Agenda item

The Committee considered a report of the Executive Head of Economic Services providing a follow up to the business grants item considered by the Committee on 14 September 2018. The report included:

·         a performance analysis of the first six months of inclusive growth criteria for the Business Growth Programme (BGP),

·         an assessment of the implications of extending inclusive growth criteria to all business grants programmes and;

·         the proposed options for new core and inclusive growth criteria (appended to the report) for the Committee’s consideration. 

·         an update on implementation of the Committee’s other recommendations, suggestions and ideas on business grants put forward at the 14 September 2018 committee meeting.

The following were in attendance for this item:

·         Ben Still, Managing Director

·         Henry Rigg, Head of Business Support

Following questions, the Committee discussed:

·         How the current policy within the Apprenticeship Grants for Employers (AGE) scheme to promote higher wages for apprenticeships than the legal minimum and not penalise young people was welcome.

·         The importance of helping to combat the trend of apprentices being used as cheap, menial labour and protect apprenticeships as valuable alternative learning opportunities that lead to meaningful, long term work as a primary outcome.

·         That further work may be needed to analyse the profile of the businesses currently applying for and receiving grants to ensure that the right businesses, with the right practices and circumstances, are being captured by the grant programmes and allow any gaps to be remedied in future programmes.

The Committee requested additional information on:

·         How many grants have been given and jobs pledged for the Digital Inward Investment Fund since the publication of papers.

·         How many of the apprenticeships currently on the AGE programme are higher level apprenticeships and how many apprenticeships on the previous iteration of the AGE programme ( 2015-17) were higher level apprenticeships.

Regarding the new proposed inclusive growth criteria for business grants due for consideration at the LEP Board meeting on 26 March 2019, the Committee concluded that the LEP should consider the following recommendations:

1.    The Committee’s previous recommendation that inclusive growth criteria should be extended to all current and future business grant programmes at all grant award levels be maintained.

2.    In order not to discourage some businesses from applying because the real living wage requirement is too difficult, an additional programme of support and assistance could be put in place to help applicants rise to a level where they are able to meet the necessary wage requirement (within a certain time period). Another option is offering a reduced grant or withholding the full amount to applicants unable to meet the real living wage requirement (within a certain time period).

3.    In order to better support small businesses, the commitment to "pay all suppliers within 30-60 days" should be significantly strengthened and the required timescale be reviewed with a view to reducing it if possible. It was noted that some partner councils have adopted two weeks as the maximum payment window.

4.    Although a reduction in the required payment timescale might have a knock-on effect on a supply chain if a small businesses is required to pay their suppliers sooner than they are paid themselves, this issue was worth pushing for and Combined Authority and LEP could also take a leading advocacy role to promote the practice of paying suppliers on time to ensure the overall health of local supply chains.

5.    There should be a programme of support in place for each commitment to help applicants meet requirements and ensure there is greater uptake of the 'harder' commitments with a highly inclusive social outcome – such as employing people with disabilities or health issues. There is a danger that, if given a choice, applicants will opt for 'softer' commitments or commitments which come with further support and grants to help them further, such as the "energy audit" and "working with colleges / schools" – as the data from the first six-months review suggests.

6.    The commitment to "employ local people with disabilities or health issues" should be more strongly promoted to applicants and strengthened with a programme of additional support for businesses seeking to commit to that option. That commitment is one of the most necessary and inclusive options on the list with a high value social outcome.

7.    There should be a stronger commitment to promote, incentivise, support and monitor higher level apprenticeships paid at living wage levels that conclude in long term, good employment for young people.

Resolved: 

i)     That the report be noted and the Committee's feedback, conclusions and recommendations be considered further. 

ii)    That a supplementary note outlining the recommendations made by the Committee regarding business grants criteria be tabled at the LEP Board meeting on 26 March 2019.

iii)   That the additional information requested by the Committee be circulated to Members following the meeting.