliver job-focused support across a number of key sectors.

· All LAs have conducted recession summits and good practice has been shared via Shaping Norfolk's Future (the economic development partnership for Norfolk) coordination.

· Key support has been identified in a number of initiatives funded via EEDA's Investing in Communities programme that is delivered sub-regionally.

 

3 How the various agencies are working together to deal with the current climate and also to prepare citizens and communities for the future upturn:

· As above, local flavour to include work within the LAA to coordinate responses

· Working Neighbourhoods Fund funding in Great Yarmouth, with JCP chairing Employment and Skills Board and the LA looking to use £7.1m over the next three years to deliver support to areas and groups in most need, against deprivation indices.

· Use of Kickstart programme (loans for mopeds to provide access to work) to increase the job prospects of those in rural areas

· Introduction of Integrated Employment & Skills, (Norfolk is one of 12 pilots nationally) that gives Skills Health Checks to JSA customers via nextstep advisers based in Norfolk Jobcentres. Live since Feb 09 for newly unemployed, now expanding to existing JSA customers.

· The County Council also coordinates support activity with other LAs, responding to businesses' requirement for us to join up, clarify and explain. We therefore look to support and complement other LAs' initiatives, where appropriate-eg participating in recession summits in King's Lynn and North Norfolk.

· In terms of the County Council's own activity, we are taking steps to retain resilience in the downturn and doing everything we can to be ready for the upturn. These include:

o Investing £200,000 in a two-year programme of support and training for individuals who are made redundant, but who are ineligible for other government support projects, delivered by Norfolk Guidance Services.

o Increasing our small building maintenance schemes programme by £280,000, with work placed with Norfolk-based companies.

o Providing £125,000 for our Citizens Advice Bureaux for extra debt advisors, which is in addition to the £350,000 of support already provided by Norfolk County Council.

o Holding a corporate procurement event-Norfolk Open for Business-as part of a wider programme of 'Meet the Buyer' events in different parts of the county.

o Producing an EDP insert for businesses on 'Managing in the Downturn'.

o Promoting local credit union options available to both individuals and businesses.

o Issuing a regular Norfolk Business Matters e-newsletter to over 100 companies and organisations, including content on the economic downturn and what the Council is doing to help.

· Finally, we and our partners continue to focus on actions that are consistent with our long-term ambitions around the development of Norfolk's knowledge economy-such as:

Hethel Engineering Centre (HEC). Hethel Engineering Centre is a celebrated example of best practice in enterprise hub development. In partnership with EEDA, Lotus and South Norfolk Council we have created a superb resource for engineering and technology businesses. Over 25 high quality new businesses have been created and hundreds more have been supported throughout the last 3 years. The next stage is to establish a Technology Park on adjacent land, in partnership with Lotus, which will host an additional 1500 jobs, effectively doubling the existing cluster of world class engineering and technology. Intervention funding may be required to ensure this happens in a timescale to meet the requirements of the significant business enquiries we have received recently, since the concept was announced.

Norwich Research Park (NRP). The NRP is a collaboration between the University of East Anglia, the Norfolk and Norwich University Hospital, and four independent research centres; the John Innes Centre, the Institute of Food Research, the Sainsbury Laboratory and, from June 2009, The Genome Analysis Centre. With over 9,000 people the NRP has one of Europe's largest single-site concentrations of research in Health, Food and Environmental Sciences. Norfolk County Council and other partners have worked with NRP-Enterprise to create a vision and action plan for the park that will facilitate the commercialisation of the world class research carried out there.

4 Measures which could be taken to provide sustainable economic growth

· A coordinated approach to application for the Future Jobs Fund to maximise targeting to areas most in need

· Investment in further training based on future economic growth sectors

· Key transport infrastructure developments

In terms of Norfolk's activity on the last two points, Norfolk County Council and its partners are progressing a number of infrastructure measures to facilitate the sustainable growth of the Norfolk economy, some of which would benefit from additional government intervention:

 

4.1 Northern Distributor Road


The Norwich Northern Distributor Road (NDR) is the key piece of major infrastructure within the Norwich Area Transportation Strategy (NATS). Although there is of course a compelling case for the NDR simply to solve existing transport problems, it is vital for facilitating the planned jobs and housing growth in the Norwich Area (a New Growth Point) in the period to 2026 and beyond.

Altogether around 42,000 new dwellings are being planned from 2001 to 2026, along with a target of 35,000 jobs to provide employment opportunities for the growth in population. Two strategic employment locations identified in the East of England Plan (EEP)-Norwich Airport and Thorpe St Andrew - are directly served by the NDR.

As part of the development of the Greater Norwich Joint Core Strategy (JCS) a Growth Infrastructure Study has confirmed the importance of the NDR in delivering the planned growth. This concludes that the NDR:

· Should be delivered as soon as possible in the medium term (after 2011)

· Is needed to remove traffic from unsuitable roads in the northern part of the area

· Is needed for the planned housing and employment development over the wider area and

· With other strategic improvements, is required to provide better accessibility to key employment locations.

 

The 'Postwick Hub' improvement would provide the first leg of the NDR, while at the same time dealing with junction capacity problems that are a constraint on business and housing development, including Broadland Business Park. It would also double the size of Postwick Park & Ride.

The County Council believes that an early go-ahead for the Postwick Hub remains a realistic prospect. The Government has undertaken to release Community Infrastructure Fund grant for the scheme in September, if the NDR gains 'programme entry', and has promised its 'best endeavours' to keep to this timetable.

A go-ahead for the Postwick Hub proposals would bring an immediate benefit through the injection of £21m of construction work into the local economy, including an estimated 80 jobs on site. In the longer term, the NDR will bring journey time savings that have been assessed as being around £258m, which is more than twice the cost of the road. This will improve the competitiveness of Norfolk businesses that rely upon transport infrastructure, directly or indirectly.

A study by Roger Tym and Partners (RTP) on the economic impacts of improved access that the NDR would bring, found there were particular benefits to:

· The development of Norwich Airport and the employment area around it.

· Employment sites near the route of, as well as those further from, the NDR.

· The retail trade and office employment in central Norwich.

· The volume and value of visitors to Norfolk.

· The alleviation of labour market constraints on company growth.

· Economic activity rates and unemployment levels in Norwich and North Norfolk.

· Attracting inward investment, reducing perceptions of peripherality.

 

4.2 Long Stratton Bypass

A £28m bypass has been approved to bypass Long Stratton on the A140. While the original proposal sought to tackle traffic congestion, the approved plans are being reviewed in light of the recent Joint Core Strategy, which may include an allocation of up to 2000 new houses at Long Stratton. This may mean alterations to the type of bypass required. In addition, the A140 is the most direct route to the Haven Gateway and London and, as such, is often chosen by freight operators in favour of the A11. An improved route will therefore assist freight operators' journey times and provide relief to other vehicles. The bypass will also enable further employment land to be unlocked at Long Stratton, which could prove as popular as Gateway 11 on the A11 when the Wymondham bypass opened.

 

4.3 Development of the Outer Harbour at Great Yarmouth and 1st East

Having been 20 years in the planning and negotiating, July 2009 sees the first freight delivered to the outer harbour at Great Yarmouth. This key development, brought about by a £40m public sector partnership, will ensure the port's future and facilitate growth in the energy sector, as well as in transport, distribution and logistics.

 

Great Yarmouth itself has wards that are among the 10% most deprived in the country and the outer Harbour is a key response to this. In order to maximise its impact and to tackle wider regeneration issues, an Urban Regeneration Company (1st East) was established. While the company has produced a master plan, it has no direct funds. If core and capital funding were made available, as is the case for most other URCs, 1stEast it would be better able to make interventions to produce lasting change and economic prosperity for the local area. In particular, North Quay currently comprises derelict or underused land, particularly along the water frontage, and is a primary gateway into the town. Its regeneration is a primary priority for the town and it is proposed that there would be a mixed use retail, business and housing scheme as well as public access to create a new attractive waterside location.

 

Many of the proposed developments in Gt Yarmouth are constrained because of the need to undertake major tidal flood defence work. Only £81m has been allocated for Great Yarmouth in the next 50 years, which is a modest sum and insufficient to support the key centre in the Southern North Sea for gas exploration and extraction, as well as one of the UK's most iconic tourism destinations.

 

 

 

22 May 2009

 

 

 

 

 

 

 

 

C:\Documents and Settings\browninga\Local Settings\Temporary Internet Files\2009 05 22 - Regional Select Committee of the HOC - Enquiry into the Global Economic Downturn in the EofE - NCC response.doc