Memorandum from Engineering Employers
Forum (EEF) (EM 33)
SUMMARY
EEF in the East Midlands has a good relationship
with east midlands development agency (emda). emda
leads for all RDAs on relations with EEF and their Chair, Dr Bryan
Jackson, is in regular communication with EEF's CEO Gilbert Toppin.
Recent appointments within EEF have further strengthened links,
in particular the appointment of a regional external affairs advisor.
EEF at the regional level engages with emda via the East
Midlands Business Forum (EMBF) as well as direct contact. One
of EEF's continuing areas of concern relates to the way manufacturing
is represented in the current Regional Economic Strategy (RES).
EEF would wish to see more explicit reference to the importance
manufacturing in the forthcoming Single Regional Strategy (SRS);
reflecting the significant contribution manufacturing makes to
the region's economy. Overall EEF believe that emda has
performed well in delivering general business support services
in particular to SMEs.
ABOUT EEF
1. EEF, the manufacturers' organisation
is a trusted partner of thousands of employers around Britain.
We work on behalf of over 6,000 companies, in manufacturing, engineering,
technology and beyond. In total these companies employ close to
one million people. Within the East Midlands we provide practical
support to 376 business sites.
EEF'S OVERVIEW
ON THE
ROLE OF
EMDA
2. Over the last 10 years emda has
seen a widening of its original portfolio as described in the
RDA Act (1998). emda is sometimes criticised and challenged
by organisations on the periphery of economic development for
its apparent lack of support and engagement with their agendas
eg the Strategic Health Authority. In light of a tightening of
RDA budgets and the current economic conditions, EEF would encourage
emda to continue to focus its investment on those activities
that directly impact on economic growth and we acknowledge that
emda has reallocated investment to enable more resources
to be allocated to front-line business support.
3. emda is required to have a business-led
board. While there are business people on the emda Board
we would welcome greater understanding of their credentials to
speak on behalf of the wider East Midlands business community.
EEF understands that the Board appointment process is managed
via the Government Office for the East Midlands (GOEM) and would
encourage GOEM to take account of this in the next round of Board
appointments.
4. EEF supports the "joined up Government"
approach, as described in New Industry New Jobs, and would
like to see this echoed at the regional level. We believe that
to do so would enable emda to focus more of its resources
on core economic development activity and ensure others eg the
LSC, allocate significant resources to support the skills needs
of employers and the workforce.
5. emda needs to focus more on strategic
leadership and less on managing project and programme delivery.
EEF understands that the majority of emda's funding comes
via the Department for Communities and Local Government; perhaps
explaining the significant investment into regeneration projects.
This is compounded by the fact that RDA budgets are largely capital
based which drives them towards investing in land and buildings
rather than revenue -based support for business. EEF would encourage
BERR to take a greater lead with emda both in terms of
investment and direction.
6. The East Midlands has always lacked a
regional identity. The main conurbations are located along the
M1 corridor which means that the rural fringes of the region often
align to the urban areas in other regions; eg a business in rural
North Nottinghamshire is likely to have closer links to the industrial
base in South Yorkshire. emda has been reasonably successful
in building an East Midlands identity, however regional boundaries
are meaningless to business and can create problems; eg where
a competitor is able to access support simply because they are
located in different region or locality within a region.
7. EEF hope that the Business Support Simplification
Programme will reduce many of these disparities however we remain
concerned about the restricted access to ERDF Priority Axis 2
which means only businesses in particular parts of the East Midlands
can access funding. Businesses continue to struggle to comprehend
the various eligibility criteria and restrictions and are frustrated
by what some regard as an unequal and unfair advantage given to
some businesses because of their size, sector or location.
8. emda identifies four priority
sectors in the RES; transport equipment, food and drink, healthcare
and construction. Many other regions share similar priority sectors
and there may be an argument for more nationally led programmes.
While emda has worked with other RDAs on major projects
eg with AWM, SEEDA and EEDA in the development of Motorsport Valley
EEF would support further cross-RDA collaboration.
IMPACT OF
FINANCIAL AND
ECONOMIC SITUATION
ON BUSINESS
IN THE
REGION
9. The current economic climate in the East
Midlands echoes that experienced in other regions with manufacturers
experiencing significant reductions in orders leading to redundancies,
reductions in investments in capital equipment and training, and
on-going restrictions on cash flows. The most recent survey showed
that manufacturing output in the East Midlands continued to decline
in the second quarter of 2009, and a balance of companies are
expecting both outputs and orders to retract further over the
coming months.
10. As a provider of business services, EEF East
Midlands has seen a significant increase in demand from our members
to assist with organisational restructuring. Over the last quarter
of 2008 there was a marked increase in number of queries received
by EEF East Midlands relating to restructuring advice (at its
height we received a 50% increase in call volume with 75% of calls
being restructure related). That has now subsided however tribunal
activity has increased markedly since the start of the year. Compared
with the same time last year we have seen an additional 40-50%
increase in tribunal numbers with redundancy related dismissals
contributing toward those numbers.
11. In October 2008 emda established
a regional economic cabinet. Chaired by the regional minister
its remit is to take action to support business during the economic
downturn. EEF remains concerned that it is public sector heavy
with representation from LSC, Job Centre Plus and others. We feel
that the manufacturing voice is under-represented. As manufacturing
accounts for 23% of the region's economic output EEF would welcome
the opportunity to play a greater role in supporting this work
by providing timely information of the challenges, priorities
and needs of East Midlands' manufacturers.
THE PERFORMANCE
OF EMDA
12. In the independent performance assessment
of the RDAs completed in 2007 emda scored the highest marks
(jointly with ONE North East) and this is consistent with our
view.
13. The Manufacturing Advisory Service (MAS)
in the East Midlands has proved particularly successful and according
to figures just released by emda, MAS EM assisted a record
number of manufacturing businesses over the last 12 months. MAS
supported over 500 businesses last year and estimates that it
helped businesses to create or secure 484 jobs, save about £11
million and increase profits by £8.5 million. emda has
recently renewed its contract with PERA to continue to deliver
this service. EEF would encourage greater promotion of MAS services
directly to businesses as anecdotal evidence indicates that some
manufacturers are still unaware of the service.
14. For EEF the challenge remains emda's
ability to deliver support to business at the right place, at
the right time and in the right form. emda delivers most
of its support via Business Link. The range of support services
offered are a mix of national programmes and regionally specific
support. Despite efforts to re-launch the Business Link brand
it is still regarded with a degree of suspicion by some businesses
and this can cloud their perception of the quality and range of
support available. Many of our members are large businesses and
while Business Link is a first port-of-call for all business support
larger companies are in fact ineligible for much of the support
available. More needs to be done by emda to increase awareness
of support for larger businesses; many of which are supplied by
the region's SME base.
15. emda has demonstrated its capacity
to respond quickly and effectively to crisis; most notably their
response to foot and mouth, the floods and most recently to the
economic down turn which saw it redirect resources away from lower
priorities to boost support for the region's business community.
This capacity to respond rapidly is vital to supporting businesses.
16. It is encouraging that emda has
shown a commitment to businesses in rural areas; including the
regeneration of the former coalfields; now home to a new generation
of businesses.
17. In addition EEF is pleased with emda's
continuing support for improvements to regional infra-structure
including the development of the new Parkway Station near East
Midlands Airport, the opening of Corby Station and the planned
upgrade of the Felixstowe to Nuneaton rail link; all of which
will improve transport links, freight movement and journey times.
As a region that exports a high level of its manufactured goods
reliable transport links are vital.
18. EEF would welcome greater opportunity
to support emda's planning and decision making process
where it impacts on manufacturing. We have an extensive range
of intelligence, experience and direct access to manufacturing
businesses many of whom would relish the opportunity to support
future regional economic development plans. Unlike other regions
where there is significant direct engagement with EEF on programme
development in the East Midlands emda relies on the East
Midlands Business Forum (EMBF) as its main route to business consultation.
EEF are members of EMBF however because EMBF represents all business
EEF believes that manufacturing specific issues are often lost
in the submission of more generic responses. EEF has made concerted
efforts to build closer links with emda at Board, Executive
and programme management level and we look forward to consolidating
these relationships further.
REGIONAL ECONOMIC
STRATEGIES
19. emda has promoted the fact that
its consultation process for the last RES A Flourishing Region
was the most expansive of its kind ever undertaken. EEF and
other business organisations were consulted in a number of ways.
With the next iteration we would welcome an earlier opportunity
to contribute to its development. EEF is not advocating being
involved in the final drafting but we can provide access to a
strong base of manufacturing businesses that would welcome more
opportunity to have their input.
20. The RES identifies "Priority Actions"
and allocates regional partners, including EEF (via EMBF) to lead
on their delivery. We are not aware however of any formal process
for ensuring delivery against these Actions. In the West Midlands
a group exists to work with the RDA to progress these and we would
encourage emda to consider a similar approach in the East
Midlands.
CHANGES TO
REGIONAL POLICY
FOLLOWING THE
SUB-NATIONAL
REVIEW
21. EEF welcomes the bringing together of
the Spatial Strategy and Economic Strategy into one Single Regional
Strategy (SRS) as we believe this will bring greater clarity and
connectivity between spatial and economic priorities. We do have
concerns regarding the indicative timescales for the production
of the SRS and would urge all parties involved to ensure this
is not overly bureaucratic and burdensome.
22. emda's position within the region
provides "critical mass" in terms of setting regional
economic priorities. Whitehall is too remote to understand regional
needs and the local authorities are too fragmented. EEF is concerned
that with the implementation of SNR and the devolution of economic
decisions to the local authority level there is a risk we will
see fragmentation, duplication and parochialism. emda's
role to date has been to orchestrate investment decisions across
the region and reduce these risks therefore EEF sees a continuing
role for a regional body to ensure that while those making decisions
that impact on manufacturing might act locally they are reminded
of the need to think regionally and even globally.
23. With the failure of the Regional Government
agenda there was a clear need to address the question of local
accountability for, and scrutiny of, the economic strategies.
We recognise that the new arrangements agreed in the Local Democracy,
Economic Development and Construction Bill, with RDAs and newly
formed Local Authority Leaders' Forums taking joint responsibility
for a SRS, address this issue.
24. However, we are concerned that a SRS
could become subject to costly delay either because of disagreements
between RDAs and the Leaders' Boards, or indeed division within
the Boards themselves. There is a safeguard to avoid this, through
the ability of Ministers to force the process, but we have doubts
about how effective this will be.
25. The test will lie in the emda's
and the local authorities' capacity to agree the Strategy that
has the support of the business community without protracted consultation
and "examination in public" procedures. This is especially
important at a time of such economic uncertainty and businesses
will be looking to emda and the Local Authority Leaders'
Forum to show leadership and direction.
26. emda has been challenged over
its capacity to manage its additional spatial and planning responsibilities,
and the same challenge might be placed at the local authorities'
feet with regard to their capacity to deliver the economic development
agenda. We are also concerned about the capacity of the local
authorities to undertake the required Economic Assessments and
would be pleased to provide intelligence and data pertaining to
manufacturing in support of this work.
27. Stakeholders have a critical role in
informing the SRS process. Where previous arrangements of stakeholder
engagement have worked well, they should be maintained as far
as possible and used as examples of best practice elsewhere.
EMDA'S
AND SUSTAINABILITY
28. The RES describes the ambition for the
East Midlands to be "A Flourishing Region;—with growing
businesses, skilled people in good quality jobs, participating
in healthy, inclusive communities and living in thriving and attractive
places". One of the structural themes of the RES is "Ensuring
Sustainability" which describes a commitment to, among other
things, sustainable productivity and economic wellbeing.
29. emda has demonstrated a commitment
to sustainability not only through the delivery of business support
services to encourage businesses to reduce waste and improve efficiency,
but also in its approach to physical developments eg a requirement
for all new buildings to meet BREEAM standards and the on-going
redevelopment of one of the most toxic sites in Europe; the former
Avenue Coking Works. We feel that emda continues to demonstrate
a commitment to the sustainability agenda.
30. emda and Advantage West Midlands
worked with three Midlands based universities to secure the head
offices of the Energy Technologies Institute at Loughborough;
a body that oversees up to £1 billion of public/private investment
into energy innovation. This also places the East Midlands in
the spotlight and we would encourage emda to take a greater
lead than it has perhaps done so far in this agenda. The region
is home to several manufacturing businesses that operate within
the power generation sector including nuclear, wind and bio-fuel.
We would encourage emda to give greater consideration to
the level of support available to these businesses especially
given continuing soaring energy prices and concerns over security
of supply. EEF would also encourage emda to invest more
in tackling energy issues, taking a more active role the planning
of future energy supplies. We look forward to the SRS giving clarity
to this area.
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