This report provides an update on the achievements of the Marches Local Enterprise Partnership (LEP), its revised governance structure, current board membership and priorities outlined in its Strategic Economic Plan (SEP).  It also provides a briefing on the role and purpose of the Annual Delivery Plan and its priority activities in order for the scrutiny committee to fulfil its function of making reports or recommendations to council or the cabinet on matters which affect the council's area or the inhabitants of that area.

The Committee considered an update on the achievements of the Marches Local Enterprise Partnership (LEP), its revised governance structure, current board membership and priorities outlined in its Strategic Economic Plan (SEP). 

The report also provided a briefing on the role and purpose of the Annual Delivery Plan and its priority activities in order for the scrutiny committee to fulfil its function of making reports or recommendations to council or the cabinet on matters which affect the council's area or the inhabitants of that area.

The Director for Economy and Place introduced the report, noting the LEP’s role, and emphasising the importance of the Council’s partnership with the LEP and the Council’s success in securing funding from the LEP.

The new Chair of the LEP introduced herself to the Committee.

The Partnership Manager then gave a presentation as appended to the agenda papers at appendix 5.

In discussion the LEP representatives responded to questions as follows:

Preparations for Brexit

The Marches Growth Hub had been positioned as the contact point for advice.  There was a Brexit tool kit on the Marches Growth Hub website.  This contained links to all relevant government advice.  A number of events were also being promoted through the growth hub, delivered by the growth hub team supported by partners providing advice.

It was understood additional government funding would be made available shortly for face to face business advice.

In terms of the future role of the LEP itself there was constant communication with the government.  The current advice was to continue with the development of the Local Industrial Strategy (LIS).  Discussions were ongoing with local authority colleagues on the possible impacts, for example on the farming sector.

The LIS was to help to plan for the future and what could be done to create new jobs and new opportunities.  European funding had helped to alleviate challenges over the last 5 years.

There was uncertainty about future economic development funding.  The LEP working with partners was monitoring developments and seeking to be in a position to respond to them.

Councillor Phillips commented, in his capacity as independent chair of the LEP European Structural and Investment Fund (ESIF) Committee that the government had indicated that the level of funding allocated under European funding rules would be continued until March 2023. The rural development programme had been key to the local economy and how that funding was replaced would be significant.

Support for Clean Growth

The LEP was keen to encourage and enable businesses to grow in an economically and environmentally sustainable way.

The Marches Energy Strategy referenced green energy, and carbon neutral ways of working, growing specialist battery technology and more environmentally friendly methods of energy production.

Alternative Transport Options

In terms of working to explore options and support different choices there was a Transport Officers Group under the LEP looking at opportunities for sustainable transport.  A detailed transport strategy was on the Marches LEP website. Research funding had been secured to explore joint initiatives that helped transport connectivity between the Marches and mid-Wales.

In terms of capital funding the LEP Board was tasked with identifying projects that would deliver jobs, housing and other growth benefits.  Projects such as electric buses could be considered as long as the project helped those objectives.  Challenges of bus transport and access to jobs were well known.  The LEP was waiting to see if additional funding was to be brought forward.

Support for the Market Towns

It was acknowledged that to date investment in market towns as key employment centres had been limited.  The majority of Phase 1 growth deal funding had been allocated to Hereford, Shrewsbury and Telford.  There had been investment in broadband in Herefordshire that benefitted all areas and investment in skills training facilities.  Growth deal funding received in 2017 had mostly been allocated to innovation and skills – a key challenge, hence the NMiTE and cyber security centre projects.

There had been help for businesses in rural communities through the European funded Rural Development Programme.

It was noted that Leominster had recently been allocated some £2m for regeneration under the new Heritage Action Zone Fund for Market Towns, designed to support economic growth.

The Strategic Economic Plan recognised that to date there had not been investment in the market towns.  The issue had also been raised during the current consultation on the LIS and this would be reflected in the Strategy accordingly.

Support for Rural Communities

It was observed that the consultancy the LEP had employed to develop the SEP and the LIS was Metro Dynamics which promoted its enthusiasm for the future of cities.  It was asked whether consideration had been given to employing consultants with a track record on working with isolated rural communities.

In reply it was noted that the Director of Metro Dynamics was local to the Marches and knew the area.  A contract had been awarded following a procurement exercise to find an organisation with expertise in developing local industrial strategies.

The importance of a consultancy understanding the local area and the issues and developing appropriate initiatives was recognised.

A member commented that small, clean electric buses would be a major benefit to rural communities.

Governance

The LEP had a detailed accountability and assurance framework setting out all the governance requirements.

The LEP had become a company limited by guarantee.  Agendas and minutes were all made public. The LEP had committed to attending local authority meetings to answer any questions.  Board members had to complete a register of interests and this too was published.  There was a clear policy for recruitment and rotation of the Chair and board members.

South Wye Transport Package (SWTP) and Hereford Transport Package (HTP)

A question was asked about the risk of currently allocated funding being redirected to other projects in the region given the recent decisions taken by Herefordshire Council to pause work on the schemes. 

The LEP’s position was that a contract was in place for the SWTP.  Regular discussions were taking place with the Council.  The Board would discuss the matter again at its meeting in November.

There was no LEP funding in the HTP.  The LEP supported the project.  The Council had correctly advised Midlands Connect on its position.  The project was part of a package Midlands Connect would submit to the Department for Transport.  The LEP could not speculate on what decisions might be made.

It was asked whether funding under the HTP had to be spent on a road.

The Director for Economy and Place commented that the two transport packages were separate projects.  The SWTP included the southern link road and was funded by the LEP.  The HTP included the western bypass which had been identified as a regional priority by Midlands Connect. It was subject to funding bids yet to be determined by the government.

The LEP had been advised by Government that the Marches growth deal funding concluded at the end of March 2021.  The Board would need to take a decision, possibly early in the New Year, on whether to reallocate the funding if the project was not to proceed.

Independence and objectivity

It was asked how the conflicting interests of directors in terms of their wish to secure funding for their own areas were balanced.

In reply it was stated that the experience was that all partners had tried to make decisions in the best interests of the region. The degree of collaboration and co-operation had been highlighted by government as being an exemplar.  All directors understood that they were required to make decisions to deliver the LEP’s aims and vision and were accountable accordingly.

It was also observed that LEPs were required to be independent of local authority influence and asked how this was achieved.

In reply it was stated that the LEP had an independent secretariat.  It rented private office space.  Whilst working closely with local authorities it had no management reporting line to them. The Government had rated the LEP as good in their annual assessment of LEPs.

The potential competition between Harper Adams University and NMITE in higher education in the agritech sector and the LEP’s approach to funding in this context was raised.

It was stated that the LEP did not encourage duplication but if there was demand the LEP had no issue with new entrants to the market place.  The LEP did have a higher education group that linked to the skills advisory panel.  One of the aims of the group was to encourage collaboration and avoid duplication, whilst recognising that every organisation had its own commercial objectives.  Some government funding streams, eg the UK Research and Innovation Strength in Places fund, actively encouraged local institutions to work together,

Clarification was sought on engagement with Holme lacy college and Hartbury College.  It was stated that the principals of the further education colleges in the Marches were also encouraged to co-operate.  There was scope to encourage greater collaboration and innovation.  Holme Lacy College had received skills capital funding from the LEP.

Support for NMiTE

The LEP recognised the transformative opportunities that universities brought to towns and communities and there was strong support for this type of development.

There had been an issue in that information requested by the LEP had not always been forthcoming. It was important to ensure that the development met the needs of funders.

The LEP had been seeking for a business plan for some months together with detailed information on the next phase of investment.  The project was ambitious.  Timescales were challenging.  The deadline for investment was March 2021.  The LEP was in regular contact with NMiTE about the project.  The LEP Board had to be satisfied that it was investing in a project that would deliver the required outputs.  It was likely to be discussed at the Board’s next meeting.

It was observed that the report stated in the section on risk management that financial risk to the council and other local authority partners was limited through the use of Shropshire Council as the LEP’s accountable body.  Clarification was sought on a request to the council to underwrite an amount of £850k from the university project, despite a letter having been sent by the Department of Business, Energy and Industrial Strategy (DBEIS) to the S151 officer.

In response it was stated that the LEP’s S151 officer had to be satisfied that funding was used to good effect.  NMiTE was a start-up business with limited financial backing apart from the funding provided by the Department for Education for revenue investment and by the LEP for capital investment. NMiTE were seeking funds from private donors.  However, the project did not have a financial track record demonstrating an ability to repay the sum if outputs were not delivered so it had been requested that an element of the project would need to be underwritten.  A similar course of action had been taken on a LEP funded skills capital project in Bridgnorth.

It was asked if the Board would have come to a different decision on requiring the sum to be underwritten if it had seen the letter from the DBEIS to the S151 Officer on the NMiTE project.  In reply it was stated that it was not possible to speculate on this point.  It was observed, however, that the Board had previously exercised caution over the weight that could be given to such letters. It was suggested it would be helpful if the letter from the DBEIS to the S151 Officer could be made available.

Public Profile of LEP

The LEP was keen to raise public awareness of its role within communities.  Liaison with parish councils was seen as one possible mechanism.  The LEP engaged with chambers of commerce and the federation of small businesses, National Farmers Union and other groupings across the area.

There was an established public relations and marketing company that worked for the LEP.

Government Review of LEPS

The review had been useful.  A lot of the recommendations had already been delivered by the Marches LEP.  The biggest change had been the requirement for the LEP to become a legal entity.

There was no information from government on the future role of LEPs.  The LEP was working on the LIS to make the case for future funding for the area.  There had been a suggestion that one of the reasons for the review of the LEPs had been to ensure that they could manage the future funding streams that would replace European and other government funding.  However, there had been no recent information on this point.

Tourism

The LEP vision was to work with each local authority to develop a joint strategy for tourism and the visitor economy. A document had been produced as a statement of intent setting out opportunities for joint working between the three local authorities.

The LEP was providing funding to support the three local authorities in gathering baseline data for tourism purposes.

The LIS and the SEP referenced the importance of the visitor economy in both tourism terms and encouraging inward investment

Climate Emergency

The LEP referenced sustainability in the LIS.   The LEP Board had set up a sub-group to develop the energy strategy that addressed various aspects of climate change.

A member expressed reservations about what they perceived to be a conflict between the LEP’s plans to invest in roads and addressing the climate emergency.

Frequency of LEP attending General Scrutiny Committee

The report indicated that the LEP was intending to meet relevant scrutiny panels twice a year.  It was suggested that an annual meeting would be the preferred course after the LEP published its annual delivery plan and end of year report.

The Chairperson thanked the representatives of the LEP for their attendance.

RESOLVED:

(a) to recommend to the executive that:

       i.          the LEP be encouraged to declare a climate emergency as a priority;

     ii.          the LEP be encouraged to raise its profile through engagement with Parish and Town Councils and business forums;

    iii.          the LEP be requested to focus on promoting available schemes to the market towns; and

(b) provision be made in the Committee’s work programme for an annual report from the LEP.