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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
14
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
77
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
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