Written evidence from South East Economic
Partnerships (SEEP)
INTRODUCTION
South East Economic Partnerships (SEEP) has
pleasure in responding with written evidence in connection with
the inquiry by the Business Innovation and Skills Committee into
the proposed New Local Enterprise Partnerships (LEPs).
WHO IS
SEEP?
SEEP is a network of Economic Partnerships (EPs)
that exist in the South East of England. Of crucial importance
is that without exception each EP has a Chair from the private
sector and a Board of Directors that include directors of individual
businesses and business representative organisations as well as
senior representation from Local Authorities, Universities and
Voluntary, Community and Faith Sectors. However unlike business
representative organisations EPs are not focused on particular
companies that are members of those organisations—EPs embrace
large companies as well as SME businesses in their respective
areas regardless of sectors.
EPs have played a key role over the years in engaging
with business and local authorities and whilst certain Local Authorities
do engage with the private sector successfully many businesses
prefer working in conjunction with Local Authorities through the
EPs. EPs are not restricted to council administrative boundaries,
developing and participating in cross-regional initiatives. Indeed
there are many examples of EPs facilitating joint County Council
initiatives—the Gatwick Diamond initiative for instance
was initiated by the EPs in Surrey and West Sussex in conjunction
with the local business community.
Many EPs in the South East are playing a leading
role in preparing proposals which will be submitted by 6th September
on the formation of LEPs. It is pertinent to mention that the
EPs already have strong direct senior level business engagement
with SMEs and large companies. In many instances EPs have been
asked by organisations such as the CBI, IOD and Chambers to act
as the lead organisation with Local Authority partners with respect
to LEP formulation.
As EPs are partially funded by Local Authorities
they are seen as the natural catalysts for engaging with the private
and public sectors.
FUNCTIONS OF
THE NEW
LEPS
The number one priority for LEPs must be to facilitate
strong economic growth and employment. This is reflected in submissions
from busines support organisations stating that the over-arching
objective of LEPs should be to provide an environment in which
wealth creation/economic development can flourish.
SEEP strongly supports this aim as it does supporting
the aim to have a more balanced economy so that the UK is less
dependant on financial services and the public sector but also
between regions.
However this should not be at the expense of assuming
that the South East needs negligible assistance. The area covered
by SEEP is relatively prosperous but it is worth emphasising that
there are places in the South East where conditions for business
growth are poor, for example in the Thanet area as well as the
Isle of Wight. Also there are places in the South East which have
highly vulnerable local economies viz. Hastings which is linked
to public sector employment and Portsmouth that is linked to the
naval base. Accordingly well targeted investment is crucial if
the area is to improve its overall competitiveness compared with
other regions in Europe and elsewhere in the world.
The South East England Councils (SEEC) has recently
emphasised to the Government the importance of continuing to "invest
in success" by supporting business in the South East. SEEP
strongly supports this approach so that the area can improve its
global competitiveness position thus adding to the country's GDP.
Multi-national companies think and act in a
global manner and the loss of a major company would not only impact
employees of that company but the many hundreds of SME businesses
that supply goods and services to that large company. The area's
loss is Europe's or the Far East's gain.
London and the South East has been slipping
on a global competitiveness basis in recent years as indicated
below:
— The top ten regions in the world are
all either in the US (1st place being held by San Jose-Sunnyvale-Santa
Clara) or Sweden (Stockholm = 6th) and Japan (Tokyo = 9th).
— The South East ranks 74th (it was 55th
in 2005 and 51st in 2002).
— London is ranked 102nd in 2008 (it was
56th in 2005 and 50th in 2002).
Reversing this trend and ensuring that large
companies remain and SMEs flourish is fundamental and LEPs should
help this process.
If the UK is to reverse this trend then business
and local authorities must work together and engage in a really
meaningful way. Coordination between LEPs is critical and SEEP
is well established to facilitate this coordination, for example
through sharing best practice and addressing cross boundary issues.
At recent meetings attended by senior business
executives in Kent, Surrey and Hampshire the point was made that
LEPs provide a real opportunity for businesses to play a key role
in highlighting the needs of the area but that it would be quite
inappropriate for LEPs to be creatures of Local Authorities. Equally
the co-ordination between LEPs for sharing best practice and handling
cross LEP initiatives should not be left just to Local Authorities.
LEPs should balance strategic and delivery roles.
Perhaps this will be something that will be decided by each LEP.
Again there is a debate on whether LEPs should take on certain
functions currently handled by the RDAs that perhaps could be
handled at a sub-regional level. SEEP believes that LEPs should
be involved in an element of delivery.
It would appear that certain activities such
as Inward Investment, Sector Leadership and Business Support will
be handled at a national level but consideration needs to be given
as to how LEPs can identify local business needs. Certainly LEPs
could provide such services as after care support through Investor
Development Managers where there is direct contact with companies
in the respective sub-region. EPs have direct experience of providing
this capability across the South East.
There needs generally to be capacity within
the LEPs to articulate the specific "selling points"
of the respective area and to engage with UKTI to handle any specific
inward investment enquiries.
It is expected that a practical approach will
be taken to what should happen at the national level and how this
is manifested at the local level. EPs currently work at both local
and national level with different industrial sectors such as aerospace
and defence, pharmaceuticals, environmental technologies, marine,
construction and media technology. SEEP currently co-ordinates
the interface with sector consortia across the South East for
the benefit of all EPs. This experience would be made available
to the LEPs.
There has been a significant activity recently
through the Local Economic Assessment in gaining an up to date
picture on a range of factors—economic, social and environmental—that
impact sustainable growth. It identifies the challenges and opportunities
for the local economy going forward and hence has relevance in
setting the vision for each LEP. SEEP would recommend that the
LEA work is certainly retained and used by the LEPs.
The Government needs to give some leadership
and guidance so we look forward to some further clarification
following the publication of the expected White Paper on LEPs.
Related to growth is the issue of skills. Unless
businesses can access the appropriate skills at all levels then
they will be impacted in terms of their success. Much work has
been done with Employment and Skills Board which have been employer
lead and it is important that this work is integrated with LEPs.
THE REGIONAL
GROWTH FUND
AND FUNDING
ARRANGEMENTS UNDER
THE LEP SYSTEM
SEEP believes that the Regional Growth Fund should
be delivered through a single pot against bids that demonstrate
quantified economic benefits for the respective area.
SEEP would recommend that all LEPs prepare robust
business plans—the foundation for any company regardless
of size.
In reading the Consultation document there is
a clear emphasis on the encouragement of private sector enterprise
by providing support for projects with significant potential for
economic growth as well as the creation of sustainable private
sector growth. SEEP applauds this objective which should be a
key objective for the LEPs. Support for those areas that are currently
dependant on the public sector must also be addressed. There are
areas in the South East that are dependant on the public sector,
viz. Hastings, but there are others that are have a more balanced
economic structure.
In looking at the Regional Growth Fund to limit
the SE in terms of accessing that Fund for specific projects and
focus on deprived areas would not be constructive. SEEP would
strongly support the view of SEEC that the Government needs to
continue to invest in success as well as encouraging enterprise
in other regions in the UK with incentives.
As already stated the area covered by SEEP is
relatively prosperous but well targeted investment is crucial
if the area is to improve its overall competitiveness compared
with other regions in Europe and elsewhere in the world.
Projects that could be considered include formation
of hubs, clusters, infrastructure, transport improvements, research
parks etc.
The Board of any LEP, just like a trading company,
would wish to understand how core funding as well as project funding
would operate. All LEPs will have initial costs so to ensure that
businesses invest some clarity in this area will be needed. Certainly
some small amount of funding to cover initial costs would be required.
Businesses will only engage and commit resources and expertise
if they can see clear the commercial benefits. SEEP is in an ideal
position to help businesses and local authorities agree common
priorities and identify funding streams.
SEEP therefore recommends that LEPs are run
like businesses and that business plans are put in place on formation.
GOVERNMENT PROPOSALS
FOR ENSURING
CO -ORDINATION
OF ROLES
BETWEEN DIFFERENT
LEPS
Co-ordination on issues relating to economic growth
such as skills, innovation, infrastructure and transport that
are relevant across adjoining LEPs should be addressed by business
and Local Authorities working in tandem. As Local Authorities
are looking to share services so the newly created LEPs should
share best practice supported by a very small co-ordinating organisation.
SEEP exists to enable the EPs to share knowledge
and best practice, collaborate on common issues, work on initiatives
across administrative boundaries, provide a cross EP response
to issues of relevance across the network, to influence regional
economic policy and to interface with regional stakeholders such
as the CBI, EEF, IOD etc as well as the Diamonds group and SEEC.
SEEP is able to provide a wide business perspective to Local Authorities
in the South East.
Most if not all of these co-ordination activities
will be relevant across LEPs.
ARRANGEMENTS FOR
CO -ORDINATING
REGIONAL ECONOMIC
STRATEGY—STRUCTURE
AND ACCOUNTABILITY
OF LEPS
SEEP believes that on certain strategic issues
there is a need for some form of regional economic strategy. Examples
would include co-ordination of strategic transport corridors covering
road and rail links. Other infrastructure initiatives such as
broadband should also be included.
SEEP also believes that all LEPs should be governed
by a Board of business and Local Authority representatives split
50/50 with the Chair coming from the business community.
LEPs will be expected to provide strategic leadership
and vision and EPs are well placed to help in this process as
they are chaired by business people and their boards include many
senior executives and representatives of large and small companies.
It is this structure that has given the EPs credibility and support
from the business community.
EPs usually have a wide Partnership Board plus
an Executive Board. For example the EP in Surrey includes the
Directors of Businesses, the Leader and Chief Executive of the
County, District Council Executives, the Vice Chancellors of the
three Universities in the County and senior representation from
business representative organisations.
SEEP would expect that LEPs could follow a simpler
structure with just one Board supported by a small professional
executive team answerable to the Board of each LEP.
There is clearly a need for co-ordination to
provide an economic strategy that avoids creating a mini-RDA.
SEEP has the credibility already within the EP network to handle
economic intelligence and to help formulate a strategy by working
with the individual LEPs.
THE LEGISLATIVE
FRAMEWORK AND
TIMETABLE FOR
CONVERTING RDAS
TO LEPS,
THE TRANSITIONAL
ARRANGEMENTS, AND
THE ARRANGEMENTS
FOR RESIDUAL
SPENDING AND
LIABILITY OF
RDAS
The White Paper on LEPs to be issued soon should
set out the legislative framework for converting RDAs to LEPs.
SEEP believes that whilst there may be a case
for phased implementation once the White Paper has been issued
and the Public Bodies Bill enacted progress should be made in
forming LEPs subject to final confirmation from Government.
It is important that with the demise of the
RDAs the LEPs should shadow their respective RDAs, in order to
ensure that the knowledge developed over the years within RDAs
can be retained.
With regard to RDA assets and liabilities SEEP
believes that a centrally run national body should be established
to handle these issues.
MEANS OF
PROCURING FUNDING
FROM OUTSIDE
BODIES (INCLUDING
EU FUNDING) UNDER
THE NEW
ARRANGEMENTS
Several EPs have secured private sector funding
and sponsorship and have European Union funding for specific projects
suggested by and supported by business.
SUMMARY
SEEP enjoys the support of both local authorities
and the business community, can and does work across administrative
boundaries, provides a platform for sharing information and best
practice, interfaces with stakeholders such as the CBI, EEF, IOD,
ICAEW and FSB and can provide an economic perspective ranging
from addressing the needs and priorities of groups of local authorities
to identifying the needs of business, some of which can only be
addressed at a national level. SEEP believes that it is in a very
good position to assist the LEP process and provide value in terms
of economic growth.
APPENDIX
SEEP exists to enable the EPs to share knowledge
and best practice, collaborate on common issues, work on initiatives
across administrative boundaries, provide a cross EP response
to issues of relevance across the network, to influence regional
economic policy and to interface with regional stakeholders such
as the CBI, EEF, IOD etc. as well as the Diamonds group. SEEP
is able to provide a wide business perspective to SE Local Authorities.
The role of SEEP with regard to EPs is currently
as follows:
— Represent the collective views and interest
of all members of SEEP.
— Share best practice and ideas between
SRP's thus saving cost viz. the establishment of task groups lead
by the private sector, engagement with universities etc.
— Develop initiatives that benefit a number
of sub-regions.
— Agree priorities and be selective in
choosing which activities/initiatives to take forward concentrating
on a few things well done rather than to spread resources too
thinly.
— Facilitate contacts with key stakeholder
organisations for the EPs, disseminate information about possible
programme funding to support specific sub-regional priorities/projects.
— Disseminate and provide interpretation
of key information/policy developments etc from Government for
the EPs.
— Ensure that the bi-monthly meeting of
SEEP is relevant and meaningful for all parties that attend achieving
positive results.
— Draw on the expertise from the SEEP Executive
Group and provide endorsement for its recommendations.
— Be pro-active, have a professional image,
provide a collective voice and one point of contact and to promote
the role and expertise of its members.
— Provide a business perspective to Government.
12 August 2010
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