Written evidence from the Society of Motor
Manufacturers and Traders (SMMT)
ABOUT SMMT AND
CONTACT
1. The Society of Motor Manufacturers and
Traders (SMMT) is the leading trade association for the UK motor
industry, providing expert advice and information to its members
as well as to external organisations. It represents companies
throughout the automotive sector ranging from vehicle manufacturers,
component and material suppliers to power train providers and
design engineers. The motor industry is a crucial sector of the
UK economy, generating a manufacturing turnover of £51 billion,
contributing over 10% of the UK's total exports and supporting
around 800,000 jobs.
2. SMMT welcomes the opportunity to respond to
this inquiry and should further information be needed on any of
the comments included in this response please don't hesitate to
contact Jennifer Huckstep, Senior Policy Manager, SMMT on 020
7344 9221 or jhuckstep@smmt.co.uk.
INTRODUCTION
3. The UK motor industry is part of a highly
competitive global automotive industry. Many of the vehicle manufacturers
and component suppliers operating in the UK are multi-national
businesses, which seek consistent, accessible, supportive relationships
with governmental partners.
4. It will be important for Local Enterprise
Partnerships (LEPs) to work within a coherent national strategy
that seeks to encourage and support investment in UK manufacturing.
This should be consistent with the partnership approach being
forged between government and industry through the Automotive
Council.
5. SMMT member companies have developed
close working relationships with the existing Regional Development
Agency (RDA) structure. In the transition to LEPs it is imperative
that support for skills and training, collaborative working (such
as on R&D) and the benefits of a strategic understanding of
major industry is not lost.
6. SMMT has 500 members spread across the
UK. Many of those have sites in several regions. Their experiences
of RDAs is varied, however on the whole they are positive and
have supported the "regional" approaches to help bridge
the gap between the roles and responsibilities of central and
local government.
7. The work of the RDAs, such as One North
East, Advantage West Midlands or the North-West Development Agency
has been welcome. As government acts on the economic and political
need to improve value-for-money, increased local accountability
and leadership at all levels of government and in its agencies,
the positive activities RDAs undertake for business must not be
lost. As the roles and responsibilities of the new "local"
structure emerges, we support ensuring good-value, effective and
focused actions supporting businesses across the UK.
DELIVERING SUPPORT
8. RDAs original statutory purposes were
accurate and necessary:
— Further economic development and regeneration.
— Promote business efficiency, investment and
competitiveness.
— Enhance development and application of
skills relevant to employment.
— Contribute to sustainable development.
— It must be clear where these roles and
responsibilities sit in the new approach, and that industry can
identify how businesses of all sizes, some global, with multi-national
footprints will be able to access and engage. From inception the
RDAs gathered additional responsibilities and on some occasions
lost focus, this hindered their effectiveness and we would stress
the need to avoid this happening to LEPs.
9. Efficiency and value-for-money should
be core to LEPs. We recommend clear measurable metrics are set
by national government and applied equally. These will be invaluable
to ensuring continuous evaluation, monitoring and review.
10. The roles of Business Link, the Manufacturing
Advisory Service (MAS) and RDAs in supporting business have sometimes
been blurred and confusing. Some basic business support information
can be difficult to access, and sometimes critical information
on access to finance conflicting. The provision of a service to
help businesses with some basic forms of information could be
provided nationally to ensure consistency across the country as
the information does not differ by region. This would be cost-effective
too.
11. Sub-national bodies add real-value by
providing of business support for activities such as R&D,
they can also assist collaboration between key stakeholders, such
as business and universities, or research councils. SMMT members
have also benefited from close collaboration and funding between
RDAs and the Technology Strategy Board.
12. On helping deliver training and skills,
perhaps through funding, the fit of the RDA is less clear. We
will be responding directly to the government consultation on
skills policy. The skills landscape is complex, and also sometimes
difficult for business to engage with. Schemes such as train-to-gain
were welcome; as is government support for apprenticeships. Skills
policy implementation and business interaction is best placed
with a single-body for simplicity and also for cost-effectiveness.
SEMTA and the IMI are well-positioned experts for our sector.
13. LEPs will have a role in representing
and selling areas; and assisting UKTI in knowing why investors
may find certain areas the right place to make strategic investments
and in turn significantly benefit economies. How this interface
will work needs to be clear as it is will play a role in UK growth.
14. Our priority concern is that this good-work
in supporting business will be lost and the capability will not
be continued. This would be very damaging and potentially hinder
emergence from recession. In particular our members value:
— Facilitation—the work of RDAs in
bringing together stakeholders—for example academia and
business.
— Fora—regional opportunities to
discuss regional issues.
— Horizon scanning and identifying opportunities
ie perhaps in the future interaction with Regional Growth Funds.
— Best practice sharing ie business improvement
techniques.
— Low level emergency funding—although
slow to obtain was useful during the recent downturn and business
critical in some cases.
— Opportunity flagging ie government funding.
— Business advice and signposting.
— Regional showcasing and promotion ie
where there is excellence or skills in particular areas locally
then promoting this is well done by some RDAs and very beneficial
to business and regional economies (although we recommend UKTI
should be the main focus for national trade policy and investment
attraction—which must be co-ordinated properly across the
UK).
REGIONAL VS
LOCAL
15. In developing its plans for LEPs Government
must avoid unnecessary fragmentation. LEPs should work within
a coherent national strategy that seeks to encourage and support
investment in UK manufacturing. This should be consistent with
the partnership approach being forged between government and industry
through the Automotive Council. The Automotive Council was announced
on 12 November 2009 as part of the previous Government's response
to recommendations made in the industry-led report from the New
Automotive Innovation and Growth Team (NAIGT). Its main aims are
to enhance the attractiveness of the UK as a location for global
automotive investment, promote UK-based manufacturers and technologies
and strengthen the supply chain, and position the UK as a leading
global player in developing ultra-low carbon technologies.
16. Several SMMT members have highlighted
concerns over local politics hindering the working of LEPs and
the potential difficulties of LEPs working together. This may
lead to duplication or challenges in progressing the growth agenda.
We would suggest this risk is taken into consideration by national
government and monitored accordingly. Previous experience from
RDAs shows that there may be a risk of increased `turf wars' that
exist between local councils. A national approach and awareness
of local-political agendas must not impact on consistent delivery
for business.
17. It is important that the transition
to new arrangements does not undermine key projects or investments
which RDAs deliver for business, these need to be maintained and
not lost in the process of change. It should also be noted that
many RDA staff have excellent knowledge of their areas and are
an important resource.
18. We would insist that under any new regime
significant regional employers and investors should be invited
to be involved in the bodies. An example may be a local business
as chair of any new body. This would help avoid any disconnect
and the understanding of business needs and also LEP bids to the
Regional Growth Fund.
REGIONAL GROWTH
FUND
19. Although funding has been limited, we
have examples within the sector where RDAs have aided industry
with low-level targeted funding. Should regional growth funds
take over this role, industry would welcome the opportunity to
share experiences of accessing this funding.
20. We see LEP led bids and private sector
bids as essential. LEPs bids must be closely monitored and have
minimum local engagement criteria as well as regional to ensure
conflicting and competing, or even duplication does not occur.
This will be a slow and drawn-out process which is very challenging
and concerning during this critical stage in the economy and for
business as we emerge from the recession.
21. The importance of the fund to our sector
is accessibility and prioritisation. As we emerge from the recession
to ensure stable growth investment needs to be made in productive,
exporting sectors such as ours, which not only support significant
numbers of jobs but also add value and drive towards a low-carbon
economy.
22. The emergency budget announced significant
cuts in capital allowances, investment allowances and possible
changes to R&D incentives. As a sector which invests heavily
in R&D and sustaining advanced manufacturing, we would encourage
the fund to look at what works for business to encourage investment
whether it be in new equipment, up-skilling or R&D. At €20
billion, the automotive sector as Europe's largest investor in
R&D, a significant proportion of this is in the UK.
23. The fund needs to be flexible, accessible
and have minimal administrative burdens. We would recommend that
although it is regional, organisations such as national trade
associations are heavily consulted and communicated with to ensure
distribution to important sectors and businesses in their supply-chain.
It must work for all sizes of business too. Where money is spent,
for example on R&D there needs to be greater co-ordination
across regions and with national agendas. Any investment which
can be made to enhance the broader competiveness of industry is
valued. Recent criticism has been made of the UK performance in
the European Innovation Scoreboard. The criticism largely focuses
on our inability be joined-up and share knowledge. Targeted and
structured investment may help this.
24. Industry welcomes the Regional Growth
Fund and looks forward to the White Paper and helping government
shape what it looks like and what it does. SMMT is responding
directly to the Department for Business, Innovation and Skills
on their call for input on the regional growth fund.
CONCLUSION
25. In summary, industry looks for clarity
of where the roles and responsibilities currently undertaken by
RDAs will fit into the local agenda. Global automotive companies
need confirmation that the activities undertaken by LEPs will
be accessible, led by business needs and be supported by a national
framework, for example as set out by the Automotive Council in
our sector. In the transition away from the regional approach,
national government must ensure the roles and responsibilities
for activities which are supporting business across the UK are
sustained. Industry looks forward to Regional Growth Funds which
reflect the needs of sectors which support sustainable growth.
13 August 2010
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