Memorandum submitted by Ten Sixty Six
Enterprise (SE 19)
ORGANISATIONAL BACKGROUND
Ten Sixty Six Enterprise (TSSE) is a not for
private profit organisation owned by the members of the Hastings
Area Chamber of Commerce.
TSSE provides the following services:
— Representation for the business community
through the Hastings Area Chamber of Commerce—this includes
representation on Hastings Local Strategic Partnership, the Hastings
and Bexhill Economic Alliance and East Sussex Strategic Partnership
(and Business Board).
— Enterprise Agency for Hastings and Rother,
providing advice to pre start, start up and established businesses.
This is through a mixture of public and private funding—for
instance the delivery of business support funded through the Local
Enterprise Growth Initiative. The agency works closely with Business
Link Sussex, both as a deliverer of service and as a partner.
— Provision of loan finance across Sussex,
Kent and Surrey to pre start and established businesses that are
unable to access conventional bank finance (through its wholly
owned subsidiary, Capitalise Business Support).
— Management services for Hastings and
St Leonards Town Centres.
— Management of Locate East Sussex, the
Inward Investment service for the County (through Service Level
Agreements with the County Council, Districts and Boroughs).
— Delivery of the largest business to business
exhibitions in Sussex—Lets Do Business.
RESPONSE
The role, responsibilities and accountability
of SEEDA
Our various roles as detailed above bring us
into contact with SEEDA and Business Link at different levels
and in different ways.
The role of SEEDA is seen locally in Hastings as
being a facilitator of change, through the support of regeneration
activity in the town. In this respect SEEDA is seen generally
in a positive way and has had a demonstrable impact on the fabric
of the town. Whether this will lead to a longer term change in
the economic dynamic for the town is still to be seen. Although
the principle of "Education Led Regeneration" is generally
subscribed to there is an issue of disconnect between the development
of University Centre Hastings (which is welcomed by all), and
the incredibly poor performance of the Secondary schools in the
area.
In general terms the perception of the business community,
and the wider community, is that SEEDA is not held to account
for its actions (either positively or negatively), and it is not
clear how some methodologies are tested before full implantation—an
example of this would be the Enterprise Gateway service. This
was designed as a service that would promote enterprise, particularly
in disadvantaged areas. This programme was (as I understand it)
a SEEDA initiative, but was worked up in isolation of other provision
(such as that of the Enterprise Agency movement). The programme
was launched originally with 9 Gateways, with the RES indicating
an expansion to 20. I am sure that an analysis of the project
on its own would demonstrate "value" and hitting targets,
however I am not aware of any analysis or comparison between what
the Gateways deliver against what an Enterprise Agency would deliver
for the same value.
This would be a general criticism of SEEDA who
I believe have not always worked effectively, or encouraged in
partnership.
The process by which the RES was drawn up and
the level of involvement of regional stakeholders
Members of the Hastings Area Chamber of Commerce
attended a sub regional event where the draft RES was discussed.
Although I believe the event was useful the strategy at that point
was so all encompassing that it was difficult to argue with anything
that was being put forward.
We also responded in writing and our main concerns
revolved around what was perceived as a strong weighting of tone
and support to high growth areas and sectors. In actuality Hastings
has faired well out of SEEDA which has in some way mitigated that
fear, however I believe the feeling across the rest of Sussex
is not the same.
The effectiveness of the RES for the South East
in delivering against its targets including the degree to which
the regeneration of areas of deprivation and the former coalfield
areas has been successful
Hastings has benefited significantly from government
and SEEDA investment—it is too early to say what effect
that will have in the longer term particularly in the current
economic climate. Hastings is certainly still "work in progress"
and the key to success will be continued investment into the area.
As stated previously the physical improvements should
lead to an economic benefit but I am concerned that there is a
disconnect between the good works that SEEDA have facilitated,
and the most deprived parts of the community where we still have
generational unemployment and very poor educational attainment
The effect of the financial and economic situation
on businesses in the region including the effect on different
sectors such as manufacturing, service industries etc
To date the Hastings Area economy seems to have
faired relatively well in comparison to other parts of the region/
country. This is largely down to the high proportion (46%) of
public sector employment. However the concern locally is that
although the recession may be shallower than other areas, that
it will be longer.
The new workspace already brought forward, and in
course may go some way to alleviate this issue, but as yet it
is too early to tell.
Businesses are still experiencing difficulties
in securing credit—evidenced by a sharp increase in enquiries
from established business for our loan fund. A number of businesses
have also expressed frustration at being able to access finance
through the Enterprise Finance Guarantee Scheme. Two banks that
we have spoken to have advised that they are lending between 35-48%
of their targets for EFG lending (and this is believed to be the
best performance). This is not necessarily a criticism of the
banks who may be lending "prudently" in the current
difficult general trading environment. It is more that the government
could have done more to support other potential lenders such as
Community Development Finance Initiatives, whose remit is to lend
to those more "high risk" propositions, and can add
value to the borrower through the provision of ongoing advice
and support through the period of the loan.
The changes to regional policy proposed in the
Local Democracy, Economic Development and Construction Bill and
the potential effect on the work of SEEDA
This is not an area of expertise so have no
comment.
The role of other Government agencies such as
the Government Office for the South East, and of partnerships
between Government agencies, local government and the private
sector, in delivering the aims of the RES
Hastings has again benefited from the close working
and partnership, particularly between SEEDA and local government.
The partnership developed to support the regeneration process
has joined local authorities, SEEDA, local MP's and some private
sector representation together to develop a coherent strategy.
The leading players are undoubtedly SEEDA and Hastings Borough
Council, but that is only right and proper. Both SEEDA (through
Seaspace its delivery arm) and HBC have consulted regularly and
updated the business community on their aim and objectives. The
business community has supported the process through lobbying,
particularly for improved communication resources, particularly
road but also rail and virtual links. The Chamber of Commerce
has for instance been working very closely with various partners
(including SEEDA, Seaspace and HBC) to bring a high speed Point
of Presence into the town to improve virtual connectivity.
How effective initiatives such as Business Link
are being in assisting businesses in the current climate, including
helping them to gain access to funding both from Government funding
streams and through the banking system
SEEDA are currently retendering for the Business
Link contract for the region and the move away from six Business
Link franchises to one should be applauded as this should reduce
"back office" costs significantly, and provide more
funding to front line service provision. The risk is that this
will reduce the local flavour for provision, although SEEDA in
their consultations through the process appear to have recognised
this risk.
The six Business Links have operated in different
ways—even through the last couple of years where they should
have been working on a more consortium driven basis.
The majority of our work has been with Business
Link Sussex, who we have had a range of contracts with over the
years, and they have generally worked well through local partners,
and delivered successfully to businesses. This has not been a
methodology used by all Business Link providers where some appear
to have established their own internal provision rather than working
through partners.
The core Business Link provision of small business
reviews is an effective tool, providing businesses with information
and guidance—this can be particularly useful in these difficult
economic times.
The one gap in provision is that of finance
where the banks are unable or unwilling to lend (up to c £50,000).
SEEDA has invested heavily in Finance South
East which provides finance to high growth (potential) or innovative
business through a mixture of debt, mezzanine or equity finance.
Although there is undoubtedly a need for financing this type of
area, SEEDA has largely ignored the sub £50000 debt sector
(other than through funding provided through DBERR (Phoenix legacy
funding), or devolved to local partnerships (who have identified
the need).
A recent independent report on Community Development
Finance (Inclusive Finance the Next Steps—March 2009, by
BMA in association with Community Finance Solutions) in the region
pointed out that Finance South East Services were likely only
to impact on 0.1% of the business stock in the region. I believe
this is further evidence of SEEDA's leaning towards high tech
businesses, rather than the core of its economy—the small
business sector.
Capitalise Business Support (CBS) has witnessed
a significant increase in enquiries from established businesses—in
particular those referred by Business Link, in the last three
months. The banks are still wary of lending, even through the
Enterprise Finance Guarantee.
CBS are in the process of applying to become
a lender through the EFG, and although the changes announced by
Lord Madelson recently may help the CDFI sector and CBS to use
the EFG vehicle, more changes are still required, or further government
investment is required if the gap in the finance market is to
be filled.
The CDFI sector has also suffered in the SEEDA
region through its own internal staff changes leading to a lack
of continuity. At one point SEEDA was funding a CDFI development
officer, this role then ceased, but SEEDA still maintained a key
member of staff to oversee the sector. Staff changes then led
to further staff churn and the apparent loss of any key point
of contact for around 12 months (at the time the contact was needed
most—the start of the recession).
SEEDA has now acted and there is a key contact
point, and they have funded the above report, and we await further
developments, but progress remains slow at a time when action
is needed.
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