CEDOS January 2023 Newsletter
Message from the Chairman
Dear All,
Happy New Year, I hope that you enjoyed the Christmas break and that you made good use of the days when the sun shone. I enjoyed long walks at Sherwood Forest, Rutland Water, and in deep darkest rural Lincolnshire. I was struck by the number of cafes and bars which were closed whilst we were out – no doubt a mixture of staff shortages and energy/supply costs affecting viability.
Looking ahead, even though we’re still waiting for ministers’ set-piece New Year announcements to put flesh on the Prime Minister’s priorities, I think that we can see some pointers towards the environment for economic development in 2023.
The PM has announced his ambition to extend maths lessons to all 17 and 18 year olds. I’m sure we all agree that it’s already been a challenge to establish Multiply programmes (they’re quite niche !) and I wonder how easy it will be to make maths training relevant to many young people in education. My younger daughter is at FE college undertaking training to work in a childcare setting – it’ll be interesting to explore how more maths could be made relevant to people like her.
His comments about growing the economy and reducing inflation, which largely follow OBR and others’ projections, make the cynic in me wonder if there will be any new incentives beyond what the PM has said about increasing innovation support. In the CEDOS Executive we increasingly talk about what we do as a profession without government support, so I don’t think that a lack of significant government economic development announcements should be of great concern to us. We’re doing a good job in our own right.
Although most of the media coverage on the Levelling Up Bill has been about housing, there is still plenty of reference in the bill to further devolution. The CEDOS Executive is keen to help our members to explore examples of how to ensure that the economic development voice is heard loud and clear in devolved structures. Our first Lunch and Learn session of the year will concentrate on this and we will be running a Devolution Forum every month. We hope that you find it helpful.
In late autumn CEDOS responded to the government’s Funding Simplification Review. For the older members amongst us, we wonder if it heralds a return to Single Regeneration Budget type processes (which I remember as being less about “single” and rather more about inter-governmental tussles over sovereignty of the budgets that had been amalgamated into SRB). The second session of the year will be on the direction that the Funding Simplification Review is taking. Again, very helpful information and intelligence for all members.
Even though the spike in energy prices looks like it is starting to soften, the issue of energy security and energy price is likely to dominate economic policy during 2023. Our third session before the summer is going to focus on this issue, and on how we can take advantage of new partnerships and new investment to the benefit of our local economies and communities.
Our profession continues to operate through significant change, but economic development functions within local government are a constant within that changing environment. We have the ability to support investment, to make connections between partner organisations, and to advocate what is best for our local economies. Our work with the LGA on the changing role of economic development officers will help to provide information which will help members to manage and respond to those changing circumstances. We will also continue with the informal forums that we operate and that members can dip in and out of -the Community Renewal Fund forum is of course coming to an end but as an Executive we are keen to provide that simple networking opportunity for members to debate the detail of specific issues. Let us know if there are any topics you would welcome some peer support on.
Hopefully this note explains what we’ll be up to with CEDOS this year. Which of course brings me to the subject of subscriptions … Matt Epps and his colleague Emily will be in touch to pursue payments from those of you who have not already paid. A subscription of £750 per annum is the equivalent of roughly a day and a half consultancy support, and it gives you access to a broad range of intelligence and a network of peers. It’s very good value for your money!
I look forward to seeing you in 2023. Here’s to a happy new year in the economic development world.
Justin Brown, CEDOS Chair and Assistant Director for Growth – Lincolnshire County Council
CEDOS AGM and Sheffield University Visit
The 2023 CEDOS Annual General Meeting confirmed a further term for the existing roles for a further year. Justin Brown will remain as Chair, Matthew Epps and Treasurer and Matthew Shufflebotham as Secretary.
Along with a hybrid meeting, our 2023 Annual General Meeting included a site visit to a suite of Translational Research Centres at the Advanced Manufacturing Park of the University of Sheffield. The focus of the visit was to understand how the University are filling the gap between fundamental and experimental research and the ability to translate this learning, testing, prototyping and process innovation into tangible and useful outcomes for businesses. All the Translational Research Centres were beneficiaries of European Regional Development Fund and give:
“regional enterprises, global companies, new technology start-ups and academic research teams access to advanced testing facilities and the opportunity to collaborate with leading academics”
The visit incorporated the Translational Energy Research Centre (TERC), a national pilot-scale facility working to understand and demonstrate green energy solutions for a secure, affordable and sustainable energy system.
It was impressive to see the scale of a range of commercial energy generation facilities and carbon capture facilities on site – as many Authorities explore small scale, local energy projects. In the context of discussions with commercial energy producers and distributors, especially over planning matters, it is useful to have an overview of how the processes works in practice, as well as being able to visualise what a development in this sphere might look like.
Second up was the Integrated Civil and Infrastructure Research Centre (iCAIR), which brings together an interdisciplinary team of researchers to accelerate innovation and develop long-term collaborations between academia and industry.
The focus of iCAIR is to test new and disruptive technology and approaches to the construction, infrastructure and water sectors. During the visit, it was clear that the facilities were being used by local City Region SMEs, including testing the structural integrity of an experimental concrete mix from a local business and testing a new bridge structure that requires less materials without compromising strength. It was interesting to note the emphasis of the research was strongly centred around carbon reduction and waste minimisation – not just issues relating to civil engineering.
The third venue was the Laboratory for Verification and Validation (LVV), which with its helicopter parts, ex RAF jet fighter and three climatic chambers was more like something out of the A-Team than an acoustics and vibration testing centre. The centrepieces of the facility were the shake table within a climate chamber – which can recreate an earthquake at minus 50 degrees and the rather large wave tank! The shake table itself required so much concrete to anchor and stabilise it you could probably build a small skyscraper from it!
In keeping with the general carbon reduction theme running through all of the centres, the facility was testing blades for wind turbines. Again, the centre demonstrated it had engaged and worked with local businesses, including local engineering firms.
The final stop was to the Royce Translational Research Centre, researching ways that new alloys can be developed and testing their properties. The facilities allow businesses to use commercial scale state-of-the-art facilities that would either not be cost effective for businesses to invest in on their own or would ultimately be unaffordable. Once the concept is proven, the business can use the data and learning to develop their manufacturing processes and invest in relevant tooling and machinery with confidence.
Part of the centre included testing the properties of different alloys for 3D Printing, with the University working with national and local businesses to test manufacture a range of 3D Printed components for use in the healthcare, energy, aviation oil and gas and manufacturing sectors.
Generally, there is a relatively low level of understanding within local government of some of the work that universities do with businesses – and the visit to the Translational Research Centres helped to understand how the University of Sheffield were able to support local SMEs and the value of product testing in the business growth cycle. The outcome of innovation support in this manner is often more difficult to link to the ‘growth’ outcomes we are used to measuring such as jobs created and safeguarded. The offer of the University where product development is concerned (as is the case across many other universities) occasionally leads to new high quality new products and a significant number of jobs in a small number of businesses,….or nothing across the rest. In the programmes we are used to managing in Local Government, we are used to a range of more limited outcomes but from a broad range of businesses, which reduces programme risk and helps develop consistent and cost-effective services. This is also partly why universities are more reluctant to sign up to economic programmes with significant job outputs.
The Translational Research Centres were born out of the era of smart specialisation and the Witty Review of the role of universities in economic development. The review identified that whilst universities support innovation in a number of ways, they do face a number of challenges in this work. These include:
• Lack of information and knowledge amongst the local business base of the technical expertise of the University to support product development and process improvements. To overcome this requires investment in costly outreach activity
• The high cost to Universities of engaging with SMEs in comparison to larger corporates
• The lack of funding to assist in commercialising high-risk research and developing spin-outs – especially to get these businesses into a revenue-generating position.
• Lack of available physical space in close proximity to HE expertise for translational activity to take place
• Research and development frequently results in a strong negative cash flow for SMEs, which in lower margin sectors can be hard to overcome.
The key features of the Translational Research Centres have been utilising ERDF investment to provide engagement resources and a pathway for the University to engage with sub-regional SMEs – instead of focussing their efforts on larger businesses and research projects that are easier to engage, often build long term relationships with the University and can pay! Universities generally do not have the capacity to seek out and support local SMEs without additional funds – even there is a desire to do so. This is something to consider going forwards as ERDF resources cease and UK Shared Prosperity Fund is more focussed on localised interventions. Whilst all the centres have continued to work with local SMEs post ERDF, the open days and events have reduced in volume and the client mix is increasingly gearing to research and larger businesses.
If any members wish to find out more about the visit or make contact with any of the centres (individually or collectively), please get in touch with Rob at info@cedos.org. The facilities are well worth a visit.
Business Grant Appraisals
It is that time in the cycle when a new economic development programme is launched, and a plethora of business grant schemes are about to open for applications up and down the country. Given the paltry management fee for the UK Shared Prosperity Fund and the non-existent management fee for the Rural England Prosperity Fund, Local Authorities up and down the country are now facing the challenge of how to appraise applications on a limited budget. In many places this will mean using an in-house process of appraising grant applications. This is something many Authorities may have limited recent experience of undertaking.
There are positives and negatives to outsourcing grant appraisals. Firstly, it provides an external and independent view on applications, and often a different perspective on what businesses want to do in their proposals. It can often provide access to knowledge and skills the Authority does not necessarily possess and can provide confidence in the appraisal process for any decision-making panels. The downsides are the appraisal process can be somewhat removed from the programme management process – appraising projects on their own merit, rather than in the context of what outcomes the programme needs to deliver and the context of wider defrayal….and of course it is expensive!
An appraisal is a critical component of the delivery of any grant programme. An effective appraisal process should be far wider than just checking if an application is eligible. The appraisal should support a robust decision-making process, not be the decision-making process in itself. It should also identify any risks – but in a much wider sense than the financial risks of the applicant becoming insolvent. Risk includes timescales and slippage, reputational risk, risk to delivering outcomes and business governance risks.
“An appraisal is not just a process to identify eligibility and suitability – it is also a process to improve the quality, deliverability and contracting of the proposal.”
A good appraisal should also be mindful of the contracting and monitoring process of the grant programme (and indeed wider UKSPF/REPF programme) and should seek to ensure projects are simple to contract, simple for the business to deliver and simple to monitor.
An appraisal should also form part of the audit trail for decision making and it is likely to be the first piece of primary management information that the programme generates.
An appraisal is also important to show the programme overall has considered ‘additionality’ in its decision making.
Based on appraisals across a range of business and project grant funds across England, listed below are a number of common issues in the appraisal process to look for when appraising projects for a business grant:
• A range of permissions and licences (and not just planning) can lead to delays in project start/finish dates – and businesses do not always know what permissions they need or how long they may take to secure
• Where businesses have tight cashflows – there is a stronger risk they may not prioritise spending on their approved project in light of other financial pressures. This can lead to delays in defrayal. The risk is greater the larger the project and the higher the intervention rate that the business will contribute.
• UKSPF/REPF has ‘in-year’ spend targets and individual delays in a project’s spend can be more problematic for programme management
• In the current climate, quotations can age very quickly and should not always be taken at face value! This can cause issues at contracting and payment stage and issues should be flagged in any appraisal.
• In the current climate creating a ‘vacancy’ is not the same as filling a job
• Some outputs can be problematic to measure – such as reducing carbon emissions if the business cannot baseline its emissions at submission or claiming jobs that do not start before the end of the programme. It is always worth checking any salary/wage costs in financial projections against job outputs! They do not always match!
• Not all jobs can be easily measured and evidenced, e.g. self-employed off-book positions, agency staff or increases in shifts/hours instead of creating new jobs
• Is a business ‘over-specifying’ what they require for the purpose of the grant, especially where intervention rates are over 50% – for example by specifying an AppleMac when a Chromebook would suffice!
• Identifying any linked businesses through a Companies House check can identify if there are conflicts within any leases, quotations or suppliers
• A key risk to identify is whether there are any steps in between the grant investment and the delivery of outputs and outcomes. E.g. A business needs a grant for a contribution towards production machinery…but can’t increase employment (all of which are in the Distribution team) until we subsequently buy a conveyor belt. Another example would be…we need to buy IT equipment and our IT Manager will oversee the process when we recruit one.
• Priorities within the appraisal process can change over time as profiled outputs and outcomes become clearer and resources become tighter – and this needs to be reflected in the process
Recent CEDOS events
We were pleased to work with the What Works Centre for Local Economic Growth on a session to support the understanding of and deployment of logic models in project development, held in early December. We also hosted an event with Wiltshire Council on Allocating and Delivering Employment land, looking at barriers to developing allocated employment land, exploring the levers local partners had to accelerate development and wider constraints. Wiltshire Council are keen to work with CEDOS members on this agenda. If you are keen to share practice or ideas, please get in touch via info@cedos.org and CEDOS would be happy to facilitate a discussion.
Forthcoming CEDOS events
Last CEDOS Community Renewal Fund Forum – 9th January 12 – 1pm
This Monday (9th January) will be the last CEDOS Community Renewal Forum and an opportunity to reflect on the learning of the programme, share experiences and discuss the closure of the fund within Local Authorities. The session is open to members and Local Authority non-members. From 6th February the slot used for the Community Renewal Fund forum will become a Devolution Forum, providing the opportunity to share practice, ideas and experiences of the devolution and County Deal processes.
The last Community Renewal Forum event will be at 12pm – 1pm on Monday 9th January. If you would like to join this event, please click the link here.
UK Shared Prosperity Fund Forum – 16th January, 12pm – 1pm
From June 2022 onwards CEDOS will be hosting an ongoing UK Shared Prosperity Fund Forum. Our forums have covered a range of topics relevant to the fund including preparing Investment Plans, intelligence on the REPF and routes to market for projects and activity. The forum has helped to share ideas, intelligence and positive debate.
Our next forum will be held at 12pm-1pm on Monday 16th January 2022. Click here to join the meeting.
CEDOS Lunch and Learn Session – February 17th 2023, 12 – 1pm
The CEDOS Lunch and Learn sessions return for 2023, with a first session to be held on February 17th at 12-1pm. The focus will be on devolution and County Deals and how the devolution process is shaping local economic development governance, structures and partnerships. The session will feature input from Mark Livesey, Chief Executive of the LEP Network.
If you do not receive a direct invite for the Lunch and Learn sessions and would like to join, please contact info@cedos.org
Future dates during 2023 for Lunch and Learn events are:
17th February
21st April
23rd June
15th September
24th November
If there are any specific topics that you wish CEDOS to cover or any specific networking sessions that you think would be of value to Local Authorities, please let us know. We are always happy to pull members together around common issues or needs.
CEDOS on LinkedIn
CEDOS are delighted to launch our new LinkedIn company page for members to share links, news and commentary. LinkedIn is the world’s largest professional network and we look forward to engaging with current and prospective members on the platform. To follow and post please visit https://www.linkedin.com/company/cedos/