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SOUTH WEST REGIONAL ASSEMBLY SELECT COMMITTEE HEARING ON BUSINESS DEVELOPMENT held at THE RACECOURSE TAUNTON SOMERSET on MONDAY 1st DECEMBER 2003 - - - - - - - Present: Mr Ian Munro (Chair) Ms Bryony Houlden (Chief Executive) Cllr Cathy Bakewell Cllr Mike Byatt Cllr Christine Channon Cllr Andrew Govier Cllr Alan Hockridge Mr Christopher Irwin Cllr Gordon Jennings Mr Howard Thomas Mr John Wilkinson - - - - - - - Present for the RDA: Ms Caroline Bull Mr Geoffrey Wilkinson Mr Nick Buckland Mr Steve Richards - - - - - - - Transcript of the Shorthand Notes of Harry Counsell & Co Cliffords Inn, Fetter Lane, London EC4A 1LD Telephone: 0207-269-0370 - - - - - - - P R O C E E D I N G S - - - - - - -

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1. Welcome and Introduction THE CHAIR: Good morning everybody, welcome to you all. We 1

could not do anything about the weather, I am sorry about 2

that, and the view is not so good today, the last time we 3

were here it was a fantastic view. This is a hearing of 4

the South West Regional Assembly which today is going to 5

look at the work of the South West RDA in promoting 6

Business Development in the region. 7

I would like, on behalf of everyone, to wish a warm 8

welcome to our colleagues from the South West Regional 9

Development Agency: Nick Buckland, Board member, Geoffrey 10

Wilkinson, Chief Executive, Caroline Bull and Steve 11

Richards. Thank you all very much, and obviously your 12

colleagues just behind at the back, welcome to you. 13

If I can just go round and introduce ourselves on the 14

Scrutiny Panel, I am Ian Munro, I am chairing the Scrutiny 15

Panel. 16

MR IRWIN: I am Chris Irwin, I am a social economic partner of 17

the Assembly, representing public transport users. 18

CLLR BYATT: I am Mike Byatt, I am a councillor member of the 19

Assembly. 20

CLLR HOCKRIDGE: Alan Hockridge, councillor member of the 21

Assembly for North Somerset. 22

CLLR BAKEWELL: Cathy Bakewell, councillor member for Somerset, 23

about to turn gamekeeper from poacher because I am joining 24

the RDA Board on 4th December. I have taken legal advice 25

and at this moment in time I do not have a conflict of 26

interest. 27

CLLR CHANNON: Christine Channon, GA member, and I actually 28

represent the Regional Assembly on the Inward Investment 29

Advisory Group. 30

CLLR GOVIER: Andrew Govier, councillor member from Somerset 31

County Council. 32

MR THOMAS: Howard Thomas, Social and Economic partner member 33

for environmental groups. 34

MR WILKINSON: John Wilkinson, Social and Economic Partner 35

member, representing the CBI. There are two RDA Board 36

Advisory Groups that I have been a member of - I think they 37

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are in the process of being looked at - one is the Business 1

Development Group and the other is the Infrastructure 2

Group. 3

CLLR JENNINGS: Gordon Jennings, councillor member from Torbay 4

and I am also co-ordinator of doing the scrutiny in that 5

area. 6

MS HOULDEN: Briony Houlden, chief executive of the Regional 7

Assembly. 8

THE CHAIR: Just to remind ourselves why we are here. As you 9

know, Regional Assemblies have been given the 10

responsibility to scrutinise the work of the Regional 11

Development Agency, and the agreement between the South 12

West Regional Development Agency and the South West 13

Regional Assembly has been very much to have a two year 14

programme which includes public hearings of this nature, 15

picking up a theme from the RDA's Corporate Plan. Today's 16

theme is the work of the RDA in terms of promoting business 17

development in the South West. 18

Our agreed objectives for this scrutiny panel and 19

process are to help strengthen the accountability of the 20

Regional Development Agency and to really better understand 21

the regional needs and really how the RDA has responded to 22

those. 23

To prepare for this hearing, just to remind everyone 24

here, the members of the Scrutiny Panel have had one to one 25

sessions with key stakeholders within the region who are 26

involved in business support, we have also received 27

completed questionnaires from Assembly members and a 28

written submission from the RDA itself, and we are very 29

grateful for the work you have done. That has all gone 30

into the melting pot, I suppose, and from that various 31

things start to emerge. 32

Last week we had a very successful event here, in this 33

very building, where we had over 60 partners from the 34

region, all here looking to discuss the whole issue of 35

business development and support, and we had a very 36

interesting discussion on the report from Dr Gareth Jones 37

on the work carried out by DTZ, and I am grateful to the 38

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RDA for letting us share that report on business support in 1

the region. That certainly stimulated a very wide-ranging 2

debate and we found that particularly useful, so thank you. 3

As I said, the process has led up to today and a 4

number of things have emerged, and those are the ones that 5

we really do want to focus on today. But also we have had 6

inputs from other key experts, and I am very grateful to 7

Professor John Hudson from Bath University and Liz Carter. 8

I am sorry I have got my back to you Liz, but it is good to 9

see you as well. Again, just formally for the record, a 10

full report on the scrutiny process, including the detailed 11

recommendations, will be published in the New Year, and 12

this will be formally passed to the RDA at the Full 13

Assembly meeting in March and, obviously, will be available 14

on the Regional Assembly website. The event today is being 15

transcribed by a stenographer and the full transcript will 16

be available. So can I ask people to try and keep their 17

voices up as much as they can. It is worth noting that 18

that report will be circulated to Government Ministers and 19

widely within the region. 20

We do welcome members of the public and the press, 21

Unfortunately, you will not be able to ask questions 22

yourself, but if there are matters of interest you wish to 23

raise, there is a paper in your pack you can fill in and it 24

will be passed to the panel. 25

Could you check that your mobiles are all switched 26

off, it is nice to be away from the office. Finally, what 27

are we looking for? We are looking for an enjoyable 28

process for both sides, so let us make it that way, and 29

keep the questions as succinct and to the point as you can, 30

and let us make sure the responses are as well. 31

Perhaps I could ask Mike and Chris, if you would, to 32

kick off our questions. Thank you. 33

2. Vision and Strategy 34

MR IRWIN: Thank you, chairman. I thought we would start off 35

with a very easy question, and I suppose where I am coming 36

from is that I am particularly interested in the clarity of 37

thought, the depth of commitment, the degree of buy-in that 38

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may or may not exist in what you are about, in terms of 1

your vision and your strategy. Having gone through the 2

very stimulating DTZ report, one cannot help but be struck, 3

inevitably, by the key message which is about the lack of 4

common, shared strategy and joined-up delivery across the 5

board of this whole process in the South West, and the 6

suggestion that really addressing this would make the whole 7

process much more effective and much more efficient. 8

So my very simple first question really is, is there a 9

shared vision? Do you think there is a shared vision for 10

Business Development in the region? 11

MR WILKINSON: I think the fairest answer to the question is 12

that a precise vision is still being developed and we are 13

aiming to include a vision in our Enterprise Strategy for 14

the region, which is nearing its final stages now. The 15

work that we have been doing for that, together with other 16

things, including the discussion today, should help to 17

formulate that, but what I would say is that, as with other 18

areas of policy, a vision for business development must be 19

derived from and be consistent with the overall vision in 20

the Regional Economic Strategy, which I am sure you all 21

remember, but the vision in the Regional Economic Strategy, 22

which was devised from consultation across the region, is 23

the that the South West of England will have an economy 24

where the aspirations and skills of our people, combine 25

with the quality of our physical and cultural environment 26

to provide a high quality of life and sustainable 27

prosperity for everyone. 28

So that is the starting point, and I think that has to 29

be the starting point in each area of our policy. Clearly, 30

that vision for the region cannot be achieved without 31

efficient, innovative and overall growing businesses. 32

The mission then in the Regional Economic Strategy is 33

to increase sustainable prosperity and productivity for the 34

region and all our people, and our first objective in the 35

Regional Economic Strategy - and there are three objectives 36

- and the relevant one here is very specific: to raise 37

business productivity. 38

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So in developing the precise vision for business 1

development, that is the context against which we have to 2

operate, and it is a hard and competitive world and, in 3

many ways, it is getting more competitive and in many areas 4

our businesses will have to improve to keep up with or keep 5

ahead of the best, if they are going to survive and grow, 6

So that is the background. 7

Against that, and in the light of the work we have 8

done in the Enterprise Strategy, we have got a suggested 9

form of words, but at the moment it is still just a 10

suggestion. It would be something along the lines of "A 11

region where the potential of our entrepreneurs and 12

enterprising businesses is unlocked and enabled, so as to 13

create the growth and wealth on which a healthy, balanced 14

and diverse South West economy depends." 15

So that is a proposal that has emerged out of this 16

work so far. We are still very much open, it is not up to 17

the RDA to design this, it is up to us to try and get 18

agreement on an appropriate vision, we would like to do 19

that and we would like to include it when we publish the 20

Enterprise Strategy. Having said that it is for the region 21

to decide and we want the input, it should fit within the 22

agreed vision that I have repeated today for the overall 23

Regional Economic Strategy. 24

MR IRWIN: I do not really want to open debate about the 25

Regional Economic Strategy, but can I just pick you up on 26

one thing which really Professor Hudson rather brought to 27

our attention in the workshop last month, and I suppose is 28

stimulated really by your reference to the draft wording 29

that you are talking about, where you talk about a region 30

in which potential is unlocked and enabled. One thing 31

Hudson was saying was, yes, if one is going to intervene it 32

is to overcome market imperfection and, normally, he says, 33

in these cases one would be looking to do things that are 34

correcting minor imperfections which disadvantage the 35

region as a whole. I thought that in your last statement 36

you were beginning to talk about the whole - infrastructure 37

shortcomings, for example, lack of broadband, transport 38

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difficulties and so on - but my understanding is that 1

actually you said let us be more specific, it makes more 2

sense to be more specific by attaching importance to 3

maritime, the haulage industry, aerospace, food and drink 4

and so on. I just want to try and feel my way through that 5

one and get it out of the way. 6

MR WILKINSON: Okay. I think that this will come up again 7

because I think that it is important. We have two 8

approaches: in terms of working with key sectors, we have 9

identified five plus three (eight) sectors where we have 10

worked to facilitate the establishment of that sector 11

setting up its own group to identify its own priorities and 12

areas where that group believes we can work effectively 13

with them. But we do have a more generic approach as well, 14

and you have mentioned broadband, for instance, and the 15

objective there is 100% availability and maximum take-up, 16

so we are working on both of those things. That is the 17

generic approach, the generic approach to the financial 18

escalator, if you like, trying to provide access to finance 19

at all levels. So the short answer is we do both. We 20

cannot do everything and so there is a more structured 21

involvement with some priority sectors that again have been 22

identified, not just by us but by the region, but there are 23

these generic approaches on issues which are broad and 24

across the region. 25

MS BULL: Can I just add to that because you mentioned the 26

addressing market failure point, and of course there are 27

two ways of doing that. There is plugging the gap, which 28

might be a short term gap, hopefully will be a short term 29

gap, but there is also stimulating demand, and I was just 30

reminded of that when you mentioned broadband, because you 31

can provide all the infrastructure in the world, but if 32

people do not see any benefit in using it, then they will 33

not. So that is very much at the top of our minds when we 34

are looking at business support, stimulating demand as well 35

as trying to get the right supply in place, even for a 36

short term. 37

MR IRWIN: I see that. My worry, I think, is probably that I 38

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am personally suspicious about that, because the danger 1

there is that there is (a) the likelihood, but (b) that you 2

distort the market so that the chosen winners actually may 3

create problems for those who you have not selected - by 4

helping the labour supply of the winners, you may worsen 5

the labour supply of neighbouring non-winners. That is 6

what I am worried about. 7

Can I then just take a second bite and ask how you 8

will know when you are getting there? 9

MR RICHARDS: Shall I try and answer that? I think if you 10

look at what we did in 2000 with PRISM, we stepped back and 11

we took a look at what was happening. DTZ in 2003 was to 12

see how far we had gone, so there will be a continuous 13

process, and within DTZP there were 1200 companies 14

surveyed. The big thing about the South West economy is 15

that it is very diverse, so who do you speak to as the 16

representative? We have got John here from CBI, we speak 17

to IOD, we speak to FSB. If you speak to each business 18

they will have individual problems themselves, so I think 19

the answer to the question is what does success look like? 20

I think in another three years' time we would hope to see 21

more coherent and integrated business support and 22

infrastructure that is publicly financed, because that is 23

the business we can actually impact on, and greater 24

engagement from the private sector through a more 25

interchanged model, where the public sector will look at 26

brokerage rather than delivering everything itself. 27

MR IRWIN: I thought you might be going to tell me that you 28

measure it by observing the region as no longer the region 29

with the greatest disparities. 30

MR WILKINSON: I think it is difficult to encapsulate in a 31

single statement. There are lots of things; that would be 32

one and, clearly, closing the productivity gap that now 33

exists in many parts of the region would be another, so we 34

are seeing progress on a number of fronts. 35

CLLR BYATT: Can you just explain a bit more? You have 36

obviously got some very significant challenges and I am 37

just interested in how you think about how you are going to 38

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communicate all those different challenges with some 1

clarity about what you are going to focus on to small 2

businesses in different parts of the region, that all seem 3

to be a long way away from the bigger picture. 4

MS BULL: When you say a long way away, do you mean 5

geographically a long way away? 6

CLLR BYATT: In their mindset in terms of their focus on their 7

own particular business, about whether or not the RDA is 8

relevant to them and what part do you play in terms of what 9

they are trying to do on a day to day basis and where they 10

are going in the future? I am talking about the many small 11

businesses that exist throughout the region, in different 12

parts of the region. So it is partly geographical, but it 13

is also about the nature of the business. 14

MS BULL: I suppose the first thing to say then is that as a 15

Regional Development Agency what we are there to do is to 16

act as a strategic catalyst really, to try and bring about 17

the right sort of business support to all of those 18

companies. So how they view us will not be as the business 19

supporters generally, for the majority of businesses, and 20

obviously - or maybe not obviously - businesses, for 21

example, who are in our priority sectors where, through a 22

sector development organisation, they have interacted with 23

us, they will have a much better idea of what the Regional 24

Development Agency is there to do. Essentially, we need to 25

be providing leadership, commitment and resource to the 26

business support organisations themselves and, publicly 27

funded-wise, the main players there would be the Business 28

Links, so ways in which we can support those Business Links 29

to get their messages out. In that connection you are 30

right, marketing communication is absolutely key on that, 31

so that they are putting a value proposition to those 32

businesses out there to make them realise that they have 33

got something to offer, that they can add to their business 34

growth and development and that they can have real bottom 35

line benefits in providing that support. I think that is 36

the sort of thing that we should be working with them on, 37

and I guess, as you have probably seen from the Business 38

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Support Review, there were strong messages on the 1

difficulties of communicating clearly, particularly with 2

some of those small and medium-sized enterprises who, let 3

us face it, are up to their eyeballs trying to get their 4

businesses forward and, very often, do not think about any 5

kind of support, let alone have a view on where they might 6

get it from. 7

MR WILKINSON: I think another key area, if I can add, is 8

through the supply chains from the sectors themselves. I 9

was at the Cornwall Sub-regional Partnership meeting last 10

week and we were talking about Marine South West which is 11

the group for the marine industry, and there was someone 12

there from the Cornwall marine sector group. After the 13

meeting he said to me, if you can get the umbrella right - 14

and a lot of that will be the larger companies - then we in 15

Cornwall can use that and leverage off that to get more and 16

more involvement from smaller companies. That is the sort 17

of catalyst effect that Caroline was referring to. 18

Similarly in the aerospace industry, the supply chain 19

there is, I think, under the umbrella of WEAF and helped by 20

some of the funding that we give to WEAF, and they now have 21

700 members. They had an event the other day where Boeing 22

came over, made a presentation to South West Aerospace 23

defence companies about how they could supply not only 24

Boeing but Boeing suppliers in the States as part of the 25

defence offset arrangements. So by developing a structure 26

and then working through the supply chain, we can then get 27

far greater reach than we could do as an agency with a few 28

people. 29

MR IRWIN: But you do not do it through a formulated vision or 30

strategy, or do you? There are two dimensions: there is 31

what you do once you have got the vision or strategy, and 32

we understand the supply chain thing moving through that, 33

but I wonder though whether you do not have to, as it were, 34

engage people at an earlier stage. The earlier stage seems 35

to be, as you said, the problem for many businesses in 36

terms of the availability of their time and interest in 37

engaging in these sort of things in the first place. 38

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MS BULL: And we were very aware of that. We commissioned and 1

paid for the research that was the Business Support Review, 2

and within that there was a survey of 1200 businesses of 3

all types, and there were discussions with a wide range of 4

intermediaries. We had a number of working groups held to 5

develop the draft Enterprise Strategy, so that we 6

understood exactly what the concerns and priorities are of 7

businesses, and to try and make sure that any policy 8

response that we produced as a result of that would be 9

owned by all the stakeholders, including the businesses. 10

Now you will not get to all of them, but by using, for 11

example, the Federation of Small Businesses and drawing 12

them in, the Institute of Directors and the sector 13

development groups themselves, that is how we can really 14

hold a thermometer up, if you like, to try to get a feel 15

for what they need or what they think they need, how that 16

fits with what there is at the moment and to then come via 17

the Enterprise Strategy, come forward with recommendations 18

on how we and all the other organisations involved in 19

business support can make it better for them. 20

We would want to go on reviewing that, that is a live 21

strategy and we want to review against it and test whether 22

what we have done with our partners has made a difference 23

on a regular basis, so that we can evolve it and change it 24

as it needs to be changed. 25

MR IRWIN: So if I was the Federation of Small Businesses or 26

the South West TUC say, and said amongst all the 27

organisations in the South West, in terms of business 28

support and the like, there is the RDA, do you know the RDA 29

and do they have a vision that articulates something that 30

holds this whole plethora together, they would say "without 31

a doubt"? 32

MS BULL: They would say we certainly know the RDA, we 33

certainly know about the draft Enterprise Strategy, we have 34

been involved with it and it is something that we want to 35

take forward with them. 36

MR IRWIN: And the plethora of other organisations is no 37

problem to the RDA? 38

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MS BULL: The plethora of organisations is clearly a problem 1

and that has come out in the review; organisations often 2

doing the same things for the same groups of people, so 3

that is something which the strategy must be addressing. 4

CLLR BYATT: Could I just follow that up with one question that 5

links in here, you mentioned about value for money - if I 6

picked it up right --- 7

MS BULL: I am sure if we did not we should have done. 8

CLLR BYATT: And you mentioned about the proliferation of 9

agencies doing different things. What are the chief ways 10

in which you think you will be able to demonstrate that the 11

vision and strategy delivers value for money? 12

MS BULL: That is difficult. Has anybody got some ideas on 13

this one? 14

MR RICHARDS: I think in terms of value for money what I have 15

learned is some of the lessons from the recent DTI business 16

report and review, where they have looked at how they are 17

seen as confusing in the marketplace and how they needed to 18

go from 167 schemes to 10 schemes to enable people to 19

understand the broad thinking of it. 20

I think there are two ways that we can do that. One 21

is that there is an on-going dialogue about closer co-22

operation between the RDA and the Business links, who are 23

the primary suppliers, looking at how we can use the 24

leverage of our funding next to theirs to actually drive 25

and change behaviour within the marketplace within the 26

public sector. Private sector people earn their money from 27

their clients, so they stand or fall in the market, if they 28

do not provide what the customers want then they do not get 29

the business. 30

So I think in answer to your question we are working, 31

as was PRISM and now is DTZ, with benchmarking from which 32

we can now work forward. We can overcome some of the 33

parochial vested interests that there are and say, look, 34

this is what the companies are telling us, this is what the 35

stakeholders are asking us to do and that is how we will 36

try and drive it forward with future policy. The 37

enterprise strategy will be at the core of that. 38

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MS BULL: I suppose the other aspect is the targets, because 1

into the future we have our own targets but also Business 2

Links, for example, have their targets, and as over the 3

next couple of years there is an integration of Business 4

Links funding through the RDA (which is what will be 5

happening over the next few years) we will have the 6

opportunity to be agreeing with them targets which will 7

show that value for money, because they will be showing 8

outputs against what funding is going into the Business 9

Links. 10

CLLR BYATT: Thank you for that. Can I slightly develop the 11

answer in another area, if I may. Can you explain to us 12

what the role of the RDA is in developing and agreeing the 13

vision you have got? 14

MS BULL: I think I might have covered a little bit of this in 15

the last answer, so I will try not to repeat it too much. 16

Essentially, it is acting as a strategic catalyst, 17

providing the vision, providing the leadership, providing 18

the commitment and providing some funding as well. So as 19

with the Regional Economic Strategy where we went through a 20

very extensive consultation process with, I think, over 400 21

organisations and individuals there, with Business Support 22

and developing that, we have funded the Business Support 23

Review, and you have mentioned that you have already had 24

some quite detailed information on that, a presentation on 25

that. Within that we wanted to make sure that businesses 26

were involved, and that is why we conducted a survey of 27

businesses, as I mentioned. We benchmarked the position 28

now on Business Support with how it looked three years ago 29

when we had previously had a Business Support Review, so we 30

wanted to see what improvements or changes had been made 31

along the way. We also benchmarked against what is going 32

on in Scotland and in the North East where the perceived 33

wisdom is that there are some good things going on, so we 34

wanted to see what they were doing, what we could perhaps 35

learn from that and incorporate within our own strategy for 36

the future. 37

We led the process of consultation with the five 38

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working groups, so that we were clearly able to understand 1

the priorities and needs of businesses and to make sure 2

that whatever policy response came out of that would be 3

owned by the stakeholders, who were all part of that 4

consultation process as well. We believe that as the 5

strategy develops, our role will be to make sure that it 6

continues to be relevant, we will be leading on some of the 7

actions ourselves although we will be looking to our 8

partners to lead on actions as well, and we will want to 9

monitor the overall implementation of the strategy. That 10

is really important, as I was explaining; if we can review 11

and monitor on the way through and we have clearly 12

articulated milestones and objectives and outcomes, then we 13

will be able to see how well that strategy is doing, to 14

check against it and to review it. 15

I should say that we think that today is part of the 16

process of developing that strategy and agreeing the vision 17

that Geoffrey mentioned earlier. We would be interested to 18

hear your views on that and to know how you might want to 19

input to that, both now and in the future. 20

MR IRWIN: Can I just follow that up slightly, and the 21

chairman will tell me I am out of order if he thinks I am, 22

but my concern is, just drawing on my own past experience, 23

that an awful lot of what I read from the RDA is a 24

different language to those things one is concerned with, 25

the things one is worried about and strives towards in 26

running a business. It is how you make that bridge. i 27

think it is back really to the buy-in issue: if you are 28

speaking a different language, just in terms of the 29

sharpness of priority, if you like, if the RDA and the 30

business support community are talking in different terms, 31

how do you get that meshing with the needs of the business 32

community, translating it into me as a managing director 33

thinking ah, this is my saviour? 34

MS BULL: I think translation is the right word. I do not 35

think that the RDA and the business support organisations 36

are talking a different language, I think the business 37

support organisations are very well-versed in being able to 38

15

speak in certain terms to government departments, for 1

example, where, as you say, there is a whole different 2

language out there. 3

MR IRWIN: We are speaking in harmony are we? 4

MS BULL: Well, the business support community is shouting for 5

the needs of its businesses, and the government is clearly 6

and presumably trying hard to make sure that what is being 7

provided is matching those needs. 8

The clever translation job, I believe, is the business 9

support community with the businesses themselves, making 10

sure that the funding that is coming down and what it is 11

theoretically there for actually matches with what 12

businesses want, and they translate to the businesses that 13

it is something they want, by articulating the business 14

benefits in plain English to those companies so that they 15

can see some point in them taking up that support. So 16

language is difficult, we have to think. 17

MR IRWIN: Language is difficult, but let me just pursue the 18

line a little bit more. Thank you very much for providing 19

a copy of the draft Regional Enterprise Strategy. I 20

confess that as I read it - and I actually did read it all 21

the way through - I thought what planet are these people 22

on? How does it relate to the reality of having a decent 23

set of figures at the end of each week or each month or 24

each quarter or each year. There is a linguistic 25

disparity, if you like. 26

MS BULL: I guess the important thing is that when businesses 27

look at the Enterprise Strategy they can understand what we 28

are trying to get to. I have gone through it, because if I 29

meet somebody in the pub or on the bus I need to explain to 30

them what we are trying to do in ways that make sense to 31

them. So I have written down here "promoting enterprise in 32

schools". That means explaining to kids and people at 33

colleges why starting their own business could make sense 34

for them, either because it gives them freedom to do 35

things, if they have got interesting ideas and they want to 36

turn them into business propositions and businesses then 37

they can do that, but also because maybe it means they can 38

16

make more money than they might do in a conventional job, 1

with all the caveats that apply when, you know, you say APR 2

of 5.2% or whatever. 3

If we are talking about providing advice at every 4

stage for businesses, if they are just starting or if they 5

are growing or if they have got to the point where maybe 6

they want to hand their business over to their children and 7

their grandchildren, then making sure that there is advice 8

and help available for them to do that; helping them 9

through the maze of the bank manager. 10

MR IRWIN: Let me tell you, as I read it I thought this has 11

really been written for some great schoolteacher in the sky 12

who ticks off boxes in response. 13

MS BULL: No, it was not at all. In fact, this has evolved 14

specifically from the input of businesses at the 15

consultation and the business support provided as well, 16

knowing that if they are going to have any effect at all 17

they have got to convince businesses to take up their 18

services. 19

MR IRWIN: This is a focused strategic statement of a 20

specifically South West Regional Development Agency 21

position. 22

MS BULL: Are you asking the question if we looked at this in 23

the North East would it look different? 24

MR IRWIN: Yes, that is a good way of putting it. Would it 25

look significantly different? 26

MS BULL: Would it look significantly different? If you take 27

the point that 80% of business needs are generic and only 28

20% are very specific, then I think there will always be an 29

element of commonality between our strategy and, say, the 30

North East or the South East strategy. Where the exciting 31

bits, if you like, come are where --- 32

MR IRWIN: And the things that justify regional organisations 33

come. 34

MS BULL: Well, your words not mine. Where the exciting bits 35

come are where we introduce the specific, so if you are 36

thinking about social enterprises, and here in the South 37

West you have got all those rural communities out there, we 38

17

specifically address that in this. That will not be the 1

same, for example, in London's strategy, so there will be 2

differences and it is for us and for the business support 3

providers to pick out where those differences lie and where 4

they need to customise the support that they give. 5

MR IRWIN: So how will you chase down that 20%, who are you 6

going to consult or who is being consulted on that 20% 7

regional identity part? 8

MR WILKINSON: We have been through a long consultation 9

process already, but first of all we go back to the 10

Regional Economic Strategy, who did we consult with? There 11

were over 400 organisations within the region --- 12

MR IRWIN: And you certainly agreed it with the Assembly. 13

MR WILKINSON: We certainly did, and we had the chairman of 14

the Assembly come along and endorse it at our board. The 15

consultation process, obviously, has been more specific 16

here, but it has involved all the business organisations. 17

We can list them if you like, but it is obvious. It has 18

also involved the supply side as well. 19

MS BULL: We always put all our documents as well through the 20

Plain English test. I am not quite sure whether we have 21

done that yet or whether that is the next stage once we 22

have got the final draft, but we would always do that and 23

that sometimes alters them quite significantly. 24

MR BUCKLAND: I think, also, there are the sector groups as 25

well, we are working with the sector groups and finding out 26

their requirements and working through that. So there is 27

that aspect as well. 28

MR IRWIN: Would you find it useful to speak to the Assembly 29

formally? 30

MS BULL: Has the Assembly been consulted? 31

MR BUCKLAND: I do not think so, not yet. 32

MS BULL: Then we certainly would. 33

CLLR BYATT: Can I just go back on something, because obviously 34

what you are describing is a multitude of roles and 35

ambitions that you have got, clearly. I just want to see 36

how do you balance out those multitude of roles and if you 37

had to hang your hat on a key thing rather than the whole 38

18

matrix of things we have just heard, what would you hang 1

your hat on as being the primary role and what would you 2

exclude from the strategy? In a sense, you have a strategy 3

and a vision and it is embracing of lots of different 4

things, but would one of you just care to say well, in our 5

view the strategy is not about that because our primary 6

role is about this? Could you just sort of sum that up for 7

me? 8

MS BULL: One point to make is that the strategy, the Regional 9

Enterprise Strategy, is not just the RDA, it is all of 10

those organisations. So from the point that we have got it 11

to now, which is through, as I said, extensive consultation 12

and several iterations, we have got it down to something 13

that people can agree, and that is probably half an answer 14

to Chris's earlier question about how do you make it look 15

significantly different. In order to have a strategy that 16

everyone is in agreement with, you have got to have some of 17

those common, central poles, and I would not want to cut 18

any of those things in there out from that regional 19

strategy. 20

MR WILKINSON: I think we must make a distinction between 21

strategies and then priorities and actions and delivery. 22

In terms of Business Development, we are starting from the 23

Regional Economic Strategy, we are not just talking about 24

business support in the sort of Business Links connection, 25

we are talking about all these other things: incubation, 26

science parks, ICC, sites and premises, finance for 27

business and innovation. We are talking about all those 28

things and the Enterprise Strategy is now, if you like, 29

designed to encapsulate this high level, aspirational 30

level, under which will then fit specific actions and 31

priorities and delivery mechanisms. I think the area where 32

the language gets to be a common language is in the sector 33

groups, and that is why we place such a lot of emphasis on 34

the sector groups, because there it is business people 35

talking to each other, and we can facilitate here and there 36

but that is where, obviously, people do talk the same 37

language and that is where specific training and analysis 38

19

exercises and very tangible and specific things are 1

developed. 2

MR IRWIN: Does it require government approval, this strategy? 3

Do you have to go off and get lana mark or imprimatur? 4

MS BULL: No, we have approval by all the stakeholders, 5

approval by our Board, and then it is in place. Obviously, 6

we refer to it, we talk particularly to the DTI and 7

Government Office, who have been involved in developing it 8

as well. 9

MR WILKINSON: The government give us guidance for our own 10

corporate plan and within that the guidance includes the 11

encouragement to develop strategies in a number of areas. 12

MR IRWIN: I suppose it is just my suspicion about boxes. I 13

am just wondering was there an ultimate audience for this 14

document. 15

MS BULL: I should say that the Enterprise Strategy was not 16

something that we were told to have and we developed a 17

number of other strategies because it was very clear to us 18

when we started that we were going to be involved in 19

incubation, innovation was really important within the 20

strategy, for example, finance for business and access to 21

finance for business, which we could see coming through as 22

being a major issue across the region. But it is only 23

relatively recently that we have seen that we have got 24

these things, but we need to draw together, almost to fill 25

in the gaps, to have an over-arching Enterprise Strategy. 26

So that was our decision. 27

MR IRWIN: I take that point, thank you, but I am now going to 28

turn it right round. The Prime Minister lays great store 29

by talking about the future of the UK economy being driven 30

by knowledge-based activity, and I suppose, looking at the 31

Enterprise Strategy, I ask myself does that really come 32

through in this. 33

MR RICHARDS: I think the answer to that is that as with a 34

business your aspirations have got to be matched by your 35

skill sets and the realities of where you are, and so you 36

have to assess where you are able to take them, and I think 37

the Enterprise Strategy is very much rooted in what the 38

20

region talks about and what we can do within the region, 1

bearing in mind that regional boundaries are devised by 2

government, not by businesses, because businesses know 3

where the customers are. So you have got to have a 4

realistic and balanced view of what you can actually 5

achieve. Yes, we would all like to be the next Silicone 6

Valley, but in reality that is not going to happen. 7

MR IRWIN: Last year's Bangalore. 8

MR RICHARDS: That is right. I think the point that has 9

probably not come across is that a lot of those strategies 10

address specific issues. The Enterprise Strategy is really 11

to kind of cut through because it is more about the 12

cultural change in attitude, it is winning the hearts and 13

minds, and I think that is what it is designed to do. So 14

it will impact upon, hopefully, schools, it will look at 15

maybe a different way that they teach enterprise in 16

schools, it will work within the HE to encourage more 17

reach-out to businesses, to get more students to have an 18

entrepreneurial model within the course that they study so 19

that they have got real options. 20

How I articulate it is that, starting up your own 21

business at the moment, there are too many push factors in 22

the sense that it is redundancy or whatever. So you have 23

to try to build more pull factors into that to make it more 24

attractive, and Caroline touched on that in her answer in 25

the sense of emphasising the independence and the rest of 26

it. We want to try and get that greater balance, and I 27

think that is where the document really drives to. 28

MR BUCKLAND: I think also, across the region, you have got a 29

lot of people who have multiple careers and develop those 30

careers. I am on my third or fourth iteration in my 31

career, so people do change their careers and, setting up 32

your own business and developing that business is a way 33

forward, it is something that we are trying to do there, 34

and it is very clearly one of the ways in which we are 35

supporting people. 36

MS BULL: The knowledge base is very important to the region 37

as well. We have just had some research carried out by 38

21

Arthur D Little into the knowledge base, looking 1

particularly at higher education and how we might draw 2

higher education and the expertise there much more into 3

businesses to benefit the businesses. So that is something 4

that we are taking in at the moment, the outcome of that 5

particular piece of research. 6

We have our innovations strategy and that is very much 7

focused on knowledge transfer, technology transfer, so it 8

is certainly not something that we are ignoring. 9

CLLR BYATT: Obviously, you mentioned the fact that you are in 10

partnership, in a sense, with other agencies and key 11

partners throughout the process, and some of those things, 12

some of those agencies, you are not necessarily going to be 13

the agency that delivers on some aspects of it, so how can 14

you ensure that those other agencies deliver on aspects 15

which are integral to following your strategies? 16

MS BULL: We do that through agreement, so part of the process 17

of consultation was trying to get to the point where we 18

could agree on what we all thought should be done and who 19

would play what part in that, and how we would be able to 20

measure when that had been achieved. So this is the point 21

that you were talking about earlier. So it is through 22

agreement, and it is through common sense really, so 23

through those business support providers, knowing that they 24

have got a role to play, they know where they are being 25

driven at the moment - in some cases they are funded in a 26

particular direction - perhaps through the discussions we 27

have determined that there are other things that they can 28

do in a slightly different way, and maybe, therefore, we 29

would be agreeing with them how there might be some 30

additional funding, not just from us but from some other 31

sources as well, to help them achieve those things. 32

MR WILKINSON: In some ways "ensure" is quite a strong word, 33

is it not, how can we ensure that other agencies do these 34

things? We work together, we try and do more and more 35

joint planning, but the problems we are addressing have 36

been around for a really long time and we are anxious to 37

play a role in making it work better, making it more 38

22

coherent, and I think the government is likely to ask us to 1

take an increased role there. But it is something that is 2

emerging, it is not something where we are on top of the 3

pile ensuring other people do these things, it is not like 4

that at all. 5

CLLR BYATT: Just for my own peace of mind, in a sense, I think 6

you have addressed it but just reassure me about the sub-7

reasons and disparities in terms of growth, sustainability 8

and development. How do you make sure that, in a sense, we 9

have not got prosperity and growth in some areas and other 10

areas are missing out? 11

MR RICHARDS: I think the answer to that is that it has always 12

been clearly our policy that we want to lift every part of 13

the region, and if you try and balance one against the 14

other, then you will lose both. What we have to try and do 15

is continue to lift the high performers and lift the lower 16

performers as well. So that is what we are trying to do. 17

Take inward investment, for example, someone will look at 18

Swindon, the next place will not be Plymouth and then 19

Penzance, it will be Swindon, Madrid or wherever. So you 20

have got to be realistic about where you take these things, 21

but we are trying to close the gap, while recognising that 22

you have to work with both the high performers and the ones 23

that are not. 24

MR WILKINSON: In general terms, firstly, you are aware of the 25

government's PSA2 target, which is to raise rates of growth 26

in all regions but to reduce the differences between rates 27

of growth. The same would apply to sub-regions, but it is 28

a very aspirational and difficult target. 29

In spatial priority areas, based on the index of 30

multi-deprivation, we do particular types of work only in 31

those areas, and obviously it is important as part of that 32

to make links to business, as well as skills and training 33

and all the other things in those areas. A lot of that is 34

done through our area teams; we made the decision, as you 35

know, a couple of years ago to set up delivery teams in 36

each part of the sub-region, and that is the reason we did 37

that, so that they could work more closely with local 38

23

groups on that. 1

But there are major disparities. The biggest 2

disparities are actually in London, between the richest and 3

the poorest, as it happens, but after that it is probably 4

here because we have 160% of average GDP in Swindon and 5

parts of Wiltshire and 65% in Cornwall. Cornwall has 6

Objective 1, and clearly we work with Objective 1 to try 7

and maximise the benefit there, and then we work in our 8

spatial priority areas with the local communities and the 9

local authorities and others. Business Development should 10

be part of that, as well as a separate line in itself in 11

our agenda. 12

MR BUCKLAND: I think also the sectors that are coming to us - 13

again, biotechnology is a good one where we have some very 14

good examples down in Cornwall and up in the Bath and 15

Bristol area, so we are working closely with those sectors 16

and developing that. 17

The peninsula geography as well works well with the 18

knowledge exchange concept. I mean, that works well and 19

overcomes some of the infrastructure problems, which I 20

guess you know about. 21

MR IRWIN: Can I just check that I am taking away the right 22

message? Having done a little bit of homework, I was 23

rather struck by my reading of the minutes of the 24

Department of Trade and Industry Select Committee last 25

summer, which had been looking at the area of business 26

support. Martin O'Neill had been talking about there being 27

a plethora of organisations, Ian Brinkley who is the chief 28

economist of the TUC used the phrase: "There is a danger 29

that you are going to lose the chief focus within the 30

regions with the multiplication of bodies, if this carries 31

on." 32

In a sense, that has been the sub-text of my thoughts, 33

listening to you today, but you are saying no, don't worry, 34

we are providing a useful catalyst based on the Regional 35

Economic Strategy, and we have got all sorts of other 36

strategies, including the Regional Enterprise Strategy, we 37

have consulted business and significant institutional 38

24

organisations, and we are all pulling together in one 1

direction, including that 20% that is really within our 2

grasp, the regional dimension of it, so I should not worry 3

at all about the plethora of organisations, the lack of 4

clarity, there is a single model for the rest of the UK. 5

MS BULL: We are not saying don't worry, we are saying we are 6

determined to address the problem that we know exists. 7

THE CHAIR: Chris, Mike, thanks very much for those questions 8

and thanks for your responses. I am happy to take one 9

supplementary from colleagues around the room, if there is 10

a burning point that they want to get out, particularly 11

related to vision and strategy. Howard? 12

CLLR THOMAS: Just to confirm that my notes are reasonably 13

correct, the answer to the question as to whether the RDA 14

has a vision in this area, the answer straightaway at the 15

moment is not yet; and the answer to the question as to 16

what your role is, is that you are still developing it. Is 17

that correct? 18

MR WILKINSON: The answer to the question about vision is that 19

there is a vision in the Regional Economic Strategy; in 20

terms of the question for developing a precise vision 21

within the Enterprise Strategy, then that process has not 22

come to an end; it is getting close to an end, but we view 23

the discussion today as part of that, there are other 24

discussions to have, it has not yet been to our Board, so 25

precisely defining that, we are not at the end of that 26

process. 27

MS BULL: Because it is not just a vision for the RDA, it is a 28

vision for the region. 29

MR WILKINSON: As far as our work is concerned, clearly it is 30

evolving. I mean, all the time we are discussing with 31

government and other agencies how we should work together 32

and whether we can achieve an improvement in what now is a 33

dispersed and many faceted system. Hopefully, there are 34

improvements here and there; for instance, we took over the 35

regional selective assistance last year and we hope we have 36

managed to make some improvements by that coming under the 37

RDA; it is possible that enterprise grants will be combined 38

25

with that and it looks as though we shall be working more 1

closely with Business Links, probably with the Learning & 2

Skills Councils in some way, Learning & Skills Councils are 3

now going to have regional directors. So there are things 4

happening all the time, and part of our job is to try and 5

make sure that they are improvements rather than the 6

reverse, but we cannot overstate it, it is a very difficult 7

process, there are lots and lots of problems and we would 8

not claim at all that we have solved all these problems, 9

but it is work in progress and it will be. 10

MR THOMAS: We will be coming on later in the day to the link 11

with other organisations and so on, but do you think that 12

there is any other organisation than the South West RDA 13

that should have this vision, as we have been discussing, 14

or should it be you? 15

MS BULL: It is a regional vision, so it should include all 16

the stakeholders that are involved in this area of 17

activity. 18

MR WILKINSON: It does not make sense if it is our vision 19

really. I mean, it has got to be held by the other supply 20

side agencies and, hopefully, it will be shared by 21

individuals and businesses in the region, and if it is not 22

then it is not much use. 23

MR THOMAS: Thank you very much. 24

THE CHAIR: That is probably the hardest one, the vision and 25

strategy discussion because it is what it means to 26

different people at different times, and getting the buy-in 27

is a challenge for all of us, but hopefully as we unravel 28

the day the vision will lead through, as you can see, into 29

the priorities and the joined-up delivery and suchlike, and 30

I think it is probably as we get to the end of today these 31

things will start to emerge and come together and we will 32

have a course of action. Thank you for your responses, it 33

is time for a break now and then we will come back and take 34

the next bit. 35

(Short adjournment). 36

THE CHAIR: I am sorry to be such a taskmaster, but it is 37

important that we keep to our timetable as much as we 38

26

possibly can. I found that a very useful session, and 1

going round and getting feedback from colleagues in the RDA 2

and also from the Scrutiny Panel, they found that was a 3

useful session, so thank you for that. 4

We are moving on now to the priorities, and I think we 5

are all well aware that, in a sense, the RDA has a limited 6

pot of funds, it has to prioritise, how does it really get 7

to the nub of it and I think this session will start to 8

come down on a lot of the work that you do. I am grateful 9

to our two colleagues to my right, Gordon and John, who are 10

going to lead this session. If I can just say, the 11

microphones are really just for background, they are on all 12

the time just to pick it up, because we are conscious that 13

colleagues perhaps cannot hear behind. 14

3. Priorities 15

MR WILKINSON (CBI): The purpose of this session is to better 16

understand how business support in the South West is 17

planned and delivered to meet the region's strategic 18

priorities. My guess is that we will always get a bit of 19

leakage, as we saw in the first session, from one into 20

another and we will try and avoid too much leakage from 21

this into other areas. 22

I think a summary of the evidence starts with the DTZ 23

survey, noting that there are limited resources to provide 24

business support services, which Ian has mentioned, so in 25

prioritising support, the report proposes that the focus 26

must be on the businesses that are open to receiving 27

support to help them grow, to ensure that the impact of 28

public sector intervention is maximised in the regional 29

economy. When we had the Business Development Workshop on 30

19th November, the working group that I chaired emphasised 31

the need to reconcile any assessment of regional priorities 32

with sub-regional and local needs. Some doubts were also 33

raised about the effectiveness of a regional, sectoral 34

approach as some businesses may not recognise the purpose 35

of a sectoral classification, which I think leads us on to 36

the first question which is what can the South West RDA do 37

to ensure that business support services support the 38

27

regional priorities. 1

MS BULL: There are three strands really to our approach to 2

this. Firstly, we scan the horizon, if you like, so we 3

need to make sure that we are not developing policies in 4

isolation, they need to be relevant and meshing in with 5

national priorities and European priorities as well, and 6

that includes lobbying and being engaged in responses and 7

focus groups, to make sure that the South West's needs are 8

known and reflected when those national and larger policies 9

come out. 10

The second area - and I will give some examples in a 11

minute - is through influence and leverage, so by working 12

with the key regional stakeholders to get engagement with 13

the strategies and make sure that through funding streams 14

and working through their funding streams as well we can 15

achieve a greater impact. We are trying to address, for 16

example, market gaps, so horizon-scanning, influence and 17

leverage, and the third area is a logical one, through 18

intervention, so that by driving policies and behaviour 19

through helping perhaps with funding, so targeting 20

intervention into areas which help meet the regional 21

priorities. 22

To give you some examples, we work very closely on 23

horizon-scanning with our sponsor department, which is the 24

DTI, and with other departments as well, so the DfES on 25

workforce development, management development, DCMS on 26

tourism and also with the DG in the EU on knowledge-27

transfer. What we try to do is to make sure that there is 28

a continual dialogue going on between us and all of those 29

departments to make sure that the policies are aligned. As 30

more strategic and policy intervention is devolved to the 31

regions - and it is happening in a number of areas, not the 32

big devolution discussion, there is a natural progression 33

there - then it will become easier for us to be able to 34

shape and drive regional policy intervention and influence 35

those national initiatives. An example of the 36

collaboration to date, for example, is with the 37

Manufacturing Advisory Service where the DTI will really 38

28

determine that there should be support and help for 1

manufacturing businesses. They were prepared to put a 2

significant amount of funding in, but they wanted the 3

region also to be max funding and to say how they wanted 4

that Manufacturing Advisory Service to look in their 5

particular region to make sure that it met a need for the 6

region - different types of manufacturing, different 7

issues, so that is the way that went forward. 8

On influence and leverage, for example, the bulk of 9

publicly funded business support is primarily through 10

Business Links, and that is a combination of funding earned 11

from businesses, so when businesses are paying for support, 12

and also through SBS central funding, so the global annual 13

budget for the Business Links network in the South West is 14

a total of £35 billion, of which £15-£16 million comes from 15

SBS centrally, but the rest comes in from those other 16

areas. Business Links have to consult with RDAs and in 17

this region I think it is a very warm consultative process, 18

because we can both see benefits in getting our strategies 19

and policies to align with each other's, and we now have a 20

formal planning process, so we sit down with Business Links 21

at a certain point in the year, we talk about what is 22

coming through or Regional Economic Strategy and our 23

Corporate Plan and they, in preparing their next year's 24

business plan, are trying to make sure that what they are 25

doing is in line with how we are taking things forward. We 26

also consult, as we said, with private sector organisations 27

as well and a number of those organisations, as you noted 28

the CBI, are engaged with the RDA in various different 29

groups. 30

Then on the intervention front, we have organisations 31

that say to us "We want to provide a certain type of 32

business support." We would be absolutely clear that 33

anything that they want to provide must tie in to our 34

Regional Economic Strategy and must tie in to the various 35

strategies that we produce, so that we are ensuring that 36

there is not duplication. This is one of the ways of 37

trying to stop the proliferation that we talked about. 38

29

So there are a number of different ways, a number of 1

different approaches that we take, to try to make sure that 2

business support services are meeting our regional 3

priorities. 4

MR WILKINSON (CBI): One of the regional priorities, I think, 5

that has already been mentioned, but perhaps we could 6

explore a bit more about, is the issue of the knowledge 7

economy and knowledge transfer. The thing that came out of 8

the workshop, which was news to me, is that in the South 9

West the proportion of R&D spend, split between 10

universities, public sector and private sector in this 11

region, is roughly a third, a third, a third, which is out 12

of kilter with other areas where it would be more with 13

private industry. Could you specify the prioritisation you 14

put on this issue and how you can adjust that regional 15

imbalance? 16

MR WILKINSON: I think the first question is what is the 17

explanation for it, and there are lots of different 18

explanations, but one pretty key explanation is the size of 19

a company, because it tends to be the very large companies 20

in a limited number of sectors that account for a huge 21

proportion of the R&D - big pharmaceutical companies, for 22

instance, have a very high proportion. I do not know 23

whether you want to elaborate on that, Steve? 24

MR RICHARDS: If you look at the South West economy and the 25

diversity of it, the point Geoffrey makes is that if you 26

take the third, third and third a lot of that might be 27

within the NHS - we have got very good teaching hospitals 28

in Bristol and Bath which are world leaders on cancer and 29

suchlike - and then you have got significant defence 30

establishments like DERA and PEER that operate, so that is 31

where that sits, but within the private sector it is the 32

big boys like British Aerospace, Airbus, Hewlett Packard 33

and Smiths where the majority of that R&D is undertaken, 34

and the challenge for us is to try and get that down 35

through the supply chain as we talked about earlier and try 36

and get more interaction. If you take Rolls Royce, for 37

example, Rolls are moving their strategy on aero engines 38

30

from 80% in-built to 40% in-built and are actually looking 1

at their tier 1 suppliers to develop and share the risk. 2

That has got significant implications for the SMEs within 3

that supply chain, both within the region and outside. A 4

lot of those businesses are global, so we are in 5

competition with not just the five in the South West and 6

the Midlands, it is Singapore and Taiwan, wherever it might 7

be. So I think that is where we are coming from. 8

With the universities, obviously, we have got really 9

good technology, we have universities at Bath, Bristol, 10

Exeter and Plymouth in different things and it is trying to 11

reach out with them. We are spending something like £3.7 12

million through something called Knowledge Exploitation 13

South West to try and get greater reach from the 14

universities into the business communities that they are 15

involved with. 16

MR WILKINSON: The knowledge transfer and the knowledge 17

support is absolutely up in our priority list. Steve has 18

mentioned Knowledge Exploitation South West which is part 19

of it, and you probably know that HEFCE now includes in 20

universities funding what has been called the third leg, 21

and all the universities put in bids for this and were 22

successful in varying degrees in establishing their own 23

infrastructure for promoting enterprise, the spin-out of 24

knowledge and the drawing-in of businesses. 25

What we did with the KESW project was to try and join 26

that up into a network across the region so that if a 27

business went into Bournemouth and actually they did not do 28

what it wanted but UWE did, then that cross-reference was 29

made. So there were facilities within each of our higher 30

education institutes to know what all the others had 31

available, and to direct people accordingly. But there 32

were other things in that, and one of the concepts was a 33

business Fellow in departments whose responsibility would 34

be encouraging entrepreneurship within his department, 35

looking at commercialisation opportunities. 36

That, though, is only part of what we are doing in 37

this area. What I think we need to do is build the whole 38

31

infrastructure from where you have got knowledge to where 1

you are actually commercially using that knowledge in new 2

business opportunities, and it is not just the HEIF and 3

KESW type products within the department, but through 4

incubation units, innovation units and ultimately into 5

science parks. So that is why we have upped our priority 6

in this whole area and invested large amounts of money 7

around the region in incubation and innovation and science 8

parks. 9

CLLR JENNINGS: I have still got a problem slightly. You talk 10

about talking on one dimension to different people, but I 11

am looking for the feed down into the local areas that 12

evolve into the regions and I have not yet picked up the 13

Local Skills Councils which I feel are very important to 14

all the different sectors. Do they sit on that top echelon 15

and what sort of partnerships do you have down in, because 16

it is at the base that it needs to be really formed for it 17

come back up again? 18

MS BULL: Obviously we are a strategic regional organisation, 19

but we have mentioned our area teams. We certainly work 20

with the Learning & Skills Councils, increasingly so now, 21

in a sort of tripartite arrangement with the Learning & 22

Skills Councils, Business Links and ourselves, because, as 23

you say, skills and business development are inextricably 24

linked. What we try to do is to ensure that via our area 25

teams and via those local Learning & Skills Councils and 26

the local Business Links we are aware of what the local 27

issues are and we work with them to try and generate some 28

solutions, not necessarily for the RDA to carry forward 29

but, perhaps, sometimes for us to part-fund and for us to 30

support those organisations to carry out. 31

CLLR JENNINGS: On that aspect would see yourselves more as an 32

enabler than a leader? 33

MS BULL: I think we take a leadership role in bringing those 34

organisations together. We are an enabler by sometimes 35

providing resource, which may be money in those cases, so 36

it is a combination of both, but we are a strategic 37

regional organisation. 38

32

MR BUCKLAND: I was going to say, there is obviously the 1

linkage with the FRESA and there is representation from the 2

RDA on all of the local Learning & Skills Councils, so 3

there is that linkage there as well. So there is a two-way 4

flow between the Learning & Skills Councils and the RDA in 5

that respect. 6

MR WILKINSON: Perhaps while we are on that, one of our Board 7

members sits on each of the Learning & Skills Councils so 8

there is that formal link, and in addition to that there is 9

a formal process whereby they share their plans with us, we 10

review and then give written comments on their plans, and 11

we do that each year. So there is a close linkage, and 12

then on top of that, at executive level, Caroline meets 13

with the executive directors of the Learning & Skills 14

Councils, and we had a joint executive - all my directors 15

and all their directors met - a few weeks ago, and we met 16

the new chief executive of the Learning & Skills Council to 17

discuss how we can take this process further and work more 18

closely together in terms of the identification of 19

priorities. There is a lot of work that goes on between 20

us. 21

CLLR JENNINGS: That linkage then forms your priorities from 22

the base up, yes? 23

MR WILKINSON: It is obviously very influential in formulating 24

both our and the Learning & Skills Council's priorities as 25

well, so it is a two-way process. What we are trying to do 26

is identify things that will have a significant impact on 27

the region, and if I can give a couple of examples, we have 28

been working for some time now with Bournemouth, with the 29

university and with the FE college to develop a hotel 30

training school. Obviously, that is a priority in the 31

Bournemouth area because that is a key area for tourism, 32

but our agenda for tourism is to raise quality 33

particularly, and one of the key ways of raising quality is 34

providing a better service and having better trained and 35

better-equipped people, and we see that hotel school, which 36

will be students and the university and the FE college, 37

running a five star hotel, a bit like a teaching hospital. 38

33

We see that becoming a resource for the whole region and 1

then making links to other FE colleges, HE and to things 2

like chef schools across the region to provide a network 3

for addressing the quality agenda, and also to create a 4

virtuous process whereby people will go, well-trained, into 5

the highest class establishments and some of them, 6

hopefully, will then think I can do this and set up their 7

own business, and in that way to really make progress on 8

developing the quality of our tourism offer. So it starts 9

with something that is quite local and, hopefully, spins 10

through that sector in the region. 11

MR WILKINSON (CBI): If we move on, perhaps, to our second 12

headline question, which is again based on what I was 13

saying in the introduction, that there are limited 14

resources for providing business support services, but how 15

do you feel, as the RDA, that business support services in 16

the region should be prioritised? Should it be by sector, 17

by growth potential, by geographic area, by what? 18

MR WILKINSON: It depends how specific you want to be. If you 19

are talking of business support in terms of the traditional 20

Business Links type business support, or if you are talking 21

of the more general activities that surround that as well? 22

MR WILKINSON (CBI): I think there are two things. At a 23

regional level, if you like, we have got your priorities, 24

how do you prioritise the various regional issues of which 25

you are talking and, as you say, as far as Business Links 26

are concerned you aim to influence what they do and what 27

the LSCs do and that sort of thing, and then perhaps a view 28

as to what your priorities are in trying to influence them 29

at the local level. So I think there are possibly two 30

answers. 31

MR WILKINSON: I think we get back to the issue of how do you 32

prioritise without picking winners. Obviously, the public 33

sector trying to pick winners does not have a very good 34

track record, and I think that as far as our general line 35

of activities is concerned, we operate in two ways and we 36

touched on this in the first session: one is to identify 37

areas where we think there is an argument for public 38

34

intervention, and they are in things like knowledge 1

transfer, which we have just talked about, and things like 2

access to finance. They are generic and across the region 3

and available for whoever needs to tap into them. Getting 4

the demand side right is a different matter, but those are 5

generic across the region. 6

We then, clearly, have identified priority sectors for 7

particular input from us in the way I described earlier, 8

not that we were going to do anything in terms of running 9

those sectors, that is up to the private business to do, 10

but on the basis of all the work done across the region and 11

the Regional Economic Strategy, those sectors we identify, 12

not as being winners exactly, but as being of particular 13

significance to the region at the moment, and likely to be 14

in the future, but subject to review. So the five main 15

ones are substantial sectors that, even if they are not 16

going to be there in 30 or 100 years time, they are jolly 17

important to us now and we need them to be as productive, 18

efficient and innovative as possible, and then others which 19

do seem to be emerging sectors capable of high growth. We 20

have devoted time and resources to get sector groups, 21

private business sector groups, working together to 22

identify how they can improve productivity, skills and so 23

on within those sectors. 24

MR WILKINSON (CBI): So what you are saying is that as far as 25

regional priorities are concerned, you have got the sectors 26

as being a priority, knowledge transfer being a priority 27

and finance. Those would be your three regional 28

priorities. 29

MR WILKINSON: That is a way of categorising it, yes. You can 30

use different terms like innovation, promotion of 31

innovation and that goes beyond the work with HE's to 32

innovation relay teams and so on, so there are other 33

things, but we certainly highlight those areas. 34

MR WILKINSON (CBI): On the sector issues, how regularly do 35

you review priority sectors? 36

MS BULL: In 1999, 2001 and we have an on-going review at the 37

moment. 38

35

MR WILKINSON (CBI): So it is every two years. 1

MS BULL: Every two and a half years, yes. 2

MR WILKINSON (CBI): From the point of view of the influence 3

of what is done more at the local level, what are your 4

priorities in terms of what they are doing? 5

MR WILKINSON: We work with each Business Link in their own 6

areas and have said how can we pool resources, so they have 7

come up with particular projects, each of the Business 8

Links now, where we are jointly funding things that they 9

have identified and we agree specific priorities for. But 10

I think prioritisation there is slightly different, and I 11

think this is up for debate. At the moment Business Links 12

have done two things: they have been a brand and an entry 13

point, but they have had specific advisers in different 14

areas that go in and give specific advice to businesses, 15

free for a certain amount and then on a fee-paying basis 16

after that. 17

What is up for discussion now is whether they should 18

become mainly portals and brokers --- 19

MR WILKINSON (CBI): Signposters? 20

MR WILKINSON: Signposters and brokers, so some of the 21

resource that now goes actually to providing free advice 22

will go to give more comprehensive service to more 23

businesses in a signposting way, and then the businesses 24

will have to either pay themselves or find some other 25

sources of finance for the advice itself. 26

MR WILKINSON (CBI): Am I hearing right that really what you 27

are saying as far as the local level is concerned, you 28

would allow local Business Links and whatever to assess 29

their own priorities, which you support. 30

MR RICHARDS: Just to add to what Geoff has already said. I 31

think you can take this back up a level in terms of our 32

sectoral support. If you look at it in terms of proactive 33

and reactive, if you are proactive it does not necessarily 34

mean you will not do anything for the reactive side. We 35

have chosen our sectors on the basis of where we can make 36

the greatest regional impact, so for instance financial 37

services is a huge sector in the South West, 15% of our 38

36

workforce, and the reality of that is that a lot of the 1

decision-makers within finance are outside the region, so 2

there is very little you can actually do to impact on the 3

decisions that are made. 4

So in coming to your point about local businesses, 5

yes, we recognise there are local priorities and the 6

Business Links are empowered to react to that. We would 7

seek as much common ground as we can within the policy area 8

that we have, but really we would want to take a secondary 9

role and we do that through our area teams in the sense of 10

support. They have our support, but not necessarily our 11

funding, because we are focusing the resources we have on 12

the sectors where we think we can make the most impact. 13

So we might say, yes, that is very important, it is a 14

very good idea, but it is not actually one that we are 15

going to be a primary founder for. We might put some money 16

in, but were would be an expectation that the local players 17

would be the ones and we might put some money into 18

leverage. 19

MR WILKINSON (CBI): Thank you. The point I think which comes 20

up perhaps under this headline question is when we were 21

talking to various people prior to this hearing, the common 22

theme coming through was the RDA does too much. Would you 23

like to comment on that? I think the general view was, you 24

know, if you refined down and just concentrated on a few 25

issues and focused the financial support on a few issues, 26

your effectiveness might be greater. 27

MS BULL: I think the concept that we should focus on a fewer 28

number of things in order to get greater impact is a good 29

concept. The difficulty, of course, is deciding which of 30

those things ought to be your priority, and as soon as you 31

drop one thing off there will be somebody somewhere saying 32

"Hold on a second, that actually was really important 33

because ..." So we have some really difficult, careful 34

choices to make and we have been aware that the history of 35

the RDA has meant that the various organisations that came 36

together when the RDA was formed, all did a lot of things 37

out there, and it has been down to us through our Regional 38

37

Economic Strategy to try and focus onto the key areas where 1

we believe we can really make a positive difference. So it 2

is an on-going process. Would that be fair, Geoff? 3

MR WILKINSON: Part of our role is to look at innovative ways 4

of doing things and pilot them, with the intention of them 5

being picked up and mainstreamed, rather than us supporting 6

and funding them forever. So I think there must be an 7

element of that in our work, and again we have done that in 8

conjunction with Learning & Skills Councils quite often, we 9

have identified a gap, we have highlighted a project and 10

then it has been picked up, and there is a good example, I 11

think in Dorset, the A3 project. 12

MS BULL: Yes. 13

MR WILKINSON: So we identified a particular source of support 14

which is now going on without our involvement or finance at 15

all, and we do have a role in identifying gaps and seeing 16

if there are ways to pump prime them and enable them to be 17

self-supporting and continue without our intervention. 18

MR WILKINSON (CBI): So really what you are saying is, yes, 19

you see some merit in refining down your activities, but it 20

is difficult. 21

MR WILKINSON: It would make life easier for us in the sense 22

of focusing our activities. 23

MR WILKINSON (CBI): Who is driving it, Geoffrey? Is it what 24

you have inherited, being driven by government, or is it 25

being driven by cannot say no? 26

MR WILKINSON: I think it is being driven by the needs of the 27

region, which are wide across the region and across all 28

sorts of different activities. We are only talking about 29

business support here today, but we have a very wide agenda 30

and we have to address that agenda, and I think people 31

would be very put out if we said we were going to back off 32

from any of our existing activities. So there is very 33

strong pressure on us, actually, to do more rather than to 34

do fewer things. 35

MS BULL: But we are trying to be much clearer about our 36

priorities and the criteria by which we judge things, so 37

that outside organisations will have, perhaps, much clearer 38

38

expectations of what we can and cannot do. 1

CLLR JENNINGS: Just following on the same lines, because I do 2

get the feeling you are trying to be all things to all man 3

as it were, but listening to the last comment is your 4

support linked to the will, or to the skills that benefit 5

from it? 6

MS BULL: Sorry, could you just repeat that? 7

CLLR JENNINGS: Would your support be linked to those that are 8

showing the will to move forward as opposed to what skills 9

and benefit come out of it. 10

MR BUCKLAND: One of the major things we have to look at is 11

changing attitudes amongst some of the people below there, 12

but we have talked about some of the generic issues across 13

the various sectors, so things like financial support and 14

mentoring and coaching, those sorts of things, incubation. 15

So those are generic needs, but amongst the business 16

community there often is a need to actually change the 17

attitude towards accepting support and understanding what 18

they actually do need, and it is very often a case of they 19

do not really know the right questions to ask because they 20

have never really considered this. I mean, the number of 21

businesses which actually have a business plan, even 22

running to a few sentences, are few, so we need to change 23

attitudes down there and we also need to change attitudes 24

towards people developing their own businesses, that people 25

can take that route. As Steve said earlier, too much of it 26

is where people are made redundant, or there are other push 27

activities rather than pull activities, people are not 28

thinking about starting their own businesses. So we have 29

to take that sort of approach, and also on top of that, if 30

one takes mentoring and coaching and finance, very often 31

there is an attitude that the entrepreneur can do it all, 32

they are unaware that they perhaps need to bring in other 33

people and reward them from that, and that that cake will 34

get bigger so therefore they actually have more to give and 35

they can make more out of it. So there is this change of 36

attitude and we need to look at that. Again, it is working 37

within the sectors in terms of picking winners and looking 38

39

at ways of going forward there. 1

MR RICHARDS: If you look at this in a technical sense, if 2

you look at your markets and look at how you segment, very 3

often segmentation has always been the wrong type of 4

business, the number of people employed and so on. I think 5

we are now looking more at a model revolving around values 6

and beliefs, the very point you put forward. The bottom 7

line is that unless there is a will and a desire within the 8

business to improve and grow, it is not going to, and the 9

challenge for the business support community is how you 10

segment the market where you can get most impact, because 11

your outputs and outcomes will flow from how effective your 12

segmentation model has been in the sense of doing that. So 13

I think there is a more rounded view, and certainly within 14

the Business Links we are looking at values and beliefs as 15

much as anything else. 16

If you talk to a venture capitalist, the three things 17

they say are important are management, management, 18

management. So there are some big issues around that, and 19

I think the point that Caroline has raised regarding skills 20

is not for this hearing today, but there has been a similar 21

big fight between government departments, between DTI and 22

DfES, and DfES if you like has won the battle in the sense 23

that they take prime responsibility for workforce and 24

management development. The issue is, of course, getting 25

that into the marketplace, and I think the LSC and Business 26

Links pilot and the discussions at high level will actually 27

see a far more integrated approach to that, and indeed our 28

funding in that area, we are funding significant things, 29

possibly with Exeter University, we are also looking at 30

coaching for impact on other business areas. It is very 31

much about getting the needs of the business community. 32

MR BUCKLAND: I think also there is generally a risk aversion. 33

95% of the businesses in the region are under 10 people, 34

and there is a great risk aversion if you are quite 35

comfortable and you are doing well, what is the reason for 36

expanding, you will take a risk in doing that, so there is 37

an education process there. The LSC again is promoting the 38

40

leadership and management skills required, so there is a 1

lot of activity there. 2

CLLR JENNINGS: Thank you for that. If I could take us into 3

headline question 3, how does the South West RDA ensure 4

that local priorities are met through relevant business 5

support provisions as well as meeting regional strategic 6

objectives? 7

MR RICHARDS: I think we debated it in the group that we were 8

in last Wednesday, and I think it is the 80-20 rule again, 9

in the sense that 80% of business issues are generic to any 10

business, whether you are in Padstow or whether you are in 11

Dorset or Christchurch. A lot of the issues that 12

businesses face are the same, and we partly answered that 13

earlier on in the morning session, and we have got to 14

therefore try and look at how we can streamline and get 15

that generic business advice addressed. 16

We are very focused on the 20% difference, what are 17

the differences that rural businesses face compared to 18

urban businesses? We are very clear about that and the 19

challenge in that is actually getting suppliers and 20

intermediaries to recognise that we need to move on and 21

change, and I think that is an area we still need to 22

tackle. I think, again, our strategies and policies will 23

evolve as we get closer links with the business community 24

and with the LSC. So I think the answer to your question 25

is, is it generic or is it specific to whatever business? 26

MS BULL: Can I make a couple of extra points as well? Where 27

we have funded physical developments like innovation 28

centres, incubation or even really just, you know, 29

straightforward business parks or industrial estates, we 30

always now take business support and access to business 31

support into account and make sure that if there is a 32

proposal coming forward for something like that, that there 33

is a specific plan for how support can be provided to the 34

businesses that move onto that development. 35

The second point that I was going to make, just 36

speaking about local priorities, there are times when it is 37

within our remit to support quite extraordinary local 38

41

needs, and an obvious example of that would be foot and 1

mouth. So there will be times when there are very local 2

crises which we can legitimately be involved in, would want 3

to be involved in, albeit with other partners as well, 4

particularly local authorities. So we have an issue with 5

maybe a company that is looking to close down, then we 6

would immediately be tying in to the local authority, to 7

Job Centre Plus, to all the relevant agencies to try and 8

make sure that we were supporting in those circumstances. 9

CLLR JENNINGS: With issues like that I would assume that there 10

are sub-regional partnerships that you would link into, or 11

is there any difficulty in linking into those partnerships? 12

MS BULL: We would link into sub-regional partnerships. Very 13

often it is actually down to a local authority level and we 14

would be meeting directly with that local authority because 15

we had those sort of relationships via our area team. 16

MR WILKINSON: It might be a partnership that is already a 17

standing partnership, or it might be one put together 18

specifically for that purpose, depending on what the needs 19

are and how they have been identified. 20

CLLR JENNINGS: I have nothing more, thank you. 21

THE CHAIR: Okay, thank you very much for that. We have got 22

time for one supplementary question. Christine, do you 23

want to come in? 24

CLLR CHANNON: I really would like to ask two questions, but 25

there is a relationship between them. You talked about 26

trying to influence people, and one thing I would like some 27

clarification about is in terms of Business Links. You 28

talked about the budget for Business Links, but I was not 29

quite sure whether it was a separate budget or whether it 30

was part of your budget, the £35 million. Perhaps you 31

could clarify that. 32

Secondly, going on to that part of this, you talked 33

about the need to influence what they did, and I just 34

wondered whether in terms of the signposters you felt it 35

was better for them to retain the autonomy they have or 36

whether it would be much more useful to subsume them in 37

that particular way. 38

42

The other question relating to influence is back to 1

the Learning & Skills Councils. I remember when we did 2

that particular committee inquiry we were concerned about 3

the fact that the FE tend to look for bums on seats, 4

because that is how their funding comes in - and this is 5

where I think the DfES are not being particularly helpful 6

to the DTI - and what we could do possibly by flagging up 7

that your needs are influenced in that way is really very 8

important. 9

THE CHAIR: Before you answer that, we have done the Skills 10

Select Committee so if you can just narrow any response on 11

that, because I am a bit conscious that we will get too 12

sucked into the skills agenda, although it is a relevant 13

point. Are you happy with that? 14

MS BULL: Yes, I think so. 15

MR WILKINSON: There is a specific question on the budget of 16

£35 million. I think the budget Caroline was referring to 17

was the budget of the Business Links, part of which is 18

publicly funded and part of which is generated by their own 19

business activities. So it is not our budget, it is not a 20

supplement to our budget, it is their budget and is a 21

separate pot. What we have done with each of the Business 22

Links is we have identified an area of work which is among 23

our priorities, but is also seen as a priority for them. 24

One example, for instance, was working with Trade Partners 25

UK on preparing something for exporting; we then jointly 26

funded a pilot project with them on that specific area of 27

work with some of our money and some of theirs to promote 28

that activity and assess whether that should be rolled out 29

more generally. 30

There was a question that you raised at the end, 31

should Business Links become part of the RDA? I think 32

there is general agreement, we discussed it right at the 33

beginning, of confusion, and people do not know who is 34

doing what. We are committed to working to reduce that and 35

working better with Business Links is an area, and the 36

precise form of that, how close we should get, is being 37

piloted, as you probably know, around different regions. 38

43

Some RDAs are saying we will take over Business Links and 1

we will supply that. At the moment within the RDA we do 2

not have people that go into companies and deliver business 3

advice. It is not something that we have done and, 4

probably, for a strategic regional organisation you may 5

think it is a step too far, but you probably need to 6

integrate the approach followed by Business Links more 7

closely with what we do to make it more coherent to the 8

users, and we are committed to work with them to try and 9

find a way of doing that. 10

MS BULL: We have taken a natural evolution approach, really, 11

so our relationship with Business Links is a very close 12

working relationship. At the top of our minds all the time 13

we are trying to see what is it the customer needs, how can 14

we best serve the needs of the customer? That is one of 15

the reasons why the Business Support Review, I think, has 16

been a very fruitful exercise because we have worked very 17

honestly and openly with the Business Links, and that is 18

also what their views are. So for the future we have got a 19

number of working groups, with the Business Links, and 20

indeed involving the Learning & Skills Councils as well, 21

which probably comes towards the answer to your final 22

question, because we can see how important it is that the 23

skills issue that the Learning & Skills Councils deal with 24

are inextricably linked with the business development 25

issues that Business Links deal with, so a three-way set of 26

working groups to decide how in future we should best take 27

things forward, and we have got no preconceived ideas on 28

the structure as yet, we want to get the strategy and how 29

we roll that forward right first. 30

MR WILKINSON: I know it is not directly relevant, but can I 31

pick up the point about the bums on seats. It is more than 32

that, the qualification, the funding that follows 33

qualifications. I think we would think it would be useful 34

to get the Regional Assembly's support. We have been 35

arguing very strongly for increased flexibility in the 36

targets and the funding of local Learning & Skills Councils 37

and we discuss this with your colleagues frequently. So if 38

44

the Regional Assembly did want to reiterate that, I think 1

workforce development overlaps with this session and we 2

would be very happy to jointly lobby yet more. 3

There are good pilots about. We have got one in 4

Gloucestershire where the training is taken on to business 5

parks, and we have got one that we are developing in 6

Cornwall and across the region, I think probably in Poole 7

and Plymouth as well where a prime company, working in the 8

marine sector with FE colleges, will have training on their 9

site, but it will be available for other smaller companies 10

to come and join in. So there are lots of good models 11

here, but I certainly still believe they are constrained by 12

the funding and target formulas on Learning & Skills 13

Councils and there should be more flexibility. 14

MR RICHARDS: Can I just complement your answer on this, just 15

so it is clear. The funding comes directly from Small 16

Business Services into our budget, so that comes directly 17

down through, and the Business Links have got 14 themes 18

which they have to answer to; some would argue that with 14 19

objectives it is probably nine too many, but that is how it 20

is, so we are looking in the sense of where this goes 21

forward. The three pilots that Geoffrey has alluded to are 22

three pilots within the West Midlands, East Midlands and 23

Yorkshire and Humber on how better RDAs can work with 24

Business Links. Those are being evaluated at the moment 25

and in some areas there is far closer collaboration from 26

April of next year, in the sense of where the funding goes 27

and the executive decisions made. As Caroline said, we 28

want to be sure that the model that we take forward in the 29

South West is right for the South West, not one that DTI 30

have taken on for us and said take this model forward 31

because you are bit like the West Midlands." So very much 32

we are working with businesses to make sure that business 33

support is how it should be for the South West businesses. 34

THE CHAIR: Thank you for your question, Christine, and thanks 35

for your responses. Just to remind you where we are in the 36

day, we are where we wanted to be at twenty past for lunch. 37

What I would ask Scrutiny colleagues to do is convene 38

45

ourselves at about one o'clock, just to check up whether we 1

are happy with everything and if there any subsequent 2

things that have emerged and check where we are before we 3

move into the afternoon session. But we are on schedule 4

and we will all need to come back sharpish at 1.15. Thank 5

you very much. 6

(Lunch adjournment). 7

4. Joined Up Delivery 8

THE CHAIR: Welcome back, everybody, thank you very much. 9

Obviously, as we move this afternoon to the next two 10

sessions which are linked together, the first one is 11

obviously joined up delivery, which has dominated much of 12

our discussion this morning. We will not necessarily want 13

to go over old ground, of course not, but there are aspects 14

in terms of the questions and the things have come through 15

from stakeholders in the region that we do have to follow 16

up in the proper way, so I hope you will bear with us on 17

that, but obviously I am looking particularly to Andrew and 18

Howard to be creative in how they ask some of those 19

questions and drill down. Over to you. Thank you. 20

MR THOMAS: Good afternoon, we do not, indeed, want to go over 21

old ground which has been discussed this morning, but 22

summarising what DTZ reported about the current situation, 23

they said that there were a large number of organisations 24

involved in the delivery of business support and they are 25

identifying that there is competition between providers and 26

that there was "poor knowledge and understanding of goals, 27

capabilities and services" among the providers of business 28

support (which obviously includes yourselves) and that it 29

was compounded by poor communication between those 30

providers. It said "As a result, it is widely perceived 31

that businesses are confused by the range of provision of 32

business support", and we had a paper from Professor John 33

Hudson, who is here with us today, listening to what is 34

going on, in which he said it was important that different 35

agencies co-ordinate their delivery in a mutually 36

supportive manner, and we had a workshop which discussed 37

that issue further and I chaired the discussion which 38

46

resulted in these questions. I think we can then get the 1

first headline question that we informed you about perhaps 2

quickly out of the way; I do not know, it is obviously up 3

to you. 4

Do you perceive yourselves that the roles and 5

responsibilities are clearly defined and well understood by 6

those who receive it and by those who provide it? Do you 7

agree that actually this area is, shall we say, not at the 8

best at the moment, or would you disagree with DTZ's 9

findings? 10

MR BUCKLAND: I think the headline answer to that is no, I 11

think our own research in Business Support Reviews in 2000 12

and 2003 have both shown that there is confusion among 13

regional businesses as to where to go for support, and they 14

are very often unaware of the various sources, so it very 15

clearly matters. 16

I think that confusion is very often compounded by 17

businesses' ability to articulate their business needs and 18

understand what type of support they need, so it is very 19

clear that we actually need to do something different 20

there. 21

MR THOMAS: So it is their fault. 22

MR BUCKLAND: No, not entirely, I think it is the alligators 23

in swamps metaphor that you need to look at there, very 24

often you forget your original intention was to drain the 25

swamp when you are up to your neck in alligators. But 26

there is also a lack of awareness on the supply side as 27

well and there is limited communication between the 28

different business support providers, and I think the 29

research also shows there is little evidence of team 30

working on that business support side. 31

It is also compounded by the multiplicity of funding 32

sources and where that is going. I know that Chris and I 33

have talked about this a little bit, but I was at a meeting 34

in Birmingham in the early part of this year where we had 35

two DTI people arguing as to whether there were 196 or 174 36

small business support mechanisms out there, so I think 37

there is confusion at that level. Certainly, again, at the 38

47

dinner I was at last week with Prince Andrew, the special 1

adviser to the DTI was talking about this multiplicity of 2

funding streams, so there is a lot of that there as well. 3

We have taken a lead in terms of developing these 4

strategies, and through the Regional Innovation Strategy, 5

the finance for business and the Regional Enterprise 6

Strategy, they are trying to provide a framework for the 7

development of more integrated business support. It is 8

trying to bring together regional stakeholders and to get 9

an understanding of their relative roles and their 10

responsibilities for different organisations and how we can 11

develop that. 12

MR THOMAS: We have had evidence that over the past three 13

years not much has improved in this area. First of all, 14

you may not agree with that, but if you do what can be done 15

to improve the understanding of roles and responsibilities? 16

MR WILKINSON: I think we should not have sweeping statement 17

that nothing has improved in the last three years, I do not 18

think that is true. I think it is true that in specific 19

areas there is much confusion because things have got 20

rationalised and more have happened and so on, but there 21

are other areas, I believe, where there is now a more 22

systematic approach, and I come back to our approach 23

through the priority sectors for instance, wherebthere has 24

been much better engagement and understanding now, and the 25

reason is because it is largely businesses talking to each 26

other rather than the public sector talking to the 27

businesses, so it is facilitating that and them in 28

themselves working together to identify priorities. Then, 29

with an agency like ours, they can then communicate those 30

priorities and we can help direct them to where those needs 31

can be met. So in some areas, and I would also say in the 32

HE knowledge transfer agenda, quite a lot of strides have 33

been made in the last two or three years. 34

MR THOMAS: If I could just pick up on something, you 35

mentioned the priority areas and I have the impression that 36

the RDA is much "happier" dealing with what you call 37

priority sectors than it would be in tackling what has been 38

48

said round the table as being the localised issues. What 1

do you say to that? 2

MR WILKINSON: The RDA does not employ individuals to go and 3

give business support to individual companies, it is not 4

our role and it never has been our role. We are a 5

strategic body to identify priorities and identify ways of 6

addressing those priorities. I think there are other 7

organisations of course which do do that, and as I said 8

earlier this is a very long term problem. The DTI itself 9

is working very hard on it and they set themselves an 10

objective to reduce the number of initiatives they have got 11

now, down to ten by next April. Whether they are going to 12

succeed in doing that I am not sure, but they have publicly 13

stated that as an objective. But a lot of the business 14

support initiatives are not even DTI initiatives, they come 15

through other departments as well and lots are being 16

created as well as the ones being rationalised, So I think 17

in the general area of the proliferation of individual 18

initiatives, it probably is fair to say that things are not 19

much less confusing than they were a while ago, but at 20

least it is acknowledged and at least people are working to 21

address this. 22

CLLR GOVIER: Just on the point that Howard made his 23

introduction around, competing agencies or agencies 24

competing for business support, is that something that you 25

feel is an issue? One of the other points he made was 26

around the communications side, if communication could be 27

improved between those agencies, because we have come 28

across examples where it has not just been competing, it 29

has actually been conflicting and one agency has been 30

pulling people in one direction and the other has been 31

doing the same. How do you think you as an RDA have a role 32

in making sure that does not happen? 33

MS BULL: I think there are a number of fronts that we can act 34

on. We can try to build a clearer understanding of the 35

underlying strategy, the strategic rationale if you like, 36

for business support across the whole of the business 37

support community. Whereas at the moment they tend to jump 38

49

at a particular activity which they think they could be 1

good at or which seems maybe like a quick win, or is an 2

obvious thing to them at that point in time, if they 3

understand part of the overarching strategy, it makes it 4

much easier for them and us really to select which 5

particular sections of business support it is most 6

appropriate for them to address. We can help in that by 7

promoting the role of increasing productivity and the role 8

of innovation in contributing to increased productivity, 9

because there are some specifics which those business 10

support providers can get their teeth into. 11

I think, also, if we are able to work with them to 12

identify what their relative roles are, not just what they 13

happen to be good at at the moment, but given where they 14

come from, whether it is locally or, for example, the 15

Enterprise Agency against Business Links against higher 16

education, then it makes it much easier again to divide up 17

the business support overarching role between those 18

different agencies, and we can then help reinforce that 19

differentiation between them. 20

It would be useful, I think, if there was more joining 21

up at central government level between the different 22

streams of funding and the different targets that come 23

down. DTI are now our main sponsor, but DCMS, DEFRA, DfES 24

all develop policies which impact on business development, 25

and they put their funding through in different ways as 26

well. So if there was some kind of way of synthesising 27

that, showing how all that funding comes together in 28

business support and then, using the differentiation 29

between the providers, to make it much clearer, both to 30

them and to the customers as to who does what and for what 31

reason. 32

MR THOMAS: Should the RDA be doing that? 33

MS BULL: If it is the RDA working with all those 34

organisations that receive funding, yes, and I actually 35

think that for a lot of those organisations they would be 36

and are quite relieved that this is happening, in a way, 37

because they are not immune to criticism. If you have one 38

50

organisation doing something, and it is clear to the rest 1

of the world that they are duplicating what other 2

organisations are doing and their funding is public 3

funding, they know that the writing is on the wall really, 4

they cannot continue to do that. So it is relatively easy 5

from our perspective if we have different initiatives put 6

to us for funding, albeit matched funding, we can very 7

clearly say well, actually, that is duplicated by something 8

else that is going on so we are not going to fund it in 9

that format, you have got to show that you are doing 10

something that is clearly different. It obviously helps by 11

adding value, but is clearly different to other 12

organisations, and we can help them discuss amongst 13

themselves who is the best person to do which bits of the 14

job. 15

MR THOMAS: So this goes beyond sitting on the boards of LSCs 16

and what have you, this is actually having an executive 17

role in the funding process. 18

MS BULL: I would call it a strategic role. I think we can 19

input, we can say what we see and we can work with them, so 20

I would call that a strategic role. 21

MR WILKINSON: It is not for us to say we should have an 22

executive role on the Learning & Skills Council, I do not 23

think. That is a high level national policy issue and we 24

can make representations about making the system work more 25

smoothly, but we certainly cannot make changes of that 26

nature without national level agreement. 27

MR THOMAS: It is helpful to know your views as a result of 28

your experience. If we have this confused situation, 29

clearly people feel that that is undesirable and we 30

understand that you feel it is undesirable, so I think if 31

it is working together again we would carry your views if 32

we agree with them. I think we would like to go on to the 33

second point now. 34

CLLR GOVIER: The second headline question was what does the 35

RDA think should be done to promote more coherent and 36

effective business support arrangements in the South West. 37

I think, just picking up on the point Geoffrey has just 38

51

made around the need to rationalise or change the way in 1

which the business support is structured, I suppose the 2

question to you is how do you think the Regional Assembly 3

in lobbying government could assist you in actually putting 4

forward what structure, what structural changes should be 5

made, because that would be something that I think most 6

members would find useful to come out of this report, for 7

us to say this is a model we feel would produce a more 8

effective business support in the South West. Perhaps you 9

could give us your views on that. 10

MS BULL: Yes, I think there will be natural rationalisation 11

because of public funding constraints on it. As I said, 12

business support organisations cannot go on overlapping and 13

duplicating to the extent they have done, and the sort of 14

natural rationalisation would be through organisations 15

saying "Right, we have only got a limited pot of money, we 16

know what you want to achieve so we need to target our 17

funding where it will have the most impact." Clearly, that 18

is going to be where it is going to make the most positive 19

differences to the businesses involved, but also where 20

something has not been done before or not been done in the 21

same form before. 22

I also think that to an extent businesses seem to 23

becoming better educated on what they need, or better able 24

to translate the problems they have into the support that 25

they need, and they would be voting with their feet so they 26

will only be using and continuing to use the services that 27

make a real positive difference to them, and therefore 28

demands will drop away for services that are not being so 29

useful and helpful. 30

CLLR GOVIER: Do you think you would be better placed if you 31

actually had a clear role given to you to actually oversee 32

that, rather than it being as it seems to be at the moment, 33

by goodwill on all sides? What I am saying is that if you 34

were actually given that specific task to do, would that 35

assist in bringing people's ideas together. 36

MS BULL: Others may disagree with me on this one, but I 37

always have the perspective that if you can do things by 38

52

goodwill and people think that it makes commonsense working 1

together, you have got more chance of actually achieving 2

what we all want to achieve at the end of the day. Having 3

said that, there will be times when clear, straight 4

leadership is needed, and in those circumstances if there 5

is a remit to do that, so that something is agreed and in 6

place, then that helps, I agree. 7

MR WILKINSON: There are some difficult questions to be 8

answered, and we have touched on one of them this morning. 9

Would businesses prefer a more coherent framework but less 10

actual funding for support, so you spend the money on 11

making the structure clear and on the signposting, but that 12

means there is not so much money to spend on actual support 13

and you have to buy that as a business yourself? I do not 14

think we should necessarily --- 15

CLLR GOVIER: Does that have to be the case because, you know, 16

if there is a rationalisation of support and clearer 17

consultation, perhaps doing away with some of the 18

structures, would it have to be that there would not be so 19

much money? I am not necessarily sure that that is the 20

case. 21

MR WILKINSON: We have done one exercise - I will not say 22

where it is, but we have done it in tourism - where we have 23

actually looked at the number of tourism organisations in 24

an area and then how much of their budgets go on 25

administration. If you have not necessarily just one 26

overarching agency, but if you had joint membership of all 27

those agencies and therefore only one admin, but still 28

services supplied - and you could have two tier level 29

membership within that - then you probably could save quite 30

a bit of money and have more money to actually use for 31

market development and other things. 32

I would not underestimate the difficulty, however. 33

Even in that one single area I think it is going to take 34

months to get towards agreement and even longer to get 35

towards implementing that. I believe this is a very tough 36

agenda and that is why the difficulties have persisted. We 37

should be working with others and I think it would 38

53

certainly help to flag up the results of the survey, the 1

results of your workshop and so on, but I do not think 2

there is a simple solution at the moment, I think we need 3

to work a lot more on trying to identify the solutions with 4

the other people involved. 5

MR THOMAS: Our third question was to be about your role 6

specifically in this area of coherence, and if I could cut 7

to the chase, do you think you should take over Business 8

Links or something like that? 9

MS BULL: The DTI proposal is that funding for Business Links 10

will come through Regional Development Agencies over the 11

next couple of years. I do not see that as a takeover, but 12

certainly it makes a lot of sense if we are talking about 13

trying to bring the funding together into one funnel and 14

use it for the best purposes. So instead of having various 15

individual styles of funding, all of which have their own 16

targets attached to them, many of which might be achieved 17

by the same thing, hence duplication, if the funding is all 18

coming through one organisation, which is us, then it makes 19

it much easier for us to be able to knock out that 20

duplication because we will be able to see it more clearly. 21

But we know that the Business Links have the will to do 22

that anyway; I think it is probably some of the other 23

business support organisations maybe who fund it in other 24

ways that will have more of an issue with that, and that is 25

where we need to achieve what we need to achieve, with 26

their goodwill and agreement. 27

MR THOMAS: Why do they have an issue with it? 28

MS BULL: Because if you have an organisation that has been 29

funded for several years to provide support in a fairly 30

generalist way, and that is funding their own internal 31

administration and support mechanism, then you can see why, 32

for them, it would be quite important to try and continue 33

that. 34

MR THOMAS: What do you think about the area of learning and 35

skills? It was represented to us, especially from business 36

link organisations and so on, that the sort of 37

qualifications that may be being offered by educational 38

54

institutions is not responding essentially to business 1

needs in the sense of what people need; therefore, very 2

often, small businesses especially could see the attendance 3

of staff on these courses as being a drain on resources 4

rather than an addition to them. What do you think the RDA 5

can do to make sure that funding in the learning and skills 6

area - I know it was a previous issue for scrutiny, but it 7

is obviously something that has been represented to us. 8

Where does that funding go, how is that best organised in 9

the sense of trying to support business? 10

MR WILKINSON: We touched on this this morning as well. We 11

strongly belief that there should be more flexibility in 12

the funding of Learning & Skills Councils. At the moment, 13

to characterise it, the Treasury set targets, which are 14

mostly in the form of qualifications at a national level, 15

and then they are dished out to Learning & Skills Councils, 16

they tend to dish them out to the FE colleges, and the FE 17

colleges are very constrained as to how they can spend the 18

money within that. 19

There is a small amount of the budget which is more 20

flexible, but it is a very small proportion, and we believe 21

that there should be more flexibility. It is a regional 22

issue as well and this region has a very high proportion of 23

small companies, so that model fits us less well than it 24

would fit a region with larger companies. So there should 25

be more discretion within a regional structure for not 26

having exactly the same targets for everyone, 27

MR THOMAS: How is that an initiative then? Obviously you 28

feel very strongly about this as an RDA, but how are you 29

able to progress that initiative to result in that which 30

would deliver what you want? Do you have to have control 31

of some of the budget, or the priorities that are set by 32

the LSC? 33

MR WILKINSON: We can put the argument first, and we have 34

been. I was on the steering group of the Learning & Skills 35

RDA pilots and I made this point very strongly within the 36

steering group, and they have said they are looking at it, 37

the DfES has said they are looking at this as an issue. 38

55

There has been now an announcement that there will be 1

regional directors and that will allow at least a look at 2

regional priorities rather than just national and local, 3

and it may free up and make that work. I suppose if you 4

just gave us the money we could do it, but I think that is 5

too simplistic really because I do not think it is going to 6

happen, so I think that we must work - and that is why I 7

asked for your support this morning - in recommending that 8

there is a greater proportion of the budget that is allowed 9

to address local needs as identified by businesses and 10

others on the demand side, locally and regionally. 11

CLLR GOVIER: I would like to go back to the point that we were 12

just discussing before that last question. You seemed to 13

be saying that the relationship with Business Links now is 14

quite good, and then Caroline alluded to the fact that with 15

some other organisations they are perhaps more protective 16

of their space and their area of delivery. 17

MS BULL: I would not know, I was not trying to pinpoint any 18

one organisation or one type of organisation, it is just 19

that there are a lot of organisations out there who are in 20

receipt of various chunks of funding from all sorts of 21

government departments associated either with particular 22

sectors, or size of business or whatever. If we could draw 23

something that said very clearly, right up to this size of 24

business then, say, Enterprise Agencies were about this, 25

business start-ups perhaps, it is very specific because 26

there is not meant to be any .... written, then Enterprise 27

Agencies will provide that. If it is a business of this 28

size across these sectors then these businesses will 29

provide that help, but then of course the whole picture is 30

always confused by our 80/20 rule of 80% of business 31

support being about generic issues, in a generic format, as 32

opposed to the other 20% as specialist, so it is not always 33

so easy to do that. 34

MR BUCKLAND: I think that within this there is also the 35

ability of an organisation to say well, actually, we are 36

not the right route but there is another organisation which 37

is the right route, and for businesses that is one of the 38

56

key things, to actually go to a source and that actually is 1

a gateway or a portal into assistance and support. One of 2

the key things, I think, that we need to look at is how you 3

make sure that you have a routine which is a routine for 4

everything rather than just going and getting the no answer 5

from one organisation. Businesses have not got the time to 6

go to multiple organisations until they get the right 7

answer. 8

CLLR GOVIER: Do you think you are moving towards the position 9

where that will be the case, so that if I am a business, 10

wherever I am in the South West I can phone up a number or 11

write to an agency and it will be seamless to that 12

business, rather than it being like you just say, oh no, 13

sorry, we cannot help you? 14

MS BULL: Let me clarify one thing and then follow up on that 15

point. We have used the word signposting a few times now 16

in relation to Business Links. The actual word that they 17

were prepared to use is brokerage, because it is not a 18

question of sending someone off to find an enterprise 19

agency, they will actually broker the relationship with the 20

most suitable provider of business support for that 21

particular company in the circumstances, and that is a lot 22

more added value than just signposting. So that is one 23

part of what I wanted to say. 24

The second point is that the Business Links, in this 25

brokerage role, have been talking about and I think they 26

are actually now developing a central sort of 27

gateway/portal website thing. It is to achieve economies 28

of scale, to give consistency in certain aspects of the 29

generic business support across the region, and that makes 30

a lot of sense, and that is one way of trying to 31

rationalise down and make more consistent and get rid of 32

the so-called postcode lottery. 33

MR WILKINSON: And to promote that as the entry point brand. 34

CLLR GOVIER: And that would go round to businesses who were 35

not just Business Link customers, but that was the point, 36

that the Business Links might be appropriate for that 37

company, they may not be, it might be an Enterprise Agency 38

57

or something that would suit them. 1

MR WILKINSON: Yes, and in terms of workforce development, 2

yes, that can link in with learning and skills, and if we 3

could get more flexibility in their budget it would all 4

start to work much better. 5

MR THOMAS: That is for existing businesses, but of course the 6

chief problem that we have in the South West are the people 7

who are not in business at all, they might be in prison, 8

they might be on a drugs rehabilitation programme whatever, 9

we all know the wards that we are talking about. Where 10

does this coherence emerge as it were to someone who - he 11

does not know it yet or she does not know it yet, but she 12

needs to start up a business as opposed to try and get a 13

job. I have always been very worried about the fact that 14

you get these huge initiatives where a deprived area is 15

taken in hand by some organisations, sometimes the RDA, and 16

they plonk some huge building on it like a football stadium 17

or a business park, but that sometimes seems to miss out on 18

the people I have in mind, and social inclusion is a big 19

issue for the Regional Assembly, as I am sure it is for 20

you. So this coherence of approach, how will that help 21

that target group. 22

MR RICHARDS: I think the principle that we work to is equity 23

of access. Not everybody is entitled to unlimited business 24

support because there is a limit to where it can go, and 25

one to one based business advice is very expensive and you 26

have got to be able to look at, if you like, your profile 27

of how you want to do that. So what we focus on is very 28

much equity of access to that support. 29

Turning to the point of the regeneration efforts, we 30

are very much looking at two aspects of it and, yes, 31

sometimes we focus on place, in other words regeneration is 32

a nice building, but it is far more both nationally and 33

regionally, in our minds, around the people aspect of that. 34

It is people that drive regeneration and not the 35

buildings. So you are looking at new enterprise areas and 36

how you support that, and more funding is targeted at that. 37

At the end of the day, it does come to the demands of the 38

58

people, if they do not want that advice we have got to make 1

sure that they have got access to it if they do. We cannot 2

force people to do that. 3

MR THOMAS: So in fact then in summarising that, if someone 4

is, due to lack of education or the appreciation of 5

possibilities, unable to take advantage of that which you 6

provided, that is their fault. 7

MS BULL: No. 8

MR WILKINSON: It is obviously a specialist area, is it not, 9

and whether it is one that the RDA should get more involved 10

in ... 11

MR THOMAS: That is my question. 12

MR WILKINSON: I think the areas you are talking about, 13

prisoner rehabilitation, what happens inside prisons and 14

what happens in very, very deprived communities, clearly 15

there are some initiatives within Business Links at the 16

moment for ethnic minorities and other minority groups, but 17

I think you are identifying going even further than that. 18

I would have thought that has to be a supplement to the 19

main business support programme, which is what Steve has 20

been describing as particularly addressing those issues, 21

and I would have thought that you do need more specialist 22

people who know more about that to work on that. 23

MR THOMAS: Please do not take my questions, by the way, as an 24

implication that I think you ought to be doing something, I 25

simply wanted to know what it was, if anything, that you 26

thought you ought to be doing. 27

MS BULL: There is a scheme called Prisoners in Dartmoor and I 28

am not sure whether it is so much about entrepreneurship or 29

whether it is skills for business generally, but I know 30

that that is something that we are part-funding. 31

MR WILKINSON: We are helping to fund that. 32

MR THOMAS: But you would agree that it is not therefore just 33

through the conventional Business Links route, this has to 34

be something special. 35

MS BULL: And it may be through the communities. I mentioned 36

earlier about community regeneration schemes or where we do 37

build business parks, making sure that there is business 38

59

support and advice there. So your point is that sometimes 1

you need to be really careful about who you are using to 2

engage with some of those communities, I think, and that is 3

very specialised and we would be looking at that on the 4

basis of particular schemes in certain local areas. 5

MR WILKINSON: Our approach to community development is very 6

much to work with a community group which would then advise 7

on every aspect of the development. There are lots of them 8

around. 9

MR THOMAS: The establishment of your local area teams was 10

very much appreciated by those with whom we held 11

interviews. How are you judging those and do they need 12

expanding in a budgetary sense? The people who we 13

interviewed thought that they did, which might come as 14

pleasant news to you. 15

MR WILKINSON: There is always a balance is there not? We 16

talked about road improvements this morning and there are 17

three road improvements now adopted, but it would spend all 18

our budget in one year. So that is at one extreme. We 19

have got a limited budget and we try not to spend more than 20

a small percentage of that on administration, and therefore 21

we are limited in the number of people that we can put on 22

the ground, but we are always looking at whether that 23

limitation makes sense or whether we should push a little 24

bit here and there. We would, in some areas, like to have 25

some more people, but we are conscious of spending public 26

money and that most of that public money should go on 27

things that are for other people, not for our own 28

administration. 29

THE CHAIR: We have got about five minutes and I would like to 30

bring in a supplementary. Do you want to finish that off? 31

MS BULL: I was just going to say in one line really that it 32

is not always a question of more money. We have recently 33

looked at how we are resourced in a particular area and, 34

given the circumstances of that area and what we now know, 35

it made more sense to tweak that resource and do things in 36

a slightly different way. So we are responsive to local 37

conditions. 38

60

MR THOMAS: Just as a quick anecdote to this, I know the area 1

of Bristol called St Phillips Marsh very well. There was 2

an organisation called the Bristol Development Corporation 3

which just stuck a road across it and isolated it even 4

further. I do not know whether anybody actually lives 5

there any longer, there are a couple of brothels down there 6

--- 7

MS BULL: They sleep in doorways actually, 8

MR THOMAS: That is a statement and I do not want an answer, 9

it is to show you where I was going, but I wanted to know 10

where the RDA thought it was helping the local area, where 11

a thousand people used to live, to regenerate. 12

THE CHAIR: I have a couple of supplementaries. Chris, do you 13

want to come in? 14

MR IRWIN: I suppose it partly goes back to this morning. I 15

mean, what I am listening out for is coherence, clarity and 16

focus, and I think I hear it. Nick and I were at the 17

Prince Andrew dinner on Wednesday night at Bristol, and 18

then I think of the Grand Old Duke of York, because I keep 19

on going up the hill and coming back down again as I listen 20

to you. 21

Let me take the salient point. In the DTZ report it 22

said - and this is a remarkable piece of very frank writing 23

- having gone through the charge list, "These key messages 24

are not significantly different to those identified in 25

similar regional studies, the Business Support Process for 26

Regions, carried out in 2000 and 2001." It is presumably 27

talking about the PRISM report. 28

When I talk about the Grand Old Duke of York going up 29

the hill and coming back down again, one minute you say, 30

Caroline, for example, the writing is on the wall, or Nick 31

says "The RDA accepts the points in Howard's initial 32

question." Then I hear what I think is slightly evasive, 33

if I may say so - evasive is the wrong word, it is 34

troubling to me because I do not expect a clarity of 35

priority and leadership which, in a sense, DTZ is saying is 36

needed. 37

When you talk about your incrementalism, your natural 38

61

rationalisation, your natural evolution approach, not the 1

big devolution discussion but gradual progression, it is 2

all very, very empty. Yet here we are, three years ago we 3

were told that those sorts of things should be going on, 4

two year ago told those things are going on, in here told 5

things that are missing. I am perhaps being very unfair, 6

but I just want you to display to us now either that you 7

take on board absolutely the need for authoritative 8

leadership in this area, to take a strategic lead in 9

actually managing the budget, not regarding it as something 10

you are quite embarrassed to have but something you are 11

delighted to have and can relate to your various strategies 12

that are important for the region. I want to hear you say 13

that out loud, or else I want you to tell us why you do not 14

want to say it out loud or how we can help you create an 15

environment in which it is possible to say it out loud. 16

MR WILKINSON: There are specific things and there are general 17

things there, are there not? As I said, the DTZ report 18

focused on a lot of activities, some of which we have not 19

been involved with. What we are saying now is that we do 20

clearly want to work to make the interface between business 21

support delivered through Business Links and the RDA's 22

priorities much clearer and smoother. We have been moving 23

towards it in a gradual fashion by working closer and 24

closer with them, but we expect over the next two years for 25

actually the funds to be channelled through us and 26

therefore to have a much clearer role. 27

MR IRWIN: Because you as an RDA have a strategy that is worth 28

championing and believe is really worth pushing. 29

MR WILKINSON: We as a region have a strategy that is worth 30

championing and we are custodians of certain aspects of 31

that. 32

MR IRWIN: Thank you. 33

MR BUCKLAND: We have talked about the multiplicity of funding 34

routes and organisations and it is herding those together 35

and, as Caroline was saying, getting this brokerage sorted 36

so that you can actually get the single portal, the single 37

route in. 38

62

MR IRWIN: Driving it. 1

MR BUCKLAND: Driving it, yes. 2

MR RICHARDS: I think when you look at it between 2000 and 3

2003 the big thing for us is that we have not had control 4

of the funding that affects the behaviour of the people 5

working in that area. When that happens then we will have 6

a greater say, but the reality of it is that most of the 7

funding is centrally driven through certain targets. 8

MR IRWIN: How can we help put it where it ought to be? What 9

you are saying is that you would like to drive it - I do 10

not think I am putting words in your mouth - and to do so 11

you need the funds to give you the power to drive it. Is 12

that right? 13

MR RICHARDS: We do, but we also need a lead from business to 14

tell us what we really need and we can react to in a more 15

responsive way. I think that is part of it. 16

MR IRWIN: You are satisfied that the consultation for 17

identifying that has been inadequate. 18

MR RICHARDS: I think there is already evidence in the region 19

of things changing. For example, take Cornwall, there is a 20

Business Support Group that is driven by businesses and 21

most applications for funding for business support now have 22

to, if you like, go through that to prove itself, it is 23

like an executive committee. I think that is a model that 24

is developing also in Devon and it is the sort of thing 25

that we want to encourage but, as you say, when push comes 26

to shove unless you control the chequebook you do not 27

control the projects. 28

MR IRWIN: Do you need us to give you a bit more push? 29

MR RICHARDS: Anything that helps to make the region more 30

effective would be gladly received. 31

MS BULL: But in a spirit of partnership. I accept the 32

leadership word but what I would not want that to be seen 33

as is world domination, because I think that that sort of 34

model does not work. 35

MR IRWIN: Inclusive leadership. 36

MS BULL: Yes. 37

THE CHAIR: Okay, thank you very much, Chris. Thank you for 38

63

your responses. We are going straight into the next one, 1

which is initiatives and actions, and always in situations 2

like this you do come up as the tail end Charlies in many 3

respects. 4

5. SW RDA Initiatives and actions 5

CLLR BAKEWELL: The purpose of this session is to explore 6

specific South West RDA activities, objectives, 7

effectiveness and the extent to which they may identify 8

need. It is a bit of a catch-all, but we want some 9

specifics. Part of our evidence has obviously been 10

Professor Hudson's suggestion that the RDA should do more 11

to facilitate entrepreneurship, the environment in which 12

the entrepreneur can deliver wealth and prosperity and they 13

should facilitate the working of that as an invisible hand 14

rather than trying to replace it. The DTZ report notes 15

that the DTI is looking to streamline the provision of 16

business support services at the national level, reducing 17

the national generic product, leaving the regions to devise 18

solutions for the more specific challenges they face. 19

During the workshops there were discussions that 20

demonstrated perhaps that there is a great deal of 21

confusion over where the responsibility lay, or should lie 22

in supporting social enterprise. Some questionnaire 23

responses said that there appears to be little support in 24

the region for business wishing to develop a co-operative 25

model and that contact with the co-operative development 26

schemes needed to improve. 27

That leads me into headline question 1, which is how 28

can businesses and social enterprises be encouraged in 29

disadvantaged areas? 30

MS BULL: This is actually a specific priority in our Regional 31

Economic Strategy under one of our strategic objectives, 32

which is to improve economic inclusion. We have become 33

increasingly aware of the potential, particularly of social 34

enterprises and what they can do for the economy of the 35

region, so we now have a cross RDA group which covers 36

people from all different parts of the RDA: physical 37

development, business development, all aspects, to try and 38

64

improve what we are doing for social enterprises, and part 1

of that will be to raise awareness of the benefits of 2

social enterprises. 3

We put some funding, £750,000 over the next three 4

years, into an organisation called the Regional 5

Infrastructure for Social Enterprise (RISE) and that is an 6

organisation that has been set up to promote and coordinate 7

social enterprise across the region and to improve 8

standards of support for social enterprise. So that is the 9

specific, and trying to raise the quality of that support 10

as well. 11

But there are a number of things that we do and we aim 12

to do with partners: for example, supporting the 13

development of community finance initiatives, and that 14

happens again on a local basis. A lot of this will happen 15

on local bases, depending on the needs of each particular 16

local area. As I mentioned earlier, we try to make sure 17

that we have a local business voice when we are putting 18

together community regeneration programmes, so if a 19

community comes to us with a plan for that particular 20

community we would want to make sure that businesses are 21

within that and that there are some specific activities or 22

initiatives proposed to support the businesses in that 23

particular community. So there is a whole range of things 24

really. 25

I happen to chair the cross-RDA group on social 26

enterprises and one of our board members is very supportive 27

of social enterprises and is the chairman of Proactive, 28

which might well have been represented at your workshop. 29

What we try to do with that group is to look at and visit a 30

number of different social enterprises when we meet, so 31

that we are aware of what the differences look like, where 32

there is some good practice, where we can see that, 33

perhaps, one or more social enterprise might benefit from 34

meeting with others. That is effectively what RISE is 35

there to do. 36

CLLR BAKEWELL: Do you think that you are the right 37

organisation to be leading or do you think it might be 38

65

better placed with GOSW? 1

MS BULL: We have Government Office represented on that group 2

because we discussed it when we were first setting up the 3

group and we were first supporting RISE, and we agreed that 4

it was really important that we should be working very 5

closely together with Government Office on this. 6

MR WILKINSON: I think part of the background is where our 7

funding comes from as an RDA too. We are sponsored by the 8

DTI, but 85% of our funding comes from the ODPM and this is 9

certainly an issue which is right on their agenda and one 10

which they want us to pursue. It is really the crossover. 11

Up to now we have been talking of our objective 1 being to 12

improve business productivity. The way we come through 13

this is objective 2, increase economic inclusion, and 14

obviously there is an overlap because we are talking about 15

businesses here, but it is a different emphasis and it is 16

part of our agenda. We believe that social enterprise is a 17

key part of regeneration of disadvantaged areas and have a 18

key role to play in that, in all sorts of different forms 19

but in very small forms and then in quite large forms like 20

Eden in Cornwall. Patricia Hewitt said that was her 21

favourite social enterprise; it is a bit extreme, but there 22

is a role for social enterprise in lots of different ways 23

and it would be supported in the main through increased 24

economic inclusion, under that objective, and then of 25

course we would like those businesses to be productive and 26

innovative and all the other things as well. 27

CLLR BAKEWELL: In relation to neighbourhood renewal, is there 28

a role there for social enterprises and small businesses to 29

work more closely together? 30

MS BULL: Definitely. Social enterprises in many cases are 31

small businesses, so yes. 32

CLLR HOCKRIDGE: You have obviously started to pool roles and 33

you are obviously working across the RDA to make 34

comparisons. 35

MS BULL: Yes. 36

CLLR HOCKRIDGE: Do you think you are being successful, do you 37

think you are going in the right direction and how do you 38

66

think you compare to the other regions you meet and talk 1

with? 2

MS BULL: We actually did a piece of best practice work. I 3

asked all of my colleagues at each of the other RDAs to let 4

me know what they were doing on social enterprise because, 5

frankly, if there are good things that are happening in 6

other regions and they are applicable to our region we are 7

going to pick them up, and vice versa. I think there have 8

been quite a few things going on over a number of years on 9

social enterprise, which quite a few people in the RDA 10

probably were not that aware of, and I think that whereas 11

they have been very focused on the community regeneration 12

front in the past, there is an awful lot of social 13

enterprises competing for business support as a whole, and 14

I want to be able to try and pick up on some of that. So 15

the answer to the question, the plain answer to the 16

question, is that there has been a lot going on, it 17

probably has not been brought together under a business 18

support banner before and with the advent of RISE I think 19

we are going to have a much more coordinated and helpful 20

and supportive approach to social enterprise as a whole 21

across the region. 22

MR BUCKLAND: I think this also ties in with a number of urban 23

regeneration companies as well through the region, so again 24

those are helping in that arena as well. 25

CLLR CHANNON: If I can just follow on from that, it is 26

interesting about your cross-regional communications, I 27

think. How effective do you think your internal 28

communications within the South West are? 29

MS BULL: In what particular respect? 30

CLLR CHANNON: Between different departments and the way in 31

which you relate up between the part of you that deals with 32

inward investment and the part that deals with learning and 33

skills, the part that deals with rural development, urban 34

renaissance and so on. 35

MS BULL: Certainly, I would say that internal communication 36

is good between all parts of the agency. Clearly, within 37

the directorate it is easier, so I cover skills, inward 38

67

investment, business support and it makes it very easy 1

therefore for me to be able to be clear what needs to 2

happen, who needs to communicate with who, that is very 3

good. The whole point about the cross-RDA working group 4

was that we recognised that for some issues there are 5

people within each of the different directorates working on 6

those things, so we have infrastructure, we have got 7

environment, for example, where there are people who are 8

coming at those particular topics from different 9

directions. There are about five different areas where we 10

deliberately set up cross-RDA working groups to pull all 11

the diverse parts of the agency together, to make sure that 12

we did have a single strategy that everybody bought into, 13

everybody knew the part that they would play in that 14

particular strategy. Certainly in the case of social 15

enterprise we meet every couple of months, we go around the 16

table and sort out what everybody is doing, how that 17

impacts on our overarching strategy for social enterprise 18

and it means that we can be much, much more coherent on 19

that basis. 20

MR WILKINSON: The five groups are ICT, social enterprise, 21

sustainable farming and food, tourism and environment, but 22

if I can answer your question I hope we are getting better. 23

All organisations have issues about internal 24

communications and consistent messages, it is something we 25

are working hard on to get better at, we are not perfect. 26

CLLR CHANNON: That leads on nicely to headline question 2 and 27

I am the lady wearing the green suit today and I want to 28

talk to you about sustainable development. Some of your 29

key stakeholders claim that support for sustainable 30

development advice has been fragmented across the region, 31

yet the DTZ report says that there has been a high level of 32

demand. 33

What do you think your role should be and the role of 34

others in promoting business practices that support 35

sustainable development? 36

MR BUCKLAND: Clearly, sustainable development is very 37

important, and one of our Board members is extremely vocal 38

68

on this, so we are very aware of that. The Business Link 1

business plans make reference to our regional sustainable 2

development framework and the RDA - in our appraisal 3

process we incorporate measures against the 15 themes of 4

that framework, and clearly one of the emerging sectors 5

that we are headlining is the environmental technology 6

sector, so we are looking at that clearly and we are 7

promoting good practice throughout in terms of minimising 8

energy usage and minimising travel to work, and a reduction 9

in the need to travel to work. 10

We are supporting those environmental technologies in 11

general and producing demonstrator projects as well, for 12

renewable energy technologies in particular, and we are 13

putting work together to strengthen and promote the 14

regional supply chains, so again we are reducing the need 15

for activity there. There are some good examples, Regen 16

South West is the establishment of the South West Renewable 17

Energy Agency and there is three year core funding there 18

from the RDA, with regard to that in partnership with the 19

Government Office and there is a mixture of private and 20

public sector organisations in there. Obviously, there is 21

the environmental technology sector development and we have 22

in place their appointment and we are funding the sector 23

coordinator for that particular sector, so that is looking 24

at all aspects of environmental technology from waste 25

through to renewable energy. 26

We are stimulating the development and demand for 27

broadband across the region, ranging from everything from 28

Acnell down in Cornwall to the latest broadband projects 29

which have been announced for Devon, the Wiltshire 30

Outreach, and there are some planned partnerships with 31

Dorset, Somerset and Gloucestershire, and by the injection 32

of RDA funding of about £5 million we are actually get max 33

funding up to about £35 million, so there is some good work 34

there. 35

That is going to stimulate demand within that area, to 36

encourage people to take up broadband, and that in itself 37

can actually help with reduction in travel to work and 38

69

those sorts of activities. 1

We are also, in terms of some of our constructions, 2

looking at sustainable development, and the Torfadden 3

Estate down in Cornwall is a very good example of that 4

where we are using geothermal technology to actually heat 5

those buildings. Finally, there is Hand-in-Hand which is a 6

conference and some awards where we made awards to 60 7

businesses who had taken part in describing how they gained 8

economic benefits from putting environmental improvements 9

together. So there is quite a lot of work that we are 10

doing in that area. 11

MR WILKINSON: Can I tell you about one more thing, because it 12

occurred to me while Nick was talking that some things that 13

we do that might not look as though they are part of this 14

agenda really are. A while ago we bought the RAF Locking 15

site and it relates to market failure as well; that site 16

could have been sold and it could have been sold for 17

housing and people could have lived there and commuted up 18

the motorway to Bristol and South Gloucestershire. We took 19

the view that that was not sustainable, all to do with 20

pollution and blockages on the motorway, and that it would 21

be a much better use for that site as a mixed use with 22

employment space, so that people would not have to commute 23

up the motorway, they could actually live and work close 24

by. So we are looking at the chance to make that sort of 25

intervention. The externalities were not factored into the 26

house project, so there is a case for public sector 27

intervention and it is a sustainable activity. Now when we 28

are looking at our employment space we are always looking 29

at the travel plan to do it as well. 30

CLLR CHANNON: There is tremendous emphasis on green tourism in 31

the South West region, probably greater than in any other 32

region at all. You talked about the sustainable energy and 33

so on, but this sometimes causes great problems for us in 34

the face of whether we could preserve the environment by 35

not putting a wind farm or whatever it is up on Exmoor or 36

Dartmoor, and how do we reconcile these things? 37

MR WILKINSON: I talked to Malcolm Bell about it a few days 38

70

ago; his answer, I think it is a pretty sensible one, is on 1

a case by case basis. So it is not that all wind farms are 2

dreadful for tourism, so you have to look at the 3

implications of the particular cases. In terms of what we 4

are doing ourselves, the RDA, with Regen South West, has 5

got three priorities in renewable energy: wave power, tidal 6

power and biomass, so we are not actually as an agency 7

promoting wind farms, but on the other hand, in certain 8

areas, they may well have a contribution to make. 9

CLLR CHANNON: Cathy touched on co-operatives and the supply 10

chains in terms of this. Should businesses outside key 11

sectors be assisted in developing supply chains, and 12

looking at what you were saying about cross-regional 13

fertilisation like this, have we had any comeback which 14

implies that there is some way to perhaps ..... co-15

operatives? 16

MS BULL: Yes, is the answer. It is very difficult, almost 17

impossible, to say that you would confine a supply chain 18

development initiative to one sector because you will find 19

that businesses from various different sectors may all 20

supply into, for example, aerospace or marine, so the sort 21

of things they produce may look obviously as if they are 22

marine or aerospace, widgets and blodgets, but they are 23

actually supplying in. 24

What we have done on a national basis is that we 25

always try and encourage businesses, as far as possible, to 26

use and develop their supply chains within a region or 27

certainly as they can get because it obviously reduces 28

travel time, it is good for the regional economy and, 29

provided they can get the right quality, the right quantity 30

at the right time - just in time as they need it - then it 31

makes sense for us to try and make sure that they do buy 32

locally. 33

But the reality is that particularly in some of these 34

global industries they need to go much more widely than 35

that, so certainly on automotive and on aerospace, we are 36

part of a UK-wide supply chain development programme that 37

is trying to ensure as far as possible that the UK is able 38

71

to be self-sufficient in what it supplies to those two 1

sectors, and we would hope to be able to expand on that. 2

We have done quite a lot of work on food and drink as well 3

in the South West, because that is obviously a key sector 4

for us here, and you will have seen, I think, in some of 5

the supermarkets that they now put much more emphasis on 6

local produce; certainly some of that is due in part to 7

initiatives that we have been involved in to do with 8

Sainsbury's, and we have had similar things with Budgens, 9

with Waitrose and Somerfield. 10

So there is quite a lot you can do and, thinking about 11

co-operatives, certainly on food and drink there are a 12

number of co-operatives that we have worked with, cross-13

region, but I cannot think of any off the top of my head. 14

CLLR CHANNON: Two or three times this morning we touched on 15

business incubation and perhaps I could tease a little more 16

out about that. What criteria do you have in actually 17

setting them up, how many incubation units would you think 18

are feasible within the region? 19

MS BULL: We do have a strategy which has identified where - 20

Arthur D Little the consultants looked at what we have 21

already done, where they think there is scope for more 22

incubators and innovation centres, based to an extent on 23

the report that they provided on Higher Education, so that 24

is the knowledge-based businesses again. Within our 25

strategy we identified where there was scope for new sites, 26

and the work that Arthur D Little has just published then 27

goes through on a site by site, sub-region by sub-region 28

basis and makes the case - or a lesser case in some cases - 29

for why we should go ahead with support in those areas. 30

CLLR CHANNON: A lot of attention has been paid to sustainable 31

development --- 32

MR WILKINSON: Can I just make one more point before we get 33

onto that on incubation, because I do not think it is a 34

static issue and I do not think you can only have so many 35

in the region, it depends what else is going on. So, for 36

instance, with the development of the Peninsula Medical 37

School then that opens up opportunities for more incubation 38

72

related to that; as the CUC develops and focuses on certain 1

issues, that will open up more opportunities for 2

incubation, so we are tying it in to developments elsewhere 3

and it is part of our technology exchange programme. So it 4

is not a static, it is quite a dynamic activity. 5

MS BULL: Any development that we directly fund, we have very 6

strict criteria on sustainability and sustainable 7

construction that have to be adhered to, associated with 8

our funding those developments. 9

MR WILKINSON: It is interesting, the CUC - you know the Hunt 10

building which has got the green roof (it is not grass 11

apparently, it is a green roof) so they could not have 12

solar power panels in the roof, but we worked with them 13

quite hard and now they are introducing [something] 14

Boltelleck windows and we helped with an application for a 15

grant for that in order to find a little bit extra for that 16

as well. So we do do a sustainability review of all the 17

projects that we are involved with. 18

CLLR BAKEWELL: Before we move on to the headline questions 19

here, can we go back to what you were talking about in 20

terms of renewable energy, and that it was being developed 21

on a case by case basis, given that you have got a huge 22

amount of strategy for everything, how do you not have a 23

strategy for that, and if you do not have a strategy for 24

it, is there not the danger that renewable energy will just 25

happen on a piecemeal basis? 26

MR WILKINSON: We have a strategy for those sectors within 27

renewable energy that we will support, and we established 28

Regen South West. We have a programme with Regen South 29

West to try and develop six demonstrator projects for 30

renewable energy in the region, focusing on the areas of 31

tidal power, wave power and biomass, which we have 32

identified as being areas which not only would benefit the 33

region in terms of production of renewable energy, but 34

where we could develop technologies which could be leading 35

edge technologies which would then become growing 36

businesses for the region. There is also a strategy with 37

Government Office on the proportion of energy that should 38

73

be renewable that is consumed within the region. 1

The case by case reference was actually picking up 2

Malcolm Bell's - the boss of South West Tourism - two 3

applications for wind farms. The point there is that in 4

his view anyway - and I think I agree with this - is that 5

you cannot just say "All wind farms are bad for tourism", 6

that is not necessarily the case, it depends where they 7

are. Some of them would be terrible for tourism, but that 8

is not necessarily the case, it depends where they are, 9

some of them would be terrible for tourism and some would 10

not be so bad, and that certainly is the approach when he 11

is asked to comment on wind farms that he is adopting. 12

Whether we should have a plan for wind farms in the region, 13

I am not sure whether it is for us to do that, that is for 14

the planning authority to do. 15

CLLR BAKEWELL: Coming now as well to the next headline 16

question, you have got that question so I will not repeat 17

it. Can I just drill down a bit into that and ask you 18

whether you think that the Venture Capital Fund is targeted 19

at the right businesses? 20

MR RICHARDS: This is part of, obviously, our access to 21

finance issue. I think the Venture Capital Fund was 22

launched in response to an identified gap, and some say it 23

should go upwards beyond £500,000, but the reality of that 24

funding was again that there was very generous support from 25

DTI for that and there was also a significant European 26

involvement through the European Investment Fund. Of 27

course, what it does is it invests into individual 28

businesses, so there are state aid issues, so it took us 29

quite a considerable amount of time to get the state aid 30

approval forms in, and it was the view of Brussels that we 31

could only go up to £500,000. So we are rather constrained 32

by that. 33

I think that as part of our strategy it is the right 34

thing. We are busily building above and below the Venture 35

Capital Fund, and there are two strands to our finance 36

strategy. One is about making sure that the right sort of 37

finance is available, and secondly money with management 38

74

people is providing coaching and mentoring in how to use 1

that money wisely. So, yes, the Venture Capital Fund if 2

you like is our focal point, but again we are trying to get 3

the culture of equity into the marketplace. A lot of 4

people want to just borrow money rather than give up a 5

share of their proposition, but the reality of the 6

situation is that the risk profile of the idea they want to 7

put forward is not financeable by debt, because obviously 8

debt has to be serviced and if you have not got an income 9

stream you cannot repay the debt, so equity is the only way 10

forward. So above and below that we are doing things 11

around energy investment and business finance as well. 12

CLLR BAKEWELL: One of the things that came out of the workshop 13

was that there was a feeling that the level of support for that 14

had been set too high. Do you agree with that? 15

MR RICHARDS: No, I would not because it is the cost of the 16

finance and equity finance does not come cheap, that is why 17

we are looking to work on an angels network which is called 18

informal venture capital because they do not go through the 19

big due diligence processes that have to occur with formal 20

venture capital. 21

One of the things about the Venture Capital Fund, and 22

it is probably not well known, and it is probably out fault 23

for not raising it, is that it is also an experiment by the 24

government to try and encourage more people to invest in 25

SMEs as an investment that they can invest in. The wisdom 26

within the investment community are that SMEs are low 27

growth, high risk, poor investments. If we can make a 28

success of the regional Venture Capital Fund and it can 29

make a good return on the investments., it will actually 30

demonstrate to investors that this is a good market to 31

invest in and more funds will flood in, therefore there is 32

a bigger opportunity for them. 33

CLLR BAKEWELL: So is it always the first institutional 34

investor, or should it be? 35

MR RICHARDS: In terms of the Venture Capital Fund it has got 36

to be, yes, but as I said we are developing an Angels 37

Network which, hopefully, will get people through a stage, 38

75

and when you go into the second stage growth, that is where 1

you would move into the Venture Capital Fund. Obviously if 2

you go beyond that you go into things like [inaudible] and, 3

fingers crossed, you become a Plc. But it would be 4

reasonable to look at the short scale first. 5

CLLR BAKEWELL: Are you targeting specific sectors? 6

MR RICHARDS: No, the Fund is a generalist fund, open to 7

everybody, though obviously there is a weighting towards 8

the sectors that we have and it would be therefore a more 9

integrated approach if those sectors had some weighting in 10

the sense of that, but at the moment the demand is such 11

that we can entertain all good ideas. 12

CLLR BAKEWELL: Is it weighted towards start-ups or existing 13

businesses? 14

MR RICHARDS: It has got to have a portfolio approach, it has 15

got to make a return for its investors, so obviously it 16

needs, if you like, some fairly solid investment support in 17

order to take on the more risky ones, which the start-ups 18

and the early day schemes very often do not have. So the 19

answer is if a really good thing comes along I am sure the 20

fund manager will support it. It is important to stress 21

that because of the Financial Services Act we have got no 22

executive control over the nub of it because we are not 23

experts in finance and, obviously, the people we have 24

employed therefore have to have an independent role in 25

that. 26

CLLR BAKEWELL: Thank you. 27

CLLR HOCKRIDGE: Moving on to question 4, I am very aware 28

that we have covered a lot of it and clearly there have 29

been comments made during the day that resources are not 30

all you might expect them to be, and although it is not 31

just finance it is clear that there was nothing more you 32

could do, and that you had to prioritise and could not do 33

all things for everybody which can make life difficult. 34

But it says here that the sub-regional partnerships are 35

engaged in the promotion of business development, and that 36

seems to be an area where, with a bit of luck, the rest of 37

the region can help you deliver some of your aspects and 38

76

aspirations in their own local sub-regional area. How do 1

you help sub-regional partnerships promote business 2

development in their areas, because that is an area where I 3

think local people could be involved more than where we are 4

at? 5

MR WILKINSON: If you literally mean the sub-regional 6

partnerships that we deal with, that is the seven of them 7

including Westbury and Gloucester First, that is the level 8

you are looking at in this question. Obviously we deal 9

with lots of other partnerships on a sub-regional level, 10

but taking those we deal with them differently because they 11

are in different states of evolution and they are different 12

organisations in the different parts of the regions. I 13

think one of the most interesting developments recently has 14

been with Gloucester First in Gloucestershire and there, as 15

I understand it, the county council has actually put its 16

economic development department within the economic 17

partnership, within the SRP, which is also then the 18

economic arm of the county-wide LSP. Therefore it has got 19

quite a capacity and we have just reached agreement that as 20

far as investor relations in Gloucester are concerned, we 21

will work through that partnership for investor relations 22

in Gloucestershire. That is the first time we have done 23

anything like that, but it is a pretty sensible arrangement 24

when the sub-regional partnership has got that sort of 25

capacity, wants to do that and makes a case, and it 26

obviously fits very well. 27

I think in other parts of the region they operate 28

differently. In Cornwall, for instance, there is Cornwall 29

Enterprise which has a role and, obviously, we work closely 30

with them, we work on Objective 1 and other things with 31

them. 32

In other counties and other parts of the region, the 33

sub-regional partnership itself has not quite seen that as 34

its role yet, and we had meetings with them actually, just 35

a few days ago, to discuss this. They are all looking now 36

at development plans and how they might work with us over 37

the next couple of years. We have been funding capacity 38

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for them to have a capacity to service sub-regional 1

partnerships, but in some cases (and Gloucestershire I have 2

mentioned) the local authorities have also funded that 3

capacity and so they have grown and developed more quickly. 4

In others they have not, and the only funding they get is 5

from us, so in some ways they are developing more slowly. 6

CLLR HOCKRIDGE: You talked about the RDAs connecting with each 7

other throughout the country or whatever. Are the 8

partnerships fairly common? You say you have not had a 9

meeting as yet, but are there some broad principles to work 10

towards? 11

MR WILKINSON: The meeting we had that I was talking about was 12

just within our region, with all the sub-regional 13

partnerships within our region, and the approach there is 14

quite a bit. There is one extreme in the North East where 15

they have actually divvied out the budget between the sub-16

regional partnerships to some extent, and so they have four 17

mini RDAs around the major RDA. We, in our board, have 18

taken a view against that because it seems to create all 19

sorts of issues about the region, and there are others that 20

do not have any dealings with sub-regional partnerships at 21

all, so it is a whole range in other regions, and clearly 22

we do exchange what we are doing and we do look at good 23

practices, but I think in some ways obviously they are 24

evolving in line with what people feel in that sub-region, 25

so we are not trying to impose a common pattern on 26

everybody. 27

CLLR HOCKRIDGE: Presumably with a lot of areas in the South 28

West we are linking with the Business Links in that area, 29

and the schools, councils and all other things are coming 30

together under those bodies. 31

MR WILKINSON: Yes. 32

CLLR HOCKRIDGE: So they are a very similarly put together body 33

of people in each county. 34

MR WILKINSON: It is, and again we do not determine their 35

membership. We have obviously got an expected template, if 36

you like, but we do not say you have to do this. However, 37

almost all would involve Business Links, learning and 38

78

skills, local authorities, and then to a greater or lesser 1

extent voluntary groups and other community groups, and 2

environment groups too. 3

CLLR CHANNON: I would like to lead into the fifth headline 4

question. You talked to us today about innovation and 5

knowledge transfer, and if I remember rightly the 6

proportions that were mentioned were a third, third, third 7

in terms of that. Can you tell us how was the figure 8

arrived at and how does it compare to other regions? 9

MR WILKINSON: I think the third, a third, a third was an 10

analysis of current R&D in the region and who is doing it. 11

That is right, is it not, Steve? 12

MR RICHARDS: Yes. 13

MR WILKINSON: So that is just a fact, and why it is a fact we 14

discussed a little bit. We are not saying it should be 15

like that, we are just saying if you say who is spending 16

money on R&D, that is where it falls at the moment. We 17

discussed a bit why that might be so, because it does look 18

as though we have less R&D in the private sector in this 19

region relative to other regions, and one of the 20

explanations anyway is that for private sector R&D the 21

largest spending bodies there tend to be large companies 22

and tend to be in pharmaceutical and high tech sectors, and 23

although we have some we perhaps do not have as high a 24

proportion as some of the other regions. So that is one of 25

the explanations of the facts. 26

We certainly feel that there should be more R&D in the 27

region, more research in universities, if we can get hold 28

of any public sector research establishments - and we have 29

got quite a few already - we are glad to have them, but 30

particularly more R and especially D in the private sector. 31

That is why we are so keen to work with the research 32

establishments and particularly with higher education to 33

develop this infrastructure and support within the 34

institutions themselves through the incubation units, 35

through innovation units and into science parks where 36

businesses can develop. It is a very high priority for us 37

to do that and we are working all round the region at all 38

79

different levels. It is not just the high tech, although 1

often it is, but we have talked about the hotel school 2

where you can get the knowledge out of the university and 3

into the sector and raise the quality of tourism. 4

We have just started on an incubation/innovation 5

centre for the Bournemouth College of Art for the creative 6

media sector there and we are working with most of the HE 7

on this strategy and with all them through our KESW project 8

which provides the network then to link businesses to the 9

particular institution that can help them most. 10

MS BULL: We have also developed a programme called HE stars 11

to encourage further investment and inward investment from 12

businesses, specifically into R&D, so where we have some 13

professors and high-flying academics who have a leading 14

aspect to their research which is globally really 15

excellent, then we are introducing them to some of the 16

businesses within the region and indeed some sectors that 17

we would like to get into the region to try and encourage 18

them to put R&D into the South West. So that would address 19

the private sector R&D issue. 20

CLLR CHANNON: There is a tremendous growth industry which is 21

growing rapidly as we all get older, it is called the 22

social care and health industry. Quite a lot of it is 23

actually in the independent sector but it is clustered. 24

What do you think you can do to try and harness that, 25

because those of us who have to supply that sort of care 26

are having to go forward now to encourage people to come in 27

to fill the posts. 28

MS BULL: I guess, as you say, that it is clustered and 29

certainly we have had discussions with particular area 30

teams for whom that is an issue. When we have done 31

research into the priority sectors in the region, 32

invariably that comes through as specific sub-regional 33

priorities, so that is where we would be working perhaps in 34

a more reactive way but with our area teams and 35

organisations in those particular sub-regions. So it is an 36

issue. 37

THE CHAIR: Can we start to draw this session to a close? 38

80

Cathy, have you got one more to go? 1

CLLR BAKEWELL: I have got one more, I just wanted to go back 2

on one of the things about the HE establishments. 3

THE CHAIR: Okay. 4

CLLR BAKEWELL: If I went to all the HE establishments in the 5

South West would I get the answer from all of them that 6

they felt well-supported in R&D by you? 7

MR WILKINSON: It depends how you phrase that question: well 8

supported in R&D? I think the answer to that is we do not 9

fund the mainstream research, and that is where it all has 10

to start, and I think this is another area where you and us 11

together should be lobbying as hard as we can because of 12

the recommendations of the HE White Paper were carried 13

through as they were stated, then we do believe that there 14

would be a loss of research within this region and that a 15

bigger proportion of the budget would go into the golden 16

triangle of Oxford, Cambridge and London. In fact, under 17

some of the scenarios the bulk of the funding would go to 18

about four or five institutions - a couple of London 19

colleges and Oxford and Cambridge. So certainly we 20

strongly advocate the agenda that I talked about, which is 21

linking the spin-out of research to the institution where 22

the research is developed. That is not necessary, there is 23

no common agreement, but there is a feeling that it does 24

not matter where the research originates and an institution 25

can spin out other people's research to its local 26

businesses. We feel that that can happen, but you get much 27

greater momentum if you have locally relevant research. We 28

would hate to see Plymouth, for instance, lose funding for 29

marine research and other things, and there is a danger 30

that that will happen. 31

So we think that although there is case, and a very 32

strong case, for having world class research and the 33

government giving that priority, that should not be at the 34

expense of nationally and regionally important research on 35

all our HE institutions. 36

CLLR HOCKRIDGE: The last one now, if we go back to the sharp 37

end of it all, how can you ensure a transparent and 38

81

streamlined process when dealing with applications for 1

support for a business? Do the Treasury guidelines help 2

you, do you have problems, what support do you give to 3

these groups putting in applications? 4

MS BULL: I think the answer to that one is that we are 5

working on it. In terms of being transparent and 6

measurably streamlined, I guess, our priorities are set out 7

in the regional headline strategy and our corporate plan 8

sets out, as I said, the activities that we will invest in 9

and the outputs and the outcomes that we seek if we are 10

going to put funds into a project, and the strategies and 11

plans that we keep wading through - we have a little pile 12

here on the desk - all outline where and how and why we 13

would support any kinds of activities under finance, or 14

incubation or whatever. So I do not think anyone should 15

really be in any doubt as to the type of funding 16

application for business support which has got a chance of 17

succeeding. 18

Then on the specific targets, we agreed the specific 19

targets for business support in consultation with our key 20

partners, in both the private sector and the public sector. 21

So there is a widespread knowledge of what those targets 22

are and we now have an integrated appraisal process, so 23

from the very first application or throwing up of an idea 24

that we as an RDA might support, going right the way 25

through to completion of a strategy, a delivery plan, a 26

monitoring and evaluation programme, that is integrated all 27

the way through. We have had training in the use of that 28

new system and we have given training to external bodies as 29

well that regularly deal with us. So the processes are in 30

place, it is transparent and there are guidelines available 31

to people who want to apply to us. 32

By streamlining I think you probably mean speedy, and 33

we are trying to get faster at that and we have deadlines 34

within which we will meet certain application criteria, but 35

we are very robust. It is public money, we have to make 36

sure that we are getting value for money and we do drill 37

down and do question, we do ask for more detail and even, 38

82

very often, for more systems to be put in place by 1

organisations that are asking us for funding to make sure 2

that they are auditing and they are showing that what they 3

are producing is value for money. 4

CLLR HOCKRIDGE: If it is driven by you then something that 5

comes to you fresh, you can start looking at it for them in 6

terms of stage 1, and if you cannot help them then 7

presumably you can direct them to somebody who might be 8

able to help them. 9

MS BULL: There is always a case officer who will take any 10

particular application on and deal with it and work through 11

the RDA processes on that, yes. 12

CLLR BAKEWELL: Can I just come back on that? Do you think 13

this robust process that you have just described is going 14

to put some businesses off, who could not have any other 15

source of finance but to come to you? 16

MS BULL: Yes, I do, and I do not think that that is a bad 17

thing, quite frankly. I think it is important that we show 18

that anything that we are funding is in accordance with our 19

strategy and our plans, and we come back to the question 20

halfway through the proceedings really, are we trying to do 21

too much? So we are trying to find a way of legitimately 22

filtering what we do. 23

CLLR HOCKRIDGE: I think that is right and I think to some 24

people that is very daunting. When people get to you they 25

have probably been in business for a while and they have 26

probably been through some of those, but getting people who 27

are starting early on, not just you guys, it can be very 28

discouraging. 29

MR WILKINSON: I think it is not easy to get your hands on 30

public money, and there has to be a procedure - and we are 31

looking at that procedure to see whether it can be 32

streamlined - but there must be a robust, open and 33

transparent procedure because we are custodians of public 34

money. Also, we have some very clear targets which we are 35

supposed to be meeting ourselves and we report these to the 36

Regional Assembly. 37

Other areas: we now administer the regional selective 38

83

assistance fund of £2 million and I can tell you that most 1

businesses who want to apply for that - not the very small 2

ones, but certainly if they want to apply for the large 3

grants, have to employ advisers to help them through that 4

process. If they think they have got a very good case they 5

will take a decision and then go ahead and do it. 6

THE CHAIR: Thank you, Alan, thank you, Cathy, thank you, 7

Christine. I would also like to say thanks to Andrew and 8

Harold earlier, it was obviously a long session and there 9

was a lot in that, and I want to just try and pull the day 10

to a close, if I may. 11

First of all, I think it has been an interesting 12

journey really for all of us, particularly the Scrutiny 13

Panel over the last few months and culminating in today, in 14

what we have understood and what we have learned about the 15

work of the RDA and, in particular, the other partners in 16

the region. I think we have learned an awful lot. Our 17

work is not finished, colleagues, as you know. We have to 18

absorb, we have to reflect on the questions and the answers 19

and pull that together in a draft form, and that will be 20

ongoing over the next few weeks. As I say, I think we have 21

got a lot out of it. 22

In terms of what I said right at the start, I think 23

what we wanted today very much was to have a discourse, a 24

discussion, and I think we have achieved that largely. We 25

have been able to have a very constructive debate and 26

discussion and I hope colleagues will join me in agreeing 27

that. I think it is certainly refreshing and the way we 28

would want to approach future scrutiny meetings. 29

Obviously, I have got some thank yous and I would 30

like, firstly to thank the RDA team for being here with us 31

today and answering the questions honestly and openly and 32

as frankly as you have, we appreciate that. We thank the 33

RDA officers themselves for joining us today; I was 34

watching their concentration levels and I was very 35

impressed, you kept with us all day, so well done to you. 36

Thanks too to our Regional Assembly officers because 37

an awful lot of work and energy and effort goes into 38

84

producing the quality of documentation that we all see that 1

is summarised for the Scrutiny Panel to obviously frame its 2

questions in the way it does, so I am very grateful for 3

what they have done. 4

I have particular thanks to the Scrutiny Panel members 5

themselves. This is not their day job, they have got other 6

jobs and it takes an awful lot of work to go through that, 7

and you can see by some of the questions and the phrasing 8

that people have thought through this and taken it 9

incredibly seriously. So I am very grateful to all of you 10

for what you have done and thank you for that. 11

We have not really got time for any last minute 12

questions, but if there was one real burning one I am happy 13

to take it because we are ahead of schedule. Is there 14

anything from us that you think we cannot go from here 15

today without saying, or is there anything that colleagues 16

from the RDA would like to say, or is there anything from 17

you that you feel you would not like to leave today without 18

saying? 19

MR WILKINSON: I think we would like to express our 20

appreciation of the constructive approach. The more we can 21

work with you and share information, especially in the 22

preparation for these sessions, the more productive they 23

can be. So we have been very pleased at the way we have 24

been able to work together. 25

I think it has also been useful to identify some areas 26

and we will do this, hopefully, in the report as well where 27

we can take forward things together. 28

THE CHAIR: Absolutely, and I think that certainly came out a 29

number of times and that is something that all colleagues 30

around the table feel is the strength of scrutiny being 31

carried out in this way, together taking the region 32

forward, with the Regional Assembly and of course the RDA 33

and with the partners. It is changing times we are in, we 34

have heard a lot today of what might be around the corner 35

in terms of business support and it is an interesting 36

picture. We understand the challenges you face and there 37

is clearly lots to take on board from today, and we will 38

85

report that back. Thank you very much and thank you to 1

everyone else. 2

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