Written evidence from One Nucleus Ltd
I am writing as Chief Executive of One Nucleus
in response to the request for evidence for the Select Committee
Enquiry into Local Enterprise Partnerships (LEPs). One Nucleus
is a not-for-profit membership organisation with over 500 members
in the life science and healthcare sector. We are proud to be
based in Cambridge and London (a true supercluster with international
reach). I am very keen to have input into this enquiry.
Specifically:
THE FUNCTIONS
OF THE
NEW LEPS
While businesses welcome the opportunity to
work closely with the Government in public-private partnership,
many, particularly the large multinational companies, are concerned
about the motivation for businesses to engage at this level of
Local Authorities. The health and life sciences sector is global
and even micro businesses in our sector have to think and operate
globally and seek to engage at a level of Government, both national
and international commensurate with that agenda. It is therefore
hard to pinpoint the benefits of them engaging with an LEP. Clarity
is needed on this. The majority of our small businesses are tenants
of incubator or science park facilities—issues such as planning,
transport etc (that the LEPs are well placed to address) are therefore
of little relevance to their individual businesses.
In addition I am concerned about the appropriateness
of LEPs to deliver the innovation and growth agendas. The Technology
Strategy Board (TSB) has the credibility among businesses as a
central body to oversee this, however it does not have the granular
knowledge or capacity to deliver effectively at a local level,
which has traditionally resided within the Regional Development
Agencies. I do not believe the LEPs can deliver these agendas
to companies, lacking, as they will be, in sector knowledge and
company intelligence. An alternative structure, housing those
who are closely acquainted with the companies and their sectoral
needs, may well be needed to deliver this agenda.
One Nucleus therefore seeks clarity on how (and
why) its members will support and engage with the LEP responsibility
for economic growth of our businesses in a meaningful way, bearing
in mind their own global outlook and objectives. I also urge consideration
of the TSB as a central body to oversee innovation and growth,
with locally engaged sector experts able to deliver this through
the most effective structure.
GEOGRAPHIC BIAS
The majority of One Nucleus members are based
in the East of England and London. These regions, together with
the South East, are home to around 80% of the UK's health and
life science companies. Indeed, the majority of therapeutic products
in the clinic were discovered and developed in the Greater South
East. I cannot emphasise enough how crucial it will be that innovation
products and services, including the Regional Growth Fund, are
allocated on the basis of excellence, rather than geography and/or
levels of deprivation. Backing winners is surely the most appropriate
approach in these tough economic times. The Greater South East
cluster is one of the UK's leading engines for economic growth
and hence geographical bias in favour of the northern regions
will seriously compromise the potential of the national health
and life sciences sector if the excellence in the Greater South
East is not adequately supported. The Budget announcement of the
national insurance contribution holiday is one example of clear
discrimination against start-ups in the Greater South East—to
block the pipeline of these early stage companies will dangerously
compromise the national engine for economic growth of health and
life sciences.
One Nucleus therefore strongly urges objective
and independent allocation of national funds to the successful
clusters across the UK where there is critical mass to drive economic
growth
FUNDING ARRANGEMENTS
UNDER THE
LEP SYSTEM
I urge the Committee to consider the critical
need of sector-specific intelligence driving the decision-making
process for this fund. LEPs will need to harness the local, regional
and possibly national sector literacy and understanding to enable
them to respond appropriately and objectively to their different
sector priorities. It is impractical for me to suggest that LEPs
should have the in-depth sector specific knowledge themselves—what
will be vital for their credibility with the sector will be to
engage fully with and have systems in place to engage meaningfully
with specialists.
One Nucleus therefore suggests LEPs take advice
from, and are closely engaged with sector specialists who are
best placed to support the enhanced growth of local sector strengths
and permit an objective appreciation of, and support for functional
economic areas of national excellence.
COORDINATION OF
ROLE BETWEEN
LEPS
A major concern for our members is how the Government
will ensure the effective local delivery of national innovation
functions and products. Embedding the delivery of such activities
within the context of the economic development agenda has been
broadly welcomed by the businesses and they urge the Government
to ensure there is connectivity between these various activities.
Nothing frustrates One Nucleus members more than fragmentation.
They have neither the resource nor the time to wade through potential
"mind spaghetti" (as one member described the potential
scenario). There is a very real concern that there will be less
clarity about delivery of activity rather than more.
It is also very clear that investment in infrastructure
or local initiatives to promote growth and innovation (such as
through a science park, incubator or shared capital equipment)
must be based on a sound knowledge of the needs of business in
that area. It is therefore critical that these activities are
aligned and integrated, and guidance is needed on how this will
work where more than one LEP is involved with a particular cluster.
One Nucleus therefore urges the Committee to
consider how the economic development role of LEPs will effectively
align with the local knowledge of delivery of innovation products
and services.
MEANS OF
PROCURING FUNDING
The EU is likely to be an important source of
funding for economic development activities. One Nucleus is a
leading partner in two major EU projects and a number of our member
SMEs have received funding through the Framework VII instrument.
I am unclear, however, on how the LEP structure will permit access
to EU funding when a number of the instruments call for a regional
Government partner. Where, as in the Greater South East, the sector
cluster is likely to be shared across a number of LEPS, a sub
national structure will be needed to allow bidding to these funds.
One Nucleus is therefore concerned as to how
the LEP structure will permit eligibility for, and effective use
of, these funds and urges the Committee to consider this in their
enquiry.
Thank you for the opportunity to submit evidence
at this important time. If it would be of value to the Committee
for me to submit oral evidence I would be delighted to do so.
6 August 2010
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