London Borough of Bromley. Renewal and Recreation Portfolio Holder. For pre-decision scrutiny by the Renewal and Recreation PDS Committee on

Transcription

1 Report No. DRR10/00098 London Borough of Bromley PART 1 - PUBLIC Decision Maker: Renewal and Recreation Portfolio Holder Date: 12 October 2010 For pre-decision scrutiny by the Renewal and Recreation PDS Committee on Decision Type: Non-Urgent Executive Non-Key Title: BUSINESS SUPPORT PROGRAMME 2010/11 Contact Officer: Chief Officer: Ward: Martin Pinnell, Head of Town Centre Management and Business Support (Acting) Tel: martin.pinnell@bromley.gov.uk Marc Hume, Director of Renewal and Recreation All 1. Reason for report 1.1 This report provides evaluation of the Council s business support programme, provided as a response to the current recession and delivered in 2009/10, and sets out proposals for the continuance of this support programme, through various projects, for the remainder of 2010 and into RECOMMENDATIONS 2.1 The Portfolio Holder is asked to: Note the outcomes of the 2009/10 business support programme as summarised in paragraph 3.4 and provided in more detail in Appendix Agree that the proposals outlined in paragraphs are to be funded by the Business Support Fund Agree that from the 2011/12 financial year the Business Support Fund be amalgamated into the Portfolio Initiative Fund, to provide a unified fund which can be used to help deliver on Building a Better Bromley and Portfolio Plan priorities as set out in more detail in paragraphs 3.5 and

2 Corporate Policy 1. Policy Status: Existing policy. Contributes to Building a Better Bromley and the Recreation and Renewal Portfolio Plan 2. BBB Priority: Vibrant Thriving Town Centres. Financial 1. Cost of proposal: Estimated cost 36,000 for 2010/11 and 7,500 for 2011/12 2. Ongoing costs: Non-recurring cost. 3. Budget head/performance centre: Business Support Fund 4. Total current budget for this head: 60,130 (Business Support Fund) and 28,800 Portfolio Holder Initiative Fund 5. Source of funding: Existing revenue budget 2010/11 Staff 1. Number of staff (current and additional): 1 FTE current (no additional) 2. If from existing staff resources, number of staff hours: Legal 1. Legal Requirement: No statutory requirement or Government guidance. 2. Call-in: Call-in is applicable Customer Impact 1. Estimated number of users/beneficiaries (current and projected): Depending upon project number of business beneficiaries will range from 50 to 12,000 plus. Ward Councillor Views 1. Have Ward Councillors been asked for comments? N/A. 2. Summary of Ward Councillors comments: 2

3 3. COMMENTARY Economic and policy context 3.1 The UK economy, although technically out of recession (with latest reported GDP figures for the UK showed a 1.2% growth in Q2 2010), is still weak. The Government s determination to tackle the public sector deficit will mean significant cuts and although the scale of these have not yet been revealed, there is likely to be a considerable contraction in the number of jobs in the public sector. Amongst the 6 boroughs in the London South sub-region, Bromley has highest proportion of jobs in the public sector at 31% of workforce, compared with 22% across London (source: Annual Business Inquiry 2008). According to the 2001 census Bromley also has 24% of its residents employed in the public services too which is higher than the London average. With the proposed re-balancing of the UK economy in favour of the private sector, this makes the Bromley s economy potentially more vulnerable. However, recent independent research by Experian has suggested that Bromley s economy, by other measures, is amongst the most resilient in the country because average household earnings and house prices are high. There are also signs that a private sector-led recovery could be taking place in Bromley in that 19% more businesses started up in the first 2 quarters of 2010 than in the same period in However, the fact is that the majority of these will fail during their first 12 months and most employment growth will come from the retention and growth of existing businesses in the borough. 3.2 Within the landscape of public sector funded business support in London there is much current uncertainty. It is possible that the Mayor s proposals for devolution could result in the London Development Agency being wound up as a separate entity with most of its powers and functions rolled into the Greater London Authority. The LDA has already seen budget cuts for this financial year and this process is likely to continue. There is also uncertainty about whether the creation of Local Enterprise Partnerships (LEP) as vehicles for stimulating private sector growth, being rolled out across the English regions as a replacement for Regional Development Agencies, will also be applicable in London. 3.3 The Business Link for London contract has been extended until March 2012, which gives a degree of stability and Business Link will remain the main gateway into public sector funded business support across London. However there are likely to be fewer pan-london funded programmes for businesses to be referred onto. Business Link has also been asked to refocus its adviser time on businesses with 10 plus employees and those with growth potential therefore smaller businesses will generally not experience the same level of support as previously. Whilst Business Link will continue to deliver some Starting a Business seminars (mostly taking place in Central London) to provide an introduction for new entrepreneurs, free of charge or subsidised in-depth help will be scarce especially once the LDA funded Business London programme (delivered locally by Bromley College) comes to an end expected end of December Hence there will be a gap in provision of business support at various levels that will be noticeable, especially for smaller Bromley-based businesses. Council business support initiatives in 2009/ During 2009 and early 2010 the Council funded a number of initiatives, many of which were a response to the recession, and which have assisted local businesses to access the support or skills needed to survive and grow. This programme has ranged from the provision of information (for example through the A to Z Guide to Local Services for Business), through business support events (for example Boost Your Business) to a subsidised business mentoring service. Below are listed the main projects, with the cost to the Council in brackets, along with very brief information. Further information on all the projects and their outcomes can be found in Appendix 1. 3

4 Business advice events Boost Your Business ( 16,000) The main event took place in central Bromley in March 2010 and comprised expert-led seminars on key business subjects, a business support exhibition and networking opportunities, attracting 167 attendees, representing 142 businesses. The event was organised in partnership with Business Link in London who contributed financially and through providing seminar leaders. Subsequent feedback from businesses suggested that the event helped businesses to obtain help from various agencies, do business to business networking and to win new business. Four smaller local Boost Your Business events, using a similar format, were held throughout the year, providing support for businesses based in Biggin Hill, Beckenham, Hayes / West Wickham and the Crays. These were attended by over 220 businesses. Coaching for High Growth ( 12,600) This is a joint venture between the Council and Bromley College (working through its business support arm Business Focus). The scheme was designed to target businesses that have more than 2 employees and have been in business for 18 months plus and provides these with up to 2 days of subsidised coaching from expert advisers to assist them to tackle barriers to growth. 27 businesses have been supported through this programme, with 7 of these reporting actual employment growth, and 7 others expecting growth in the next year. The projected assisted in the creation of 29 new jobs, with another 19 possible in the near future. The Council paid a third of the overall costs of the project with the College and the clients contributing the other two-thirds between them. A to Z Guide ( 3000) Quick reference guide providing all the direct dial telephone numbers and s for business-relevant services in the Council and also details of other agencies providing business support. The Guide was ed to over 7000 business rates payers with the annual bill in March 2010 and is included with the Council s business Welcome packs and distributed at business events. Global Entrepreneurship Week ( 6000) Promotional events taking place to coincide with the Global Entrepreneurship Week (November 2009) leading up to an Enterprise Fair in central Bromley which was supported by Business Focus, British Franchise Association and NatWest Bank. 100 people attended the Fair which included an exhibition of support providers and seminars on key subjects. A follow up telephone survey suggested that a third of those attending have subsequently started in business. Industrial estate engagement ( 5000) A specialist business support agency, the Society of London Manufacturers (SOLOMAN) was engaged to follow up on a survey which highlighted issues and barriers affecting businesses on the Lower Sydenham industrial estate. This engagement resulted in the formation of a business group to encourage a common approach working with the Council and other agencies to tackle the issues. 4

5 Inward investment brochure ( 4125) South London Business were engaged to create a glossy brochure outlining the advantages of the borough of Bromley as a business location, drawing on their experience of inward investment for South London. The brochure will be distributed during the autumn to potential inward investors by commercial property agents, Think London (or its successors) and other partner organisations. An electronic version will be available on the Council website. Procurement support ( 6000) An information and training event Supply Bromley was hosted by the Council in November 2009 in partnership with Supply London, which provided funding and personnel. The Supply Bromley event was attended by 130 local businesses. Follow up telephone research suggests that 85% of these considered the event helpful in preparing them to compete for public sector contracts. Over a third of those responding to the survey have subsequently competed for public sector contracts, and 22% of these have won contracts, either direct from public sector bodies or main contractors. An open evening to focus on opportunities for small and medium enterprises arising out of the Cyclical and Reactive Maintenance Contract was also organised in June The Open Evening was attended by more than 140 businesses, most of whom submitted PQQs for one or more of the contracts. Five local businesses (4 of whom attended the Open Evening) have recently been included on the 18-strong list of contractors to be called upon for cyclical or reactive maintenance work by the Council. Bromley North Business Survey ( 2200) In order to coincide with and inform work on the improvement strategy for Bromley North Village, a telephone survey was undertaken using a professional market research agency to gather views on sentiment and needs amongst businesses in Bromley North. The evidence is being used to shape current and future action by the Council and its partners in the area. Outline of proposals for business support in 2010/ Officers have reviewed the effectiveness of maintaining a separate Business Support budget particularly in the context of tightening Council budgets. The conclusion drawn is that fewer resources can be dedicated purely to business support projects, but should be made available to support a wider range of initiatives in support of the Building a Better Bromley and Renewal and Recreation Portfolio Plan priorities, especially the aim of encouraging vibrant, thriving Town Centres. It is therefore recommended that the Business Support budget be incorporated into the Portfolio Initiative Fund from April 2011 onwards. 3.6 In this financial year there remains 60,160 in the Business Support Fund which is as yet uncommitted. In order to continue to support local businesses and to maintain Bromley s reputation as a business-friendly borough a number of project are proposed, all of which are suggested by the success of previous projects or which have been initiated in discussion with partner organisations. These proposals are set out in paragraphs 3.7 to 3.18 below, outlining their justification and estimated costs, which total 36,000. This is the estimated net cost to the Council after other funding is taken into consideration. More than in previous years we are looking for additional sources of income to support the projects introducing a wider use of charges to businesses and expecting a higher level of financial contribution from partner organisations. It is recommended that the remaining uncommitted spend on this Fund be incorporated into the Portfolio Initiative Fund for the remainder of this financial year. A report 5

6 will be provided to the Portfolio Holder for pre-scrutiny at the 7 December PDS meeting outlining proposals for initiatives to be funded from the Initiative Fund in support of the Portfolio Plan for the remainder of the year. Coaching for High Growth 2 ( 15,000 over 2 financial years, 50% in each year) 3.7 The purpose of this proposed project would be to assist young (but not start up) businesses with high growth potential to tackle and overcome barriers to growth at a subsidised cost. As with the current programme eligible businesses would be provided with up to 2 days mentoring from expert advisers. The programme would be delivered in partnership with a business support agency. The costs of the project would need to be met through contributions from partners and from the clients of the scheme, with the Council contributing up to 20%. Because the project would be delivered in partnership with a business support agency the client business would be able to take advantage of other funded programmes which may be applicable (such as Access to Finance). The project would take place over 1 calendar year (starting late autumn 2010) and to be funded over 2 financial years (2010/11 and 2011/12). 50 businesses would benefit from the project and, from evaluation of the 2009/10 project, we can expect about 16 businesses to experience growth in the first 6 months after intervention and to create around 50 new jobs between them. Expected cost of project to the Council: 15,000 ( 7,500 in 2010/11 and 7,500 in 2011/12). 3.8 Whether this project goes ahead is dependant upon obtaining funding partners and sufficient client contributions, to ensure the Council s costs are kept low. We would seek to make some of the payment to the delivery partner dependent upon agreed job creation outcomes, as evaluated at the end of the project. Boost Your Business for Growth Enterprises ( 8,000) 3.9 Building on the good reputation of previous events this would be a borough wide event, including seminars, an exhibition and networking, aimed particularly at businesses with growth potential, especially those with 5 or more employees who have been in businesses for more than a year. The evaluation of the 2010 Boost Your Business revealed that 68% of attendees would accept charging for this event, so a charge of approximately 20 per head will be made. The focus of the training and the exhibition would be on assistance for growth, and we would hope to attract additional support from other agencies such as Business Link and banks. The Boost Your Business for Growth Enterprises event would be an opportunity to create leads for the Coaching for High Growth project, should this go ahead, and to showcase other relevant support from various agencies, including private sector providers. In order to extend the reach of the event a virtual Boost Your Business event website or web pages will be created, to benefit businesses not able to attend. We would expect at least 100 businesses to be represented at the event, with a significant proportion of these taking up further support. Estimated net cost of the event and website: 8,000, but this commitment may be reduced by contributions from other agencies. Boost Your Business local events 3.10 Boost Your Business Local events are business support events for any kind of business but aimed at those in particular communities. Thanks to a financial contribution from a partner organisation, officers have organised Boost Your Business Local events for Orpington on 28 September 2010 and another is planned for Bromley North. However, as the value of these may be limited in comparison with a borough wide event, without external funding there will be no further Boost Your Business Locals organised this financial year. 6

7 Procurement support ( 10,000 for 3 initiatives) 3.11 Experience of previous initiatives has shown that one of the most powerful ways for a Council to support local businesses is to harness the considerable spending power of the local authority itself, by encouraging and supporting local businesses, particularly small and medium enterprises, to start competing for these opportunities. This is not always a straightforward process, however, as legislation prohibits a contract being awarded on the basis of locality, and all procurement processes must be kept fair and transparent for all as well as seeking the best value for money for the local authority and Council tax payers. Within these constraints there are some steps that can be taken to encourage and equip local SMEs in this arena, and the following projects are proposed: 3.12 The Council s Business Support and Procurement Teams will work together to identify potentially SME-friendly contract opportunities arising during the next 6 months. Where these exist businesses in the relevant sectors will be invited to attend training sessions to assist with the completion of Pre-Qualification Questionnaires (PQQ) and tender documentation. This training, free to the eligible businesses, would be provided by Supply London and hosted by the Council. The Council s spend on this project would depend upon the availability of suitable contracts but is not expected to exceed The Council will work, as in previous years, with London Business Network to raise awareness about business opportunities arising out of the forthcoming 2012 Olympics. This would consist of an event to showcase the Compete For system and to highlight other relevant business support. The cost to the Council is not expected to exceed Discussions are taking place with three other South East London boroughs about possible joint projects to encourage more use of local SMEs in the public sector supply chain. This joint work may include a South East London Meet the Buyer event, hosted in partnership with Supply London and a project to encourage purchasers within the four authorities to Think Local when using discretionary spend. Should these projects go ahead the Council would look to share costs with the partner authorities and Supply London, but Bromley s maximum commitment would not exceed A to Z Guide update 3.15 The last revision of the A to Z Guide - a quick reference guide to business-relevant services from the Council and other business support - was produced in March With a number of changes having taken place to services and initiatives for business support, an updated edition would be an advantage. The updated A to Z Guide would be mailed with Business Rates demands, Welcome packs and distributed at events. In addition, and for the first time, the Guide will also be direct mailed to sole traders / home based businesses (i.e. non Business Rates payers) based in the borough. We would increase the number of businesses receiving the Guide to increase to 12,000 during the year. Given the reach of the publication, we would expect to be able to meet the full costs of the new A to Z from commercial sponsorship. Commercial Property event 3.16 This would be an event to showcase vacant property and commercial property services (including Commercial Property Database) to businesses, particularly SMEs, in the borough. The event would include talks from experts on aspects of dealing with commercial property for small business owners, and opportunities to network. The event would support SMEs either looking to move into commercial accommodation for the first time, or planning to upgrade their premises. It will also assist with reducing levels of vacant properties across 7

8 borough by highlighting available vacant properties and sites. Working with agents we would seek to meet the full costs of this event through commercial sponsorship. Building a Better Bromley / Inward investment showcase event ( 5000) 3.17 This is a proposed high profile event to take place in spring 2011 to launch both Building a Better Bromley and the new Inward Investment Brochure to the business community and to commercial property agents, developers and landlords across London. Officers would work with South London Business and other partners to create a showcase for the borough as a business location, and would include opportunity to highlight the Bromley Area Action Plan and other opportunity sites. Potentially this event could use a prominent business location (either occupied or vacant) as a venue, and so the main cost would be around marketing to key audiences. Estimated cost: 5000 Local heritage / walking guides ( 2000) 3.18 This project would aim to provide local people and visitors to the borough with information about places of interest in our town centres, in the form of local sight-seeing / walking guides. The information for the project will be researched and collated by a young person employed under the Future Job Fund, but high quality design and print for the guides would require some Council resources, although we would seek sponsorship from local catering establishments to offset some of these costs. Estimated net cost to the Council: POLICY IMPLICATIONS 4.1 The proposed projects support priorities outlined in the R&R Portfolio Plan, particularly Outcome 2: Encourage Business Competitiveness and Investment and the Economic Framework Action Plan, Priority 1 (Sustaining and growing business and investment), as adopted by the Bromley Economic Partnership. 5. FINANCIAL IMPLICATIONS 5.1 As outlined in paragraphs 3.5, it is proposed that from April 2011 that the Business Fund would cease to exist as a separate fund, but any budget allocated previously for that Fund (in this financial year: 60,130) would be combined with the Portfolio Initiative Fund to allow greater flexibility in funding a wider range of initiatives to support Building a Better Bromley and R&R Portfolio Plan priorities. 5.2 Two projects have already been agreed from the Business Fund 2010/11 namely the Bromley Business Guide and Directory (to be updated by March 2011), which was authorised by the Portfolio Holder on 15 July 2008, and the Orpington Business Survey, which was authorised by the Portfolio Holder subsequent to the R&R PDS Committee meeting on 14 January The proposed projects outlined in paragraphs above would, if authorised, commit a total of 36,000 from the Business Fund for 2010/11 and an additional 7,500 for the 2011/12 financial year, which would be a call on the Portfolio Initiative Fund. This would leave a total of 14,130 uncommitted for this financial year. It is recommended that these monies are combined into the existing Portfolio Initiative Fund (budget for 2010/11: 28,800) to create a combined fund of 42,930 for which proposals will be provided to members at the 7 December 2010 PDS meeting. 8

9 Business support projects 2010/11 & 2011/12 Business Portfolio Fund Initiative 2010/11 Fund 2011/12 Committed expenditure Bromley Business Guide and Directory 6,000 Orpington Business Survey 4,000 New proposals Coaching for High Growth 7,500 7,500 Boost Your Business for Growth Enterprises 8,000 Procurement support projects 10,000 A to Z Guide ,000 Commercial Property event 500 BBB / Inward Investment showcase event 5,000 Tourism brochure project 2,000 Total for Committed and proposed projects 46,000 7,500 Budget for Business Fund 60,130 60,130 Budget for Portfolio Initiative Fund 28,800 28,800 Total Budget 88,930 88,930 Unallocated 42,930 81,430 Non-Applicable Sections: Background Documents: (Access via Contact Officer) Legal and Personnel Implications Report to Local Economy Portfolio Holder Update on Business Support Fund 2008/ DR08071 Report to R&R Portfolio Holder Budget Monitoring Report 2009/ DRR10/