Written evidence from the Tensor plc
To start with you need to understand that most
of us in business and almost all of us in manufacturing feel pretty
disconnected with Government and disenfranchised. I am a past
CBI councilor and have been involved with countless Government
initiatives, all start with good intentions and fizzle out in
a bureaucratic mess. So I am not expecting too much here. I have
listed below the problem the UK faces and what we need to do.
THE PROBLEM
In the UK we have no cohesive game plan between
industry and Government on how we are going to grow the UK, especially
in manufacturing and technology. Its only going to work if it
becomes "team UK" based around a simple structure of
communications that business and Government understand. As it
currently stands, over the next 15 years
— UK manufacturing will decline because
we no longer have a strong manufacturing base, unlike Germany
and engineering (designing and making things) is not held up as
a worthwhile career in schools.
— China will stop being a piece parts manufacturer
and flood the UK with well designed and well made (the latter
they do now) end-used products denying us the product added-value
we can achieve now. They will also buy up innovative British companies
to steal the ideas and then dump them.
— India will move more slowly, but because
they are dealers/traders by nature will do the same as China on
services, especially software.
— The UK is tiny compared with the giants
of China and India. We do best fast-on-our-feet and innovative,
but we need cohesion.
The problem will be as we slowly come out of
recession (after the double dip) if other European countries,
the USA and the East get their act together quickly then we will
be squeezed.
You will notice I have not mentioned the Financial
sector or Services. That's because we have been half-good at that
in the past so that's not where the LEP's should concentrate their
work. The area that will come under attack will be software
with India selling end-user packaged systems, again denying us
added value. This will impact software exports as well and balance
of payments.
The major UK wealth creators are the mediums
sized businesses ("M's"). EU definition of an SME is
a business with less than:
— 250 full time employees.
These are approximate figures as they are Euro
based. As you can see the M's are not small companies, and there
are a lot of them. The problem is that as far as Government is
concerned they all get lumped together with the small companies
("S's") of which there are even more.
Big business in the UK is large enough to take
care of itself. It's the M's that need to grow to become global
with global alliances. Large companies can afford to do this themselves.
It doesn't generally affect small businesses.
Unfortunately, there is no cohesive organisation
around the M's can use to help them in this objective. We all
know, in broad terms, what we have to do but frankly haven't a
clue. If we succeed, it's often by luck. That has certainly been
the case with Tensor. What is needed is an organisation that can
bring together M's in a Club Atmosphere so that we can share best
practice and even capital/resources to reduce risk. The CBI should
be doing this but they are hopeless at a local level.
THE SOLUTION
A structure based on District Council ("DC")
areas could provide the backbone of LEP's that the M's need.
The functions of the new Local Enterprise Partnerships
and ensuring value for money
— To be the place where businesses, especially
M's and manufacturers share knowledge, experience and problems.
— A forum for business to determine what
they need from Government.
— The local MP must be involved. LEP's
will be the communications channel between business (especially
manufacturing M's) and Government. Include a few business dinners
for Managing Directors and CEO's, some in London where MP's and
Ministers can have informal private discussions with the wealth
creators and the Government can get its game plan across. You
need to get the people at the top involved.
— Policy/needs of business to decided at
regional level from consensus input from Local LEP's.
— Forge links with CBI, IoD for agreed
needs and objectives.
— The CBI is 100% funded by business and
run by businessmen. Keep the civil servant types to a minimum.
Needs to:
— Be inexpensive to run (volunteer local
businessmen).
— Be a Club atmosphere. Place where sharing
knowledge, ideas, business can flourish.
— Have Exports as a key theme.
— Emphasis on manufacturing.
— Remove bureaucrats and useless "has
beens".
— Refocus on what business needs.
— Cut expensive paper based communications/brochures.
All electronic, no nonsense and need driven.
— Controlled and financed by Local LEP.
— Weld Foreign Office ("FO")
activity to LEP needs to gain exports. FO needs to put the same
effort into exports as it does on spying and counter terrorism.
Its commercial war out there!
Structure and accountability of LEPs and ensuring
co-ordination of roles between different LEPs
— Each District Council area to have a
LEP with pressure on all businesses employing more than 50 people
to join. Could be initially funded by Government or the DC but
then self funded through subscription. Run by business for business.
The important thing is to keep it local.
— Local LEP's have seats on the regional
LEP, proportionate to number of businesses in the Local LEP. Policy
decided at regional level from consensus input from Local LEP's.
— All communications electronic. Use Internet
surveys/voting system to agree needs.
— Region LEP's determine regional economic
strategy.
The legislative framework and timetable for converting
RDAs to LEPs,
— Now. No time to loose, but please think
it through and set up some pilots if in doubt. You could start
by chopping any current RDA staff or projects that are not really
necessary. I am sure the CBI could give you some pointers.
— The key is to make sure that all business
employing 50 or more feel, and is, included and that LEP's are
extremely well covered on TV and radio. Tensor employs 130 people
and I heard of LEP's by chance over dinner with another CEO.
This submission is not politically correct and
not entirely thought through. However, it gives you a good idea
of what is needed from someone on the coalface.
20 August 2010
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