Conclusions and recommendations
Enterprise Finance Guarantee Fund
1. We
welcome Government's Enterprise Finance Guarantee Fund but are
concerned that the Fund appears to be not widely known among small
businesses. If the Fund is designed to help small businesses then
more must be done to inform them of its existence. We are also
concerned about the low success rates of those that do apply for
it. It is difficult to assess the success of the Fund until more
firms apply and we recommend that the Regional Minister works
with the SWRDA, Business Link and the banks in the region to increase
take up of the scheme and to identify reasons why the success
rate is so low. (Paragraph 25)
Late payment
2. We welcome the Regional Minister's and South West Councils' efforts to ensure prompt payment. We note that throughout the public sector there is an intention to pay promptly and in some cases ahead of schedule. However, we are also aware of evidence that it is not necessarily happening throughout the region. We recommend that the new Regional Minister seeks to identify the reasons why payments are not being processed within 10 days; that he repeats the commitment that the public sector in the South West will pay within 10 days; and that he continues to press it to honour this commitment.
(Paragraph 29)
Trade credit insurance
3. We recommend that the Regional Minister and the Task Group to monitor the effectiveness of the Trade Credit Insurance top-up and the number of insolvencies closely and continue to make representations to central Government.
(Paragraph 32)
Tax
4. The Committee notes the positive consensus about the work being done by Her Majesty's Revenue and Customs to help businesses manage their tax payments through the recession. However, we are concerned at the apparent discrepancy of service to customers who use the business payment support service and those who approach their local tax office. We recommend that the Government investigate as to why there appears to be this inconsistent service, and consider what lessons can be learned from the implementation of the business payment support service that might be usefully applied to other schemes.
(Paragraph 34)
5. We recognise that
where there is an issue of pressing concern in the region that
relates to national policy, it is important that the Regional
Minister can raise matters in Whitehall on behalf of the region.
We recommend that the Regional Minister considers how he can more
clearly demonstrate that his influence, either alone or in coordination
with the Regional Economic Council, has brought about changes
for the benefit of the South West. (Paragraph 37)
Public procurement
6. We welcome the work of the regional agencies and South West Councils to encourage and increase local procurement and support the efforts to make sure that best practice is spread throughout the region. We recommend that regional agencies and local authorities make further efforts to explain their contract requirements and examine how to build up the capacity of small business to be able to apply for contracts.
(Paragraph 41)
Green economy
7. We welcome the commissioning of the report on green jobs that the Regional Minister presented to the National Economic Council.
(Paragraph 45)
8. We welcome SWRDA
and the Task Group's ambitions to bring about a sustainable low
carbon economy in the South West. However, we remain to be convinced
of progress in this direction. We expect to return to this subject
in the near future. (Paragraph 48)
Graduate unemployment
9. We welcome the partnership working between Jobcentre Plus and universities in the region to cater for the wider profile of people seeking employment opportunities during the downturn.
(Paragraph 59)
Deferring redundancies and retaining skills
10. We see the Future Jobs Fund as an opportunity to supplement skills in the region. We welcome the work of the Government Office and Jobcentre Plus in co-ordinating bids for the fund. We would also support the inclusion of those, such as the trades unions, who may be able to help identify skills shortages in the region that could inform stronger bids.
(Paragraph 66)
11. We note that retaining skilled workers is a high priority for the region and support the measures that many firms are taking to put off making redundancies. We welcome the joint working between management teams and trades unions to try and secure jobs. We recommend that the Task Group consider extending some initiatives across the region, such as the initiative in Liskeard where the Citizens Advice Bureau approach employers to provide advice on the range of options that might be available before making redundancies.
(Paragraph 68)
Train to gain
12. We welcome the flexibilities introduced to Train to Gain to increase access, but are also aware that Train to Gain is under pressure due to demand. This situation needs to be monitored carefully and more resources made available as necessary.
(Paragraph 72)
13. We welcome the demand for training from business. We note the value and popularity of Train to Gain, and we welcome the extra funding and flexibilities provided by the Government at the end of 2008 to increase the accessibility of the scheme. However, we note the concern of the Federation of Small Businesses that the financial support is paid to the employer once the training has been completed and that this might discourage the take-up of training by small businesses. We recommend that the Regional Minister and partners investigate this and explore alternative ways of paying, for example by phasing payments.
(Paragraph 74)
Wage subsidy
14. A wage subsidy scheme requires resources beyond what the South West Regional Development Agency can provide. However, there was support within the region for such a scheme. We recommend that the Government review the impact and cost of Pro-Act in Wales, make public its views on the costs and benefits of introducing such a scheme, and of not introducing such a scheme.
(Paragraph 78)
Housing
15. We welcome the efforts that the Action Group on Housing and Infrastructure has made with regard to identifying and unblocking housing schemes that could increase the availability of badly needed homes in the region, and also provide much needed help for the local construction industry.
(Paragraph 87)
16. The problem of housing provision in the region necessitates joint working, involving those in both the private and public sector involved in construction and development, local authorities, the third sector and the mortgage lenders. We would urge the new Regional Minister to maintain his predecessor's attention to this area.
(Paragraph 88)
Mortgage rescue scheme
17. We note the ambition of the mortgage rescue scheme and the lack of take-up. We also note the publicity relating to the scheme may have increased the number of people approaching local authorities and advice centres for assistance. In this regard it may have inadvertently helped direct those at risk to a useful source of advice. We recommend that the Government further monitor the effectiveness of the scheme. It is too early to say if the scheme might be successful and recognise that demand is likely to increase.
(Paragraph 93)
Debt
18. We welcome the work that local authorities and the third sector are doing to increase awareness and take up of benefits and tax-credits. We recommend that the Government Office work with local authorities, the third sector and other partners, using local area agreements where possible, to further encourage joint working and spread best practice.
(Paragraph 101)
19. We welcome the extra hours funding that the Government has made available to the Citizens Advice Bureau, and note the evidence from Citizens Advice Bureau and AdviceUK relating to the demand on their services, their concern over the difficulty of securing funding for front line services, and that the additional hours funding expires in March 2010. We recommend that the Government continue to provide adequate funding for Citizens Advice Bureau.
(Paragraph 102)
20. We note that the repercussions of the downturn on jobs, housing and family finances may not be fully apparent yet. We recognise that it is preferable for those at risk of getting into financial difficulty to gain advice relating to benefits and financial management sooner rather than wait until a crisis develops. We recommend that the Regional Minister works to bring together with the voluntary sector, local authorities and the SWRDA to ensure consistent and joined up sources of advice relating to debt and financial management.
(Paragraph 103)
21. We also note that the South West Economic Regional Task Group does not include any representative from the third sector in its core membership. We recommend the Regional Minister consider including such a representative on the Task Group.
(Paragraph 104)
The role of the RDA
22. In spite of the difficulties in the economy and their resources, we welcome the RDAs commitment to continue its support for business through the recession, and its emphasis on making sure the focus of Business Link is on the needs of business in the region, and in particular that of small and medium enterprises.
(Paragraph 111)
23. We understand that all RDAs have had their budgets cut, and that funds from RDA budgets may go to fund other regeneration schemes. We think that wherever the RDA is in the country, it should be given adequate funding to fulfil the role that Government has given them. We recommend that the SWRDA does not have its budget cut further. It should be able to take short-term and long-term strategic decisions based on an agreed and stable budget. We recommend that the SWRDA single pot budget should not be reduced for the next two years. We recommend that the Government look again at the formula for allocating budgets to the RDAs.
(Paragraph 115)
The role of the Regional Minister
24. We agree with our witnesses in welcoming having a Regional Minister. However, we remain to be convinced as to what the precise role of the Minister is. We note that the Regional Minister's role has been given certain responsibilities by the creation of the South West Economic Task Group, but we presume that the lifetime of the Task Group is finite. We recommend that the Government give clear guidance as to what the precise role of the Regional Minister will be in the future.
(Paragraph 117)
South West Regional Economic Task Group
25. The establishment of the Regional Economic Task Group is a welcome initiative and early indications are that it has been effective in some key areas—particularly in improving communication between government and the region and in pushing for progress on capital projects. However, there are concerns that it has focussed attention primarily on the concerns of business, to the exclusion of other issues such as the third sector and personal finance. The Regional Minister should work to address these concerns.
(Paragraph 122)
Regional Economic Council and Council of Regional
Ministers
26. Representing the views of the region to central government is a key part of the role of regional ministers. It is important that regional ministers should be seen to be actively lobbying government on their region's behalf and that their efforts should be open to scrutiny. We further recommend that the Regional Minister explains how he intends to report back to those outside the Task Group as to his representations to Whitehall on behalf of the region, and the outcomes.
(Paragraph 126)
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