Written evidence from the University of
Surrey and Surrey Research Park
EXECUTIVE SUMMARY
The functions of the new Local Enterprise Partnerships
(LEPs) and ensuring value for money
The University of Surrey and its Surrey Research
Park firmly supports the creation of a business led LEP that would
cover the whole County of Surrey or a functional economic area
(such as Surrey and North West Hampshire). The LEP should provide
the skills and resources required to effectively support and develop
existing strong innovation and enterprise partnerships in this
important economic region.
The LEP would have a major role in helping to
secure funding for established partners who already drive the
regions economy as well funding for physical infrastructure needed
to support the new innovation and enterprise partnership and its
effective operation.
To ensure value for money, existing partners—who
have been collaborating successfully in the region—should
continue to work together to provide relevant business support
programmes but must avoid the cost of an overarching and expensive
strategic authority to manage the process. It is important that
the LEP provides a conduit to central government funding streams
which local partners can then target toward the most relevant
and high priority areas for investment.
One of the particular strengths that has emerged
at the centre of the location in which the University of Surrey
and its Research Park operate is in space and satellite technology.
It is suggested that any LEP for our area should play an active
role in linking across to Harwell where a hub and spoke grouping
in this technology is to be located. One of the roles of the LEP
would be to support SMEs involved in the downstream use of space
technology.
The other important activity that has emerged
in Guildford is in computer games, digital media and synthetic
environments.
The Regional Growth Fund and funding arrangements
under the LEP system
The University of Surrey and Surrey Research
Park agrees with the need to re-balance the economic activities
in the country but it also recognises that this already happens
because a substantial portion of the business rates collected
in the SE of the UK are used to reduce regional imbalances. Experience
has shown that this can result in neglect of the infrastructure
that serves towns such as Guildford and that this is damaging
the local economy.
To overcome this it is suggested that a substantial
portion of the regional growth fund should be allocated to local
organisations (such as the LEP) which can allocate secure funding
to meet local needs through a bidding process. This should be
measured, not only by the prevailing economic conditions in the
whole region, but by the potential of improving economic performance
and investment. This fund should be responsive to local conditions
where appropriate and enable sub-national economic development
by enabling councils and business to replace the existing Regional
Development Agencies.
Government proposals for ensuring co-ordination
of roles between LEPs
It is suggested that each LEP has a Board comprising
volunteers from partners and is chaired on a voluntary basis by
a leader from the private sector. LEP partners should include:
knowledge generators (universities, research hospitals,
government and corporate research facilities; sector consortia
that represent businesses that deliver particular sectorial
strength in a locality, organisations involved in supporting
innovative businesses such as science and technology parks,
local authorities through their local economic partnerships,
and wider economic partnerships such as the Surrey Economic
Partnership.
Clearly this arrangement will create a number
of such partnerships which will have local interests ranging from
the views of residents to those of businesses that will need to
be reconciled with national policies. It is therefore suggested
that each LEP creates its own economic strategy but with a requirement
for each to work with its neighbouring partners and create
investment strategies that are co-ordinated between neighbours.
There may be a strong case for looking to strong,
existing Economic Partnerships—which have private sector
engagement—to take an active role in the co-ordination of
LEPs.
Arrangements for co-ordinating regional economic
strategy
Once national strategies associated with meeting
these challenges are created they must be delivered by LEPs which
have the freedom to develop coherent delivery plans through effective
innovation and enterprise programmes. Funding would then be bid
based.
Structure and accountability of LEPs
Many existing governance structures have been
established and operated that are accountable to their partners.
There should be no centrally imposed template as sticking to a
rigid and inflexible structure could miss particular local factors
that may be effective in delivering success.
However, as an example of a possible structure,
it is suggested that a Partnership based Steering Committee is
set up for each LEP. This would engage strategic partners which
could then appoint a Management Board operating as a company Limited
by Guarantee.
All involvement would be on a voluntary basis
but the Executive of the LEP would need some limited funding.
The legislative framework and timetable for converting
RDAs to LEPs, the transitional arrangements, and the arrangements
for residual spending and liability of RDAs
Commenting on the legislative framework for
this change is not a matter on which the University of Surrey
has a view; however, it does believe that it is essential to establish
a new structure before the existing regional structures are dismantled
in order to allow existing valued organisations to continue to
support innovation and enterprise.
Lack of continuity in the social, technology
and business environment would be bad for business and needs to
be avoided.
Means of procuring funding from outside bodies
(including EU funding) under the new arrangements
It is suggested that the EU and the UK's Technology
Strategy Board (TSB) collaborate to work on creating effective
funding routes for supporting priority areas of scientific and
engineering work which are important to regional development.
Representation from the Surrey Research Park, University
of Surrey, Guildford, Guildford
Dr Malcolm Parry OBE, CBiol, MSB, PGCertEd
Director, Surrey Research Park
Mr Keith Robson BSc Hons, MIOD, MIET, CEng
Director, Research & Enterprise Support
The functions of the new Local Enterprise Partnerships
(LEP)
In responding to this question it is essential
to first ask whether the activities of an LEP are essential to
meet government priorities?
The answer is an unqualified "yes".
The experience of the last 20 years suggests
for example that:
— Global competition from well organised
countries which recognise the importance of developing the knowledge
economy, has become ferocious and the UK must compete in these
markets. The UK cannot afford to fragment and dissipate momentum
in its knowledge economy and the strategies that support this.
— The cost of R&D is increasing and
there needs to be collaboration and open innovation to increase
performance: this needs co-ordination to exploit and leverage
local facilities.
— There has been a need for a number of
new technologies to be developed to meet competitive challenges
in a number of technologies which require partnership between
the public and private sectors.
The experience of the University of Surrey and
its Surrey Research Park suggest that the functions of the new
Local Enterprise Partnerships should include the following:
— Creating a business led partnership,
which covers either the County of Surrey or a functional economic
area which also includes with Surrey some of NW Hampshire, that
can provide the skills and resources which can be used to support
an area innovation and enterprise partnership.
— To take a leading role in supporting
these partners in securing additional funding, that extends over
existing partners resources, in order to support an innovation
and enterprise partnership.
— To take a role in securing funding that
is necessary for physical infrastructure to support an innovation
and enterprise partnership.
— To promote to government the needs of
those organisations that are active in developing the innovation
and enterprise partnership and to support those organisations
that are the target for this partnership.
It is suggested that the University of Surrey
and its Surrey Research Park are an important part of the LEP.
The University of Surrey has a long tradition
of working with industry and business. The first initiatives were
through its industrial professional training year programme and
its R&D activities that date back over 40 years.
In 1981 this connection with commerce was substantially
strengthened when the University launched plans for the development
of the Surrey Research Park. The objectives for the Park were
to:
— Raise the profile of the University as
a centre of excellence with strong links with business.
— Support technology transfer.
— Creating some independent income for
the University of Surrey.
— Supporting economic development in the
region.
— Helping European Centred Industry maintain
a competitive advantage.
The University has, in good measure, been successful
in addressing all of these objectives. To do this it has committed
over £50 million of its own private funds to create the Park
with its wide range of facilities.
However, it has always worked in concert with
Central Government programmes such as KTPs, KTA, KTNs, HEIF funding
and more latterly programmes from its RDA (SEEDA) to support both
the University and ensure that the Park plays a positive role
to:
— Provide an effective role in the regional
innovation system.
— Provide locally organised support for
technology based start up and spin out companies which include
providing mentoring, high growth coaching, and support for gaining
access to funding for these and other technology companies that
have the potential for high growth and global reach.
— Deliver successful commercialisation
of science and technology. The catchment area for the companies
attracted to the Research Park is global with facilities on site
from Japan, Finland, France, US, Singapore and many others. The
catchment area for the University's contacts with industry, commerce
and business is therefore global with connections in all European
countries the Middle East (Western Asia), the Asia Pacific Region
and North and South America.
However, 80% of the companies on the sites are
from an area that encompasses Gatwick to Reading and from South
London to Portsmouth and takes in centres such as the QinetiQ
facility in Farnborough as well as corporate R&D facilities
throughout this region. This region has the potential for establishing
an LEP centred in Guildford on the Surrey Research Park.
— Link innovative companies—small,
medium and large—in a Regional "community of innovation"
which stretches across the companies in the area from Oxford,
Reading to Basingstoke, and across to Gatwick and from Kingston
to Portsmouth in the north -south direction.
— Attract foreign direct investment to
the UK.
It is also important to recognise that today
the University of Surrey is still committed to achieving these
objectives; however, the context in which these are being pursued
has moved from a local focus to a much wider international horizon.
This is because economic conditions have spread to embrace the
global economy as technology businesses have been driven towards
this wider arrangement.
Part of this process has been to help business
make an international contribution to the UK economy by taking
opportunities to export but it has also helped to:
— Attract skills from abroad (Mitsubishi
Research).
— Attract technology to the region by foreign
companies (EADS Astrium).
— Develop strong local technology businesses
that fit into international supply chains (IDBS, Reneuron, TMO
Renewables, Sting Ray, Lionhead Studios, Thompson Ecology, SSTL
and EAUK are all examples of companies that find their main markets
overseas).
— Provide a strong market for well qualified
staff and technology which together help to strengthen the innovation
capacity in the locality.
— Attract business capital to the locality.
— Attract equity finance to the area. There
are numerous examples of this including VC support for the flotation
of Detica—now owned by BAE systems which has taken the company
private again. Other examples of M&A of local innovative companies
include Microsoft (which owns Lionhead Studios), EAUK (which acquired
Criterion Software and Bullfrog) and there has also been significant
investment of equity finance into many of the companies in the
Surrey Technology Centre).
Some of the business functions that supported
these factors are derived from businesses themselves; however,
there is good evidence of the value and success from operations:
— Such as the now closed Surrey Enterprise
Hub which operated from 2002 to 2009.
— Including the current operational North
East Hampshire Innovation and Growth Team.
— As well as the activities of the Surrey
Research Park which has been operating since 1985 and the SET
Squared operation which it accommodates, which has demonstrated
that there are: good returns in terms of company formation and
growth; technology transfer; helping European centred businesses
gain and retain a competitive advantage; internationalising business
and supporting innovation and enterprise which have been helped
by local networks that combine entrepreneurial flair, skills that
enable companies to absorb new ideas and provide innovation capacity;
and helping companies gain access to markets and business support.
Delivering these returns has involved the University's
Surrey Research Park in providing a combination of:
— Physical facilities for pre and full
incubation.
— Grow on space for successful companies.
— Having a soft landing location for international
businesses.
— Offering a location to companies that
is geared up to support company development and is close to sources
of technology and skills.
— Creating support programmes and adjusting
the skills being developed through the University's teaching and
research programmes.
— Creating relevant networks between companies
that include start-ups and scalable micros, those which are small
to medium in size, medium sized and large companies (measured
by turnover).
Those areas which are most effective are where
the linkages between knowledge generation, ie, capacity for creating
new ideas, higher education institutions, public sector research
organisations and corporate R&D, innovation capacity in the
form of the capacity for commercialising ideas, new product development
units, SMEs, and major corporates, the capacity to absorb and
utilise these outputs by the private sector, and from this delivering
outputs in the way of products and services, are in place and
functioning effectively.
Not all localities/regions are the same which
means that the remit for each LEP needs to vary according to their
particular characteristics.
It is suggested that in Surrey this is led by
the Surrey Economic Partnership of which the University of Surrey
and its Surrey Research Park are active and effective partners.
Local Authorities cannot be isolated from this
interplay as so much in the way of creating the necessary social,
business and technology environment relies on their support through
planning strategies, having policies that support the provision
of appropriate housing for those involved in the knowledge economy,
and supporting effective transport facilities among other key
roles.
In addition to the local connections it is important
that LEPs have a connection with Central Government to ensure
that it can influence strategic investments in important infrastructure
such as transport connections.
With these opportunities in mind it is suggested
that LEPs need to have a broad regional view if they are to be
effective and avoid local single issue groups restricting economic
development and growth.
It is suggested that an LEP for the economic
geographical area of NW Hampshire some areas of Berkshire and
the County of Surrey should be created. The function of this would
be to focus this in Guildford on the Surrey Research Park. This
site has already hosted successfully both the Surrey Enterprise
Hub and the NW Hampshire and Surrey Innovation and Growth Team
very successfully by not only providing accommodation but also
taking an active role in the governance of these organisations
to ensure they gain from the University of Surrey's active networks.
Ensuring value for money from an LEP
It is suggested that existing partners that
have been collaborating successfully in the region continue to
work together on through both a voluntary and funded arrangement
to continue to provide relevant business support programmes but
avoid the cost of an overarching expensive strategic authority
to manage the process.
There needs to be connection to central government
that enables these organisations to have access to central funding
streams to achieve targeted but relevant locally determined investment.
Examples of organisations already active in
these networks include the Surrey Economic Partnership, the universities
(Surrey and Royal Holloway) through their respective Research
and Enterprise Units and where they exist science and technology
parks such as the Surrey Research Park, local authority economic
development departments, and business based organisations such
as Chamber of Commerce, the IoD, sector consortia and most importantly
the Surrey Economic Partnership.
It is likely that this approach will enable
the services/activities to continue to be provided but at a lower
cost than under regional structures that are now being dismantled.
In addition this arrangement allows these services
and activities to be provided by local citizens and businesses
through partnership while still having access to central resources
which are important in the areas of:
— Access to finance, eg, Venture Capital
Funds.
The Regional Growth Fund and funding arrangements
under the LEP system
The current draft of the Consultation on the
Regional Growth Fund has a clear message which is a need to re-balance
the economic activities in the country. The University of Surrey
agrees with that principle but it also recognises that this already
happens because a substantial portion of the business rates collected
in the SE of the UK are used to reduce regional imbalances. Experience
has shown that while this is happening there has been some neglect
of the infrastructure that serves towns such as Guildford because
of lack of resources and that this is damaging the local economy.
It is therefore suggested that to overcome this
difficulty there is a substantial portion of the fund put into
a arrangement for which local organisations such as the LEP can
make bids to secure funding to meet local needs and that this
is not only measured by the prevailing economic conditions in
the whole region but by the potential of improving economic performance
and investment. This fund should be responsive to local conditions
where appropriate and enable sub-national economic development
by enabling councils and business to replace the existing Regional
Development Agencies.
Government proposals for ensuring co-ordination
of roles between different LEPs
It is suggested that each LEP has a Board comprising
volunteers from partners and is chaired on a voluntary basis by
a leader from the private sector. Where LEPs are established partners
should include: knowledge generators which include universities,
research hospitals, government and corporate research facilities;
sector consortia that represent businesses that make up sectorial
strength in a locality, organisations involved in supporting innovative
businesses such as science and technology parks, local authorities
through their local economic partnerships, and wider economic
partnerships such as the Surrey Economic Partnership.
Clearly this arrangement will create a number
of such partnerships which will have local interests ranging from
the views of residents to those of businesses to reconcile with
national policies. It is suggested that each LEP creates its own
economic strategy but with a requirement for each to work with
its neighbouring partners to create strategic investment strategies
that can be co-ordinated between neighbours.
There may be a strong case for looking to strong
existing Economic Partnerships which have private sector engagement
may take an active role in the co-ordination of LEPs.
Arrangements for co-ordinating regional economic
strategy
Despite a wide variation in the economic performance
of different parts of the UK there seems to be an overriding need
for the UK to continue to work to improve its economic performance.
Clearly the extent of what needs to be done to achieve this will
vary across different parts of the country but it is suggested
that there are a number of national strategies which need to be
supported to encourage the process.
This perspective is endorsed by the views in
the report Ingenious Britain—making the UK the leading high
tech exporter in Europe.
These challenges noted in this document include:
— Culture: Developing high esteem for science
and engineering.
— Education: Getting young people excited
about science and engineering.
— Exploiting Knowledge: Collaboration,
not competition, between universities, companies and not-for-profits.
— Financing High Tech Start-ups: Turning
good ideas into world beating products.
— Supporting High Tech Companies: Creating
the right conditions for R&D investment.
It is suggested that national strategies associated
with meeting these challenges are created and then these are delivered
by LEPs that can develop delivery plans for these in relation
to innovation and enterprise programmes. Funding would then be
bid based.
Structure and accountability of LEPs
Many existing governance structures have been
established and operated that are accountable to their partners.
It is suggested that there is no national template as sticking
to a rigid structure would in some cases miss local factors that
may be effective in delivering success.
However, an example of a structure it is suggested
that a Partnership based Steering Committee is set up for each
LEP that allows access for strategic partners which then appoints
a Management Board that operates as a company limited by Guarantee.
All involvement would be on a voluntary basis
but the Executive of the LEP would need some limited funding.
The legislative framework and timetable for converting
RDAs to LEPs, the transitional arrangements, and the arrangements
for residual spending and liability of RDAs
Commenting on the legislative framework for
this change is not a matter on which the University has a view;
however, it does have a view that it is important to establish
a new structure before the existing regional structures are dismantled.
Lack of continuity in the social, technology and business environment
is bad for business and needs to be avoided.
Means of procuring funding from outside bodies
(including EU funding) under the new arrangements
It is suggested that the EU and the UK's TSB
collaborate to work on creating effective funding routes for supporting
priority areas of scientific and engineering work which are important
to regional development.
3 August 2010
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