Regional Growth Fund round one cannot be used as a measure of a LEPs success

Yesterday I notice a number of articles / twitter comments which suggest that business has no confidence in LEPs and blames the LEP for its areas failure to secure Regional Growth Fund (RGF) e.g. http://www.insidermedia.com/insider/midlands/52809-emda-revival-through-communicate-east-midlands/

There seem to be a few issues around this fund which I will try to clear up.

BIS states:

The objective of the RGF is to stimulate private sector investment by providing support for projects that offer significant potential for long term economic growth and the creation of additional sustainable private sector jobs.

The fund aims particularly to help support those areas and communities that are currently dependent on the public sector to make the transition to private sector led growth and prosperity.

So it is about jobs and growth BUT with a focus on areas that have been disproportionately hit by the public sector cuts.  The north of England was always going to do better from the RGF than the South.  The fund is competitive and was never intended to be equally spread through the regions.  The fund was also heavily oversubscribed; 464 bids were received with a combined total value of £2.78 bn (twice the value of the total fund). In fact it was so over subscribed that the amount of funding invested in the first round was nearly twice as much as the government had originally suggested (£450m to support 50 project).

Bids have to be from Private sector companies or public/private partnerships – note it is private sector led.

No LEP was in a position to bid for the RGF first round (contract had to be with a legal entity).  The RGF round one closed on the 21^st January, the first LEP Boards were not recognised until the 28^th January http://www.bis.gov.uk/policies/economic-development/leps/lep-contact-details

First round success has been reported by LEP area http://www.theyworkforyou.com/wrans/?id=2011-05-19a.54051.h as well as a full list of winners http://www.bis.gov.uk/policies/economic-development/regional-growth-fund/regional-growth-fund-round-1-analysis (subject to due diligence) however the LEPs themselves are very unlikely to have been involved in any of the bids.  

The first round of the RGF cannot be used as an indicator of the success of a LEP.  

LEPs (as a public private partnership) will be eligible to bid for RGF round two.  HOWEVER it is very difficult to compare LEP areas, not only are they different in terms of demography / geography they will not have comparable priorities.  

If you are not in a LEP it is time to take action fast

Local Enterprise Partnerships (LEP) are quickly becoming the preferred vehicle for sub national delivery around growth, job creation and has potential for this list to expand rapidly.

There are still a few Local Authorities which are not part of a LEP, this is notable within the South West.  

Whilst some may see the LEP label as adding very little (which in the beginning would have been a fair point), recent BIS (et al) announcements mean that time is of the essence in getting a LEP area ‘approved’ and getting a Board in place to ensure your LEP is in the strongest position to ‘mop up’ limited funding which has recently been announced in supporting this function.

Dates which are fast approaching include:

• LEP capacity fund second round in autumn 2011 (third and forth rounds in 2012 and 2013)
• LEP start up fund, this is a one off 2011/2012 £5M fund
• End June 2011 is the closing date for enterprise zone applications
• Regional Growth Fund round 2 – LEPs could bid for funding for delivery as a public private partnership, closing date 1^st July

The competition isn’t just with your neighbours or ‘region’ but with the whole country, after all you have to be in it to win it...

Where can we expect the 10 remaining Enterprise Zones?

The Budget named the first 11 LEPs (Birmingham and Solihull, Sheffield, Leeds, Liverpool, London, Manchester, the Bristol area, the Black Country, Derby and Nottingham, Teesside and the North East) that would benefit from the Zones. A competition for the further 10 Enterprise Zones (EZ) in the remaining LEPs was also announced.  Out of the remaining 23 LEPs (as of 24^th May) which 10 might get an EZ?

These are the remaining LEPs.  I enclose a link to further information about their EZ bid where it is available.

Cheshire and Warrington

Have not confirmed if they will bid for an EZ.  If they did Crewe is the likely contender.  News article sources http://tiny.cc/ft4na and http://tiny.cc/6qs23

Coast to Capital

Have submitted an EZ bid.  In fact they have identifed three preferred areas; Croydon; Gatwick Diamond, Bognor Regis http://tiny.cc/mxzap

Cornwall &; the Isles of Scilly

Have submitted a bid, rumored to be based around Newquay airport. http://tiny.cc/gyw54 and http://tiny.cc/4mctw

Coventry &; Warwickshire

Will be submitting a bid.  Possibly around Coventry Airport http://tiny.cc/fwqlg

Cumbria

Have submitted a bid, a west cumbrian Industrial Estate is the chosen location http://tiny.cc/p1y25

Enterprise M3

Not clear if they will be submitting a bid, Board not yet in place.

Gloucestershire

They are planning an expression of interest for an EZ http://tiny.cc/i1ivk

Gt. Cambridge &; Gt. Peterborough

Will be submitting a bid http://tiny.cc/xr6tt

Hertfordshire

Will be submitting a bid, possible sites here: http://tiny.cc/e0skf

Kent, Greater Essex & East Sussex

Will be submitting a bid, not sure exactly where yet http://tiny.cc/34hwu http://tiny.cc/78753

Lancashire

Will be submitting a bid, http://tiny.cc/jqiga but might define the exact area later http://tiny.cc/c8mnd

Leicester & Leicestershire

Not yet clear if they will be submitting a bid, business wants an EZ http://tiny.cc/g0pdn

Lincolnshire

Not clear if they will bid http://tiny.cc/34g8a

New Anglia

Will be submitting a bid, 4 areas on the short list, it wont be in Norwich http://tiny.cc/d8ecv

Oxfordshire City Region

Expression of interest submitted http://tiny.cc/axswa

Solent

Unclear if they will make a bid, seems to be wanted by business so highly probable http://tiny.cc/daqky

South East Midlands

Will be submitting a bid http://tiny.cc/i5ah4

Stoke-on-Trent & Staffordshire

Will be submitting a bid, and why wouldn’t they as the government has already announced they will get an EZ! http://tiny.cc/bw8gs http://tiny.cc/090mw

Thames Valley Berkshire

Looks like they will be making an expression of interest http://tiny.cc/bhcsj

The Heart of the South West

Have submitted an expression of interest for Plymouth http://tiny.cc/0j97k

The Marches

I can’t find anything except that there will be a LEP meeting on 24^th May http://tiny.cc/96901

Worcestershire

Kidderminster is Worcestershire’s choice for enterprise zone http://tiny.cc/hi2sr

York and North Yorkshire

Will be submitting a bid http://tiny.cc/1r2tw

So where will they be exactly? Here is a link to a BIS map of the first 11 LEP areas to have an Enterprise Zone http://www.communities.gov.uk/documents/localgovernment/pdf/1872110.pdf

My predictions, for what it is worth, are that these LEPs will get and EZ (in no particular order).  1) Heart of the South West 2) Kent, Greater Essex and East Sussex 3) Stoke and Staffordshire 4) York and North Yorkshire 5) Leicester and Leicestershire 6) Hertfordshire 7) Coast to Capital 8) Solent 9) Oxfordshire City Region 10) Gloucestershire

Statistically at least some will be correct...

I think it is also worth pointing out the Manchesters EZ is around the Airport.  It is suggested that both Coventry and Cornwall are also looking for an EZ around their airports.

BIS Timetable for Phase 2 Enterprise Zones

• May: Having received expressions of interest, we will write to all interested LEPs with the criteria against which worked up bids will be assessed.
• May – end of June: LEPs will develop their proposals and submit them.
• July: Government will assess the proposals against the criteria and announce successful bids by the summer.

Do let me know if I have missed anything, very happy to edit the blog.

Local Enterprise Partnerships Possible funding sources

Most of the LEP conversations to date have focused on how LEPs will work in principle – (their legal status, constitutions, powers and accountability).  This blog aims to help with the next steps - where they can source resources if not from the traditional funding streams.

1) Capacity Fund

The Department for Business Innovation and Skills (BIS) has made available a £4 million capacity fund over four years.  The first round has £1m allocated and was launched on the 17 February with a closing date of 31 March. A second bidding round will be launched in Autumn 2011 with further rounds in 2012 and 2013.

More information can be found here: http://www.bis.gov.uk/policies/economic-development/leps/capacity-fund

It seems to me that a ‘pick and mix’ approach offers the best chance as you could detail 5 to 10 different things you would like to use the capacity fund for and each item could be assessed individually.

2) Start up fund

BIS has made available £5 million in 2011-12 as a one-off start up fund.  The closing date for applications is midnight on the 30th June 2011

Application forms and more information can be found here: http://www.bis.gov.uk/policies/economic-development/leps/lep-start-up-fund

3) Community Infrastructure Levy (CIL)

Councils will be able to raise a new levy to help fund economic growth and lay the foundations for future success of local areas.  This is a power that allows councils to raise funds from developers alongside new building projects to help build infrastructure, such as new schools, hospitals, roads and transport schemes as well as libraries parks and leisure centre's.

Here is a good link through the DCLG website http://tiny.cc/vuu2q and another from the PAS website: http://www.pas.gov.uk/pas/core/page.do?pageId=122677

4) Tax Increment Financing (TIF)

The best introduction is from the House of Commons library and is very recent having been published in March 2011

http://www.parliament.uk/briefingpapers/commons/lib/research/briefings/snpc-05797.pdf

This may also be of use (more of a rough guide)

http://www.corecities.com/sites/default/files/images/publications/A%20Rough%20Guide%20to%20Tax%20Increment%20Financing_0.doc

5) Enterprise Zones

Best information link is here http://www.bis.gov.uk/policies/economic-development/leps/lep-toolbox/enterprise-zones

There will be 21 enterprise zones in the UK.  11 have already been announced with 10 being bid for by LEPs who don’t yet have one.  With 34 LEPs announced and more to follow not all LEP areas will have an Enterprise Zone. 

In July the Government will access the proposals against criteria with the remaining 10 zones to be announced in the summer

EZ’s will be 50 to 100 hectares in size and Businesses will get up to a 100 per cent discount on rates, capped at £275,000 spread over five years, and could receive tax breaks on capital investments in areas where advanced manufacturing dominates.

Please see another of my posts for more info.

6) Regional Growth Fund

This is not exclusively for LEPs.  The RGF aims to create economic growth and Jobs. The second round of the RGF closes on 1^st July.  Information can be found here: http://www.bis.gov.uk/policies/economic-development/regional-growth-fund

7) RDA assets? But looking increasingly unlikely as they seem to be going to the HCA.

8) Transport Funding see http://www.localgov.co.uk/index.cfm?id=98410&method=news.detail also the Local Sustainable Transport Fund which makes £560 million available over the 4 year period to 2014-15 further information available here including application form for the Department for Transport http://www.dft.gov.uk/pgr/regional/transportfund/

9) Rural Development funds

See Rural Development Programme for England A total of £3.7 billion is available for the 2007-13 programme period.  RDPE-funded grants for economic and social projects are currently administered by the RDAs but management of the funds will be moving to Defra on 1 July 2011. 

More information here: http://www.defra.gov.uk/rural/rdpe/

10) ERDF (direct from 2014?)  see page 9 http://www.parliament.uk/briefingpapers/commons/lib/research/briefings/SNEP-05651.pdf

11) HCA?

12) Business rates?

13) Coalfield Communities – remaining funds from EU

14) National Affordable Housing Programme

15) New Homes Bonus

16) Reaching Communities and Heritage Lottery Fund

17) Business Growth Fund

This is a 2.5bn fund backed by 6 banks.   It aims to support businesses that have moved beyond start up.  Information here: http://www.businessgrowthfund.co.uk/ and here http://www.insidermedia.com/insider/south-west/52761-BGF-fund-provinces

18) Pooling resources and shared services

19) LA Economic Development Budgets

20) Private sector investment

21) JEREMIE Venture Capital Funds are available for Debt and equity financing for SMEs in certain parts of the north of England further information here: www.thenorthwestfund.co.uk and http://www.northeastfinance.org/

22) JESSICA Urban Development Funds are available to Firms in LEPs in the North West, East Midlands and London.  More information here www.eastmidlandsurbandevelopmentfund.co.uk and www.erdfnw.co.uk/projects/northwest-urban-investment-fund--jessica

23) Leonardo?  http://www.leonardo.org.uk/

24) Green investment bank http://www.businessgreen.com/bg/news/2071426/decc-treasury-clash-green-investment-bank

25) Technology Strategy Board http://www.innovateuk.org/

Many thanks for all your comments.  Please also note that I am aware that all funding sources will note be available / appropriate to all LEPs.  What I do think is that the available funding streams might help LEPs with prioritisation of what they plan to do.

Please do add comments / suggestions / corrections!

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