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Memorandum from the
Government Office for Yorkshire
Summary
· Yorkshire Forward has a key role in helping improve regional economic performance and contributing to the delivery of other Government priorities including addressing climate change, flooding and promotion of a low carbon economy. · Yorkshire Forward develops and delivers the Regional Economic Strategy working with regional partners such as the Government Office for Yorkshire and The Humber. · The recent evaluation of Regional Development Agencies (RDAs) highlights the added value that Yorkshire Forward (and other RDAs) has generated. · Yorkshire and the Humber is affected by economic downturn across a number of sectors and Yorkshire Forward is playing an important part in responding to that and preparing for recovery. · The sub national review will strengthen Yorkshire Forward's role, promoting more effective joint working with local authorities in delivering a single regional strategy for Yorkshire and the Humber.
Introduction
1. Since 1999, Yorkshire Forward's (YF) role has been to help improve regional economic performance and contribute to the delivery of other Government priorities, including responding to climate change. Currently, YF is taking action to tackle the economic downturn in Yorkshire and the Humber. Looking to the future, the Government expects YF to develop a more strategic role, working closely with local authorities to deliver a single, integrated regional strategy.
The work of Yorkshire Forward since 1999
2. YF is a non-departmental public body that has five statutory purposes[1]:
· To further economic development and regeneration · To promote business efficiency, investment and competitiveness · To promote employment · To enhance development and application of skills relevant to employment · To contribute to sustainable development
3. YF was set up on 1 April 1999 and took over responsibilities previously held by certain government departments and sponsored bodies, along with associated funding streams[2]. Subsequently, YF's responsibilities increased to include regional development grants (2002), research and development grants (2005), Business Link (2005), the economic and social funding elements of the Rural Development Programme in England (2006), European Regional Development Funds (ERDF, 2007), and the Manufacturing Advisory Service (2008).
4. A key duty for YF is to "formulate and keep under review a strategy in relation to its five purposes"[3] - this is the Regional Economic Strategy (RES). The current RES was published in 2006 and covers the period to 2015. It sets out strategic priorities and targets, and the roles of regional and local organisations and agencies to deliver high quality sustainable growth. In developing the RES, YF followed closely Government guidance[4] and undertook significant activity to engage and consult widely within the region, with Regional Development Agencies in neighbouring regions, and with Government and other interests nationally.
5. YF's contribution to delivering the RES is funded primarily by the "single pot" (grants from six Government departments[5]); in 2008/9 this was £303m[6]. YF's investment strategy, and its contribution to the Government's regional economic performance Public Service Agreement (PSA)[7] and the delivery of other PSAs, is set out in YF's Corporate Plan[8].
Partnership Working
6. Delivery of RES objectives is in large part through YF's joint working and partnerships with other organisations, including local authorities, businesses, colleges, universities, the third sector, and a range of public agencies, including Government Office for Yorkshire and The Humber (GOYH).
7. Other public sector agencies who YF work in partnership with to deliver the RES include:
· Homes and Communities Agency - creates opportunity for people to live in high quality, sustainable places by providing funding for affordable housing, bringing land back into productive use, and improving the quality of the physical and social environment. · Environment Agency - protects and improves the environment and promotes sustainable development. · Natural England - conserves and enhances the natural environment, for its intrinsic value, people's wellbeing and enjoyment, and the economic prosperity that it brings. · Forestry Commission - protects, expands and promotes the sustainable management of woodlands and increases their value to society and the environment. · Jobcentre Plus - provides help and advice on jobs and training for people who can work and financial help for those who cannot. · Learning and Skills Council - exists to make England better skilled and more competitive by improving the skills of young people and adults. · UK Trade and Investment - helps UK companies succeed in international markets and assists overseas companies to bring high quality investment to the UK.
8. Annex A provides some examples of Government Agencies' and Departments' work with YF.
Government Office for Yorkshire and The Humber
9. GOYH is "central Government in Yorkshire and the Humber" (representing 12 departments[9]). It aims to transform lives and places by:
· acting for Government in the region and localities · acting for the region and localities in Government · building partnerships and delivering in partnership
10. GOYH's involvement in the work of YF includes the Regional Director attending Board meetings as an observer and chairing the ERDF Programme Monitoring Committee. GOYH advises YF during the preparation of RES and YF Corporate Plans, and works with local authorities and others to help deliver RES objectives including through the Local Enterprise Growth Initiative; Solutions for Business[10]; negotiating Local Area Agreements and Multi Area Agreements; and delivering the Regional Housing and Spatial Strategies.
11. GOYH also supports the Regional Minister's activity in the region. It ensures that the Regional Minister is briefed appropriately for the Council of Regional Ministers and the Economic Delivery Group, which the Minister set up in 2008 to address the downturn.
Climate Change
12. Addressing climate change, through a partnership approach, is an area that YF has taken a strong interest in, reflecting the significance of power generation[11] and flood risk in the region[12]. YF:
· Set a target in RES to reduce greenhouse gas emissions[13] · Provides funding and advice to businesses to help create a lower-carbon economy[14] · Supports biomass boiler technology and supply chain development in the region, and has worked with key suppliers such as the Forestry Commission and the major coal-fired power stations and local organisations to encourage biomass use · Set up a Carbon Capture and Storage Partnership (CCS) to actively develop business opportunities and plans for a linked transport network for CCS[15]. · Has a Strategic Alliance with Yorkshire Universities which is seen as a national exemplar and has resulted in the development of the Centre for Low Carbon Futures[16].
13. YF has taken an active role in addressing flood risk, working with businesses, local authorities and the Environment Agency. The summer floods of 2007 had a severe impact on numerous businesses and YF quickly made an emergency fund available to those affected. YF has provided funding to the Yorkshire and the Humber Regional Flood Defence and supported development of green infrastructure.
Accountability
14. The effectiveness of YF in delivering against objectives and targets and managing its budget is scrutinised in a number of ways, both nationally to Parliament through the Secretary of State for Business and Regulatory Reform, and regionally through its Board, its annual public meeting, and by the regional chamber[17]. Yorkshire Forward publishes an Annual Report which demonstrates how the Agency is delivering the RES[18].
15. YF is held accountable at national level for performance against objectives and targets through:
· Chair and Board Members being appointed by the Secretary of State · A Government Tasking Framework for all RDAs[19] · The Corporate Plan being agreed with funding departments before it is signed off by the Secretary of State for Business and Regulatory Reform · Annual Reports being laid before Parliament and being made publicly available · National Audit Office independent performance assessment[20] · Independent assessments commissioned by Government[21]
16. In terms of financial accountability, the YF Chief Executive is an Accounting Officer with delegations and responsibilities to Parliament, the Secretary of State for Business and Regulatory Reform, and the YF Board. YF has an Audit Committee that is responsible for supporting and challenging the financial and risk management systems and related issues of propriety and prudence. Other measures to provide financial accountability include:
· Projects for more than £10m of "single pot" generally require approval by Government[22] · National Audit Office audits YF annual accounts and systems · YF management of the ERDF Programme 2007-13 for the Department for Communities and Local Government is subject to specific monitoring and reporting arrangements
17. At the regional level, Yorkshire and Humber Assembly carried out a series of scrutiny reviews into Yorkshire Forward between 2001 and 2009[23] in line with the approach agreed between regional chambers and RDAs[24]. The reviews focussed on the impact of activities and investments and the strategic role played by YF in delivering the RES. YF is legally required to take account of the findings of these reviews[25].
Delivery
18. The Yorkshire and the Humber economy grew by nearly 50% between 1999 and 2007. This was just under the rate of growth in England as a whole[26].
19. YF was found by the National Audit Office in 2007 to be performing strongly overall, and particularly on ambition and capacity. In terms of "achievement" (including delivering RES and the Corporate Plan), YF was found to be performing well[27].
20. The recent RDA impact evaluation report[28] shows that 33 YF projects carried out between 2002/3 and 2006/7 have generated significant outputs including more than[29]:
· 40,000 jobs created & safeguarded · 2,000 businesses assisted · 330 businesses created · 350 hectares of land reclaimed · 74,000 net skills assists delivered
21. The report anticipates significant additional outputs in the future as schemes are completed. It also suggests that YF has positively influenced partners' behaviour and performance, for example in terms of providing a strategic focus and leadership, influencing and bringing partners and stakeholders together, improving linkages and partnership working, leveraging private sector investment, and co-ordinating responses to the region's challenges[30] .
Effect of the Economic Downturn
22. Yorkshire and the Humber's economy has been restructuring since the 1980s, moving from reliance on large scale heavy industry, manufacturing, mining, and textiles to a more diverse range of services and businesses. Sectors that have become increasingly significant include financial and business services, digital and new media industries, environmental technologies, and public administration, education and health[31].
23. Despite restructuring, the region is being significantly affected by the global economic downturn. Increased unemployment and redundancy figures are indicators of the impact. In the year to March 2009, people affected by statutory redundancy totalled over 40,800[32] and unemployment rose by over 67,000 to a total of 142,800[33]. The manufacturing sector has been hardest hit in the region, accounting for 33% of redundancies, followed by financial services and construction[34].
24. Nationally, the Government has taken significant action in response to the economic downturn. This includes a wide range of help to businesses, and accelerating investment in housing, regeneration, transport, health, education and skills. Annex B contains details of initiatives by BERR, DIUS and HMRC.
25. The Regional Minister is leading the response in Yorkshire and the Humber to the economic downturn, working with a wide variety of public and private sector organisations and businesses to identify problems and devise solutions. The Minister: · Chairs the Economic Delivery Group[35] to take forward issues identified as barriers to economic recovery through the Council of Regional Ministers or through other Ministers · Launched "Real Help for Yorkshire and the Humber"[36] · Appointed a small group of Business Ambassadors to help raise the profile of the region and promote the continuing importance of skills · Works closely alongside YF with the region's banks, through the Leeds Financial Services Initiative, to kick-start lending to the region's businesses
26. The Government has asked Yorkshire Forward to focus on the following[37]:
· Assistance to business as an immediate priority · Stimulating economic recovery and growth for the medium-term · Restructuring and developing the region's strengths, supporting its growth and competitiveness in the future for the longer-term
27. In response, YF is revising its Corporate Plan and taking action to:
· Support business (eg new and extended financial support schemes, and an enhancement fund of £50m for "Train to Gain") · Support people (eg setting up an Employment Support Group with the Learning and Skills Council and Jobcentre Plus, and implementing a "Time to Train" scheme in partnership with local authorities) · Support physical infrastructure (eg supporting regeneration projects in financial difficulty that YF has not previously been involved in, and taking action to bring forward development on YF sites)
Looking to the Future
28. The Government expects YF to adapt both what it does and how it operates to implement the sub national review (SNR)[38].
29. The Government announced in November 2008[39] that having considered the responses to consultation on SNR, it had decided to take forward proposals for:
· Creation of an economic assessment duty on local authorities · Local authorities collaborative arrangements on economic development[40] · Production of a new Regional Strategy jointly by RDAs and Local Authority Leaders' Boards · RDAs working with local authorities and sub-regional partners on a programme-based (rather than project-based) approach, through Joint Investment Planning.
30. A Bill is currently proceeding through Parliament to implement these proposals where necessary[41]. Policy documents giving further detail on local economic assessments, regional strategies, and sub-regional co-operation were published in January[42].
31. As a result, YF will become even more strategic in its leadership of sustainable economic growth in the region, with a geographic, programme-based approach to the investment of the "single pot" alongside other resources.
32. YF will have a statutory responsibility, jointly with a Local Authority Leaders' Board, to deliver a single Regional Strategy. This will replace the existing regional economic, spatial, transport and housing strategies, and more effectively align and prioritise public and private sector investment. The Bill and associated guidance[43] suggest that the Regional Strategy will need to cover:
· Key regional and sub-regional opportunities and challenges over a 15-20 year period · Sustainable economic growth within environmental limits, and the drivers of productivity[44] · How housing need and demand will be met · Action on climate change and energy · Transport and other infrastructure (potentially including waste, water, minerals, culture, media and sport, and environmental infrastructure)
33. A new Joint Regional Board has been established between YF and local authority leaders to deliver the Regional Strategy. It will be supported by four advisory boards on Spatial Planning, Work and Skills, Transport, and Housing and Regeneration. There will also be an Independent Board to work with and challenge the boards to ensure sustainable development and other cross-cutting themes are thoroughly considered. GOYH Regional Director and Deputies are non-voting, advisory members of these boards.
34. The new governance structures established by YF and local authorities include members from a range of stakeholders who bring expertise and capacity. Staff in YF and local authorities will need to work effectively together and with stakeholders. YF is leading on Transport and Work and Skills and local authorities are leading on Spatial Planning and Housing and Regeneration.
35. YF staff members have experience and capacity in these areas, for example through work with partners on the Northern Way, the Regional Spatial Strategy, the Regional Transport Board and Regional Funding Advice exercise. This capacity will be further developed and effectively aligned with that in local authorities, harnessing expert input from other stakeholders. For example, through the new Regeneration and Housing Board, it will be important that YF works closely with stakeholders, and especially the Homes and Communities Agency, to align investment strategies and programmes.
36. The new Regional Strategy will contribute to the mitigation of, and adaptation to, climate change. YF will work with partners to build on the work they have done in this area, making effective use of the UK Climate Projections for the region in identifying and assessing those risks and opportunities. Flooding is a particularly high risk for the region; other risks include water availability and heat-wave impacts, the latter particularly in urban areas. YF will need to tackle these issues through new ways of working with local authorities and others to develop the Regional Strategy. Applying lessons learned through the development of the RES, this will involve ensuring evidence is in place, developing options, assessing these using a variety of techniques including sustainability appraisal and statutory environmental assessments[45], and agreeing a draft strategy with partners. ANNEX A EXAMPLES OF GOVERNMENT DEPARTMENT AND AGENCY WORKING WITH YORKSHIRE FORWARD TO PREPARE AND DELIVER THE RES
Representatives from the Department of Health and GOYH played an active part in carrying out a health impact assessment of the draft RES in 2005, focusing on the wider determinants of health and the contribution that the RES could make to reducing deprivation and health inequalities. Health impact is now incorporated into strategic environmental assessment and this offers a major opportunity for health to influence plans and programmes that shape wider determinants of health.
The Homes and Communities Agency[46] was established on December 1st 2008. The two agencies have recently worked together on the prioritisation of regeneration activity within the region, identifying critical schemes which require additional support. We anticipate this partnership working will develop and strengthen in forthcoming years, as the region develops it Single Strategy and begins implementation. In particular, it will be important that both agencies work together to align investment strategies and programmes.
The Environment Agency works in partnership with Yorkshire Forward on a number of environmental issues. The EA was effectively involved in the preparation of the RES, primarily in advising on flood risk management. Strategic Environmental Assessment was a component of RES development and was under taken in 2005/06, with additional consultation being undertaken by YF to ensure legal compliance following representations from EA and other statutory agencies. EA has continued to work with YF through the Yorkshire and Humber Climate Change Partnership which has resulted in the production of the Yorkshire and Humber Climate Change Plan, and the Yorkshire and Humber Climate Change Adaptation Study. Yorkshire Forward recognise the importance of flood risk on the economy and environment of the region and are taking an active part in promoting the reduction of flood risk by agreeing to contribute £500,000 a year as matched funding to the Regional Flood Defence Committee's (RFDC) Local Levy Programme. Yorkshire Forward is also helping to promote partnerships whereby flood risk reduction can be delivered more cost effectively and efficiently with other benefits such as regeneration. The Environment Agency is also working with Yorkshire Forward and other partners on evaluating the economic impact of flood risk. When completed this will identify the potential wider economic costs of flooding in Yorkshire and help understand the implications for local and regional economies. Natural England is a joint partner along with Yorkshire Forward and the Forestry Commission for the regional delivery of the Rural Development Programme for England (RDPE). Natural England has a key role in advising YF on environmental issues and how the environment may be affected by economic development. Regionally, Natural England is also working with Yorkshire Forward on practical land management projects relating to climate change mitigation and adaptation. As a delivery partner for the RDPE, Natural England works with YF and contributes to the delivery of the RES through the delivery of agri-environment schemes in the region (worth £42M in 09-10) with objectives relating to wildlife, archaeological and landscape conservation, access, natural resource protection (soils, water quality etc), genetic conservation and flood management. As a way of protecting and enhancing the region's environmental and cultural assets, Natural England secures positive management for Sites of Special Scientific Interest (currently 89% under positive management) as well as funding numerous access, green infrastructure, climate change, health and landscape projects across the region.
The Forestry Commission is working in partnership with YF on a number of projects that support the delivery of the RES, and in particular that seek to address issues concerning climate change and flooding. This includes the development of a region wide Forestry and Flooding programme that aims to utilise targeted woodland creation to reduce flood risk to protect the regions economic assets. YF have also been a key partner in the delivery of tourism developments at Dalby Forest, including supporting the new Visitor Centre, which won the 2007 Prime Minister's Better Public Building Award.
In Yorkshire and the Humber, Jobcentre Plus has modernised the network of 59 Jobcentre Plus offices providing a professional service, centralised benefit processing in eight sites and membership of virtual contact centre network. Jobcentre Plus is working closely with Yorkshire Forward on a number of issues that have a direct impact on the delivery of the RES. Jobcentre Plus has supported major developments in the region, in partnership with the Learning and Skills Council, through developing the Integrated Employment and Skills strategies. The combined focus on labour market intelligence has identified opportunities for sector specific joint working, helping to increase activity in growth employment areas, such as care. Jobcentre Plus is working with Yorkshire Forward on strategies in response to the economic downturn, leading on a Regional Operational Delivery Group which focuses on employment, job losses and future skills needs. Jobcentre Plus has also aligned activities to influence and retain the strong financial sector skills base which is so important for the future economy of the region.
The Yorkshire and The Humber Regional Skills Partnership (RSP) brings together key agencies and sectors in the region - to give collective leadership to the skills agenda in the region and to improve skills outcomes and productivity on a demand-led basis for the region, aligned with the Regional Economic Strategy. The RSP Board includes representatives from Yorkshire Forward, Learning and Skills Council, GOYH, Jobcentre Plus, local authority and employer representative groups. The RSP's priorities for this region are: getting into work; skilling up the workforce; growing our own; being more productive and understanding demand.
UK Trade and Investment (UKTI) - The Targeted Export Support Scheme (TESS) is designed to help companies in Yorkshire and the Humber access funding to help develop their export strategy, usually over a 6-12 month period. Any size company in the region can apply, but they must be working with a UK Trade & Investment International Trade Adviser to develop their export strategy. The main idea is to help to take an existing product/service to a new market or promote a new product/service into an existing export market. Funding for TESS is provided by Yorkshire Forward but it is delivered by the UKTI International Trade Advisers (who are based in Business Link Yorkshire). The three year project, which provides £6.9million funding, was approved in June 2008. Outputs include: businesses assisted, increase in export turnover (£m), jobs created and safeguarded and private sector investment (£m).
ANNEX B
Government Response to the Economic Downturn
Real Help for Yorkshire and the Humber
"Real Help for Yorkshire and Humber" was published on 9 April 2009. This sets out how Britain is taking decisive action to come through the global economic crisis sooner, stronger and fairer. It sets out the real help that is available to families and businesses in Yorkshire and the Humber and where to find it. The latest delivery update for "Real Help" is at Appendix 1.
Building Britain's Future - New Industry, New Jobs
"Building Britain's Future - New Industry, New Jobs" was published by BERR and DIUS on 20 April 2009. The strategy builds on the industrial activism principles and will reinforce Britain's existing strengths such as advanced engineering, electronics and biosciences.
"New Industry, New Jobs" acknowledges that the growth and success of British business is key to the UK's future prosperity, but that there is a role for government to ensure Britain retains and strengthens its competitive position in a rapidly changing global marketplace. In particular the strategy sets out how the Government will: • adapt and strengthen Britain's general competitiveness policies in critical areas like innovation, skills, finance, infrastructure and access to global markets • use its role and influence in the market in a new and more strategic way • use a new approach to targeted interventions to ensure that Britain continues to retain and develop strengths in high-value areas of global growth or rapid and fundamental technological change.
Key areas for immediate action include making sure high growth, high innovation firms get the financing they need, and more support for exporters by enhancing the role of UKTI and the ECGD
The Government believes that policies central to UK competitiveness, such as infrastructure, business finance and skills, are areas where the market can fail, or non-joined up government action can reduce business performance. So the strategy argues that "in future there should be no barriers of mindset that holds back sensible and prudent (government) intervention". RDAs have an important role in this.
In the current economic climate there are companies struggling to secure the finance they need, not because of any failure in their business but due to much tougher credit conditions.
Since the start of the year Government has introduced a range of measures to help increase liquidity and ease credit conditions for small and medium sized enterprises (SMEs). This is real help that is focused and funded. It is help that has only been made possible due to the fiscal stimulus offered by the Government in the PBR.
Real Help for Small and Medium Sized Enterprises Small firms can access real help through www.businesslink.gov.uk/realhelp (over 285,000 visits to date) or by contacting their local Business Link [47]adviser.
Enterprise Finance Guarantee Scheme (EFG) Government will provide £1bn of guarantees to support up to £1.3bn of bank lending to smaller firms. Working Capital Scheme
Government will provide banks with up to £10bn of guarantees covering 50% of the risk. This secures up to £20bn of working capital credit lines for companies, and frees up capital which the banks must use for new lending. SMEs do not apply for this scheme: instead banks will bring to Government portfolios of existing and new lending.
Capital for Enterprise Scheme
A new £75 million fund (£50 million of Government funding with £25 million from the private sector). Professional fund managers will provide equity investment that can be used to pay off existing debt to free up capital for day to day cash flow and for investment for the future for viable companies. Fund managers have received serious proposals seeking a total of £57m of investment and have already made the first offers of investment.
In the current economic climate, it is more important than ever that social enterprises have the support they need to survive. That is why Government is providing real help for all businesses, including the third sector. They too can benefit from Government's working capital and loan guarantees to secure more than £20 billion in bank lending, along with a range of other government support. Health Checks for Businesses SMEs can get a free review of their business with a professional business adviser, who can provide hands-on advice and help them access Government help. Since 23 October 2008 nearly 44,000 unique businesses have benefited from the Business Link 'Health Check'. Business Payment Support Service Businesses worried about being able to meet tax payments, including Income Tax, National Insurance, Corporation Tax and VAT, can call HMRC's Business Payment Support Service on 0845 302 1435. Up to April 26 over 116,000 agreements had been reached with businesses to spread tax payments worth over £2bn. The Business Payment Support Service offers viable businesses in temporary financial difficulty a streamlined service for arranging to pay their HMRC tax bill to an affordable timetable. In Yorkshire and the Humber, by 26 April 9,560 agreements had been reached with businesses to spread tax payments worth £163m.
The Chancellor of the Exchequer announced in Budget 2009 that this service would, from 22 April, be expanded so that where a business is likely to make a loss for the current year this would be taken into account as part of any rescheduling of its Income Tax or Corporation Tax payments on profits from a previous year. Businesses can take advantage of this enhanced service if: · they are genuinely unable to pay immediately or enter into a reasonable time to pay agreement; · the tax they owe is Corporation Tax or Income Tax on the previous year's profits; and · they are likely to make a trading loss in the current year.
Help with Managing Cash Flow Short guides on managing cash flow, are available at: www.businesslink.gov.uk/realhelp. Over 55,000 guides have been downloaded. Central Government has also committed to pay all bills within ten days at latest, to help businesses with cash flow, bringing forward an extra £8bn of payments on top of the £58bn already paid within 10 days. Government is encouraging businesses to agree to pay suppliers on time. So far over 150 organisations have signed up to the code. Businesses which have signed up to this can be viewed at: www.promptpaymentcode.org.uk
The code, developed with the Institute of Credit Management and supported by major business organisations, aims to establish a clear and consistent policy in the payment of business to business bills. Key elements include encouraging businesses to: · pay suppliers on time; · give clear guidance to suppliers; and · encourage good practice through their supply chains.
Real Help for Skills
It is vital that businesses continue to invest in skills, to survive the recession and prepare for the upturn. To support this, the Government has rescued and expanded apprenticeships; there will be over 250,000 starts nationally next year. It has increased the training support available to people who are unemployed: £158m for 40,000 extra places on employability programmes for those who are unemployed or under notice of redundancy; and £83m for 75,000 high quality training places for those claiming JSA for over 6 months to help them quickly back into sustainable employment. There is also continuing support through Train to Gain with £925m invested for 2009-10 and support just for small and medium sized enterprises. The latest information on skills in Yorkshire and the Humber is at Appendix 2.
Real Help with Training - Train to Gain and Business Link Free training is available for small businesses with the Train to Gain scheme, which was made more flexible in early January 2009 to make small firms a top priority for funds, helping SMEs continue training during the economic downturn.
A new service providing employers with easy access to free advice and support launched on 1 April 2009, as part of the Government's commitment to provide "Real Help Now" for business.
As part of the Government's Solutions for Business initiative, the Train to Gain skills brokerage service has come together with Business Link to provide a comprehensive information, diagnostic and brokerage service, making Business Link the main route to all government support for business.
Business Link will now be offering a joined-up service which aims to simplify access to information for employers and offers free, impartial advice to help them improve and grow their businesses, and encourage them to develop a more highly skilled and qualified workforce.
Performance of banks and other financial institutions in delivering on Government initiatives to stimulate lending to business
BERR, with the Bank of England, is collecting lending data for SME business customers from the five main banks; Lloyds, Barclays, HSBC, RBS and HBOS.
The picture has changed little from January; stock levels are holding up, but new lending has fallen when compared to 2007, although the level is stable when compared to January 2009.
There is clear falling demand, as indicated by a large decline in applications compared to 2007, and also a decrease in approvals. There has been a shift to overdrafts as businesses seek working capital, but importantly, there was a sharp reduction in the number of limits withdrawn or cancelled.
Margins on new borrowing (loans and overdrafts) have increased, but remain less than the reduction in Base Rate, so in general businesses are paying less.
Varying survey evidence shows only a minority of firms, between a fifth and a third, seek external finance. The latest BERR Barometer survey shows 19% of SME employers sought finance in the last six months.
The majority of SMEs (around two-thirds of those seeking finance) are still managing to raise at least some of the external finance they require. The BERR Barometer figure shows 64% managed to raise some finance from the first source they approached.
A number of UK lenders have announced increases in the availability of lending in the coming months. The Government has agreed lending commitments with Lloyds and RBS that will see Lloyds lend an additional £14bn, and RBS an additional £25bn, on commercial terms, over the 12 months from March 2009. These commitments are specific, quantified and legally binding. The Government will report annually to Parliament on the delivery of these commitments.
Other banks have also signalled increases in lending. The Bank of England's Credit Conditions Survey reported that a net balance of lenders expected to increase corporate credit availability over the next three months.
Regional Lending Roadshows
Ministerial events are being held with businesses, the banks and representative bodies in all regions over the next few weeks, focussed on what Government has done to get banks lending again, and the Real Help available for businesses facing the current economic downturn.
BERR and HMT are working closely with each RDA to deliver these events.
The Prime Minister is taking a keen interest in outcomes from these events and has asked for a report of each meeting.
Appendix 1
Delivery Update - 26 April 2009
Appendix 2
Evidence on skills in Yorkshire and the Humber
There have been significant improvements in performance in Yorkshire and the Humber in the skill levels achieved by both young people and adults, but the region still lags behind national performance.
16-18
Participation in learning has increased significantly in the region:
· Further education college student numbers increased by 3.1% in 07-08 (compared with 2.7% nationally) and by a further 5.8% in 08-09 to date · Schools participation is up by 6.5% in 08-09 · Participation in Entry to Employment programmes (specifically designed to address young people not engaged in employment, education or training - NEET - issues) increased by 13% in 07-08 (compared to 8.7% nationally) and 8% in 08-09 to date
Participation on apprenticeship programmes is a more mixed picture:
· There was a 5% increase in apprenticeship participation in 07-08 · There has been a 3% decrease in apprenticeship starts to date in 08-09 resulting in 7,800 starts compared to 8,040. This is directly related to the credit crunch and the reduction is lower than might have been expected were it not for planned interventions by Learning and Skills Council (LSC), Jobcentre Plus (JCP), Yorkshire Forward and local authorities
Achievement rates have increased across the board in the region:
· Success rates for students undertaking courses that last longer than 24 weeks increased in further education colleges by 2.6 percentage points to 78.0% in 2007-8. This is a faster increase than the national average of 1.8% but still leaves the region 1.2 percentage points below the national average of 79.2% · Apprenticeship success rates increased by 6 percentage points to 64% year on year and match national rates · Advanced apprenticeship success rates increased by 8 percentage points to 64% and are 3 percentage points above the national rate · The region has the highest added value of improvement between 16 and 19 with a 22.2% increase in attainment of level 2 qualifications between these ages
However:
· The start point for skills development is low and performance at age 16 in the region remains below national averages and the region has the lowest achievement of 5 GCSEs at A*-C including English and Maths of any region · The number of NEETs is the second highest in the country at 7.9% despite falling by 0.3 percentage points year on year · Achievement of level 2 qualifications at 19 with English and Maths is 6 percentage points below the national average · Achievement of level 3 qualifications at 19 is 5 percentage points below the national average
Adults
In order to improve skill levels in the region the LSC has focused its funding increasingly on programmes which enable adults to achieve full level 2 and full level 3 programmes and on skills for life. This has resulted in the significant changes in participation and achievement in the region:
· There were 32,900 Train to Gain starts in 2007-8 from a standing start in 06-07. This annual total has already been exceeded by period 9 of 2008-9 · There were 4,036 starts on adult apprenticeships in 2007-8. By period 9 of 2008-9 this figure had already been exceeded with 4,274 starts · Adult apprenticeships for 25+ began to be available for the first time in 2007-8 with 669 starts. By period 9 of 2008-9 this had increased hugely to 2,767 starts for a part year · 19,800 adults successfully completed a Train to Gain programme in 2007-8 · There has been a 40% increase in the participation in Skills for Life programmes with the participation target for the year of 6,900 having been exceeded by period 9.
Nevertheless skills challenges in the region remain significant:
· The percentage of the working age population qualified to level 4 in the region is 25.4 %. Nationally it is 30.2%. · The percentage of the working age population qualified to level 2 or above is 65.8% compared with 68.9% nationally
The major challenge of the last 12 months has clearly been the credit crunch and an 89% increase in JSA claimants over a 12 month period:
· The response to the challenge of integrated Employment and Skills is being co-ordinated by the Regional Economic Delivery Group · GOYH has formed a regional intelligence forum and JCP and Yorkshire Forward are working together to co-ordinate MI/intelligence on the economic downturn · A regional redundancy portal has been developed using the Yorkshire Forward website · An excellent and productive working relationship has been established between LSC and Jobcentre Plus on joint planning to respond to skills challenges · Clear 'offer' leaflets have been developed to help individuals, employers and intermediaries to source support · The Employability Skills Programme for JCP customers with literacy, language, numeracy and employability skills needs has supported 2,640 starts in 2008-9 · Contracts have been exchanged to establish a six months unemployed offer in local further education college · The region is piloting the 'Time to Train' offer which supports employers to release employees under notice or threat of redundancy to undertake training. £10million of European Social Fund (ESF) and Yorkshire Forward funds will provide a training allowance in place of wages · Contracts for £15m of ESF funded activity to enhance our regional response to redundancy have been issued
Changes in responsibility
Currently the lead responsibility for skills in the region resides with the Learning and Skills Council. After April 2010 the situation will be that adult skills will be the responsibility of the skills funding agency. Young people's skills will be the responsibility of the local authorities supported by the Young People's Learning Agency.
[1] Regional Development Agencies Act 1998 [2] Responsibilities inherited by RDAs in 1999 included administration of the Single Regeneration Budget, regeneration functions of the Rural Development Commission and English Partnerships, and regional coordination of inward investment [3] RDA Act 1998 section 7(1) [4] Guidance to RDAs on Regional Strategies (DTI 2005) [5] "Single pot" is funded by BERR, CLG, DIUS, DCMS, DEFRA, UKTI. [6] Letter from John Cross (BERR) to Trevor Shaw (YF) 29th December 2008. [7] PSA7 "Improve the economic performance of all English regions and reduce the gap in economic growth rates between regions". [8] Yorkshire Forward Corporate Plan 2008/11 was approved by the BERR Secretary of State in July 2008. This is currently being updated to take account of the economic downturn and to cover the period to 2012. [9] Cabinet Office; Department for Business, Enterprise & Regulatory Reform; Department for Children, Schools and Families; Department for Communities and Local Government; Department for Culture, Media and Sport; Department for Environment, Food and Rural Affairs; Department of Energy and Climate Change; Department for Work and Pensions; Department for Transport; Department of Health; Home Office; and Ministry of Justice [10] "Solutions for Business" is a simplified portfolio of business support making it easier for businesses to get help. YF set up the Y&H Business Support Partnership in April 2008 to give a strategic overview to implementing the business simplification programme in the region. [11] Power stations in Y&H provide nearly one fifth of the UK's total electricity supply. [12] Around one sixth of Y&H is at risk of flooding, and the region has the second highest number (325,362) of properties at risk from flooding in England, after London. The region was badly affected by flooding in 2000 and most recently in summer 2007. [13] In 2003, the RES introduced a climate change target. Current RES includes a target to reduce greenhouse gas emissions by 20-25% over 1990 baseline and a commitment to deliver a Climate Change Action Plan. [14] This has included setting up Carbon Action Yorkshire, Resource Efficiency Yorkshire and Future Energy Yorkshire, and using a range of European Funds. [15] DECC contributed £20,000 towards a study on the commercial structures and financial models capable of supporting a CCS transport network [16] The Centre for Low Carbon Futures will position the region to contribute to the global agenda of a low carbon economy, fostering excellence, enhancing research capability / capacity and enabling knowledge transfer to realise regional and national benefit [17] Regional chambers are designated by the SoS under the RDA Act 1998. Up until 31 March 2009, the Yorkshire and Humber Assembly was designated as regional chamber. From 1 April 2009, Local Government Yorkshire and Humber is designated as regional chamber. [18] Yorkshire Forward Report and Accounts 2007/8 [19] The Government Tasking Framework (BERR 2007) sets all RDAs a single growth objective derived from PSA7 (regional economic performance) and requires them to address improvements in the five drivers of productivity and apply two cross-cutting principles (sustainable development and economic opportunities for all) to all their activities [20] Yorkshire Forward Independent Performance Assessment (National Audit Office March 2007) http://www.nao.org.uk/publications/0607/yorkshire_forward.aspx [21] In 2008, Price Waterhouse Cooper (PWC) undertook an independent assessment of the effectiveness of each of the nine RDAs, and the RDA network as a whole. Its report was published on 31 March 2009 [22] RDA Accountability and Financial Framework (BERR October 2008) [23] Scrutiny reviews of the Rural Economy, Climate Change and Investment Planning were completed during 2008/9 [24] Scrutiny: RDA/RA Memorandum of Understanding 2007 [25] RDA Act 1998 section 7(1) (a) [26] Y&H GVA increased from £59.7b in 1999 to £87.4b in 2007 (Table 2.1 in Progress in the Region 2008) [27] http://www.nao.org.uk/publications/0607/yorkshire_forward.aspx pages 18-21 [28] Impact of RDA Spending National Report (PricewaterhouseCoopers for BERR, March 2009) [29] Price Waterhouse Cooper evaluated 33 Yorkshire Forward projects carried out in the period 2002/3-2006/7 (total value of which was approximately £750m or 62% of the total Yorkshire Forward spend during that time) [30] Projects where PWC found that YF provided "Strategic Added Value" include Holbeck Urban Village Project in Leeds, E-Business Unlimited; Renaissance Towns and Cities, and providing help to businesses affected by the 2007 floods (PricewaterhouseCoopers for BERR, March 2009) [31] Progress in the Region 2008 Tables 2.6 and 2.11 [32] Job Centre Plus Data taken from HR1s and RRS1 information [33] Seasonally adjusted Job Seekers Allowance claimant count in February 2009 [34] Insolvency Service HR1 data [35] The Yorkshire and Humber Economic Delivery Group (EDG) is made up of the region's key public sector agencies together with private sector representation through the Confederation of British Industry and Federation of Small Businesses. The EDG seeks to assess and monitor the performance of the regional economy during the recession. It has identified three key strands against which to measure the impact of intervention by the region's public sector agencies including Yorkshire Forward [36] "Real Help for Yorkshire and the Humber" (April 2009) is a one-stop guide for people and businesses to all sources of Government help available during the economic downturn [37] Lord Mandelson's statement to Parliament 31 March 2009 - Impact of RDA Spending National Report (PricewaterhouseCoopers for BERR, March 2009) [38] Review of sub-national economic development and regeneration (HMT / BERR / CLG July 2007) [39] Government Response to Public Consultation (CLG / BERR 25 November 2008) [40] Economic Prosperity Boards and Multi Area Agreements [41] Local Democracy, Economic Development and Construction Bill 2008 [42] See http://www.communities.gov.uk/citiesandregions/thesubnationalreview/takingforwardsnr/ [43] Policy Document on Regional Strategies (CLG January 2009) [44] Innovation, Skills, Enterprise, Investment and Competition [45] Including Strategic Environmental Assessment (Environmental Assessment of Plans and Programmes Regulations 2004) and assessment under the Habitat Regulations 2007 [46] The HCA has brought together all the activities of English Partnerships and the Academy for Sustainable Communities, the investment functions of the Housing Corporation, and the delivery responsibility of most of CLG's growth and renewal programmes. [47]Business Link is a national service, managed regionally and delivered locally. In 2005 the funding and management of the Business Link service locally was devolved by BERR to the Regional Development Agencies. Each RDA contracts delivery of the Business Link service in its region to one or more Business Link Providers, which operate the service under license.
The Business Link service is delivered in the English regions as part of each RDA's Regional Economic Strategy. RDAs proactively provide additional services and support for priority sectors and under-represented groups in their regions, some of which are offered under the Business Link brand.
HMRC is responsible for managing the Business Link national website - www.businesslink.gov.uk - the operation of which is outsourced to an external service provider, SERCO. Each region operates a regional version of the Business Link website, supplemented with content from the region on the guidance and business support available locally.
The role of Business Link is to help customers identify support from both the public and private sector. By understanding customers' needs, they can direct them to the available support, helping them to select the most appropriate solutions to meet their needs. As Business Link does not deliver solutions itself, they can only advise on what is available in the market at any one time. However, the market is constantly changing with new products and services being launched to help businesses through the current economic downturn.
Business Link provides access to help and advice for businesses that wish to manage their growth or deal with a business difficulty. This will include offering businesses free personalised "Health Checks" to identify problems early and survive the current financial climate, and using qualified experts to help firms draw-up business action plans. In addition, Business Link users will be given free guidance, produced by the Institute of Credit Management, providing expert financial information to help safe guard their businesses.
Business Link - key statistics
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