4 Communicating and coordinating the
support available |
53. Throughout this inquiry, we heard that more work
was needed to ensure that Government support for business was
communicated effectively. The Department stated that this was
a particular problem for smaller businesses, which "do not
have the time or resources to go hunting for support and some
report having found Government's offer confusing and difficult
We heard about two approaches to improving business engagement
with Government support: the use of Local Enterprise Partnerships
(LEPs) and Growth Hubs to coordinate a response to local business
needs, and the use of a single point of contact from Government
to communicate national support schemes.
Local and national business support
systems: the role of LEPs and Growth Hubs
54. Local Enterprise Partnerships (LEPs) "bring
together public and private sector leaders in an area to provide
strategic leadership on local growth priorities".
The Government stated that LEPs "play an important role in
linking together national and local support for businesses [
by making sure that local priorities reflect the needs of businesses".
Similarly, Growth Hubs were described by the Government as "a
local public/private partnership" which were "locally-driven
and locally owned" but "monitored by Government to ensure
they deliver a more coordinated business support landscape".
These Growth Hubs were in the process of being established in
many areas as we took evidence, but the Department stated that
these would eventually be "the key tool that LEPs have to
bring together local and national business support".
We heard that there was therefore "quite a bit of onus"
on the new Growth Hubs and LEPs to make the support offer effective
as "those organisations are going to have to prove themselves
to be knowledgeable and giving good quality signposting"
to available support.
55. A key criticism we heard directed at the local
business support system was its variability. Although we heard
that it was "good that people can focus on the businesses
in their localities", this has resulted in a "patchwork
that is not consistent across the country".
As a result, there was a "postcode lottery" of support
Garner, Director of Strategy at Wave 2 Growth Hubs Programme,
explained that many Hubs "have been going for less than a
year", so were "variable across the country" as
they were "at different stages of development".
For LEPs, it seemed that this variability was attributed to two
causes: poor performance with insufficient arrangements for spreading
best practice, and a lack of funding.
56. We heard from Naomi Clayton, Centre for Cities,
that there were "various networks that exist to share best
practice across the country" but little formal infrastructure
to support them.
Matthew Cross, Invest in Bristol and Bath, suggested that "the
Government's role is about that coordination and network advice".
57. Our previous report on Local Enterprise Partnerships
outlined our concerns about the future financial provisions for
LEPs. During this
inquiry, the Department told us that, from 2013-14, each LEP received
£500,000 per year, £250k of which must be matched locally.
As well as that core funding, the Department stated there was
additional Government funding provided through: Growth Deals,
Enterprise Zones, the Growing Places Fund and European Structural
and Investment Funds.
58. It was disappointing that many of the concerns
we have heard previously about LEP funding have persisted. For
example Mike Palin, the Executive Director for Strategic Economic
Development, Liverpool City Region LEP, told us there was an issue
with the total amount of funding available to LEPs which "immediately
constrains what [LEPs] can do".
He suggested that this meant that LEPs had to be "more innovative
[and] engage with the market better".
We agree with Mr Palin in that it is clear that, in the immediate
future at least, increasing government funding within the existing
resource allocation is unlikely and unrealistic. This puts the
onus firmly on LEPs to be innovative and inventive in the ways
that they raise resources.
59. Concerns about LEPs were stated most starkly
by Stuart Garner from Norton Motorcycles, who told us that:
LEPs are dead. It is a very slow, archaic organisation
that doesn't act as fast as businesses need to.
We therefore put this suggestion to the Minister,
who disputed the assertion that the overall system was not functioning.
However, he acknowledged that there were LEPs that "could
be strengthened" and those that were "progressing incredibly
this inconsistency of performance, we were concerned that the
Minister's vision for LEPs remained largely hands-off, even in
terms of resources:
There are LEPs that are highly innovative. There
are LEPs that take a lower risk approach. This is part of the
beauty of localism and is an inevitable part of asking local areas
what their local needs for growth are. I do not think we should
see those distinctions as a problem. We should see them as part
of taking a local view.
While we may not agree with the specific phrasing
of Mr Garner's statement, it is clear that improvements need to
be made to ensure a consistent and high level service is provided
by LEPs across the country. The Government had a fundamental role
in the formation of LEPs and now has a responsibility to support
them when it is necessary.
Government has a role in supporting LEPs to ensure they operate
to a high standard across the board. The Government should step
up its work in coordinating best practice amongst LEPs and Growth
Hubs in order to make the most out of this system. We therefore
recommend that Government makes specific commitment to raise standards
across the LEP system, by undertaking an audit of both LEP's and
Growth Hub's best practice, which should include an assessment
of the extent to which limitations on available Government funding
are responsible for poor performance. We further recommend that,
where funding is an issue, and there are potential alternative
sources available, the Government should encourage LEPs to be
innovative in their efforts to secure further funding. The performance
of Growth Hubs also needs to be monitored and assessed to ensure
they are meeting the needs of businesses in their local area.
A single point of contact?
61. The Government has stated that its support for
business is being reformed into "three simple offers"
with "joined up marketing to increase awareness".
However, a range of evidence to this inquiry has indicated that
the support landscape remains complex and difficult to navigate.
For example, we heard from the British Bankers' Association that
"businesses often are confused as to where to look for non-financial
support and advice";
from Matthew McDonnell, Managing Director of Resimac, that "as
a small business it would be a lot easier if there was maybe just
one port of call",
as support at present was "fragmented";
from Naomi Clayton, Senior Analyst at the Centre for Cities, that
"better co-ordination is needed",
and from the Federation of Small Businesses said that "much
needs to be done to provide businesses with a more straightforward,
62. Given the complexity of the support landscape
and the "alphabet soup" of initiatives on offer,
we questioned the Minister on where businesses should go to as
a first port of call to find out about the support available to
them. He told us that the Business Growth Service, set up in December
2014, should fulfil this function, as this new Service was bringing
GrowthAccelerator, Manufacturing Advisory Service,
IP Audit, Designing Demand and other schemes, and then hopefully
at a local level through the Growth Hubs. It is precisely to bring
together that plethora of schemes into one place.
He went on to tell is that:
Bringing it all together for domestic advice,
with UKTI for international, is a really important step. With
that, we then liaise with all of these different organisations,
all of the main business bodies, all of the main banks, the accountancy
firms and the law firms also, because they have an advisory role
too, to make sure they know what Government support is available,
if they think that is appropriate.
was clear demand in this inquiry for a single port of call that
businesses could contact to be directed to the support that they
required. The Government launched the Business Growth Service
during the course of this inquiry, with the intention that this
service would fulfil such a role. If the Business Growth Service
can be developed into that single port of call, then it will be
a valuable addition. If not, then it risks becoming another complication
in an already intricate system. We have not seen evidence to suggest
that there was an awareness amongst businesses that this service
was being introduced. The Government has an obligation to make
this new service valuable and effective. In its response to this
Report, the Government should outline the steps it has taken,
or will take, to ensure businesses are aware of, and make use
of, the Business Growth Service.
143 Department for Business, Innovation and Skills
(GSB 22) extract Back
Department for Business, Innovation and Skills (GSB 22) para 8.1 Back
Department for Business, Innovation and Skills (GSB 22) para 8.2 Back
Department for Business, Innovation and Skills (GSB 22) para 8.5 Back
Department for Business, Innovation and Skills (GSB 22) para 8.4 Back
Q14 [Ms Hopley] Back
Q174 [Dr Edge] Back
Q174 [Dr Edge] Back
Q77 [Ms Clayton] Back
Q90 [Mr Cross] Back
Business, Innovation and Skills Committee, Ninth Report of Session
2012-13, Local Enterprise Partnerships, HC 598 Back
Department for Business, Innovation and Skills (GSB 36) extract Back
Department for Business, Innovation and Skills (GSB 22) para 8.3 Back
Q63 [Mr Palin] Back
Q63 [Mr Palin] Back
Q175 [Mr Garner] Back
Department for Business, Innovation and Skills (GSB 22) extracts Back
British Bankers' Association (GSB 17) para 4.4.1 Back
Q260 [Mr McDonnell] Back
Q264 [Mr McDonnell] Back
Federation of Small Businesses (GSB 18) para 1.1 Back
Federation of Small Businesses (GSB 18) para 2.1 Back