Written evidence from Tourism South East
1. EXECUTIVE
SUMMARY
1.1 This submission to the Select Committee
Inquiry has been prepared by Tourism South East on behalf of businesses
engaged in the visitor economy in the South East and across the
country. Our views and recommendations take account of the Government's
desire to maximise the potential of tourism to lead economic recovery,
create jobs and take full advantage of the 2012 Olympic and Paralympic
Games. They are also informed by our discussions with emerging
Local Enterprise Partnership (LEP) candidates in the South East.
We hope they are useful in helping to inform the Select Committee's
thinking about LEPs and we would welcome the opportunity, if appropriate,
to give additional oral evidence to the Inquiry.
1.2 List of Recommendations
1.2.1 LEPs should consider the importance
of the visitor economy and make targeted interventions. In doing
so, LEPs should not waste public money by recreating existing
structures and programmes or needlessly duplicating effort across
administrative boundaries. Value for money should be ensured by
utilising sub-national structures to leverage support from the
private sector; achieving economies of scale, eliminating duplication,
providing sector specific expertise and ensuring coordination
across LEPs.
1.2.2 With over 90% of funding for Regional
Tourist Boards (RTBs) and Destination Management Organisations
(DMOs) ceasing from Regional Development Agencies (RDAs) in April
2011, urgent consideration should be given to utilising the Regional
Growth Fund to ensure that the transitional arrangements are put
in place so that the most effective parts of the existing support
structure does not disappear and the residual benefit to the visitor
economy is not diminished.
1.2.3 LEPs should engage with membership
based organisations that represent the visitor economy in order
to ensure that they are accountable to the thousands of businesses
in this broad and diverse sector; and leverage the commercial
funding stream derived from membership.
1.2.4 The new arrangements need to include
clarification about how the existing national strategies ie for
maximising the potential of the 2012 Olympic and Paralympic Games
that are currently based on a sub-national approach will be conducted.
1.2.5 Arrangements should be made to ensure
that there is a consistent approach to converting RDAs to LEPs
across the country.
1.2.6 Given the risk to the existing tourism
support structures that have been successful in securing funding
from the EU and other agencies clarification is sought about how
LEPs will be able to target external funding that is available
across geographic areas without duplicating effort.
2. ABOUT TOURISM
SOUTH EAST
2.2 Tourism South East is an entrepreneurial,
not for profit organisation that exists to maximise the potential
of the visitor economy in the South East—a sector generating
over £13 billion and representing 300,000 employees—around
6% of the workforce. It is a business led organisation with over
2,000 commercial sector members and over two thirds of local authorities
in the South East as stakeholders. It delivers a broad range of
services including marketing, training, research and business
support as well as having a lead strategic role.
2.3 Tourism South East works in alignment
with VisitBritain and VisitEngland to ensure dissemination of
national strategy and delivery at a local level. To secure full
engagement at the local level we facilitate six Area Tourism Partnerships
(ATPs), each of which is a private sector led group that determines
local priorities.
2.4 In addition to the executive directors
and the Chairman, Tourism South East's Management Board consists
of 16 non-executive directors, selected to represent the region
geographically, as well as the industry across all key sub-sectors
and sizes of business. Each of the chairs of the six ATPs has
a seat on the Tourism South East board to ensure local engagement
(see Appendix A for a full list of non-executive directors.).
2.5 Tourism South East receives core funding
from the Regional Development Agency (RDA). This is consistent
with the funding structure of other sub-national tourism support
bodies across England. In 2009-10, Tourism South East leveraged
the £2.1 million core grant from SEEDA into a turnover of
£5.3 million.
3. GENERAL COMMENTARY
3.1 We believe that it is vital that this
inquiry considers the needs of the visitor economy which is currently
worth an estimated £115 billion to the country.
3.2 A recent study commissioned by VisitBritain
and conducted by Deloitte and Oxford Economics found that the
visitor economy provides a £52 billion direct contribution
to the national economy and an additional £63 billion indirect
impact via businesses in the supply chain, supporting 1.36 million
jobs in 2009. Moreover, the study forecast that the visitor economy
could grow to make an £87 billion direct contribution by
2020 and, in so doing would generate 1.5 million jobs. However,
this forecast was predicated with the caveat that the potential
gains would be dependent on ongoing public sector support. In
addition, the Secretary of State for the Culture, Media and Sport
recently announced that the Coalition Government had ambitions
to increase the percentage of domestic visitors holidaying in
the UK from 36% to 50% and use tourism to lever maximum economic
advantage from the 2012 Olympic and Paralympic Games.
3.3 Over the past decade the RDAs, via (RTBs)
and (DMOs) (see appendix B for a full list) have played a crucial
role in developing and providing ongoing support to the visitor
economy across England. There are currently over thirty such organisations
receiving core funding from RDAs totalling £45 million. This
has enabled targeted interventions in the visitor economy, helping
to avert market failure and has leveraged in other public and
private sector engagement and revenue. Most of these organisations
have already undergone funding cuts in 2010-11 or have had expenditure
frozen. In addition, most have been told that their funding will
cease from April 2011 creating the potential for wholesale collapse
of the support system for the visitor economy, putting at risk
the achievement of the growth potential and creating a support
vacuum less than eighteen months before the 2012 Olympics when
the country will be welcoming the world.
3.4 The case for public sector intervention
in the visitor economy is made on the basis of addressing market
failure. The visitor economy is large and very diverse and typified
by small to medium sized businesses (SMEs) that span a range of
sub-sectors including accommodation, attractions, eateries, transport
providers, the creative industries, retail, agricultural and municipally
owned services. It also includes national organisations such as
English Heritage and the National Trust.
Such a structure means that it is impossible
for free market mechanisms to provide strategic leadership on
issues such as branding, promotion, raising quality, improving
skills and collecting rigorous research data. Without this leadership
there will be a duplication of effort in many areas and/or a dearth
of effort in others. In destinations that have successfully regenerated
their tourism product eg Brighton, Portsmouth, St. Ives, Newcastle/Gateshead,
and Liverpool's Albert Docks; strategic leadership and core funding
has come from the public sector.
At present the most successful model for visitor
economy support in England is a collaborative "bottom-up"
arrangement with membership structures and locally elected boards
who determine priorities. This ensures that locally appropriate
interventions and solutions are applied while the economies of
scale that can be achieved by a larger body are realised. Engaging
private sector members ensures that commercial funding is utilised
for support services and reduces the reliance on the public purse.
3.5 The visitor economy in England has benefited
from the European Regional Development Fund, the European Social
Fund and Rural Development Programme for England grant funding
in recent years. Generally this funding has been secured by tourism
support organisations such as RTBs, coordinating bids across administrative
boundaries. As much of this funding is dependent on the provision
of match funding from RDA sources this is another example of where
the economies of scale provided by such organisations are vital
to local visitor economies.
4. SPECIFIC ISSUES
FOR THE
INQUIRY
4.1 The functions of the new Local Enterprise
Partnerships and ensuring value for money
4.1.1 We were pleased to note that in their
recent letter to leaders and chief executives of local authorities,
the Secretaries of State for Business, Innovation and Skills,
and Communities and Local Government recognised the tourism sector
as a driver of local economies.
4.1.2 The visitor economy requires public
sector support to achieve its potential and ensure that market
failure does not occur to the detriment of local economies. Hence
support for the visitor economy should be a key consideration
for LEPs.
4.1.3 By ensuring targeted interventions
in the visitor economy LEPs can play a role in delivering national
policy and targets at the local level eg 2012 ambitions.
4.1.4 By making interventions in the visitor
economy, existing tourism support organisations have been able
to leverage in private engagement and funding for projects. Maintaining
public sector support for the visitor economy will provide a mechanism
to sustain the engagement of the private sector that would otherwise
be lost.
4.1.5 The current sub-national support structure
achieves economies of scale by cutting down on needless duplication
of effort and spending by local authorities and other local agencies
that participate in the visitor economy. Without sub-national
coordination experience suggests that in delivering a local agenda,
LEPs are likely to miss the opportunities for broader collaboration
resulting in the potential for substantial waste and duplication.
LEPs could ensure similar value for money by utilising the existing
structures for obtaining economies of scale in the visitor economy.
Tourism support bodies provide sector specific expertise for the
visitor economy with regard to marketing, research, and training
and skills. This wealth of knowledge should be maintained and
used by the LEPs to avoid the recreating these arrangements across
all new LEPs at great expense or losing them altogether.
4.1.6 To ensure that interventions can be
made in the visitor economy in a way that delivers value for money,
LEPs should be encouraged to commission or procure services where
it is not viable or economically sensible for them to deliver
services in house.
KEY QUESTION
FOR THE
INQUIRY
Given the importance and the scale and complexity
of the visitor economy, how are the LEPs going to ensure that
appropriately funded support is delivered in the most cost effective
way?
4.2 The Regional Growth Fund, and funding arrangements
under the LEP system
4.2.1 Since 2003 thirty different visitor
economy support bodies have been funded by the RDAs across England.
90% of the funding for these bodies is being withdrawn by the
end of March 2011. There is still no information about how or
if these bodies will be able to continue to function beyond April
2011.
4.2.2 Transitional arrangements will need
to be put in place if these support organisations are going to
be able to ensure that business growth in the visitor economy
will be maintained; the Government's domestic growth targets are
met; and targets for the 2012 Olympic and Paralympic Games are
achieved.
4.2.3 The Regional Growth Fund could be
used to address market failure where there are geographic/spatial
gaps in rural and coastal areas due to the potential urban focus
of LEPs. The visitor economy is a crucial component of rural and
coastal economies and should be protected from market failure.
KEY QUESTION
FOR THE
INQUIRY
Given that the majority of RDA support for tourism
support organisations will cease as early as April 2011, is there
potential for the Regional Growth Fund to act as a transitional
fund to ensure continued growth of the sector and maximise the
impact of the 2012 Games?
4.3 Government proposals for ensuring coordination
of roles between different LEPs
4.3.1 Coordination needs to be achieved
to make certain that the promotion of natural destination brands
eg the Cotswolds; and compelling marketing themes eg City Breaks;
that do not fit LEP boundaries is maintained. RTBs and DMOs currently
work together and with VisitEngland/VisitBritain to ensure that
brand coordination is achieved across regional and local authority
boundaries.
4.3.2 The visitor economy is a very diverse,
heterogeneous sector made up of thousands of businesses, mainly
SMEs, but including major international companies and other national
organisations such as English Heritage. A key role of public sector
funded support organisations is leveraging in resources from and
coordinating the efforts of these businesses. LEPs should be encouraged
to work with existing public/private partnership membership organisations
to engage and coordinate disparate private sector groups.
KEY QUESTION
FOR THE
INQUIRY
How will LEPs ensure that cross border coordination
across the visitor economy on such issues as promotion and brand
awareness takes place?
4.4 Arrangements for coordinating regional economic
strategy · Structure and accountability of LEPs
4.4.1 There is an important question to
be asked about how LEPs will deliver the Government's 2012 Olympic
and Paralympic Games strategy and the Secretary of State for Culture,
Media and Sport's ambitions for visitor economy. Currently the
2012 strategy is structured around the nations and regions. For
example, in the South East, Tourism South East has been the lead
body on the region's strategy for maximising the impact on the
visitor economy from 2012.
There is a serious danger that the momentum
behind the preparation programmes of sub-national organisations
and networks like those in the South East will be lost with only
eighteen months to go. Without sub-national coordination, LEPs
alone cannot hope to fill the void. Proposals for LEPs should
include reference to how sub-national programmes which deliver
regional economic strategy such as preparations for the 2012 games
will be maintained.
4.4.2 In terms of the structure and accountability
of LEPs, they will need to be accountable to the SMEs in the visitor
economy to coordinate strategies for the sector. In view of the
disparate and large numbers of SMEs in the sector the most effective
way to achieve this is likely to be to embrace the existing structures.
KEY QUESTIONS
FOR THE
INQUIRY
How will LEPs deliver national strategic ambitions
such as maximising the impact of the 2012 Games?
How will LEPs be accountable to the thousands
of disparate businesses that make up the visitor economy?
4.5 The legislative framework and timetable for
converting RDAs to LEPs, the transitional arrangements, and the
arrangements for residual spending and liability of RDAs.
4.5.1 There is concern about how consistency
will be achieved in the process of converting RDAs in to LEPS.
The different regions appear to be adopting different approaches
and timetables with regard to the transition and the arrangements
for residual spending.
4.5.2 Regardless of whether or not some
ongoing funding is provided for the visitor economy support structure,
the existing RTBs and DMOs (see appendix B) that rely on RDA support
will need time to plan for closure or to re-engineer their structures.
The White Paper and the Tourism Minister's Tourism Strategy will
not be available until October 2010 and it seems unlikely that
the LEPs will be in place by April 2011. This adds to our concern
that it will incredibly difficult for organisations dependent
on RDA funding to plan a smooth transition. There is already mounting
evidence in the regeneration field that the respective agencies
are opting for early closure. One approach is to consider how
the Regional Growth Fund could best be used to aid an effective
transition and secure future growth.
KEY QUESTION
FOR THE
INQUIRY
Given that the current support structure for the
visitor economy will cease to exist in April 2011 due to the withdrawal
of funding from RDAs, what transitional arrangements will be in
place to ensure that the effective structures and programmes are
able to continue?
4.6 Means of procuring funding from outside bodies
(including EU funding) under the new arrangements.
4.6.1 Funding from sources such as the European
Regional Development Fund; the European Social Fund; and the Rural
Development Programme for England are important sources of funding
for the visitor economy. This funding has supported marketing
campaigns, research programmes and the provision of training and
skills to the industry. It has also enabled leverage from the
public and private sector that significantly increases the impact
of the respective projects and assists ongoing sustainability
of the activity.
KEY QUESTION
FOR THE
INQUIRY
How will LEPs target external funding that is
available across many geographic areas and also maximise the leverage
from both the public and private sectors in the way that is currently
achieved by existing tourism support organisations?
12 August 2010
APPENDIX A
TOURISM SOUTH EAST—LIST OF NON EXECUTIVE
DIRECTORS
AREA TOURISM
PARTNERSHIP DIRECTORS
1. Kevin Lorimer—General Manager,
The County Club, Guildford
Representing Visit Surrey Partnership
2. Lyn Bibbings—Senior Lecturer in
Tourism, Oxford Brookes University, Oxford
Representing Berkshire, Buckinghamshire and Oxfordshire
ATP
3. Steven Munn—Commercial Director,
Beaulieu Enterprise Limited, National Car Museum, Beaulieu
Representing Hampshire Tourism Partnership
4. John Metcalfe—Director, Isle of
Wight Council, Isle of Wight
Representing Isle of Wight ATP
5. Sally Ann Lycett—Head of Communications,
De La Warr Pavillion, Bexhill
Representing Sussex Tourism Partnership
6. Sandra Matthews-Marsh—Chief Executive,
Visit Kent
Representing Visit Kent
OTHER NON-EXECUTIVE
DIRECTORS
7. Bill Ferris—Chief Executive, Historic
Dockyard, Chatham
Representing major visitor attractions
8. Sandra Barnes-Keywood—Proprietor
Chapel Ford Bed & Breakfast, Nr Chichester, West Sussex
Representing small accommodation providers, green
tourism and sustainability
9. Alan Blenkinsopp—former General
Manager, Coppid Beach Hotel, Bracknell
Representing large hotels
10. Ken Robinson CBE—Tourism Consultant,
Chair Tourism Alliance
Representing wider industry engagement with Government
11. Greg Dawson—Director Corporate
Communications, Virgin Atlantic
Representing transportation and tour operators
12. Viv Williams—Proprietor, Hollybank
House, Chichester
Representing small hotels and guest houses
13. Eloise Appleby—Assistant Director
(Economic Prosperity), Winchester City Council
Representing South East destination managers
14. Cllr Therese Evans—Leader of Liberal
Democrat Group on Winchester City Council
Tourism Council Member representing Local Authorities
15. David Phillip—Director, Finance
and Enterprises, National Maritime Museum, Greenwich
Co-opted Chair of Audit Panel
16. Dr Susan Priest—Executive Director,
Business Development, South East of England Development Agency
Representing core funding body 2010-11
APPENDIX B
LIST OF TOURISM ORGANISATIONS THAT RECEIVE
RDA FUNDING
1. Bath Tourism Plus
2. Black Country Consortium
3. Bournemouth and Poole Tourism
4. Cotswolds and the Forest of Dean
5. County Durham Tourism Partnership
6. Cumbria Tourism
7. CV One—Coventry and Warwickshire
8. Destination Bristol
9. Destination Dorset
10. Destination Staffordshire
11. Destination Worcestershire
12. East of England Tourism
13. Explore Northamptonshire
14. Experience Nottinghamshire
15. Lancashire and Blackpool Tourist Board
16. Leicestershire Promotions
17. Lincolnshire Tourism
18. Marketing Birmingham
19. Northumberland Tourism
20. Shropshire Tourism
21. South Warwickshire Tourism
22. Somerset Tourism Partnership
23. The Mersey Partnership
24. Tourism South East
25. Tourism Tyne and Wear
26. Visit Chester and Cheshire
27. Visit Cornwall
28. Visit Devon
29. Visit Herefordshire
30. Visit London
31. Visit Manchester
32. Visit Peak District and Derbyshire
33. visitTeesvalley
34. Visit Wiltshire
35. Welcome to Yorkshire
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