31 January 2020: Brexit resilience testing, risk analysis and audit – sound familiar? These skills, second nature to accountants, are at the heart of Local Enterprise Partnerships’ (LEPs’) endeavours to support business. Jo Murray, from the Institute of Chartered Accountants England and Wales (ICAEW), speaks to Mark Bretton, Chair of the LEP Network and Hertfordshire LEP.
An independent consultant with 36 years’ business experience (including time spent on some very high-profile government programmes) and former Managing Director/Partner of the professional services firm Accenture, Mark was appointed Chair of Hertfordshire LEP on the same day as the Brexit referendum. His tenure as Chair of the LEP Network – the organisation that co-ordinates and helps set the future direction for the network of 38 LEPs – started more recently.
He is an expert on the synergies between the work of the chartered accountant and the objectives of the LEPs. After all, LEPs have been channelling public funds since their inception 10 years ago and have been accountable for delivering huge projects against metrics within defined processes. Again, sound familiar?
Chartered accountants play an important role in governance, business case appraisal and incorporation; and ICAEW and LEPs have been present together at some very prestigious top tables, such as the Industrial Strategy debate. They have also worked together on promoting key sectors on projects like 'Boosting Finance for Engineering & Technology' and 'Creative Industries – Routes to Finance'. Further, ICAEW and LEPs have combined on a regional and local basis as part of ICAEW’s Local Industrial Strategy consultation process.
LEPs and Brexit resilience testing
Top of the list of skills LEPs are mining from chartered accountancy is post-Brexit resilience testing: something accountants grapple with daily. “Resilience means different things to different companies,” Mark observes. “But it always helps to share best-practice and pool experience. Being in business can be very lonely.”
He points out that the business information channel runs both ways, from business up and from government down with LEPs in the middle. “LEPs want to have influence over government policy and business practice but we are not political. I’ve been in and around 3 ½ years of Brexit and what it means for business, but we are not here to make a judgement on remain versus leave. We are here to make sure the business voice is heard alongside all the others. That is a consistent voice across all the LEPs in England.”
The voice of business is channelled, at a practical level, through the LEPs’ growth hubs which have been intrinsic to post-Brexit planning and resilience. In the financial year 2018/19, LEP growth hubs engaged nearly a million local businesses, delivered in excess of 58,154 business interventions, attracted 477,662 unique visitors to their websites, helped 4,136 individuals start a business, directed 4,550 businesses towards sources of funding and grants, boosted 3,359 into skills/leadership and management programmes, and propelled 1,339 businesses into innovation and R&D programmes. That is a lot of activity and much of it performed quietly behind the scenes.
And there have been some notable outputs. The Marches latest figures reveal businesses across the region have enjoyed an £8.6m growth dividend in the last three years and can expect another £30m shot in the arm over the next three years. The Lancashire LEP Growth Hub has helped accelerate business growth across the region with its Growth Mentoring programme. The Hertfordshire Growth Hub, in partnership with other local organisations, supported over 4,000 businesses in 2018/19, referred over 2,600 businesses to other support provision in the county and created nearly 250 jobs. Even more impressive is the impact figures from the Get Growing Evaluation: with £12.2m NPV GVA between January 2016 and September 2018 and a £1.00:£8:60 return on investment.
Now, Hertfordshire LEP is working closely with London and South East LEPs via their respective growth hubs on the "Ready 2020" campaign to make businesses aware of the online and face-to-face support available during the Brexit transition phase and ensure they are as resilient as possible. The campaign covers recruitment and employment, trading relationships and regulation. It will encourage companies to think about how to manage risks and pursue opportunities. Support will be provided by a combination of digital resources, events across the LEP catchment areas, and business advisors from local growth hubs making themselves available.
Mark comments: “It is all about helping businesses move forward to the next phase. We will reach three quarters of a million businesses in London and the south-east and, at the same time, provide a temperature check to government on what it is like being in business in the new environment.”
LEPs’ distinct knowledge of their local economies means they are uniquely placed to exploit the opportunities that Brexit brings, and to respond to local challenges business face. Hertfordshire LEP is reporting back to BEIS on a weekly basis to provide a comprehensive early warning system on potential economic shock.
LEPs can also play a vital role in helping firms export. For example, Leeds City Region LEP is helping build business partnerships in China, particularly in the retail/e-commerce sector. Hertfordshire LEP has hosted trade delegations, in particular from China and India, showcasing its key sector strengths with visits in 2019 to Rothamsted Research (agri-science), Stevenage Bioscience Catalyst and the Cell and Gene Therapy Manufacturing Centre (life sciences).
LEPs as guardians of good practice
In common with chartered accountancy, LEPs are all about governance. Mark points out that LEPs are incorporated with finance committees and boards built significantly from the senior management teams of local businesses. They are leading by example.
“We expect LEPs to be run like businesses,” he says with his LEP network hat on. “Across England, we have secured £9bn UK funding and £2.5bn European funding. We have also secured £7.5bn private investment. We make sure every project is business-led with outcomes, metrics, value for money and delivery tracking.” Clearly, this is a shout-out from LEPs to chartered accountants to get on LEPs’ boards and bring with them skills and business best practice principles.
Mark explains that the LEPs bring together public, private, academic, local, national, supra-national and not-for-profit organisations to make sure “all projects are compelling and relevant”. He says: “We need the voice of business to be present within LEPs. Sometimes there is tension; but tension is healthy. We must take a business-led approach to delivering and governing projects".
Coordination through the LEP Network
Mark is at pains to point out that the LEP Network is not there to govern the LEPs but to coordinate them. It will have a vital role to play as the new funding model stretches out beyond 2020 after the Brexit transition period and into the UK’s separation from the EU. “We will refresh the LEPs’ approach to funding,” he says. “And we will make sure information is shared.”
Of course, the Local Growth Funding cycle is due to end soon and government is yet to share details around the UK Shared Prosperity Fund, but LEPs are clear that decisions that have an impact on local businesses are best taken locally rather than at Westminster.
In the meantime, the LEP Network has a keen eye on the green agenda. “We want to make sure that every strategic economic plan has a strong decarbonisation element to it,” Mark says. “All the LEPs are onto it. We are not interested in short-term fixes.” LEPs are working hard on developing sustainable strategies to help tackle climate change at a local level through their local industrial strategies. They are already focussed on the decarbonisation agenda and are taking practical steps to map out a low carbon future.
LEPs are also collaborating to put local energy strategies into action that will result in greener local economies e.g., the Energy Strategy for the South East and the Northern Powerhouse 11 Energy and Clean Growth Report. Recently, the Great South West partnership launched its business growth prospectus to drive a £45bn uplift to the South West economy. The Yorkshire, North Yorkshire and east Riding LEP has taken the lead on Yorkshire’s approach to climate change and Hertfordshire Innovation Quarter is Hertfordshire’s new Enterprise Zone which has a clear green framework. The Greater South East Energy Hub is a collaboration of 11 LEPs, including Hertfordshire, working together to increase the number, scale and quality of local energy projects being delivered across the greater south east region of England.
As we move into uncharted waters, the LEP Network is adapting to a rapidly challenging political and business climate. The LEP Network is directly supporting collaboration between LEPs on programmes such as the Northern Powerhouse and the Midlands Engine. It is positioning itself as a more dynamic organisation, steering LEPs on future delivery, building closer relationships with key stakeholders, and championing their impact and value across the country.
The skills that chartered accountants possess are valuable to any LEP board.Learn more about ICAEW Learn more about the LEP Network