To receive an update on the activity of the Marches Local Enterprise Partnership in Herefordshire.

The chairman introduced Graham Wynn OBE, Chairman of the Marches Local Enterprise Partnership, and Gill Hamer, Director of the Marches Local Enterprise Partnership (LEP).

 

The chairman and Director of the Marches LEP summarised a number of key points about the organisation:

-          The Marches LEP had been one of the first Local Enterprise Partnerships created and that there were now more throughout the country. LEPs had been intended in part to replace the Regional Development Agencies in providing infrastructure, housing and sustainable development.

-          The Marches LEP represented a large geographical area and 30,000 businesses of varying size. It was explained that 85% of these businesses had ten employees or fewer.

-          The Marches LEP was one of six members of the West Midlands LEPs. The Chairman of the Marches LEP also represented the West Midlands LEP at a national level.

The Director of the Marches LEP summarised a number of areas of LEP activity:

-          In 2013 the Marches LEP had developed a strategic economic plan (SEP) including a comprehensive analysis of the Herefordshire economy. This had identified numerous areas of focus including the growth of defence and security industries in Herefordshire.

-          a skills plan had been developed in cooperation with Herefordshire Council. This was in the process of being updated. Initial data gathered for the review of these documents suggested that the gap between the Marches and national performance indicators was growing to some extent. As a result the review of these documents was likely to be targeted to appropriately apply for continued funding. A key area of the skills plan under review was post 16 skills.

-          The SEP had been used as the basis for funding applications. Funding which had been secured through the SEP was largely being used to generate housing.

-          The Marches LEP had secured funding for growth and infrastructure packages for the three main urban areas in the Marches.

-          A number of Marches LEP projects were summarised. Notably a large scale investment into skills and training packages, particularly targeting the food and drinks industries. A tender for a similar package for high tech industries was also in process.

-          Work was being done at a regional level in the provision of post 16 education. Notably institutions were being encouraged to cooperate more closely and operate economies of scale.

-          Investments were being made in the improvement of broadband provision in Herefordshire.

-          Work was being done in the provision of skills training for people not in education, employment or training (NEET) in Herefordshire.

-          It was explained that the Marches LEP was in the final stages of agreeing the HCA land deal in Telford which was a significant area of LEP activity. Funding provided for this scheme would partly return to the LEP for housing.

-          The Growth Hub had been introduced recently with a physical site in Herefordshire and also an online presence provided resources for small businesses.

It was noted that Herefordshire was represented by a number of private business figures from Herefordshire as well as the leader of Herefordshire council. The governance arrangements of the Marches LEP were summarised noting the accountability and assurance framework as well as the Marches Joint committee.

The chairman thanked the representatives of the Marches LEP and invited members of the committee to ask questions.

 

The chairman noted that the Marches LEP was currently accountable to the Scrutiny Committees of the three local authorities participating. It was queried if it would be more efficient were there to be a single centralised scrutiny committee for this purpose. In response it was explained that at the formation of the LEP there had been opposition to the creation of a combined scrutiny committee. However this was now being considered as part of a review of LEP governance arrangements.

 

The vice chair queried the prioritisation of resources by the Marches LEP. In response the director of the Marches LEP explained that the accountability and assurance framework outlined the process for prioritisation in how value for money of schemes were appraised and how the impacts of a project was considered. Once projects had been considered following close investigation the Marches board would decide if a project represented good value.

 

The vice chair noted that Herefordshire had done well in funding from the LEP compared to other members. It was queried how delivery of projects was ensured. In response it was explained that a performance, risk and monitoring committee had been formed which included three board members. The committee received detailed reports on a quarterly basis on individual projects.

 

The vice chair queried the extent of cooperation between the Marches LEP and surrounding LEPs, notably with the greater Birmingham area. In response it was reiterated that the chair of the Marches LEP also represented the six LEPs in the West Midlands area at the national level, and that these six LEPs met bimonthly. There were 11 LEPs within the Birmingham ‘powerhouse’ area. The Chair of the Marches LEP was a member of the board on the West Midlands Connect project which was the first major project of this grouping. It was noted that this project represented a substantial geographic area. Within this context it was the role of Marches LEP board members to promote investment within the Marches within the context.

 

The vice chair queried how medium sized and small businesses were engaged with the LEP and how their understanding of its activity and potential resources were developed. In response it was noted that the Marches LEP represented three separate business boards who would in turn be represented at the Marches LEP. Additionally, the federation of self-employed and small businesses, as well as the chamber of commerce were engaged with. Growth hubs had been established to provide advice and support to businesses. A range of additional engagement activity was summarised.

 

It was queried if there was cooperation with Wales in LEP activity. It was noted that this was difficult due to central government policy. However there was cooperation with the Welsh equivalent of LEPs. Within Wales LEP type activity had not been in place for as long as in England. It was noted that with areas of the Marches being hubs for eastern Welsh areas, there were common challenges and interests in cooperation.

 

A member of the committee noted that there was a lack of understanding of the Marches LEP across Herefordshire, particularly in rural areas. It was noted that Bromyard had been identified as an area with over-dependence on a single industry within the report. It was described that businesses in the area were highly dependent on surrounding road infrastructure and queried what investment would be provided to pre-existing road networks.

 

In response it was noted that issues in the current network of trunk roads in Herefordshire was a concern. Additionally it was explained that there was investment going into new road infrastructure in nearby welsh areas and so it would be prudent that this be continued with the road network in the Marches.

 

The director of the marches LEP reiterated the importance of diversity in business across the west midlands area and the need to support this.

 

A member of the committee noted that most of the projects presented by the Marches LEP were centred in large urban areas despite the rural nature of much of the Marches and Herefordshire area. It was queried to what extent were rural areas, market towns and small businesses being considered by the Marches LEP. In response the chairman of the Marches LEP explained that market towns were an important part of the Marches’ strategy. In particular, ensuring market towns had sustainable futures was significant. The creation of housing enabling the provision of education was a considerable focus.

 

The director of the Marches LEP explained that the majority of the first wave of funding from the Marches LEP had been focussed on strategic projects in urban areas. However, it was intended that were a second phase of growth funding to be secured then this would be deployed with a greater focus on rural areas.

 

Representatives of the Marches LEP noted that providing funding and support for small businesses was a challenge. Much of the funding which had been secured by the LEP for small businesses was for the development of growth hubs. However additional funding was trying to be secured through European Union funding. The chairman welcomed what was being done but expressed disappointment that activity was limited in this area.

 

A member of the committee noted the lack of awareness on the work of the Marches LEP among members. The activity of the LEP in market towns with speed networking events which had been a success. It was commented that the growth hub had to be based somewhere, while it was unfortunate that this was in Hereford and not in one of the market towns this made geographical sense with Hereford being central to the county. The growth hub had a web presence, phone presence and conducted work in the market towns which was positive.

 

A member of the committee stressed that members should advertise the work of the LEP to their constituents to allow them to benefit more from the services provided. The chairman suggested that this could be the basis of a recommendation by the committee.

 

A member of the committee queried the publication of annual reports. While the LEP had been created in 2010, the first annual report was published in 2015.

-          The director of the Marches LEP explained that while the LEP had existed since 2010, considerable activity had only really started in 2015 where the LEP had begun to implement projects it had received government funding for.

-          Prior to the reports the LEP’s web presence and newsletters had been examples of publishing the LEPs work in the public domain. This was an area which the LEP had been asked to strengthen and was being improved upon.

-          The chairman of the LEP reiterated that Shropshire County Council was the accountable body for the LEPs funding and accounts and related documentation would be held by them.

A member of the committee queried how many businesses which had been brought into the Hereford enterprise zone had been based in Herefordshire previously. The member also asked for clarification of the wording of what was meant by jobs which had been ‘created directly’ by the HEZ. Additionally it was queried if there had been any foreign direct investment as the result of the enterprise zone. In response, the director ECC clarified that the HEZ was itself managed by its own board. The majority of businesses within the HEZ were local expansions. One company had come from outside from a neighbouring local authority. There had been a recent piece of FDI from Turkey and the board was working actively to bring in more FDI.

 

The chairman praised the number of companies in the HEZ which were expansions of Herefordshire businesses.

 

A member of the committee argued that there were systemic problems with the LEP in terms of governance and accountability:

-          It was described that the LEP represented an organisation which was not a legal entity which was responsible for tens of millions of pounds of public money, staffed by a board predominantly comprising of individuals from the private sector. It was argued that this was an underlying issue with all other governance issues identified with the LEP.

-          The representation for and local knowledge of Herefordshire within the LEP was held by the leader of the Council as a member of the board and also by officers of the council.

-          Concern was raised that the report identified that the leader’s annual report to council was the mechanism through which members would be formally updated on the work of the LEP and notifying members in advance over projects which would be coming forward. It was argued that member’s and members of the public lack of awareness in the LEPs activity was due to the failure to properly communicate these matters.

A member of the committee queried 2016/2017 projects identified in the report. The south wye transport package quoted a new housing development. It was argued that the Lower Bullingham housing development identified within the council’s core strategy was already served by the A49 linkages pre-existing and clarification was sought.

-          Director, Economy Corporate and Communities clarified that the Lower Bullingham site was the one identified within the report. While there was a physical linkage between the site and corresponding road networks, as was stated in the core strategy the construction of the housing site was reliant upon the construction of a full bypass. As a result the construction of the next leg of the bypass which was the southern link road was essential to this.

A member of the committee noted that the LEP not being a legal entity may cause some concern among the public. It was asked if the LEP was still obliged to respond to freedom of information and similar requests within its status:

-          The director of the Marches LEP clarified that in reality, were a member of the public to request information on Marches LEP projects via a freedom of information request or similar mechanism this would be channelled through the relevant council in coordination with the LEP. While the LEP was not legally subject to freedom of information requests the Marches LEP did provide background information and support investigations such as FOI requests and would cooperate in the formation of responses.

-          In response the member of the committee stressed that this represented an anomaly in the accountability of a body responsible for large sums of public money.

A member of the committee asked for clarification of the exact hierarchy between the marches joint committee and the Marches LEP board. The joint committee had been identified as being a mechanism to sign off board decisions, however it was queried what powers the joint committee had to block recommendations.

-          The director of the marches LEP clarified that the Marches Board made recommendations which it was then the responsibility of the Marches Joint Committee to approve. However were the joint committee not satisfied with recommendations as presented it was the responsibility of the leaders of the three participating councils to decide whether to approve recommendations or to return them for further consideration by the board. It was explained that this had not happened at that time, however, key decision making had only in reality begun in 2015 with key projects and initiatives going forward.

 

-          The chairman of the LEP clarified why the LEP was not a legal entity. The marches LEP was unique given its representation by the business sector, many other LEPs had emerged out of pre-existing bodies however the Marches LEP had not. At the time of its formation there had been a number of structures for LEPs available, when advice on best practice had been sought from government it had not been recommended to form a legal entity as it had been preferred to have funding accountable by being managed by a local authority. It was described that an external organisation had analysed the Marches LEP’s governance arrangements and identified that the Marches LEP had made improvements in its governance arrangements.

 

-          In response the chairman sought clarification that Shropshire council was the accountable body for much of the Marches funding, this was confirmed by the director of the Marches LEP who also clarified that for individual projects Herefordshire and Telford Councils were also accountable.

 

It was asked in response to public question 8, while the answer stated that LEP accounts would be available on Shropshire County Council’s website, a member of the committee had not been able to locate these and Shropshire County Council had not been able to provide these upon the member’s request.

-          The director of the Marches LEP explained that it would be investigated as to why account information had not been available or could not be located on Shropshire Council’s website as they had been in communication with the relevant information in the production of responses to questions from members of the public.

-          The member of the committee expressed the importance of these documents being clearly available as they were within the public interest.

-          The chairman suggested that the member propose a recommendation on these matters.

A member of the committee queried why contracts for the south wye transport package had been singed recently despite an assertion in previous Marches Board minutes that this would need to be done earlier. In response the Director, Economy, Communities and Corporate clarified that the dates referred to in the minutes concerned were no longer relevant. There had been uncertainty over the confirmation of funding due to elections in 2015. Confirmation of funding had been received subsequently enabling contracts to be signed.

 

A member of the committee discussed the importance of small and medium size businesses and noted the success of LEP events in markets towns. The need to focus on market towns going forward was stressed. The cabinet member economy and corporate services emphasised the need for plans to be business led.

 

The difficulties in engaging with small businesses were stressed, however through the LEPs activity and the growth hub more small businesses were now being engaged with than had been previously. Other than reinforcing this engagement activity it was difficult to suggest other actions that could be taken. The next phase of funding would also allow for a greater level of engagement with small businesses and market towns, additionally work with the business board and enterprise zone would allow these groups to identify their own priorities.

 

The chairman of the Marches LEP stressed that at all opportunities the LEP tried to engage the business board given their representation. Research was being done to try and better help engagement with the business community. However working with small businesses was difficult. The time of small business owners is very limited and engaging with these groups would remain a challenge. However, the LEP will continue to pursue cooperation with these groups as they are vital to growth in the county.

 

In response to a query by a member it was clarified that the Leominster enterprise zone is not a special enterprise zone despite the suggestion from the park’s name. As such it does not receive the with the privileges enterprise zone status this allows as is the case with the Hereford enterprise zone.

 

A member of the committee noted that due to the wording of the committees agenda they could not adequately word a recommendation in relation to some governance issues which had been raised by the committee. It was noted that as Herefordshire Council was the body responsible for the governance of the Marches LEP recommendations on relation to the need for the LEP to function in an open and transparent fashion, and for Herefordshire Council to communicate this in a concurrent fashion were not within the remit of this meeting of the general overview and scrutiny committee.

 

Resolved that:

 

a)    The committee commend and encourage further the engagement of small businesses within the activity of the Marches LEP.

 

b)    The work of the Marches LEP in cooperation with neighbouring and other Local Enterprise Partnerships, in particular the equivalent bodies across national borders be encouraged.

 

c)    That the Marches LEP ensure that the delivery of accounts and reporting is made more clear and the availability of such documentation to the public is ensured.

 

d)    That the committee recommend to the board of the Marches LEP that a summary of accounts be published in conjunction with the annual report on the activity of the Marches LEP.