Agenda item

The Committee considered a report providing an update on business grant activity and programmes being delivered or part funded by the Combined Authority since last reporting on 24 January 2018. 

After questions and discussion, the Committee learned that:            

·         The new Apprenticeship Grant for Employers (AGE) programme, which commenced in August 2018, differs from the previous iteration of the programme in that, with less available funding, the new programme will focus only on smaller businesses that have not previously had an apprentice and in specific subjects linked to priority sectors where there are skill shortages.

·         Micro businesses (with fewer than 9 employees) are eligible for apprenticeship funding as long as they can provide the right educational environment and support for the apprentice to complete qualifications.

·         The working definition of productivity that the proposed Productivity Pilot will use is the definition used by the Office of National Statistics (ONS). Businesses in the pilot will be asked to use the ONS's productivity measurement tool as a condition of funding at the start and end of their investment projects to enable a consistent approach to measuring the impact of the funding on each grant recipient.

·         The Inclusive growth criteria were developed by the LEP and Combined Authority for the Business Growth Programme (BGP) and have not been extended to all business grants schemes.

·         After a period of consultation on the principles of inclusive growth criteria, the Combined Authority and LEP agreed to evaluate the effectiveness of inclusive growth criteria which were ultimately adopted for the BGP programme over a six-month period, with a progress report due in February 2019.

·         Some business grants programmes are focused on outcomes other than job creation. The Resource Efficiency Fund has a focus on environmental targets and outcomes around reducing carbon emissions and Access Innovation is focused on the development of new products and processes.

·         In Appendix 2, the 'N/A – not applicable' figure for jobs created for the Apprenticeship Grant for Employers ('AGE II') is because the programme had only just restarted (in mid-2018) and has not yet begun producing outputs. The previous iteration of the programme which ended in mid-2017 ('AGE I') produced 3,344 apprenticeships from 2,924 grants to businesses. 

·         In Appendix 2, the '0' figure for jobs created for the Digital Enterprise programme is due to outputs only being determined by external partners (Leeds City Council) delivering the programme 12 months after investment. The '1,156.6' proposed jobs figure included in Appendix 2 relates to the jobs that the businesses on the programme collectively expect to create over the next two years. The actual contracted jobs target for the LEP's share of funding was 75 jobs and Leeds City Council colleagues had confirmed that those 75 jobs have now been created and the target achieved.

·         In Appendix 2, the gap between actual jobs and proposed / target jobs was due to a technicality of reporting mechanisms. Some grant programmes report outputs after 12 months of activity, others are compiled by partners (such as Leeds City Council) before being shared with the Combined Authority. Officers were optimistic that by the end of the monitoring life cycles of the programmes, the targets would be met. For future reports, officers proposed to divide statistics between jobs created from projects that have ended and those still in delivery.

·         The government has committed to protecting funding for European funded programmes until 2021 and Combined Authority officers have proactively sought to bid for European funding again in 2019 to ensure successful programmes can be continued and new ones can be introduced. This includes programmes focusing on recycling and the 'circular economy'.

·         Leeds City Council was the only applicant to deliver the administrative grant-appraisal element of smaller BGP grants (under £50,000). Other partner councils expressed satisfaction with Leeds City Council's delivery of that element of the BGP programme on behalf of all Leeds City Region councils to date.

After further discussion, the Committee agreed that:

·         Inclusive growth and commitments around disabilities, mental health and wellness at work should be a central feature of all criteria for business grants programmes and should not be limited to larger grant awards or be relegated to an option from a wider list of possible commitments.

·         Greater consideration should be given to strengthening environmental commitments in core criteria, target outputs and outcome evaluation for grant programmes in future.

·         A business grant / support scheme aiming to promote sustainable recycling and reduce use of non-recyclable materials should be considered for development.

·         Although external funding requirements necessitate a large focus on meeting spending targets and measuring numerical outputs such as jobs created, the Committee is keen to see a greater emphasis on monitoring and evaluating the outcomes arising from outputs. For instance, determining how many of the 3,344 apprenticeships created have led to full time, meaningful jobs in key sectors.

·         Outcome reports should be produced for each programme upon their completion to allow scrutiny members to better assess value for money and whether there have been, or likely to be, positive, long-lasting changes for local communities.

·         It would be useful to compare Leeds City Region's performance against other combined authority and LEP areas, such as Greater Manchester and Sheffield City Region, subject to available data of comparable programmes.

·         It would be useful to include a breakdown of funding sources for each programme and the associated risks related to funding in future reports.

·         Data should be collated as frequently as possible and there should be closer monitoring of outputs and performance, especially where third parties are involved in delivery, to ensure that data is as current as possible.

In conclusion, the Committee recommended:

·         That work should begin on exploring the extension of inclusive growth criteria to all current and future business grant programmes at all grant award levels and conclusions reported back to the Overview & Scrutiny Committee.

·         That, upon the conclusion of a business grant programme, a full outcomes report for each programme be produced for the Overview & Scrutiny Committee focusing on, but not limited to, inclusive growth, productivity, job creation, innovation, and environmental outcomes.

Resolved: 

i)     That the following recommendations be made:

1st)       That work should begin on exploring the extension of inclusive growth criteria to all current and future business grant programmes at all grant award levels and conclusions reported back to the Overview & Scrutiny Committee.

2nd)     That, upon the conclusion of a business grant programme, a full outcomes report for each programme be produced for the Overview & Scrutiny Committee focusing on, but not limited to, inclusive growth, productivity, job creation, innovation, and environmental outcomes.

ii)    That the report and developments since 24 January 2018 be noted and a further report on business grants be brought back to a future committee meeting so that the Committee can monitor progress against recommendations, outputs and outcomes.