Hertfordshire Growth Hub Review
Transcript of Hertfordshire Growth Hub Review
Report
April 2020
Hertfordshire Growth Hub Review
Steer Economic Development has prepared this material for Hertfordshire LEP. This material may only be used within the context and scope for which Steer Economic Development has prepared it and may not be relied upon in part or whole by any third party or be used for any other purpose. Any person choosing to use any part of this material without the express and written permission of Steer Economic Development shall be deemed to confirm their agreement to indemnify Steer Economic Development for all loss or damage resulting therefrom. Steer Economic Development has prepared this material using professional practices and procedures using information available to it at the time and as such any new information could alter the validity of the results and conclusions made.
Report
April 2020
Hertfordshire Growth Hub Review
Prepared by:
Prepared for:
Steer Economic Development
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Hertfordshire LEP
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Hertfordshire Growth Hub Review | Report
April 2020
Contents
1 Introduction .............................................................................................................. 1
Purpose of study ................................................................................................................. 1
Methodology ...................................................................................................................... 1
2 Context, Rationale, Objectives & Options .................................................................. 3
Context for the provision of the Hertfordshire Growth Hub ............................................. 3
Rationale for provision of Hertfordshire Growth Hub ....................................................... 3
Objectives ........................................................................................................................... 3
Options for delivery ............................................................................................................ 5
Comparator LEPs ................................................................................................................ 6
Conclusion ........................................................................................................................ 10
3 Inputs ..................................................................................................................... 12
Financial resources ........................................................................................................... 12
Personnel .......................................................................................................................... 13
Governance ...................................................................................................................... 14
Comparison with other LEPs ............................................................................................ 15
Conclusion ........................................................................................................................ 15
4 Activities ................................................................................................................. 17
Services to business .......................................................................................................... 17
Networking and development of the business support ecosystem ................................. 19
Conclusion ........................................................................................................................ 20
5 Outputs .................................................................................................................. 22
Introduction ...................................................................................................................... 22
Monitoring arrangements and data availability ............................................................... 22
Conclusion ........................................................................................................................ 22
6 Outcomes and Impacts ............................................................................................ 23
Introduction ...................................................................................................................... 23
Data availability ................................................................................................................ 23
Assumption-based impact modelling ............................................................................... 23
Insight from user consultations ........................................................................................ 25
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Evidence of impact from other Growth Hub evaluations and surveys ............................ 27
Conclusions ....................................................................................................................... 27
7 Conclusions and Recommendations ......................................................................... 29
Appendices
A Impact Matrix
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Purpose of study
Steer Economic Development (Steer-ED) was commissioned by Hertfordshire Local Enterprise
Partnership (LEP) to conduct an independent review of the current contract and service model
of the Hertfordshire Growth Hub (HGH).1
Hertfordshire LEP currently uses an outsourcing model for Growth Hub provision in
Hertfordshire. In October 2018, it awarded a two-year contract to Exemplas Limited, which
leads a consortium that includes the University of Hertfordshire and Hertfordshire Chamber of
Commerce. The contract includes an option to extend arrangements for up to a further two
years, from 1st October 2020.
This Review was commissioned to inform Hertfordshire LEP Board’s approach to future
provision of Growth Hub services in Hertfordshire, including the advisability of:
Retaining the outsourcing model and renewing the existing contract for a further two
years; and
Retaining the outsourcing model but holding a new procurement exercise in 2020; or
Adopting an alternative delivery model, based on lessons from elsewhere, e.g. in-house
provision.
The Review was asked to form judgements on:
The effectiveness of the current programme in terms of performance against KPIs and
delivery of company-level impact;
Perceptions of HGH amongst account-managed clients, and stakeholders and other
business support providers within Hertfordshire’s business support ecosystem;
Whether the current delivery model and service delivery are realising the LEP’s ambition
for the Growth Hub programme; and
The relative effectiveness of the current delivery model, taking account of the approaches
adopted in comparable LEPs, namely, Worcestershire, Buckinghamshire Thames Valley
and Cheshire & Warrington.
Methodology
The Review undertook the following tasks over the period January-February 2020:
A desk-based review of ‘Perfectly Placed for Business: The refreshed Strategic Economic
Plan: 2017–2030 July 2017’, BEIS Growth Hub monitoring and Evaluation Framework 2019-
20, the HGH Consortium Board Terms of Reference, HGH Board papers (including Progress
1 The work on this Review was undertaken prior to the impact of Covid-19.
1 Introduction
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Report Oct 2018 – March 2019 and July – September 2019), the HGH Annual Report 2018-
19), HGH Customer Satisfaction Survey, and ‘Get Growing ERDF Evaluation’ report;
Analysis of data provided by Exemplas in the form of the LEP’s Impact Matrix (Appendix A)
which provides data on 34 companies, plus firm-level data for firms receiving ‘intensive
support’ (of 12 hours or more); and
Consultations with: LEP Deputy Chair; LEP Enterprise and Innovation Programme Board
Chair; Hertfordshire LEP client-side staff; Exemplas Limited; Chief Executive Hertfordshire
Chamber of Commerce, Director of Client Services WENTA, Chair of Hertfordshire
Economic Development Officers (EDOs), Manufacturing Growth Programme; Business
Relationship Director Santander; three comparator LEPs (Worcestershire,
Buckinghamshire Thames Valley, and Cheshire and Warrington); account-managed
businesses.
The logic-model approach
This Review follows a logic model approach (Figure 1-1). The logic model provides a best-
practice approach to programme evaluation. It takes a step-by-step approach to develop an
understanding of how interventions lead to change (Impacts) by covering the following issues:
Context – outlines the background to an intervention, e.g. the need to support businesses
to improve UK productivity;
Rationale – identifies the market and/or institutional failures being addressed – e.g.
information and coordination failures adversely local businesses’ ability grow;
Objectives – identifies key targets, in this instance, the annual contract targets as agreed
with BEIS: 115 ‘high intensity’ interventions; 660 ‘medium intensity’ interventions; 2,700
‘light intensity’ interventions; 100 Jobs created; and 3,000 unique clients supported;
Options for intervention – identifies options to deliver priorities and the preferred option,
based on defined criteria, in this instance: what is the preferred model to deliver Growth
Hub services in Hertfordshire, e.g. in-house, out-sourced or hybrid?
Inputs – The resources available to deliver the activities, including, financial resources,
leveraged investment, key personnel, and knowledge;
Activities – the business support activities provided;
Outputs – the number of business supported by type of activity;
Outcomes – e.g. employment and GVA impact;
Impacts – wider net additional impacts, e.g. in the development of the business support
ecosystem.
Figure 1-1: Logic model framework
Source: Steer-ED
This report follows the structure of a logic model before outlining findings and
recommendations in relation to the questions posed in the brief.
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Context for the provision of the Hertfordshire Growth Hub
In line with the UK Governments ambitions to promote strong, sustainable and balanced
economic growth, the Department for Business, Energy and Industrial strategy (BEIS) provides
grant funding available to LEPs to deliver Growth Hubs. The Government’s vision for Growth
Hubs is that they should provide a single access point to impartial and high-quality business
support that brings together national and local schemes so that businesses can access
everything they need, including both public and private sector support, in once place.
Rationale for provision of Hertfordshire Growth Hub
The rationale for public sector provision of business support is driven primarily by the
existence of information and coordination failures, in particular, the view that businesses lack
sufficient information about the costs and benefits of different business support services to
make informed choices, which means that there is a risk that their use of advice and support is
not optimised. This in turn limits economic growth. Furthermore, firms often find that the
business support ecosystem is difficult to navigate with offers that duplicate or compete with
each other.
Objectives
The Growth Hub’s operations are framed by national objectives set by BEIS and local
objectives as set by Hertfordshire LEP, these are summarised below.
BEIS objectives
BEIS Principles
BEIS has established a set of principles to guide the LEP’s approach to delivery of Growth Hub
services:
Principle 1: Providing strategic co-ordination and building inclusive partnerships with local
stakeholders, the private sector and government.
Principle 2: Maintaining robust governance arrangements to oversee Growth Hub activity
and ensure ongoing alignment with the LEPs Strategic Economic Plan.
Principle 3: Developing a strategic approach to local business growth to enable ambitious
businesses to maximise their growth potential and scale-up.
Principle 4: Offer a triage, diagnostic and signposting service that joins up national and
local business support (public and private), simplifying the support on offer for businesses.
Principle 5 - Ensuring plans for Growth Hubs are deliverable and sustainable beyond
March 2018 when the current round of Government funding ends, ensuring that core
services continue to remain free to business at first point of contact.
2 Context, Rationale, Objectives & Options
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Principle 6: Applying the common metrics and evaluation framework to produce high-level
impact data in bi-annual and end of year reporting and provide BEIS unrestricted access to
firm level data for the purpose of research and analysis. 2
Key Performance Indicators
A set of Key Performance Indicators (KPIs) are agreed by BEIS and the LEP as part of funding
arrangements. These KPI targets are broadly the same year-on-year. The KPIs targets for
2019/20 are detailed in Table 2-1.
The critical minimum targets reflect a threshold below which the LEP would consider the
contract with Exemplas to be in ‘non-performance default’. The contract targets are also
referred to as the ‘performance expectations’ and reflect the practical or operational delivery
target. The ‘stretch target’ sets an ambitious target for the Growth Hub to work towards. KPI
targets are set for High, Medium and Light intensity interventions (see Table 2-2 for
definitions), in terms of the logic model, these are measures of input and activity. As well as
the number of unique clients supported, the KPIs also include jobs created, which in terms of
this Review are outputs which lead to GVA outcomes.
Table 2-1: Growth Hub LEP/BEIS KPI targets (2019/20)
KPI Descriptor Critical Minimum Contract Target Stretch
High intensity – 12 hours support 80 115 170
Medium intensity – 1 hour plus 250 660 935
Light intensity – less than 1 hour 800 2700 4050
Unique clients supported 1600 3000 4500
Jobs created 75 100 100
Source: GROWTH HUB FUNDING TO LOCAL ENTERPRISE PARTNERSHIPS (LEPs), SCHEDULE 3 - PRINCIPLES OF FUNDING (2020-2021)
Table 2-2: Definitions of different levels of intervention
“Light touch” interventions
Transactional interactions that do not consumes significant dedicated resource. E.g. telephone enquiries and basic signposting; active web-based interactions (e.g. live chat or diagnostic tools but not passive actions like views of a webpage; event attendance etc.
“Medium intensity” interventions
Interactions which use moderate Growth Hub resources (c. 1 hour plus). E.g. business diagnostic with Growth Hub advisor; attendance at a workshop; referral to a scheme etc.
“High intensity” interventions
Sustained support using significant Growth Hub resource E.g. businesses with managed accounts; services/ support provided directly by Growth Hub.
Source: Monitoring and Evaluation Framework for Growth Hubs – 2019-20203
2 Identified in: GROWTH HUB FUNDING TO LOCAL ENTERPRISE PARTNERSHIPS (LEPs) , SCHEDULE 3 - PRINCIPLES OF FUNDING (2020-2021)
3 Monitoring and Evaluation Framework for Growth Hubs – 2019-2020
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Strategic Added Value indicators
Alongside the quantitative KPI targets, the LEP has agreed a number of qualitative ‘Strategic
Added Value indicators’ with BEIS. For 2019/20 these are:
The establishment of a central resource providing access to the principal business support
providers in Hertfordshire;
The establishment of an online platform and telephone service to ensure local SMEs can
access the support they need quickly and easily;
Co-ordination and management of peer-to-peer networks and/or communities of interest
to encourage the dissemination of best practise;
The establishment of Growth Account Managers to help growth-potential businesses to
scale up quickly; and
The marketing and promotion of activities to channel SME demand for external advice,
whether or not it is free of charge.
LEP objectives
In June 2017, Hertfordshire LEP published its refreshed Strategic Economic Plan (SEP) for
Hertfordshire 2017-2030. The SEP sets out the LEP’s four main priorities which are aligned to
the four main drivers of economic growth in Hertfordshire:
Priority 1: Maintaining global excellence in science and technology;
Priority 2: Harnessing our relationships with London and elsewhere;
Priority 3: Reinvigorating our places for the 21st Century; and
Priority 4: Foundations of growth.
The refreshed SEP considers both wider macro-economic and political impacts as well as
common factors affecting local economic growth. For example, it seeks to respond to the
impact of the UK’s departure from the EU, opportunities provided by Hertfordshire’s proximity
to London, and changing working patterns enabled by digital connectivity. The SEP also states
clear alignment to the Government’s Industrial Strategy.
The Growth Hub’s activities are particularly important to the delivery of Priority 1 and Priority
4 of the SEP. Harnessing the innovative ideas of SMEs and pre-start businesses in the Science
and Technology sector is “imperative” to delivering Priority 1. Supporting growth-propensity
SMEs to realise their economic potential is seen as key to delivering Priority 4.
Options for delivery
BEIS guidance, indicates that a LEP should ensure that a Growth Hub:
Remains under its direct leadership and governance and under the oversight of the LEP’s
Accountable Body;
Abides by branding guidelines;
Complies with funding requirements;
Is embedded in its Local Industrial Strategy;
Complies with the data collection and reporting requirements set down in the new
‘Metrics & Evaluation Framework’, including firm-level data; and
Operates using locally agreed KPIs. 4
4 GROWTH HUB FUNDING TO LOCAL ENTERPRISE PARTNERSHIPS (LEPs) , SCHEDULE 3 - PRINCIPLES OF FUNDING (2020-2021)
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The guidance also requires the LEP and any external providers and partners to ‘work
proactively together to leverage additional sources of public and private sector funding and
other resources to demonstrate coordination, alignment of business and enterprise support to
add value and further enhance the Growth Hub offer’.
The BEIS guidance is neutral in relation to the ‘delivery model’ by which a Growth Hub is to be
provided – LEPs may respond in relation to local circumstances.
The ‘models’ for Growth Hub delivery can be broadly characterised as:
In-house, i.e. the LEP provides the Growth Hub service;
Outsourced to a third-party provider, e.g. a Chamber of Commerce, University, social
enterprise or for-profit company; or
Hybrid model with some services provided in-house while others are outsourced.
To date, Hertfordshire LEP has chosen to outsource its Growth Hub provision – with ongoing
partnership working and input from the LEP team. Exemplas Limited, which is owned by the
University of Hertfordshire and provides business support services to a number of significant
public sector clients, has provided the Growth Hub service in Hertfordshire since 2015. It won
a competitive tender process in 2018 to operate the Growth Hub for a further two years (with
an option to extend the contract for a further two years).
Comparator LEPs
This Review looked at the Growth Hub models operated in three LEP areas of a similar size and
or facing similar issues to Hertfordshire, namely Worcestershire, Buckinghamshire Thames
Valley, and Cheshire & Warrington. The key characteristics of the different models, based on a
review of publicly available information and telephone consultations in each of the LEP areas,
are summarised below.
Worcestershire Business Central, Worcestershire Growth Hub – outsourced
Worcestershire has around 37,005 VAT-registered businesses5 and the LEP receives around
£205,000 a year (equivalent to £5.53 per business) from BEIS for its Growth Hub service,
Worcestershire Business Central (WBC).
Worcestershire LEP does not operate programme boards. It operates a Finance, Audit and Risk
Committee which carries out the scrutiny function, and Worcestershire County Council (which
is the Accountable Body for the LEP) operates Transport and Further Education programmes.
The LEP Board focuses on strategy.
Worcestershire LEP uses one-half of its BEIS Growth Hub funding to match-fund European
Regional Development Fund (ERDF) activity. This means that it attracts around £100,000 a
year in additional EU funding, while retaining the flexibility to carry out activities that do not
meet ERDF funding criteria and/or output requirements. In practice this provides flexibility on
sectors supported and the size of firm assisted.
WBC is operated by the Hereford and Worcester Chamber of Commerce, which has well-
established IT and client management systems, works with a range of partners, and has
secured additional ERDF funding to 2022.
5 https://www.nomisweb.co.uk/reports/lmp/lep/1925185567/report.aspx#tabidbr
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In terms of staff resource, WBC has a manager, plus three advisors who operate on the basis
of geography and its key sectors: IT/Digital, Manufacturing, and Agri-Food. The telephone
service is provided by the County Council.
WBC operates a diagnostic tool, which can be used in face-to-face meetings between a
business and an advisor or over the telephone. In a similar fashion to Exemplas, the Chamber
also provides trade advice services for the Department for International Trade, which
facilitates cross-referrals and provides added value to Growth Hub services. Worcestershire
LEP operates the Inward Investment service in the area.
WBC focuses on scale-ups and growth-oriented businesses; as scale-ups are judged to give a
higher return on resources invested than start-ups. A complementary ERDF start-up
programme is run by the District Councils in the county.
WBC was originally tasked to reach around 5,000 businesses (15%, i.e. 750 of which were to be
face-to-face visits the rest by telephone). These targets generated ‘perverse incentives’, as
resources were used to hit the target number of contacts irrespective of a firm’s growth
potential. In response to this situation, the targets were reduced to 3,000 contacts a year, of
which 500 had to be visits and 2,500 had to be by phone. In addition to these changes, the LEP
and the Chamber of Commerce worked together to identify high-growth businesses in the
area using data on patents, business growth grants, and exports. This research identified
between 600 and 700 target companies, some of which were already known to the Chamber
and the LEP, and some of which were not. This research-based approach led to greater
alignment between Growth Hub activity and stated objectives, as it facilitated a targeted
approach that focused on firms with growth potential.
Some issues to be noted regarding the outsourcing Growth Hub activity to a Chamber of
Commerce, include the perception among some businesses that the Chamber, which is a
membership organisation and a provider of services, may not be seen as an independent
source of information and advice. Furthermore, there may be issues associated with data
sharing with the LEP and wider partnership. For example, once the high-growth firms were
identified as part of the re-framing of the Growth Hub contract, the Chamber was reluctant to
share findings more widely as the list was commercially useful.
Worcestershire LEP has not undertaken an evaluation of WBC, but it is aware of alternative
models, including in-house provision and outsourced provision delivered by a university. It has
also considered the pros and cons of operating a place-based model with advice and support
being provided from one or more hubs in the area – as opposed to the current model which
uses the telephone, website, and mobile Business Advisors. It has identified a number of issues
to consider in relation to revising its arrangements, including but not limited to, the resource
implications of bringing the Growth Hub in-house (e.g. the costs of IT and CRM systems), the
disruption of relations with the Chamber (who is a key partner), and the uncertainty in relation
to the Government’s view on the future of LEPs and Growth Hubs. So on balance,
Worcestershire LEP’s judgement is that now is not the time for it to decide to change
arrangements for delivery of Growth Hub services, so the LEP has no current plans to change
its Growth Hub arrangements.
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Buckinghamshire Business First, Buckinghamshire’s Growth Hub – outsourced
The Buckinghamshire Thames Valley LEP area has around 31,150 VAT-registered businesses.6
The LEP receives funding from BEIS of around £328,000 (equivalent to £10.52 per business) a
year for its Growth Hub Service, Buckinghamshire Business First (BBF).7 All of this funding goes
to BBF to cover the costs of finance, marketing, events, and business support services etc.
Buckinghamshire Thames Valley LEP does not use the Growth Hub’s core funding to match
ERDF – of which there is only £10m in the Buckinghamshire Thames Valley LEP area. But it has
provided support to partners who bid for ERDF, including the delivery arm of the Growth Hub.
The County Council provides support to the Growth Hub that is worth around £400,000 and
BBF also generates income and grants.
The Growth Hub in Buckinghamshire Thames Valley has around 12 staff – and BBF has around
50 staff in total.
A Growth Hub Management Board meets four times a year and there are regular
update/progress reports to the LEP Board; the annual submission to BEIS is reviewed by the
LEP Board prior to submission. The core teams of the LEP and the Growth Hub meet on a
weekly basis.
BBF is a membership organisation which predates the establishment of the LEP. It was
established in 2011 when 10 local entrepreneurs and business leaders met to discuss how to
encourage business growth in Buckinghamshire. BBF argued for the LEP to be established and
provided the LEP’s Board members in its early years, although the private sector members of
the LEP Board are now drawn from a wider group. BBF was established as there were no
strong business membership organisations to represent business in in the County.
BBF has around 12,000 members (membership operates at four levels: free, stakeholder,
partners and ambassador). Around 2,000 of BBF’s members pay fees, which generate around
£50,000 a year. BBF’s membership covers around 75% of Buckinghamshire’s workforce.
BBF’s offer works through provision of integrated services include skills, enterprise, growth
tourism/visitor economy, rural/LEADER programme and broadband, plus growth grants of
around £5,000 and support of around £5,000 for low-carbon workspaces. The Growth Hub
focuses on scale-ups and the wider business support ecosystem addresses the needs of start-
ups and micro-businesses; while, recently steps have been taken to align Growth and Skills
Hub activity. As a membership organisation, BBF seeks to facilitate business-to-business
activity; it operates an annual Business Festival and the website provides a directory and
marketplace where members can do business with each other.
Buckinghamshire Thames Valley LEP and BBF worked together to establish Visit
Buckinghamshire, a Destination Marketing Organisation (DMO) to promote the County’s
visitor offer. The LEP provided £150,000 (50% grant and 50% loan) to add this feature to the
business support ecosystem.
For 2018/19, BBF reports around 30,000 business contacts, and around £2.5m public sector
funds (including ERDF and HS2), along with approximately £6m of private sector match
6 https://www.nomisweb.co.uk/reports/lmp/lep/1925185575/report.aspx#tabidbr
7 Up from £287,000 in 2018/19.
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funding, generating around 580 jobs and supporting 114 businesses to introduce new products
and services.
In terms of plans for the future, the LEP procures Growth Hub services on an annual basis, to
reflect the funding position. The Local Industrial Strategy has been developed as part of the
Oxford-Cambridge Arc, it is therefore likely that, in future, some Growth Hub services will
operate across a larger area to reflect this federated approach – which will build on the
approach taken to deliver Brexit readiness activity. The local context and history of BBF and
Buckinghamshire LEP means that BBF provides significant added value as an anchor body in
the local business support ecosystem.
Cheshire & Warrington Growth Hub – in-house
Cheshire & Warrington LEP, known as 871 after the 871 square miles that it covers, contains
around 43,325 VAT-registered businesses.8 The LEP receives around £287,000 (equivalent to
£6.62 per business) a year funding from BEIS.
The Growth Hub service used to be outsourced to Blue Orchid. Under these arrangements, the
Growth Hub matched core funding to ERDF and was therefore limited to providing ERDF-
eligible activities and delivering ERDF-eligible outputs.9 The service met BEIS requirements and
contractual KPIS, however, on 1st October 2018, the Cheshire and Warrington Growth Hub
service transferred from ‘Blue Orchid’ to LEP in-house delivery. This was the result of a
strategic decision of the LEP Board which sought additional activity over and above that linked
to BEIS and ERDF KPIs. A specialist team was recruited to staff the Growth Hub with the aim of
supporting the growth of the local business community and attracting new investment from
established and new businesses. The Hub is integrated with the LEP’s strategy function and
has moved to provide an integrated skills offer for businesses. The Growth Hub Director also
leads the LEP’s work on inward investment, working alongside local authorities, and seeks to
ensure good access for local businesses to angel investors and venture capital funds.
The Growth Hub consists of a director, a business intelligence officer who links to other
programmes in the area, including ERDF and ESF projects; two full-time business brokers who
operate diagnostics to match firms with the most appropriate support – whether from public
or private sectors. The team focuses on intensive assists (of at least 12 hours) to provide
effective signposting using an account management approach – which includes Key Account
Management of inward investors. The team has developed its own diagnostic approach,
rather than procure a third-party diagnostic tool. Furthermore, it does not undertake the
direct delivery of business support, rather it seeks to build and develop the local business
support ecosystem so that firms are able to access the support they require. Next year the
team will, however, undertake some direct delivery in relation to skills support.
In terms of working with key partners, e.g. Chamber, local authorities, and Higher Education
sector, the Hub operates memoranda of understanding, which set out the roles of key
partners and how these partners will interact with and add value to each other’s services.
There are also a number of stakeholder forums to maintain links and that ensure clients are
referred to the right place/service. Given the existence of local Chambers, plus other local
8 https://www.nomisweb.co.uk/reports/lmp/lep/1925185538/report.aspx#tabidbr
9 This is particularly important to the LEP, as it wishes to work with larger companies and with businesses involved in agriculture, which ERDF eligibility criteria exclude.
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business networks, such as Warrington Works, the Growth Hub works with existing business
networks, rather than seeking to establish and maintain new ones. Chester University provides
incubator and start-up support in the area, but to date it has not focused on promoting
research-led innovation, for this kind of activity the LEP and Growth Hub have to date worked
with universities from elsewhere in the North West – but this may change in future given
changes in leadership at Chester University. In terms of export support, the Department for
International Trade Advisors, who are part of a separate team, work with the Growth Hub on
export promotion, and the Growth Hub team also works with the trade teams in local
Chambers of Commerce to provide export support to businesses.
Prior to the LEP taking the Growth Hub in-house, Blue Orchid ran the Growth Hub website and
operated a Client Relationship Management System (Microsoft Dynamics). When the LEP took
the Growth Hub in-house it reached an agreement with Blue Orchid to take over the website
and the CRM. The cost of the CRM system to the LEP is currently around £15,000 a year. The
LEP, however, is planning to enhance its CRM system as part of wider improvements to the
LEP’s systems. This will lead to higher costs. The LEP is also planning to launch a new website.
This will address basic signposting needs and help to achieve the volume required by BEIS –
currently around 1,000 engagements a year.
Some key lessons from the transition from outsourced provision to an in-house service
include, maintenance of good relations with the provider to ensure that handover of data and
systems is smooth; establish staff’s intentions in terms of remaining with their existing
employer or moving to the LEP to continue to deliver the Growth Hub service – in practice
Growth Hub staff did not move to join the LEP, which left the Growth Hub short of staff in its
initial stages. This latter issue could have been addressed if an agreed transition period had
been in place to enable a smooth handover of Growth Hub services.
In terms of performance, in 2018/19, the Cheshire & Warrington Growth Hub supported
around 530 businesses (including start-ups) and dealt with almost 900 referrals. The area
attracted around £88m of inward investment in five projects, which created 258 jobs. The
team anticipates that it will achieve 1,000 engagements, but the focus is on delivering
outcomes related to exports and new products and processes, rather than headline ‘output’
figures. The focus of activity for 2020/21 will be exports and productivity. The Growth Hub
team also seeks to target scale-up businesses, but has sought to identify and develop the
business support offer that will be available to these business prior to proactively contacting
them, as these businesses require more sophisticated support than can be provided by
traditional ERDF business support projects. The Scale-up Institute has identified 600 scale-ups
in the area, the business intelligence officer will undertake research to identify 200 where
support is likely to add value, to inform proactive activity.
Conclusion
The rationale for Growth Hub provision and BEIS guidance on the objectives and operation of
Growth Hubs are common across England, but there is scope for significant variation in the
practical arrangements that LEPs put in place to deliver Growth Hub services. Our review of
arrangements in comparator LEPs reflects the diversity of options available and the
importance of local context in determining how business support services are provided in a
given LEP area. Arrangements in Worcestershire reflect the established capacity and
capabilities of the local Chamber of Commerce, and there are no current plans to change
these arrangements given wider uncertainty over the role of LEPs and Growth Hubs. While
arrangements in Buckinghamshire reflect the self-organising capacity of local businesses,
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which have developed a tiered membership/subscription model. And arrangements in
Cheshire & Warrington reflect an evolution of Growth Hub delivery arrangements that
respond to changes in the LEP’s strategic priorities. .
Consultees in the comparator LEP areas highlighted the contingent nature of BEIS funding and
the uncertainties that this entailed. Consultees also noted the pros and cons of using BEIS
funding as match funding for ERDF. With some LEPs, Buckinghamshire Thames Valley and
Cheshire & Warrington, choosing to keep their core funding free from ERDF eligibility criteria –
thereby forgoing additional resource in favour of greater flexibility in terms of the types of
businesses and sectors with which they can work. While, Worcestershire has opted for a
middle way, by matching one-half of its budget to ERDF finance, thereby leaving the other half
of its funding free of ERDF constraints. In this matter, Hertfordshire’s arrangements, can be
seen to maximise resources to the Growth Hub but limit the scope of support to activities
which meet ERDF eligibility criteria and output requirements.
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Financial resources
The Hertfordshire Growth Hub operates a ‘shared-resources model of delivery’ by which
Exemplas may pool resources across a number of contracts to lever in additional resources,
such as ERDF.
LEP Funding
Hertfordshire LEP receives core funding of c. £287,000 a year from BEIS to deliver a Growth
Hub service. Under the existing delivery contract Exemplas receives £251,050 a year to run
HGH. The LEP draws down c. £71,750 of this funding per quarter.
Financial Leverage
Alongside this LEP funding, HGH has leveraged additional funding, primarily through the ERDF-
financed ‘Get Growing’ project. The key sources of leverage are:
ERDF ‘Get Growing’- This project provides access to structured business support
services as well as grants of up to £3,000 to access external expertise with Growth Hub
Account Managers monitoring progress and proving ongoing support.
Private sector match through the ‘Get Growing’ project (FY 2018/19) – an extension
to project enabled HGH to provide grants of up to £3,000 (against 50% match funding)
for use on consultancy services that support business growth and resilience. These
grants have leveraged £97,553 of private sector investment.
University of Hertfordshire/Exec group funding (FY 2018/19) – recognising the
additional costs and resources required to deliver HGH Hertfordshire University
invests additional resources annually. This funding supplements Growth Hub project
staff resources and enabled Exemplas to absorb a proportion of overhead costs. The
total additional investment, including website development is a six-figure sum.
Digital platform – Exemplas and University of Hertfordshire have invested in the
development and licensing of a digital platform to streamline business support
services and increase the number of light touch interventions. This has been available
in the beta form since January 2019, and subject to ongoing development. The existing
website will be taken down following the consumer launch, after which the URL
www.hertsgrowthhub.com will take users straight into the platform.
Events – Exemplas often leverages the resources to deliver some of its events
including venue and catering costs.
A breakdown of the leveraged funding is presented in Table 3-1. In addition to these external
funds, the University of Hertfordshire invested in a digital business support platform which will
benefit the Hertfordshire LEP area, and overhead and running costs of the HGH – estimated to
be worth around £450,000. Furthermore, HGH benefits from the colocation of Innovate to
Succeed (funded by ERDF and Innovate UK), and the DIT-funded export advice services. Finally,
HGH also received an additional £110,000 for Resilience work with businesses. In addition to
3 Inputs
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these specific funding sources, Hertfordshire LEP also supported the ongoing operation of the
Growth Hub through leadership and coordination activity, including working with BEIS and
other elements in the wider business support ecosystem.
Table 3-1: HGH Financial Leverage
Source Value Activity
Period April 2018 – September 2018
ERDF £ 182,860.00 HGH Get Growing Project – with support from the LEP
SMEs £ 97,553.00 HGH Get Growing Grant Projects, Private Sector Leverage
UH/EXE Group
£ 94,000.00 Contribution to salaries and overhead costs
Period October 2018 to date (Feb 2020)
UH Bus Dev
£ 7,000.00 Venue and catering costs for ALTHYCG event - March 19
OPSS, BEIS £ 10,000.00 Marketing budget to support Growth Hub/HCC PA pilot
HCC, HS2, Align
£ 11,000.00 Venue and catering costs for ATHYCG Supply Chain & Procurement event
ERDF £ 361,701.00 Get Growing 2 Project, additional £1million committed for next 2 years
SMEs £ 26,666.29 HGH Get Growing Grant Projects, Private Sector Leverage
Total £ 798,780 +a further £1m ERDF to be drawn down Sept ‘21
Source: Exemplas Ltd, 2020
Personnel
The majority of the costs associated with running the Growth Hub relate to staff. At present
the Growth Hub is staffed by a dedicated team of 11.5 FTEs of which 4.5 are funded by core
funding from BEIS. This team works across both LEP and BEIS funded projects. The Team is led
by Sian Ryan, Head of Service who holds overall responsibility for HGH. A breakdown of HGH’s
personnel, including those funded by the LEP and those funded through other sources, is
provided in Table 3-2. There are 4.8 FTE Business Advisors, including an Online Growth
Account Manager (1 FTE), a Lead Growth Account Manager (0.8 FTE) and Growth Account
Managers (3 FTEs), of which 2.5 FTEs are funded using BEIS core funding. It should be noted
that HGH had one Growth Account Manager, vacancy from January 2020, with a recruit
identified to take-up the role in April 2020.
In addition, HGH employed a small temporary team to deliver the Business Resilience project
from December 2019 to March 2020. Staff for this project included: two FTE Business
Resilience Advisors; one FTE Marketing Executive; one FTE Event Executive. These roles are for
a fixed term with contracts due to terminate at the end of March 2020.
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Table 3-2: HGH Personnel by funding source
Role Total FTEs Of which LEP/BEIS funded
Of which ERDF/Exe Group funded
Head of Service 1 1 0
Online Growth Account Manager 1 1 0
Events Manager 1 1 0
Growth Account Managers 3* 0.5 2.5
Lead Growth Account Manager 0.8 0 0.8
MI & Data Analysis Executive 1 0.5 0.5
Senior Marketing Executive 1 0.5 0.5
Business and Strategic Dev Manager 1 0 1
ERDF Project Executive 0.6 0 0.6
ERDF Contract Manager 0.1 0 0.1
ERDF Operations Manager 1 0 1
11.5 4.5 7
Source: Exemplas Ltd, 2020
Governance
The Growth Hub Board
The Hub currently operates under contract between Hertfordshire County Council (as
Accountable Body for the LEP) and Exemplas Ltd.
The Hertfordshire Growth Hub reports to Hertfordshire LEP in two ways. It has an operational
board with two LEP board members (Adrian Hawkins and Nitin Dahad) and the Pro-vice
Chancellor – Enterprise, at the University of Hertfordshire. It also reports quarterly to the
LEP’s Enterprise and Innovation programme board, which comprises both private and public
sector stakeholders. The LEP’s governance structure in relation to Growth Hub is illustrated in
Figure 3-1.
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Figure 3-1: HGH Governance Structure
Source: Source: GROWTH HUB FUNDING TO LOCAL ENTERPRISE PARTNERSHIPS (LEPs), SCHEDULE 3 - PRINCIPLES OF FUNDING (2020-2021)
Comparison with other LEPs
Funding
Table 3-3 summarises the business populations, core funding and Growth Hub staffing for
Hertfordshire LEP and the three comparators.
Table 3-3: Comparator LEPs business populations and BEIS Growth Hub funding and staffing
Local Enterprise Partnership
VAT-registered business 2019
Annual Growth Hub Funding £
Funding per business p.a.
Full-time equivalent Growth Hub staff
Hertfordshire LEP 65,640 £287,000 £4.37 11.5 (4 funded by BEIS grant)
Worcestershire LEP 27,005 £205,000 £5.53 4
Buckinghamshire Thames Valley LEP
31,150 £328,000 £10.52 12 (4 business advisers)
Cheshire and Warrington
43,325 £287,000 £6.62 4
Source: Steer-EDAs noted in Section 2, Worcestershire LEP matches 50% of its core Growth Hub funding with ERDF and Buckinghamshire and Cheshire & Warrington LEPs do not use the Growth Hub’s core funding directly to match ERDF.
Hertfordshire LEP’s approach maximises ERDF funding to the Growth Hub by matching 100%
of its core Growth Hub funding to ERDF, and leveraging further private sector funding as part
of an ERDF-funded grants programme. This approach, however, means that Growth Hub
activities in Hertfordshire have to meet ERDF criteria, which reduces operational flexibility
relative to comparator LEPs, for example, ERDF funding criteria does not permit a firm to
receive more than one intervention, whereas BEIS funding criteria permit this.
Conclusion
Thus, Hertfordshire Growth Hub’s staffing levels based on core BEIS finding are in line with the
comparator LEP areas, and the use of ERDF funding has allowed the Hub to achieve a larger
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staff than other areas. This reflects different approaches to Growth Hub provision – with
comparator LEPs choosing not to confine operations to ERDF eligibility criteria and output
targets.
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HGH’s service model is centred on account management and signposting through the
ecosystem, i.e. Business Advisors engage with clients to develop ‘roadmaps for growth’ that
utilise all available business support and funding opportunities. The aim is for Business
Advisors to develop meaningful relationships with clients in order to co-produce growth-
enabling solutions. The face-to-face service is augmented by online support services, plus
events and briefings.
To make the most effective use of limited resources, HGH focuses its business advisers’
activities on scaling-up existing SMEs (estimated to be around 2,000 in the Hertfordshire LEP
area), while the HGH website serves the wider business population.
HGH forms part of a wider business support ecosystem. The key partners, University of
Hertfordshire, Hertfordshire Chamber of Commerce, and Exemplas hold regular meetings to
ensure there is joint branding across the three organisations and maintain clear referral
agreements. The business support ecosystem also serves the needs of start-ups and micro-
businesses, with WENTA providing enterprise support via the Get Enterprising programme.
There is also start-up and incubator support in specific locations, e.g. Rothamsted Research,
BRE in Watford, as well as the University of Hertfordshire’s Incubator facility. This ecosystem
sees Hertfordshire achieving the highest start-up rate per capita outside London of any LEP
area.
Services to business
Hertfordshire Growth Hub provides a number of signposting services via the website
https://www.hertsgrowthhub.com/ and business support services, in particular Growth
Account Managers (GAM) who operate as generalists and manage clients on their growth
journeys.
Barriers to growth
In terms of understanding the HGH offer relative to business need, it is useful to understand the barriers to growth that businesses in the area highlight. HGH conducted a customer satisfaction survey in 2019. The survey asked firms to identify the biggest barriers to their growth.
Table 4-1 summaries the results (from a relatively small sample), which show the largest area
of concern was Sales, Marketing, Digital barriers, followed by Planning, Operations and
Infrastructure; with People, Training and Development; and Finance, Funding and Investment
equal third. This provides an indication of firms’ current priorities – although as changes due
to the UK’s departure from the EU emerge, there may be an increase in demand for support
on legal and regulatory issues.
4 Activities
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Table 4-1: Key barriers to growth
Barrier to growth Proportion selecting (of 12 respondents)
Planning, Operations, Infrastructure 55% (6)
Finance, Funding, Investment 46% (5)
People, Training, Development 46% (5)
Sales, Marketing, Digital 82% (9)
Legal, Regulatory, Compliance 9% (1)
Source: Exemplas Ltd Customer Satisfaction Survey, 2018
Service delivery
The Growth Hub reports regularly on its activities, evidence provided to this Review covering
the period October to December 2019, illustrates the proportion of businesses accessing
different HGH services (Figure 4-1). It shows Finance, Funding and Investment is the most
common service accessed, with Planning, Operations and Infrastructure; Sales, Marketing and
Digital, and People Training and Development trailing some way behind. Given the limited
data, it is not possible to form a judgement on whether there is a need to rebalance support to
Sales, Marketing and Digital. Furthermore, it is possible that some of the support related to
Funding may have been used to address Sales, Marketing and Digital issues.
Figure 4-1: High intensity support business support areas (Oct-Dec 2019)
Support by sector
The SEP highlights the following key sectors: Life Sciences, Advanced Engineering/
Manufacturing, Agri-science and Agri-tech, Sustainable Construction, and Creative Industries
(film, TV, digital sectors). Table 4-2 provides a sector breakdown of supported businesses
(including three where data is missing). The sector most supported is ‘Professional, Scientific
and Technical Activities’ accounting for 33% of businesses with Information and
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Communication and Manufacturing equal second. These are broadly in line with SEP sector
priorities, however, the next largest sector in terms of support is Wholesale and Retail, which
may not reflect LEP priorities.
Table 4-2: Sector breakdown of support businesses
Sector Count (n=141) Proportion
Accommodation and food service activities 8 6%
Administrative and Support Service Activities 10 7%
Agriculture, forestry and fishing 1 1%
Arts, Entertainment and Recreation 3 2%
Construction 6 4%
Data Missing 3 2%
Education 4 3%
Financial and insurance activities 4 3%
Human health and social work activities 4 3%
Information and Communication 14 10%
Manufacturing 14 10%
Other Service Activities 4 3%
Professional, Scientific and Technical Activities 46 33%
Real Estate Activities 3 2%
Transportation and storage 3 2%
Water Supply; Sewerage, Waste Management, Remediation 1 1%
Wholesale and retail trade 13 9%
Source: Exemplas Ltd Client Database Excerpt, April 2018-September 2019
Networking and development of the business support ecosystem
In addition to the provision of services to business, HGH is required to engage with and
support the development of Hertfordshire’s business support ecosystem – including provision
of an online platform plus networking events and groups. We undertook a series of
stakeholder consultations to gather views on HGH’s role in Hertfordshire’s business support
ecosystem.
Consultations indicated that the University of Hertfordshire and Exemplas developed a new
online platform to be launched in Hertfordshire and subsequently rolled out to other
areas/clients. Stakeholders anticipated an enhanced service from the new online platform
relative to the existing website. A number of consultees, however, commented that its
delayed launch had limited the development of the County’s broader business support
ecosystem, in particular a relative lack of ‘market place’ activity. Consultations confirmed that
the launch was delayed due to complications in the development stage, and a subsequent
opportunity to link the launch of the platform to a refresh the LEP’s Growth Hub brand.
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In practical terms, a number of consultees reported improvements in HGH’s performance in
recent months, with more active engagement with stakeholders. One area for improvement in
partnership working may be in the relationship between HGH and local authorities – where
clarity on the restrictions HGH has to operate under in terms of data sharing and the uses to
which HGH data are put by local authorities may improve partnership working.
Consultees reported that HGH has established an effective signposting service for businesses
that works with the grain of the local business support ecosystem. And financial
intermediaries operating in the business support ecosystem valued HGH as an asset that could
add value to their own clients, e.g. by assisting business to access grants, and therefore added
value to their own services to clients.
Some consultees suggested that more could be done to coordinate, schedule, and promote
business events – with some consultees hoping that the new digital platform may help to
address the twin problems of effective programming of events between partners and raising
awareness of events. While others cited effective cooperation between themselves and HGH
in relation to attendance at business events, e.g. Manufacturing Growth programme (MGP)
attends HGH events, and provision of materials to help them to raise awareness of HGH.
Consultations also revealed a general sense that there was scope to increase the volume of
cross-referrals. The Review, was unable to explore the cause/s of these concerns in depth but
a number of potential explanations include, partners:
Do not fully understand each other’s offers, and therefore a fail to identify referral
opportunities when they arise;
Do not wish to refer businesses to other providers as they do not believe the offer/service
meets the needs of their client/s;
Operate in different ‘segments’ of the market and therefore have limited opportunity for
referral, e.g. those known for working with established businesses may be approached by
few start-ups and vice-versa; and
Partners often do not record the referrals that they make, which means they are unable to
provide evidence of a referral having been made, while clients may not always mention
how they were made aware of a service that they access.
The consultations found evidence for each of these explanations, with the latter explanation
being the most common.
Conclusion
Our review of evidence indicates that in terms of Strategic Added Value targets outlined in
paragraph 2.7, the HGH had:
Established a central resource providing access to the principal business support providers
in Hertfordshire;
Yet to fully establish a new online platform to improve local SMEs access to support
quickly and easily –while this has been subject to delays and will serve other areas the
scale of investment in the new platform represents significant additional resources
relative to BEIS core funding;
Undertaken some co-ordination and management of communities of interest to
encourage the dissemination of best practise and that coordination is likely to improve
flowing the launch of the new digital platform;
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Established a cohort of Growth Account Managers to help growth-potential businesses to
scale up quickly – and that the scale of resource has been increased via ERDF due to the
ability of Exemplas and the University of Hertfordshire to undertake the risks associated
with large ERDF projects, which had to be of a scale that smaller organisations could not
undertake; and
Undertaken marketing and promotion of activities that channel SME demand for external
advice, whether or not it is free of charge, including taking on additional activity in relation
to Brexit Readiness and Resilience.
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Introduction
This section of the report focuses on the short-term outputs that arise from activities and
which feed-in to outcomes and impact.
Monitoring arrangements and data availability
Exemplas provides the LEP with quarterly monitoring data against agreed KPIs. The LEP’s
contract year with Exemplas runs from October 1st. Data are therefore available for contract
year 2018/19 (running October 2018-October 2019) and October 2019-December 2019. This is
presented in Table 5-1. (Where actuals are below the contract targets these numbers are
highlighted in red where they meet or exceed target they are highlighted in green).
Based on Exemplas’ KPI data for the 2018/19 contract year, HGH’s performance against the
LEP/BEIS targets appears strong with reported ‘actual’ delivery of outputs meeting or
exceeding all KPIs other than ‘light intensity’. Given the over-delivery of high intensity support
we do not consider this shortfall to be problematic.
Data from Q1 of the 2019/20 contract year indicates strong performance, and suggests the
HGH is well on track to meet all but the Jobs KPI target (consultations indicate that this is
probably explained by the lag in employment creation following the provision of support and
is not necessarily a cause for concern).
Table 5-1: LEP KPI monitoring data
KPI Descriptor Contract target 2018/19
Actual 2018/19
Contract target 2019/20
Actual Q1 2019/20
High intensity – 12 hours support
115 650 115 58
Medium intensity – 1 hour plus
660 945 660 198
Light intensity – less than 1 hour
2700 2543 2700 1471
Unique clients supported
3000 4158 3000 1727
Jobs created 100 247 100 4.5
Source: HGH KPI Profile 2018-2021 (Data prepared by Hertfordshire LEP for quarterly Contract Review meetings)
Conclusion
Thus, we found significant progress has been and is being made in relation to performance
against contract.
5 Outputs
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Introduction
The brief asked for our judgements on the effectiveness Growth Hub provision in terms of
performance against KPIs and delivery of company-level impact. Given the relatively short
time scale in which the current contract has operated, and the limited nature of outcomes and
impact data available, we have had to estimate the potential impact of Growth Hub support.
To sense check our estimates we assess other sources of information, including feedback from
account-managed businesses and project evaluations. Or approach and the constraints we
faced and the assumptions we made are explained below.
Data availability
The key difficulty in estimating the impact and value for money of the Growth Hub’s services
has been the lack of data. The data sources available were:
An ‘Impact’ data spreadsheet:
- Exemplas provided data in the Impacts Matrix established by Hertfordshire LEP
(Appendix A) for 34 businesses that had received support. This is smaller number than
originally hoped; Exemplas reported difficulties in engaging businesses to provide
these data.
- The spreadsheet includes anonymised firm-level projections of turnover (and jobs),
over four years, data were not provided for each of the four years – although all firms
provided estimates of turnover on Year Four following support. The Impacts Matrix
(Appendix A) does not contain information on the ‘counterfactual’, which means that
we were unable to ascertain the extent to which the increase in turnover forecast by
firms would have occurred in the absence of HGH support.
A ‘Business details’ spreadsheet was provided by Exemplas. This contained firm-level
details on 141 businesses which had received intensive support, including the number of
hours of support provided. This source indicated that the (mean) average of support was
24 hours (double the BEIS definition of intensive support). It should be noted, however,
that because the impact data on the 34 businesses were anonymised, it was not possible
to match the actual number of hours of support a business received to the actual turnover
forecasts of a specific firm.
Given these constraints, we applied high-level assumptions and impact modelling to estimate
the net GVA and employment impact likely to be achieved to date and then estimated a rate
of return per hour to the business support provided.
Assumption-based impact modelling
Given the data availability issues outlined above, we carried out an assumption-based impact
modelling exercise. This exercise drew on turnover data in the Impacts Matrix provided by 34
businesses and the (mean) average hours of business support provided per firm estimated.
Turnover forecasts were reported by the businesses themselves, the assumptions behind
6 Outcomes and Impacts
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these forecasts have not been verified, but have been assumed reasonable for the purposes of
estimation.
Figure 6-1 illustrates our approach to estimating the GVA impact of HGH support. It uses firms’
own forecasts of additional annual turnover four years after receiving business support to
estimate the number of jobs created (based on national benchmarks of turnover per job). It
then uses benchmark GVA per worker figures to estimate additional GVA. Net employment
impact is then estimated by applying national guidance on deadweight, leakage, displacement,
substitution, and local multipliers. Average GVA per job figures are then used to estimate net
GVA, which is then calculated at Net Present Value (using HM Treasury guidance) to estimate
additional GVA per hour of support. In more detail:
Step 1: Future Turnover to Gross Jobs – Uses data provided by firms that identifies the
additional annual turnover in Year Four following intervention at £122m, an average
turnover per job figure (£131,37310) is applied to estimate gross jobs created by this
additional turnover at 347 jobs;
Step 2: Gross Jobs to Net Additional Jobs – Uses additionality assumptions are drawn
from HCA’s Additionality Guide11 to estimate net additional jobs (assuming a medium level
of leakage (25%), a medium level of displacement (50%) and deadweight in line with
assumption for sub-regional business activities (47.2%) to give 74 net additional jobs.
Step 3: Net Additional Jobs to Net Additional GVA – Estimates Net Additional GVA
created by applying an average GVA per job figure across all sectors of £56,84012 to the
net additional jobs figure to give additional GVA of £4.3m;
Step 4: Real GVA at Net Present Value: In line with HM Treasury Green Book best practice
an adjustment is then applied to reflect social time preference (i.e. discounting at 3.5% per
year) and inflation (at 2% per year), which gives a figure of £3.5m; and
Step 5: Impact per hour – Calculates the GVA impact per hour of support based on an
assumed 24 hours of support per firm, which gives an estimated net additional GVA of
£2,295 per hour of Business Advisor time.
Figure 6-1: Modelling Approach
Table 6-1 provides a summary of the calculations. The Total column reflects the sum across all
34 businesses that received high intensity support and completed the Impacts Matrix.
10 Business Population Estimates, ONS, 2018/19 11 Additionality Guide (Fourth Edition), Homes & Communities Agency, 2014 12 Regional Gross value added (balanced approach) in England, ONS 2016/17; Business Register and Employment Survey 2016/17
Future Turnover = £122m
Gross Jobs = 347
Net Additional Jobs = 74
GVA = £4.3m
Real GVA at NPV = £3.5m
Impact per hour = £2,295
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Table 6-1: Modelling outputs for Year 413
Value for money
When appraising applications for LGF funding, Hertfordshire LEP applies a benchmark of
£28,700 per net additional job as the threshold for value for money. BEIS funding for HGH is
around £287,000, this implies a figure of 10 net additional jobs would need to be delivered in
order to be considered good value for money. The assumption-based impact modelling
suggests 76 net additional jobs as a result of HGH’s interventions to 34 businesses. As such,
HGH can be said to be delivering value for money in terms of job creation.
Insight from user consultations
In order to gain insight into the perceptions of HGH held by account-managed clients, the
Review sought to consult 10 firms which had received high-intensity (i.e. 12 hours +) support.
To do this the Review contacted 30 businesses. Each business received an initial introductory
email from Hertfordshire LEP to introduce Steer ED and the Review. If required, this was
followed by two emails which suggested potential times for a consultation. Table 6-2 provides
a breakdown of responses.
Table 6-2: Consultation engagement summary
Item Number (proportion)
Total number of businesses contacted 30 (100%)
Total number of businesses who responded to emails 9 (30%)
Total number of businesses who responded but declined to participate 6 (20%)
Total number of businesses who participated 3 (10%)
Source: Steer ED
Of the 30 businesses contacted nine responded, six of which declined to participate in the
survey. These six businesses provided a variety of reasons for their decision:
One stated that they did not wish to participate as they did not wish to spend more time
on HGH-related matters;
Two businesses stated they did not have time over the consultation period; and
13 ‘Extreme outlier values’ defined as businesses where GVA per hour of support indicated £15,000 or more were excluded from the final impact calculation.
Total (n= 34) Average per business
Current Turnover £76,806,900 £2,259,026
Turnover at Y4 £122,410,100 £3,600,297
Gross Jobs Uplift 347 10
Net Additional Jobs 76 2
Net Additional GVA in Year 4 £4,297,344 £126,392
Net Real GVA at NPV in Year 4 £3,459,697 £101,756
GVA per hour of support n/a £2,295
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Three of the named consultees said that they had not or could not recall having received
support from HGH.
Feedback from the user consultations
Given the relatively small sample originally sought, the findings from our telephone
consultations were always likely to be illustrative rather than definitive. The responses of
three firms, therefore, should be treated with caution, however, for completeness, a summary
of the responses we received to our questions on awareness and access, impact, and areas for
improvement is presented below.
Awareness of and access to the Growth Hub
Of the three businesses consulted two approached the Growth Hub directly and one was
approached by HGH at a trade show. The two business that approached HGH had some
understanding of the business support landscape having used business support in the past.
One of the businesses, which knew which service it sought, said that it was “quite easy” to
access Growth Hub services. The other two businesses reported some initial difficulty in
accessing services, given the complexity of offers, but, said that Business Advisors helped to
resolve these issues.
The consultees had used a range of services, tailored to their needs as diagnosed by the
Business Advisors, including:
A website review;
Grant application support;
Business processes review; and
Advice on Client Relationship Management (CRM) and book-keeping procedures.
The businesses felt very positive about the Business Advisors and valued their inputs because
they had “real world” business experience and provided impartial advice.
Perceived impact
The business consultees reported that HGH support had made an impact on their business,
although they could not quantify it. The views of impact varied depending on the type of
support received:
Business A stated that without HGH’s support it would not have been able to access grant
funding. The grant funding enabled the business to attend an additional trade show where
it secured a new contract. The consultee thought that the firm may have attended the
trade show in the absence of the grant, but “having access to the grant, made it a lot
easier to get internal approval to go to the trade show.” In addition, Business A stated that
it learned a lot from a review of its website (e.g. around Sales Cycle Optimisation) but was
not able to quantify the impact of this.
Business B stated that the recommendations of the HGH business advisor (to replace a
staff member with someone more suited to the role) has saved the business 0.5 days per
week. The business thought that having the external input enabled it to make this difficult
decision. Business B thought it would have probably come to a “crunch point” when it had
to make the decision but the support of HGH enabled it to be proactive.
Business C stated that business advice (relating to its finance/ book-keeping systems and
approach to client engagement) had had a significant impact on profitability. Profit
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increased by c. £5k (an increase of nearly 100%). Business C did not think this would have
occurred in the absence of Growth Hub support.
Ideas for improvement
Suggested areas of improvement included:
Business A thought free seminars to help people understand what the Growth Hub offers
and how it compares to the other services would be useful;
Business B suggested a more proactive approach; “if you ask a question, they will supply
the answer, but it would be better if they would be more proactive in supporting
businesses”; and
Business C wanted the Business Advisors to spend more time understanding the detail of
their business to inform a more tailored diagnosis of need.
Evidence of impact from other Growth Hub evaluations and surveys
2018 Customer satisfaction survey
As noted above, HGH undertook a ‘Customer Satisfaction Survey’ in October 2019 to
understand sentiment towards Growth Hub’s services by those receiving high-intensity assists;
27 businesses were contacted, and 11 businesses responded (a 40% response rate). The
results of this survey indicated that respondents’ sentiment towards HGH was very positive.
The key findings were as following:
All 11 businesses responded that they found it ‘Easy’ or ‘Very easy’ to access HGH services;
Almost all the businesses rated the knowledge and experience of their Growth Account
Manager highly with nine responding that it was ‘Excellent’; and
Nine businesses responded that the advice they received added ‘Excellent’ or ‘Good’ value
to their business.
‘Get Growing’ Evaluation
The Growth Hub delivered the ERDF funded Get Growing Programme, which was evaluated by
KADA research. The Get Growing programme aimed to enhance the competitiveness of SMEs
across the county by providing tailored Growth Plans to focus businesses on growth and help
to increase wealth reaction, innovation and job creation. It aimed to complement, streamline,
promote and add value to the services of the HGH. The Get Growing evaluation found:
The delivery model worked well; mixing diagnosis with in-depth interaction, workshops
and events;
Businesses supported experienced ‘tangible business improvements’;
High ratings for the knowledge and professionalism of advisors;
Targeting could have been more effective as some micro-businesses had been included;
The programme created 190 gross FTE jobs generating £12.2m GVA (at NPV); and
A cost per net job of £19,800 (within the expected range of £8,000 and £26,000).
Conclusions
There are limited data on the outcomes and impact achieved by HGH activity. We therefore
sought to estimate the potential economic impact of HGH activity. We estimate that an
additional GVA of £3.5m could be achieved from HGH activity, all other things remaining
equal, given businesses’ employment forecast and the application of standard benchmarks for
turnover and GVA per employee. This implies a forecast GVA uplift of over £2,000 per hour of
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business support provided, assuming an average of 24 hours of business support and that
firms’ GVA forecasts are accurate.
The qualitative evidence gathered as part of the review is limited; a majority of beneficiaries
did not respond to our request for a consultation, and a number of those who did respond
declined to participate. The limited evidence points to positive impact for those receiving
support.
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This Review was asked to form judgements on four issues. The findings are summarised below.
Is the current programme effective in terms of its performance against KPIs and the delivery
of company-level impact?
Based on the data provided, current performance indicates that HGH is on track to hit its KPIs
(Table 7-1).
Table 7-1: LEP KPI monitoring data
KPI Descriptor Contract target 2018/19
Actual 2018/19
Contract target 2019/20
Actual Q1 2019/20
High intensity – 12 hours support
115 650 115 58
Medium intensity – 1 hour plus
660 945 660 198
Light intensity – less than 1 hour
2700 2543 2700 1471
Unique clients supported
3000 4158 3000 1727
Jobs created 100 247 100 4.5
Source: HGH KPI Profile 2018-2021 (Data prepared by Hertfordshire LEP for quarterly Contract Review meetings)
In terms of the firm-level impact of HGH support, the available data are limited. The Review
estimated additional GVA generated as a result of HGH support to businesses at around
£3.5m, a twelve-fold return on the £287,000 of BEIS funding. It estimated the return on an
hour of Business Advisor support at £2,295. While subject to a number of caveats, in relation
to the accuracy of firms’ forecasts and the application of standard GVA per work benchmarks
these estimates represent value for money.
Thus, in terms of performance against BEIS KPIs (Table 7-1) and firm-level impact based on
forecasts, we judge the current Growth Hub arrangements to be effective in relation to the
delivery of outputs.
What are the perceptions of HGH among account-managed clients, stakeholders and other
business support providers in Hertfordshire’s business support ecosystem?
The Review undertook a limited number of stakeholder consultations. These reported:
Recent improvements in HGH’s engagement with partners;
Scope for more effective cross-referrals between stakeholders – or at least more effective
tracking of referrals between stakeholders;
Room for improvement in the coordination, scheduling, and promotion of business events
run by stakeholders, a situation that the new digital platform may address.
7 Conclusions and Recommendations
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Thus, overall partnership working has improved in recent months, momentum is being
maintained, and delivery of the new digital platform should further improve coordination and
joint-working.
What is the effectiveness of the current Growth Hub model relative to comparators?
The Review gathered evidence on the delivery models used by comparator LEPs in
Worcestershire (outsourced to a Chamber of Commerce), Buckinghamshire Thames Valley
(outsourced to a local business membership organisation), and Cheshire & Warrington (in-
house provision). The evidence gathered was at a headline level and suggests that the HGH
model:
Maximises the resources available for Growth Hub services – by fully matching BEIS core
funding to ERDF – but in doing so it sacrifices operational flexibility relative to the
comparator LEPs, as ERDF funding criteria do not allow a firm to receive two interventions,
whereas BEIS guidance permits this;
Levers in additional partner resource to deliver Growth Hub services, in particular
resources from University of Hertfordshire and Exemplas, for the development of online
platform, which was delayed due to complications in the development stage and a
subsequent opportunity to link the launch of the platform to a refresh the LEP’s Growth
Hub brand;
Achieves a degree of integration in the provision of business support services, e.g.
colocation of trade advice service; and
Avoids the risk that advice is not perceived to be impartial, associated with outsourcing to
membership organisations that sell business support services.
Is the current delivery model and service delivery realising the LEP’s ambitions for the
Growth Hub programme?
As noted in paragraph 7.2, delivery of BEIS KPIs are on track. In relation to the Strategic Added
Value targets specified in the Growth Hub contract, we found HGH has:
Established a central resource providing access to the principal business support providers
in Hertfordshire;
Yet to establish a new online platform to improve local SMEs access to support quickly and
easily;
Undertaken some co-ordination and management of communities of interest to
encourage the dissemination of best practise and such coordination is likely to improve
following the launch of the new digital platform;
Established a cohort of Growth Account Managers to help growth-potential businesses to
scale up quickly – and that the scale of resource has been increased via ERDF due to the
ability of Exemplas and the University of Hertfordshire to lead a large ERDF projects, which
smaller organisations are often unable to lead due to the cashflow implications ; and
Undertaken marketing and promotion of activities that channel SME demand for external
advice, whether or not it is free of charge, including taking on additional (funded) activity
in relation to Brexit Readiness and Resilience.
With regard to the adoption of an alternative delivery model, we found that where a LEP
Board has ambitions which reach beyond those stated in BEIS and/or ERDF funding
arrangements, a switch to an in-house model may be appropriate, as was the case in relation
to Cheshire & Warrington. In this case, we identified a number of lessons for managing the
transition, including:
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Develop an understanding of the resource implications of bringing the Growth Hub in-
house (e.g. the costs of IT and CRM systems);
Have a plan to manage disruption of relations with a key partner who is the current
provider; and
Agree transition arrangements, including establishing staff members’ intentions to stay
with their current employer or to move with the service, to ensure continuity of service to
businesses.
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A.1 The LEP Board wished to assess HGH’s impact on businesses and the wider economy. Data
collected to meet BEIS reporting requirements did not meet this goal. Thus, an Impacts Matrix
was developed to collect firm-level data that would allow an assessment of impact.
A.2 The Impacts Matrix (Table A-2) was developed collaboratively between the LEP and Exemplas.
It was finalised in Summer 2019, and since then HGH Advisors have been contacting
businesses which have used HGH services to collect impact data. This has not been a
straightforward task because: (a) businesses are being contacted retrospectively for data they
were not anticipating would be required; and (b) impacts take time to be realised and data
may not be available when HGH requires it.
A.3 The Impacts Matrix provides a clear improvement on the existing data collection method;
however, it also does not provide sufficient evidence to assess net impact, to do this we
recommend the following adjustments:
Estimating deadweight: The current Impacts Matrix does not provide a means of
estimating the deadweight of the intervention for a particular business. In other words, it
does not show what would have happened in a ‘business as usual’ scenario. It is the
difference between BAU and the reported performance that is the genuine impact of
support. It is recommended that a revised Impacts Matrix collect a ‘best guess’ estimate
from businesses of what would have happened without assistance from HGH. Where the
additional outputs/impact is claimed to be more than 47.2% (additionality guide
deadweight benchmark for business support interventions) it should be treated with
caution.
Total hours of support by type: A meaningful impact assessment should be contextualised
with an understanding of the amount of support businesses actually received as well as
the type of support. Without this any assessment of impact by hour of support will always
have significant potential for error. It is therefore recommended that data is provided
alongside an understanding of the type and quantum of support provided.
Cumulative planned investment: The present layout of the Impacts Matrix provides
forecasts at intervals (12 months, 2 years and 4 years). As such the data on planned
investments, which will be useful to contextualise HGH’s business support cannot be used
to calculate the cumulative total of that planned investment. We therefore recommend
that future looking data is reported at yearly intervals.
Forecast skills shortages: At present the Impacts Matrix includes a forecast of future skills
shortages at different skill levels. It is difficult for firms to accurately forecast these – the
LEP may wish to consider removing this field
A.4 A spreadsheet including these recommended adjustments is provided as a separate Appendix
B
A Impacts Matrix
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Table A-2: Impacts Matrix
Measure / Data Point Current Forecast – 12 months Forecast – 2 years Forecast 4 years
Turnover Profitability
£ £
£ £
£ £
£ £
Export Value Import Value
£ £
£ £
£ £
£ £
Employee numbers: Low (low skills) Medium (Medium level technical kills, Middle Management) High (High technical skills/senior management)
F/T P/T Total: No: No: No:
F/T P/T Total: No: No: No:
F/T P/T Total: No: No: No:
F/T P/T Total: No: No: No:
Skills Shortage: Low (low skills) Medium (Medium level technical kills, Middle Management) High (High technical skills/senior management)
Overall: No: No: No:
Overall: No: No: No:
Overall: No: No: No:
Overall: No: No: No:
Planned financial investment in skills development:
£ £ £ £
Planned financial investment in Technology:
£ £ £ £
Note: Consideration to be given to Sector Benchmarking and comparison to IHS Market data.
Aggregated data to be provided for all businesses receiving support from the HGH Growth Account Managers, expected to reach High Intensity
throughout the contract period.
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