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Simplifying Business Support The Advice of the Northwest Region
September 2007
CONTENTS PAGE
A. INTRODUCTION
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B. FOREWORD
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C. ENGLAND’S NORTHWEST
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D. HOW THE ADVICE WAS PRODUCED
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E. QUESTION RESPONSES
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F. CONTRIBUTORS
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A. INTRODUCTION As Chair of the Northwest Business Support Simplification Steering Board, I am delighted that the Region has joined forces to provide the national policy team with our views on the proposals for public sector business support in the future. We have been able to combine strong opinion and comment from diverse public, private, academic and voluntary sectors into our consultation discussions to target the development of cost-effective and efficient proposals within a broad, collaborative framework. As such, we believe it is fundamental to the success of the process and future business support that resulting proposals are business focussed and that dialogue and co-ordinated discussion continues at all levels. I am pleased that in addition to this regional response, many independent organisations have been encouraged, by the high profile and level of regional activity, to also compile their responses in order to further strengthen the views from across the Northwest. Finally, I would like to thank all those who contributed to this Northwest Regional Advice document through stakeholder events, detailed working groups and individual submissions; your views were invaluable and in particular I would like to express my appreciation to the members of the Northwest Business Support Simplification Steering Board, as indicated below.
Steve J Bennett, Chair of Northwest Business Support Simplification Steering Board And Vice-Chair of Institute of Directors
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B. FOREWORD Context
The Northwest is a strong region with many assets. It is the 2nd largest RDA/Devolved Administration with a diverse population of 6.8 million and economy worth £106 billion. GVA per head is, however, 12% lower than England average, resulting in a £17.8 billion output gap.
The Regional Economic Strategy under-pins the aim to close the wealth gap by placing emphasis on providing innovation & knowledge transfer, leadership & management, internationalisation and enterprise business support services.
There is a strong spirit of partnership working across the bodies involved in economic development at regional, sub-regional, city-region and local level, and we are committed to business support activities that are demand-led, aligned, value added and deliver best return on investment.
Business support activities across the region are currently funded by a range of Central Government streams and it is this multiplicity of funding services that is often the cause of proliferation.
The Northwest has a Regional Simplification Steering Board, with supporting themed Working Groups, to bring together key representation on business support matters across the region.
This advice has been developed by the Region from a wide range of organisations – public, private, academic and voluntary – and brings together a series of engagement activities that have been taking place since March 2007, including two well attended region-wide stakeholder events.
Northwest Simplification Vision
Create a shared business support framework, particularly for co-investment, to shape public sector expenditure in business support services;
Align the principal funding streams in the region to Business Support Simplification principles; NWDA’s Strategic Investment Plan, the 2007-13 EU ERDF Operational Funding Programme, England Rural Development Programme and European Social Funds for the Northwest. We wish to see commitment of Government Departments and sponsor organisations to this.
Further development of Business Link Northwest as the primary access channel for public sector business support in the Region;
To undertake the formulation, development, procurement, management and delivery etc of public sector business support services, in line with the Sub-National Review recommendations; and
Develop a stronger pool of shared intelligence on the portfolio of business support and its achievement. This will involve greater levels of evaluation, monitoring and sharing of best practice.
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Recommendations to Support Regional Simplification Implementation In addition to our responses to the individual consultation questions we recommend that to fulfil national and regional objectives of business support simplification, the BSSP should:
Set out a national set of principles which provide for flexibilities, at regional and local level, to take account of different economic needs and opportunities;
Incorporate the recommendations made in the Sub-National Review, particularly devolvement of business support activities;
Recognise the role of the Northwest Regional Economic Strategy, as a key determinant of the themes and priorities for public sector business support intervention in the Region;
Ensure that all Central Government Departments adhere to the Business Support Simplification Programme principles to ensure a consistent environment;
Utilise the commitment and expertise that the Northwest has demonstrated on simplification and give the Region the lead role in managing transition and implementation of business support. We welcome representation of DBERR on our regional Simplification Steering Board; and
Recognise that there is an array of reasons for the public sector to create business support services and the BSSP should not take an overly simplistic and narrow definition of market failure. Rationale for intervention needs to include: Spatial Inequalities - it is a key Government objective to increase growth and reduce disparity between regions and local areas. The Northwest region as a whole has an evidenced and significant GVA gap with the rest of the country and there are large geographical areas with additional widespread market failures – 30.8% of the region is covered by the EU Regional Aid Guidelines Map; concentrated in Merseyside, North Greater Manchester and parts of Lancashire and Cumbria, 4 Neighbourhood Renewal Areas, 5 Housing Market Renewal Areas, 16 (of 43) localities in the worst 10% of the Index of Multiply Deprivation, and 4 localities are in the lowest quartile of England’s Rural Deprivation Index. BSSP needs to ensure the maintenance of comprehensive business support services in the above areas which are frequently suffering from structural issues. Information Failures – are perhaps, alongside spatial inequalities, one of the principal and most widespread reasons for public sector business support intervention. People and businesses frequently lack easy, quick and relatively cost-effective access to complete/specialised information in order to make a rational and informed business decision. This leads to sub-optimal business decisions and suppresses demand for private sector provided goods and services. Co-ordination & Scale Failures – where collective action is required or scale of investment is very large and the costs to an individual business are too high and benefits shared by numerous organisations for example in collaborative R&D projects, interbusiness networking, joint procurement and large scale site assembly. Social Equity - the Government has identified a number of public policy objectives to encourage economic growth and tackle deprivation, poverty and inequality. Key business support related initiatives to tackle these issues include the stimulation of an enterprise culture and enhancement of basic skills which need to be encompassed within BSSP. Public Sector/Institutional Failures - as recognised by the Sub-National Review, Government failures, in addition to market failures, can exist and indeed take place at different geographical levels. There needs to be an opportunity for redress but this action must be direct and devolved to the level to tackle the issue. For example, as cited in the Better Regulation Executive Report 2007 poor quality government guidance on regulation is one of the top drivers for businesses lack of implementation of regulation requirements. 5
C. ENGLAND’S NORTHWEST England’s Northwest is a £106 billion economy (10% of England) and home to 6.8 million people, 3 million employees and 242,000 firms. It is home to the largest media hub outside of London (Manchester), one of the world’s most famous waterfronts (Liverpool), the largest concentration of advanced manufacturing and chemicals production in the UK (Lancashire and Cheshire) and to one of Europe’s leading national parks (The Lake District). The region is very clear on its overall economic vision, developed through a comprehensive, evidence based review of the Regional Economic Strategy (RES): Vision for a dynamic, sustainable international economy, which competes on the basis of knowledge, advanced technology and an excellent quality of life for all where:
Productivity and Enterprise levels are high, in a low carbon economy, driven by innovation, leadership excellence and high skills. Key growth assets are fully utilised; such as priority sectors, the higher education and science base, ports/airports, strategic regional sites, the natural environment, and the rural economy. Employment rates are high and concentrations of low employment are eliminated. Manchester and Liverpool are vibrant European Cities and, with Preston, are key drivers of city-regional growth. Growth opportunities around the key regional towns and cities of Crewe, Chester, Warrington, Lancaster and Carlisle are fully developed. The economies of East Lancashire, Blackpool, Barrow and West Cumbria are regenerated.
Despite good recent economic performance, Northwest GVA per head is 12% lower than the England average, resulting in an output GVA gap of £17.8 billion. £14.3 billion of this GVA gap is accounted for by lower “productivity” (GVA per employee). This is partly accounted for by lower regional prices and lower hours worked, but mainly accounted for by a different mix in terms of the types of work done in the region:
95,000 fewer people with degree-level qualifications; 90,000 fewer people working in the “knowledge economy”; and 18% (31,000) fewer companies than the England average.
£3.5 billion of the GVA gap is due to fewer people working per head of population:
72,000 fewer people working, concentrated in 6 districts, often close to centres of growth; 90,000 people with no qualifications; and 8.9% of the working age population (377,000 people) on Incapacity Benefit.
The RES has identified three major drivers to improving the Northwest’s economic performance and achieving the overall goals of the vision:
Improving productivity and growing the market (to tackle £14.3bn of the gap); Growing the size and capability of the workforce (to tackle £3.5bn of the gap); and Creating the right conditions for sustainable growth and private sector investment.
The following map illustrates the GVA picture across the region:
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Other key performance data reveals that:
Many parts of the region are close to centres of growth; however there are significant differences in growth rates between parts of the same sub-region such as Greater Manchester and Lancashire for example.
Rural businesses account for 40% of the business stock, 23% of regional GVA and 25% of employment; and
The region still has the third and fourth poorest sub regions in England - Merseyside and Cumbria, as well as the fifth most prosperous Cheshire.
The Northwest is a strong region with many economic assets. Partners have been working together over a number of years to develop our shared vision for the region and have achieved a great deal. All our major strategies have been aligned by joint working between agencies and we have developed the region’s capacity to make tough decisions that are credible and enduring amongst local authorities, sub-regional partnerships and city region stakeholders.
D. HOW THE ADVICE WAS PRODUCED This advice has been developed by the Region from a wide range of contributory bodies. The Northwest Regional Development Agency and Government Office North West have provided regional strategic management through a dedicated resource, and acted as the facilitators of regional activity for the Business Support Simplification Programme across the region since March 2007. A Communications Plan was adopted to ensure that as wide a range of stakeholders as possible was able to participate in discussions on the business support proposals; this plan had a number of key threads to it as shown below: Activity NWDA & GONW Website Channels Created Sub-Regional Partnership Meetings x 5 - Awareness Regional Stakeholder Event Sub Regional Partnership Meetings x 5 – Intro Document Matching Aid Exercise Sub-Regional Partnership Meetings x 5 – Consultation Process & Regional Structures Update Launch of Steering Board Launch of Working Groups Creation of Open Forum Website Channel Regional Stakeholder Event Steering Board & Working Groups Submission of Regional Advice to Consultation
Timetable April – updated ongoingly March 27 March April April – May June 19 June 4 July July 1 August August & September 14 September
At the first regional Stakeholder Event as held in March, partners overwhelmingly wanted to see an open process that enabled them to do two things:
Influence the national process; particularly the national consultation period; and Shape a shared regional business support framework; particularly for co-investment.
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The diagram below shows the mechanisms that we put in place to enable a wide reach of partners, including the business community, to do this: Input into National Programme Development
Sub-Regional Communication Meetings
Flow of Input
Northwest Consultation Response
Attendance at Regional Stakeholder Events
Business Need
Encouragement of Individual / Local / Sub-Regional Consultation Responses
Regional Simplification Steering Board
Product & Services
Delivery Arrangements
Impact & Evaluation
E. QUESTION RESPONSES Q1 Do you think the business support outlined in Figure 2 and at Annex A adequately covers the key needs of business and helps achieve public policy aims outlined in this document? The proposed portfolio covers a wide range of services that the public sector should support but there are omissions which we wish to see included (1.1), areas for clarification (1.2). We also have further comments on prioritisation (1.3), contracting (1.4) and business need (1.5).
1.1
Omissions
The provision and up-grading of property & workspace especially that which is attached to support services such as incubation (which is explicitly included) and where there is local market premises failure in some geographical locations. Domestic marketing/promotion - the framework appears to exclusively focus on the international dimension whereas many business in the North West fail to exploit marketing opportunities and the region is keen for them to better compete (for example in rural areas as cited in DEFRA’s Rural Strategy 2004 Government). Inward investment and Investor development: this could include relocation support and promotion of inward investment opportunities. Supply chain development including maximising procurement opportunities.
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Advice on compliance with legal & regulatory matters including employment, health & safety and company law, which according the CBI1 is one of the most common barrier to business growth. As shown in the Better Regulation Executive Report 2007, for many businesses the key areas on which they require advice tend to be around regulation and the burden of dealing with bureaucracy at local, regional and national levels on issues such as: health and safety; employment/HR legislation; environmental legislation; and national/local planning guidelines. Mentoring Services and Networking Support which cut across all forms of business support and many of the 24 offers, but which warrant an explicit reference in their own right. There is currently a voluntary business mentoring support network, and this could play a stronger role in any future business support framework. Exploiting franchising opportunities: should be encouraged through business support services and business skills services to aid growth in existing businesses and to identify potential entrepreneurs and to support underserved markets; as encompassed for example in the Local Enterprise Growth Initiative. Cross Cutting Themes of equality & diversity and achieving a low carbon economy.
1.2
Clarification
We recognise that there is an array of reasons for the public sector to create business support services and the BSSP should not take an overly simplistic and narrow definition of market failure. The Region would like to clarify the rationale for intervention needs as noted earlier for:
Spatial Inequalities Information Failures Co-ordination & Scale Failures Social Equity Public Sector/Institutional Failures
We recognise that there is a lack of clarity regarding the definition of business support, exemplified by discussions with higher education partners. Some HEI’s provide business assist and workforce development services which are of direct benefit to businesses and which probably are in the scope of BSSP. They are however also engaged in the design and development of courses of study and the delivery of research which are potentially outside the framework proposed in the consultation. Some regional partners have indicated that they would welcome clarity over where the dividing line should be drawn, in particular in relation to:
enterprise skills & training with employer engagement aspects, particularly leadership and management - this abuts onto business support and in some cases (especially in the HE/FE arena) is delivered as part of wider enterprise support/stimulation schemes
knowledge transfer activity to industry, including specialist centres of expertise, particularly that delivered by Higher Education Institutions.
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Regional Trends Survey 2007 – Barriers to Growth
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The Region also welcomes clarification on what are the implications, should any of these or other elements of business support portfolio, be excluded from the scope of the BSSP.
1.3
Prioritisation
The twenty or so business support offers in the framework are not accompanied with an indication of relative priority placed upon them by Central Government. The Region needs clarity on how Central Government expects to apportion priority across the portfolio and requires the appropriate opportunity to influence these decisions. The Northwest expects to take a lead role in determining its own business support priorities, which would be guided by the Regional Economic Strategy targets and sub-regional economic priorities, including:
Growing Internationally; through trade development and partnerships and international elements of supply chain development,
Enterprises operating in deprived communities and tackling barriers (which are a substitute to unemployment or worklessness);
Social enterprises (and voluntary sector organisations with potential to trade);
Micro- and lifestyle- businesses; and
Medium size businesses.
Each region and stakeholder will need to decide how much investment to put into each service offering.
1.4
Contracting
Fewer products and services will naturally lead to some of the BSSP aspirations being met. Changes or reductions in the suite of business support services should not equate to a parallel shift in number of contracts, or service providers across the country as devolving the management of business support and procurement requirements will lead to a greater number of contracts than public sector business support service offers.
1.5
Business Need
Ensuring that public sector business support is business focused is critical to the success of local, regional and national economies. This will require businesses and their representative organisations being involved in the formulation and design of any intervention. This approach needs to be accompanied with efforts to stimulate private sector interest in the use of business support services (both private and public sector). The public sector will need to work with the private sector to stimulate employer interest to overcome:
imperfect market information on opportunity and risk which is one of the key market failure reasons for public sector business support, for example addressing the environmental sustainability agenda; and
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scepticism among SMEs that may have received support in the past that has not been tailored to their needs (i.e. was supply driven).
The table below shows examples of the fit between local and regional business support need to the national offers:
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Table to show fit of business support need examples from local and regional organisations to the national offers: BSSP Themes2
Business Northwest3
Link Federation Business4
1.
Starting Up
5% Thinking of Starting
2. 3.
Operations and Efficiency
52% Business Growth
4.
Management, Recruitment & People Development Access to Finance
5% HR including employment
5. 6. 7.
8.
9.
7% Finance
Small CBI5
Start-Up Phase: 34% Raising money 29% Keeping financial records 25% Taxation 34% Marketing Support Business Growth:: 19% Keeping Financial Records 11% Financial Projections 17% Taxation 36% Marketing 25% Sales Support 26% Employment Law Skills & Training: 28% for Business Owners 22% for Employees 33% Keeping Financial Records 31% Taxation 28% Raising Money
Product Development
Sales Marketing Development
and
Potential Gaps & Need to Strengthen Offer Barriers Access Support
15% Skills
of
to to
Growth & Business
6% Sales and Marketing
1% Acquiring a Business 2% Regulation 3% Health & Safety 4% IT
Institute of Directors6
12% business start up
14% business projects
6% Innovation Training
Related
45% Business Tax
25% Innovation: 37% Acquisition machinery, equipment/software 5% Design 16% Marketing
31% Sales and Marketing
Barriers to Business Support: 59% Cost Time 44% Lack of Understanding 44%
51% Legislation
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12% employing people/recruitment enquiries
Late Payment 25% Lack of Business Finance 17%
18% enquiries for what type of financial assistance available 15% related to product development, technology and innovation
42% Regulatory Burden 44% General Burden of Taxation 16% National Insurance Contributions 13% Business Rates 11% Levels of Government Support
18% Advice on finding land and premises; companies seeking premises to expand or relocate 11% Trading standards and regulation enquiries; companies seeking help to comply with legislation
of
Employment
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expansion
Employee Skills Gaps 41%
Simplifying Business Support A Consultation 2007 Business Link Northwest Service Analysis Quarter 1 2007 4 Federation of Small Business Member Survey May 2007 (NB Responses do not add to 100% as respondents were able to select more than one factor) 5 CBI/QinetiQ Innovation Survey 2005 (NB Responses do not add to 100% as respondents were able to select more than one factor) 6 The SME Glass Ceiling Growth Obstacles in 2007 (NB Responses do not add to 100% as respondents were able to select more than one factor) 7 Blackburn with Darwen Borough Council Customer Enquires April 06-March 07 3
Local Authority7
Q2 Where do you see duplication in publicly-funded business support? Although no definitive picture on the scale or location of duplication is known, partners in the region concur that, in some localities and for some public sector business support products, duplication exists and that there may well be more than the estimated 3,000 schemes available across the country. One of the principal causes of duplication is the lack of national co-ordination. Different Central Government Departments will introduce their own schemes and initiatives at different times, with overlapping objectives and activities which are then difficult to coordinate and integrate at the delivery level. We would, therefore, look to Central Government to lead by example. The greatest manifestation of duplication felt by businesses is through the numerous information and access channels; which are essentially Information Diagnosis and Brokerage (IDB) activities. Business Link’s role in providing the primary and impartial gateway to the entire business support landscape will be crucial in addressing this issue. The extent of duplication may, however, be more apparent than real and BSSP should recognise that there is a risk of over-simplification with the loss of specific solutions to specific issues:
The Individual Business Perspective: because of varied eligibility criteria including different geography of schemes, individual businesses may only have a very small number of services available to them.
Comparing Like With Like: on closer inspection services which appear to duplicate each other and which look similar are in fact often subtly and therefore significantly different, sometimes for good reason. For example sector based support and inter-firm collaboration often requires highly tailored interventions which are delivered from within sectors and which cannot easily operate in another sector.
Replicating Good-Practice: we need to distinguish between duplication and replication. The latter being the transfer of existing good practice, with appropriate tailoring, to elsewhere.
Disaggregating Schemes: many public sector business support services encompass a range of discreet components and may be presented to the market separately. For example it is not uncommon for an integrated offer to provide entrepreneurs with advice on setting up a business alongside access to finance to facilitate early stage growth and access to a pool of mentors upon whom they can call for advice.
Q3 Where do you feel support is adequately provided by the private sector, thereby reducing the need for public sector support? Understanding exactly where the market is operating effectively is difficult to definitively answer, and indeed will naturally shift over time. There are also local areas within the Northwest, where despite the overall growth in business and professional services sector provision of business support services is still underdeveloped or difficult to access.
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The private sector is a major provider of business support services. It is rapidly evolving and growing across the UK and in the North West. Future public sector investments in business support need to avoid intervening where the market is effectively operating and be designed to encourage the market to operate more effectively in those areas where it is currently falling short. This may include interventions to stimulate demand for business support in general as separate from, but co-ordinated with the promotion of support products. Where a robust case for intervention has been made, the design of the public intervention needs to complement or enhance rather than replace the private sector market. Public sector business support services should:
understand the private sector provision; including gaps & market failures; intervene as lightly as possible; be configured to stimulate private sector supply; respond to the demands of businesses and stimulate demand for services; leave behind a sustainable operating market via a suitable exit strategy; deliver value for money and return on investment; and be subject to a rigorous impact assessment and evaluation.
Crucially for the Northwest, schemes designed in this manner provide a distinct opportunity to change the grant/dependency mentality among some businesses; which can be a risk in locations where there has been a long history of large-scale government intervention.
Q4 What publicly-funded business support do you regard as being of the highest priority? One of the Government’s key strategic priorities in the 2007 Budget is to reduce the persistent growth gap and productivity disparity between the regions of the United Kingdom. The Public Service Agreement Target 2 specifically aims to address the difference in growth rates between the three leading regions and the six lagging regions; the Northwest currently sits at the tail-end of those lagging six regions. The Region’s wealth gap can be attributed to a productivity deficit (80%) and a pronounced pattern of worklessness (20%). Tackling these challenges requires concentred effort across the five drivers of productivity: investment, enterprise, innovation, skills and infrastructure alongside a focus on lifting up employment rates. The Regional Economic Strategy has identified seven key business challenges around which our priorities will be set:
Developing new enterprise and growing existing companies; Developing higher added-value activity in Regional Sectors; Innovation to improve productivity in all companies and exploit the HEI of the region; Exploiting the science/research and development base of the region; Improving international competitiveness; Using ICT more effectively and efficiently; and Focusing on sustainable consumption and production.
The Regional Economic Strategy also recognises the key role that skills development has in addressing our productivity gap and which constitute priorities which sit under the BSSP: 15
Tackle the lack of basic skills and qualifications to improve employability and reduce worklessness; Meet the skills needs of sectors and growth opportunities - essential to support expansion; Invest in workforce development - the development of intermediate and higher level skills in the current workforce is a key driver of productivity and economic growth; Develop leadership, management and enterprise skills - crucial to company survival, innovation and productivity improvement; Develop the educational infrastructure and skills of the future workforce - ensuring young people are developing the skills they need for employment and progression to Higher Education; Developing Job Linkages between people without work and employers with vacancies; and Growing Local Employment – in areas remote from growth as well as already successful areas.
Q5 Do the business support themes make it easier for you to know what publiclyfunded support is available to meet the needs of your business? Are they the right themes? Any defined and coherent portfolio is helpful to ease communication of public sector business support offers to the private sector; but this is just one component of a complete solution. It will be necessary for the Region to develop the detail in line with Sub-National Review recommendations to fully ensure that business support is made clearer to the business community in the Northwest.
Q6 To what extent will reducing the amount of branded business support make it easier to know what is available to meet the needs of your business? The region would welcome a stronger and consistent national framework on the branding of business support, leading to fewer business-facing brands in the marketplace. Reducing the amount of branded business support should naturally make it easier to navigate the process. This is only a partial solution – public sector business support offers need to be more co-ordinated and Business Link’s role as the primary access channel needs to be continually reinforced. We have further comments with regard to marketing of services (6.1), branding of funders (6.2) and quality of service provision (6.3):
6.1
Marketing of Services
Branding plays an important role in making it easier for businesses to access the business support network but this only works if the brand represents a sense of quality in business’ minds upon which they can rely.
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The Business Link brand should continue to be promoted and associated with its gateway service and it should continue to have a key role in promoting the portfolio of publicly funded products and services. We recognise that this will need to be balanced alongside brands and marketing for products and services (both public and private). As well as fewer brands operating in the public sector arena, there also needs to be a rationalisation of marketing activity by providers and better co-ordination with Business Link’s information services (and perhaps even a reduction in the scale of funds devoted to marketing and demand stimulation by other public sector service providers). This needs to balance with the need to stimulate demand for take up of business support services
6.2
Branding of Funders
Whilst the business community has confirmed their ambivalence over the ultimate source of funding for business support, which they may receive from parts of the public sector; there remains both obligation and desire to have funding streams and organisations attributed to business support services. For example, EU Structural Funded Programmes have an obligation to carry the EU funding brand and many Local Authorities have expressed a desire for local visibility as democratically elected & accountable bodies.
6.3
Quality
Businesses will need to be reassured that services behind the brand are sufficiently flexible and well design to efficiently meet their support needs. Public sector partners will want to be reassured that behind this narrower set of brands there is a suite of services which meet identified economic development needs and objectives. It is also important that capacity and expertise are not lost in the course of rationalisation.
Q7 How can the delivery of business support be better arranged to minimise customer confusion and achieve economies of scale? Addressing the two parts of this question – customer confusion (7.1) and economies of scale (7.2):
7.1
Customer Confusion
The transformation of Business Link in the region has provided a range of opportunities to reduce customer confusion through:
A primary gateway with one brand and improved access channels; Significant investment in a CRM system available to other organisations; A IDB only service with no product delivery; and Increased marketing of the Business Link brand and service and Improved co-ordination between providers and other access points (e.g. LA planning departments)
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7.2
Economies of Scale
This can be realised through a number of processes; managed and implemented by all partners across the Region:
Investment decision-making processes for business support activities need to be based on a common set of objectives and criteria; with improved co-ordination of decision making reducing the cost of developing intervention; and
Joint investment decisions need to be made prior to procurement of products as there can be limited flexibility in ‘topping up’ contracts once they’re let. Alternatively contracts will in the future need to be written to allow for an increase in value and other partners participating.
Integration of delivery and management of services to permit common approaches to marketing and client management, standard approaches to cross-referral between services, embedding of the Business Link gateway service and possibly shared overheads/back office functions; and
The North West is commited to establishing a business support framework, developing a stronger pool of intelligence and developing Business Link Northwest as the primary access channel for business support able to deliver the required minimisation of customer confusion and securing the necessary economies of scale needed. The Region looks to Central Government to lead by example in coordinating its investment in business support. Central initiatives have too often been rolled out taking little account of existing services and complementary delivery structures, causing confusion, diseconomies and an increase in cost of the public sector doing business with itself.
Q8 How can Business Link be further developed to meet business and government needs consistent with this policy? Business Link nationally and its role as the IDB primary access channel is key to the future of the BSSP and the Region is committed to this achieving this objective. The Region would welcome clarification on how the Business Link brand and service will be adopted nationally across Government by all Departments to deliver business and policy needs. In order to meet public policy priorities, whether central, regional or local, which historically have low rates of business support take-up, Business Link must be a pro-active service, which has a responsibility to ‘make the market’ for business support. Key to the success of delivering public policy priorities in the future via Business Link as the primary access channel will require Business Link to have in place strong relationships with local policy owners; particularly those who are focussed on targeted activity in deprived areas or with specialised objectives. The model is ‘fit for purpose’ but development is required in each region to ensure that Business Link can reach all the target groups required. Quality assurance is an important factor; only through brokering to the highest standards of business support will the client base continue to grow. Business Link Northwest has established a transparent process to enable clients to make informed decisions when selecting a support provider. It then ‘follows-up’ to obtain feedback on service provision and 18
takes appropriate action. The Business Link Northwest service is also independently surveyed for client satisfaction and feedback. Ongoing Business Link Northwest will work with stakeholders on:
Penetration into disadvantaged and RES priority groups; Physical and Local Presence; Shared Customer Relationship Management Systems; Client Intelligence and Management Information; and A Quality Improvement Framework.
Q9 How can business support services make best use of Business Link as the primary access channel for business? The public and private sectors will relate and utilise Business Link differently, as set out below, however one key factor is common to both - marketing. Business Link, as an IDB activity is a key marketing vehicle, it will both make and service the market for impartial IDB services providing a route to market for services, integrated client relationship management and shared intelligence of business issues and needs. 9.1
Private Sector
The private sector can work in partnership with Business Link to raise awareness of, and confidence in, the service among the business community, and to develop:
9.2
mechanisms which aid understanding of specialisms, which can then be promoted and brokered to by Business Link; incentives to encourage a wide range of registrations on the Business Link supplier database; an enquiry handling process which can deal with the required volume and efficiently channel businesses to appropriate providers; an understanding of the impartiality position and IDB function with business counterparts; services that are fit for purpose and business focussed; not product push or output chasing; and a cross referral process to ensure business needs are met objectively.
Public Sector
The public sector can:
use Business Link as the primary access channel for business support services, including those of Central Government; build appropriate conditions into funding contracts to enshrine Business Link as the primary channel for IDB gateway services; implement the ‘Transformational Government’ policy; which places a duty on all public bodies to use both the Business Link web channel and also client management system to reduce inefficiencies in IT; and consider how clients will be attracted to business support services in the future; this is particularly true in target driven organisations or contracts, where the impulse is to generate ‘business assists’. 19
Q10 Do you agree with the proposed strategic oversight of business support? The Region supports the proposal made for strategic oversight alongside devolved management and procurement of business support as outlined in the Sub-National Review.
10.1
Strategic Oversight of Business Support
The Region recognises the need for a degree of unified oversight over the roll-out of Business Support Simplification Programme; which should concentrate on bringing together a partnership of Central Government Departments, funding streams and spatial tiers of the public sector.
10.2
Devolved Management & Procurement of Business Support
We expect the BSSP to conform with the Sub-National Review which states that a greater level of decision making power is to be devolved from the centre, including section 5.13 which states “there are….functions which are best undertaken at a regional level, such as coordination and procurement of much business support”. In line with this approach the Northwest, expects to retain policy, funding, management, procurement and delivery flexibility on business support activities particularly where:
they are deemed to be important to regional and sub-regional economic objectives; there is a sensible scaled market in which to intervene; and the scale and nature of needs and opportunities are distinct.
Q11 Is there another option that you think we should consider and how would you justify it? To expand upon the answer given in Q10, it is felt that the detailed arrangements for business support activity, whilst supporting national principles, will require underpinning with sub-regional and local intelligence on contrasting needs and opportunities within the Northwest. We recognise there may need to be a very small number of nationally procured and managed products & services, which require national oversight, but this arrangement will not be applicable for the majority of public sector business support services. The Region strongly advises that a system is developed that recognises where the investment decision is made. In the case of the North West, the combined Strategic Investment Programme of NWDA, the imminent EU ERDF Operational Programme, the Rural Development Fund for England, Learning and Skills Council Employer Responsive Budget and the European Social Fund represent the largest investment resource for business support and together point towards a regional devolved solution. This also needs to be set alongside sub-regional and local input to objectives, strategic commissioning, investment and delivery flexibility to meet local needs. Any such regional architecture should involve:
business intermediaries or representative bodies; 20
businesses representing the financial & business services sector, given that for most businesses their bank or accountant is still typically their first point of call for business support; members of the economic development and skills communities including investors and agencies responsible for setting the region’s strategic priorities; and sub-regional and local partners who can articulate the contrasting needs and priorities in their respective local areas and commission business support, in line with BSSP, as appropriate.
Q12 If you have experience of using publicly-funded business support, what were the costs to you of finding out what was available to meet your needs? The region has no central evidence to answer this question, yet individual businesses and business representative organisations regularly report their experience in terms of the cost in time navigating a complex system and frustration at not getting correct information.
Q13 How much do you think our proposals could reduce your costs in looking for and understanding publicly-funded business support? Without a clear understanding of current search and selection costs to business, it is impossible to estimate the potential level of savings in this area. Through our consultation process partners felt that a simplified, transparent business support network would significantly reduce the costs and time spent searching out the right business advice and accelerate access to business support, which would have benefits to business productivity.
Q14 How far do you agree with our initial estimates of the benefits and costs of simplifying publicly-funded business support? The 3% projected savings quoted in the consultation cannot be verified. The Business Support Simplification Programme should deliver efficiency of savings and it is crucial that these are re-invested into front line delivery and not withdrawn from budgets.
Q15 Are there other benefits or costs to the proposals? For example, what other costs and benefits are there for the private sector, the third sector and for public, private and third sector providers of business support? The lead-in time involved in achieving the benefits of BSSP should not be under-estimated. There may also be short-term costs, particularly if implementation becomes a distraction from securing impact on underlying economic conditions. Such cost increases could include extra training of staff or additional investment required in infrastructure such as client management systems. Central government should also be cognisant that the new arrangements for Business Link now managed by RDAs are still being embedded and any substantial changes to the portfolio of services which they can broker to may risk undermining customer confidence and create instability. Nevertheless, the Region is confident that, using outcomes as our key measure of success, that the BSSP will achieve significant returns in the medium and longterm. Cost savings must not simply be about getting the lowest cost suppliers. It must be about ensuring the best value for money, measured by impact on the businesses assisted and overall economic impact (i.e. additionality). 21
The development of the framework is a useful tool, but it will be important to make sure that a thorough analysis is undertaken of private sector business support activities, and that the private sector is encouraged to come up with the solutions for business clients. Q16 How far will our proposals make it simpler for business to know what publiclyfunded business support is available and how to access it? The proposals provide a good platform, but in themselves do not provide a clear route-map towards reducing current levels of proliferation or reducing scope for further proliferation in the future. The principles of the BSSP are clear and sound, however the real challenge of simplifying the array of services lies with those agencies investing in business support. Over the coming months, partners in the Northwest have agreed to produce a business support framework for the Region which will set out our priorities and principles leading to a framework against which new services can be developed and old ones revised, amalgamated or closed.
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Contributors Private Sector TaxExpert.com A4E Ltd Allan Environmental RCU Ltd Winning Pitch Ltd RTC North Reach Marketing and Communications Regeneris Consulting NISP Shaping Business Ltd People 1st The Network Company Ltd FMEA Emerge Recycling Medilink North West FSSC Downs Variava Improve Ltd Conic Blue LLP REKTN KitshoffGleaves & Company Tangerine PR NXO Strategic Marketing Network Ltd Bentley Ltd Elwers Limited Instruments to Industry Ltd Idaho Technology Limited Junction YK BPIF Winning Pitch Elwers Business Representative Organisations Institute of Directors Northwest Private Sector Partners NW Ltd CBI Northwest Chambers of Commerce Northwest Federation of Small Business Institute of Charted Accountants England & Wales South Cheshire Chamber N&W Lancashire Chamber NW Ethnic Minority Business Forum NW Women’s Enterprise Steering Business Link Northwest The Manufacturing Institute Chartered Institute of Marketing Greater Manchester Chamber of Commerce Manchester Business Support Solutions Furness Enterprise Ltd Bolton Business Ventures Northwest Enterprise Agencies Cheshire & Warrington Business Venture
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Business Clusters & Networks MIDAS Cheshire Tourist Board Chemicals Northwest Northwest Food Centre SEMTA Cumbria Tourism Regional Language Network NW CallNorthWest Sustainability Northwest North West Aerospace Alliance Enworks Cheshire Tourist Board Lancashire and Blackpool Tourist Board Creative Industry Development Service Envirolink Northwest PRIME Local Authorities Hyndburn Borough Council Manchester City Council Business Liverpool Cumbria County Council Cumbria Economic Development Officer Group Blackburn with Darwen Borough Council District Council Oldham Borough Council New East Manchester Halton Borough Council West Lancashire District Council Salford City Council Cheshire County Council Ellsmere Port Borough Council Rochdale Borough Council Warrington Borough Council Lancashire County Developments Ltd Preston City Council Bolton Metropolitan Borough Council Chester City Council Tameside Metropolitan Borough Council Bury Metropolitan Borough Council South Ribble Borough Council Pendle Borough Council Sefton Metropolitan Borough Council Stockport Council Sub-Regional Partnerships Manchester Enterprises The Mersey Partnership Lancashire Economic Partnership Cheshire & Warrington Economic Alliance Cumbria Vision
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Academic Institutes & Skills Northwest Universities Association Regional Skills Partnership SummitSkills Sector Skills Development Agency Learning and Skills Council University of Central Lancashire Myerscough College Manchester Metropolitan University ConstructionSkills AssetSkills University of Cumbria SkillsActive UFI – LearnDirect Liverpool John Moores University University of Bolton PeopleFirst Voluntary Sector Burnley Enterprise Trust North Western Deanery The Prince's Trust InBiz Regional & Central Government Government Office North West Northwest Regional Development Agency Department for Food, Environment and Rural Affairs Environment Agency Learning and Skills Council Department for Culture, Media and Sport Department for Business, Enterprise & Regulatory Reform Department for Innovation, Universities and Skills Local Government Association Jobcentre Plus NHS Northwest
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Simplifying Business Support: A Consultation The Advice of the Northwest Region September 2007
This Regional Advice Document was facilitated and produced by:
Northwest Development Agency PO Box 37 Renaissance House Centre Park Warrington WA1 1XB Tel +44(0) 1925 400 100 Fax +44(0) 1925 400 400 Email: information@nwda.co.uk HTU
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www.nwda.co.uk www.englandsnorthwest.com HTU
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Contact Mark Hughes, Executive Director, NWDA Enterprise & Skills
Government Office for the North West City Tower Piccadilly Plaza Manchester M1 4BE Tel +44(0) 161 952 4000 Fax +44(0) 161 952 4099 Email: gonwmailbox@gonw.gsi.gov.uk HTU
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www.gonw.co.uk HTU
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Contact David Higham, Deputy Regional Director, GONW Economic and Regional Issues
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