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Revitalising Blackpool Background It was 1995 when Blackpool’s Economic Development Strategy/Policy became more of a regeneration policy. Instead of working with individual companies and looking for inward investment to disparate sites across the borough the money became available to be more proactive in our approach to growing the economy and improving the town. This original proposal in the mid 1990s was launched as a strategy to diversify Blackpool’s economy away from tourism. It has in many ways had some measure of success. The creation of two significant investment sites in the south and north of the town has led to the creation or relocation of over 6,000 jobs to those locations over a 10-15 year period. This work did however use up a significant portion of all the employment land available in the borough leaving us to look at less attractive sites. This is demonstrated by the relative inequality of the 2 sites developed. The Business Park at Squires Gate which is larger and far more accessible has delivered more than 5,000 of the jobs listed above. In turn the Technology Park in the north has delivered around 1,000 jobs it is far less accessible and still has significant areas that have not been developed despite promotion of them and the passage of time. In terms of physical regeneration the town has continued to look at improving its assets and these have also yielded very good job outcomes. The Hounds Hill extension, promenade works, leisure assets purchase, many new budget hotels, and gains in the civil service in the 1990s and early 2000s have seen a similar number of jobs created in the retail and tourism sectors. he public sector also accounted for growth in the region of 5,000 jobs over the same period. In total these initiatives have created, relocated or preserved between 15,000 and 20,000 jobs in Blackpool but an analysis of all else that has happened does reveal some weaknesses in approach. For example, the Council has helped to encourage the relocation of many traditional office based jobs out of the town centre to purpose built offices on the edge of town. This has driven the significant changes to areas like Springfield Road. The ambition to move to non tourism and preferably manufacturing roles has not been entirely successful with many of the jobs on the Business Park for example being lower paid warehousing, office and call centre roles. Whilst these are all year round jobs many are also part-time. Manufacturing has grown on the business park but the area has lost significant players with TVR being the best known example. The technology theme in the North of the town did not really emerge and the Business Park does not have a specific cluster of industry to attract like minded businesses there. In the 1990s and early parts of the 2000s the Council was able to attract people to Blackpool on price with many sites closer to the M6 being much more expensive. Following the move to recession land prices have become much more competitive and competing on price alone is not now possible. By 2001, the Council had recognised that the solution for Blackpool was not going to be based purely on manufacturing and commerce and developed a new approach moving more towards tourism and the visitor economy as the way forward. The Casino story came and went but this inevitably meant that the Council had been focussing less on the approach that say East Lancashire was taking building up its portfolio of assets to support small business and using the money it brought in to deliver a much more in line with national policy approach of industry and commerce. In many areas grant regimes and Local Authority ownership of starter units etc is common place. Many areas had far more land to go at to develop further business parks and employment parks. The next change of emphasis for us came with the LEGI (Local Enterprise Growth Initiative) Funding in 2007 which enabled the Council to build a base of support for all business. This is where the initiatives like Start Up, Positive Steps and Blackpool Build Up were born. These latter 2 programmes focus on getting people into work who either do not have the appropriate skills or are not “work ready”. Since then the Council has developed further programmes and tapped into neighbour’s initiatives to support more traditional business (see below). As the recession took hold the Council used its relatively small remaining regeneration resources to launch direct support for businesses that either wanted to sustain or grow but were no longer receiving support from the banks. This was both loan and grant funding under 3 target themes or areas and had some significant successes. For example our support to Laila’s Fine Foods has helped them not only to sustain themselves but also to grow their market and output. As a major supplier to Morrisons, ALDI, ASDA and LIDL they now employ just under 200 people which is more than twice the number at the point of the fund’s involvement. This support was not just financial but also saw a major restructuring of the management team to bring in expertise in finance and other areas. There are other smaller success stories too with the relatively small investment seeing a return of more than 500 jobs either created or safeguarded as a result of the intervention. The Current Position The economic outlook for the UK is uncertain, with national forecasts showing continued low growth at best, and considerable north-south variations. The need for newly established Local Enterprise Partnerships (LEPs) and Local Authorities to lead and contribute to local economic growth has never been more pressing. With limited resources this is an uphill struggle demanding ever more creative solutions. The nature of public sector funded business support has changed radically in recent years, not least with the closure of regional Business Links – the former gateway to national business support. The overriding national objective is to support businesses with growth potential, to create the wealth, jobs (and tax revenue) needed for the future, and to rebalance the economy in favour of private sector jobs. The government has introduced a number of measures to enhance economic growth and support business growth, a number of which are set out below:- Encouraged the formation of private sector-led Local Enterprise Partnerships (e.g. Lancashire LEP) which are now being tasked with developing economic growth plans. This may result in further devolved resources to LEPs in addition to the £730 million Growing Places Fund already devolved to support infrastructure projects. Set up a £2.6bn Regional Growth Fund where businesses can apply direct for grant aid towards investment and job creation projects. Designated some 24 Enterprise Zones, including the Lancashire Enterprise Zone at existing BAE Systems sites at Samlesbury and Warton, offering 100% business rates relief (worth up to £275,000) over a 5-year period, simplified planning, and in some areas (not Lancashire) enhanced Capital Allowances for investment in plant and machinery. City Deals whereby designated cities have been given more powers to invest in growth, more freedom to support local businesses, powers over budgets and resources to drive infrastructure development, and to deliver the skills training local people and businesses need. Preston has recently been given the opportunity to submit its case. Attempted to improve access to finance for small and medium sized enterprises post the financial crisis through several schemes (Enterprise Finance Guarantees, Enterprise Capital Funds, Business Finance Partnership, UK Export Finance, and just announced, a Business bank). The North West Access2Finance team can help broker finance packages for Small and Medium Sized Enterprises. Investment in innovation, university-industry links and Research and Development via the national Technology Strategy Board. The GrowthAccelerator – set to help 26,000 small and medium sized enterprises achieve high growth over three years, through coaching and peer to peer support. Response to the Portas Review and the welcome but modest High Street Innovation Fund (awarded to Blackpool town centre) Encouraged new start businesses through national campaigns, mentoring, and start up loans to the unemployed (New Enterprise Allowance) and young entrepreneurs aged 1830 (StartUp Loan Fund). Expanding the role and capacity of UKTI (exporting and inward investment) Investing in the roll out of superfast fibre optic broadband. Expanding apprenticeships; and piloting a £340m fund designed to encourage large employers and small and medium enterprises to design and take ownership of their skills needs (Employer Ownership of Skills). Tourism sector employers in Blackpool are attempting a second round bid to form a Tourism Academy. Many of these initiatives are referred to in the government’s growth plans, industrial strategy, and recent Autumn Statement - which also confirmed that Local Enterprise Partnerships are to be given increased influence over a single pot of national resources from April 2015 (part of the government’s response to the Heseltine’s review) – subject to producing compelling growth strategies, investment programmes and bidding documents. Lancashire Wide Schemes As a result of improved joint working with colleagues across Lancashire we have been able to take advantage of a number of Lancashire wide schemes that have emerged in the last couple of years. These have been developed with funding from some of the above named schemes, and the European Regional Development Fund. Accelerating Business Growth – a £7.5m capital grants fund aimed at supporting small and medium sized enterprises manufacturers and other business to business sectors to invest and create jobs (devolved Regional Growth Fund pot). Lancashire Business View’s Enterprise programme – a Regional Growth Fund programme worth £4m aiming to help high growth small and medium sized enterprises in their first 3 years of trading with capital investment and job creation. Lancashire Innovation Network – an European Regional Development Fund funded project that assists small and medium sized enterprises with new product and process development with a small grant fund. Lancashire Business Growth Hub – A £7m scheme to help promote business growth in Lancashire has won funding from the European Regional Development Fund. The Lancashire Business Growth Hub is intended to bring together a package of support that will enable Small and Medium Sized Enterprises with high-growth potential to access practical specialist advice, coaching and mentoring. Set to launch in spring 2013. Lancashire Superfast Broadband – a large project aimed at connecting up the county with a superfast broadband fibre infrastructure, including rural areas; helping small and medium sized enterprises to grasp the potential impact this could have in the way they do business (via a £3m business support programme). Start Up Lancashire – an European Regional Development Fund programme supporting eligible new start and social enterprise businesses. The Council’s Get Started programme forms part of this offer, exclusively delivering start up support in Blackpool. Blackpool Council led Interventions Blackpool Council plays its own part in supporting local businesses complimenting national and regional initiatives to drive up enterprise and economic activity. These have fallen within the following areas:- Direct support to the tourism sector, especially the accommodation sector (capital grants, business advice, accreditation support, and enhanced resort knowledge via the Welcome to Blackpool programme (now Fylde wide)); New incubator and small business space (Enterprise Centre, FYCreatives, 81 Central): Capital Grants towards commercial improvements, restoration and arts projects within Blackpool town centre (Townscape Heritage Initiative, Invest in Blackpool, Culture Shops), and other Small and Medium Sized Enterprise projects. StartUp finance and advice via Get Started initiative assisting several hundred new start businesses; young entrepreneurs (HERO, Oracle Young Enterprise Challenge) and support to social enterprises (Social Enterprise Solutions); Demonstration Wireless network in Blackpool town centre (Wireless Blackpool) assisting businesses; and meeting the needs of conference and event organisers; Mentoring (Guardian Angels) and high growth coaching (Skills for Success) programmes for growth oriented SMEs; Providing recruitment and skills assistance to key employers, and construction contractors – bridging the gap between the needs of unemployed residents and businesses (Positive Steps, Blackpool Build Up, Aviation Academy) Developed a successful vehicle for public-private collaboration and debate in the Blackpool Business Leadership Group. Improved communication with local businesses via an online hub – detailing relevant business support and regeneration news (Blackpoolunlimited.com); Business Brokers – We have a small team of people who are informed about all of the above opportunities and that are already working with 100s of businesses in Blackpool. The Council has sustained and grown this team despite the recent pressures on budgets and is committed to continuing this support. It is believed that this demonstrates that there are quite a lot of opportunities for us to help businesses to sustain and grow. There is often a feeling in Blackpool that there is no support available. As a result of many of these initiatives being designed to work across the country there are always going to be businesses that do not readily fall into the appropriate category. Retail and Tourism are always a challenge for these programmes. We also struggle to provide financial assistance for businesses that merely wish to sustain themselves rather than grow as clearly this will not deliver the much desired job outcomes that Government requires. A more detailed analysis follows. What are the gaps? The government and European funded programmes are fairly narrowly focused on Small and Medium Sized Enterprise growth companies (which represent a small percentage of business stock), and certain industry sectors which tend to exclude retail and tourism. Lancashire County Council (LCC) favours five key sectors as having potential for growth: aerospace, advanced manufacturing, digital and creative, energy and environmental, and finance and professional services. Tourism is not a target for growth per se, but Lancashire County Council does support Marketing Lancashire (formerly the Lancashire and Blackpool Tourist Board). Many of the Council-led initiatives are no longer active post Blackpool’s Local Enterprise Growth Initiative (LEGI), although a legacy still remains. The Council is still able to: Support new start companies via the Get Started initiative, shortly set to launch an associated mentoring scheme. Offer low cost small business space via FYCreatives, 81c, and the Enterprise Centre (which is under review to see how the centre can be better utilised). There is a perceived gap however in the availability of low cost flexible light industrial units; and a proven demand for studio space for artists and craft based enterprises. Deliver recruitment support via Positive Steps; and fill general construction jobs in partnership with the College-led Build Up project. Offer a signposting and advice service to Small and Medium Sized Enterprises to encourage take up of national and local support and funds. This has worked well of late, but a widening of employer engagement across the Fylde Coast is necessary for its future success. Marketing Blackpool offer some business support to the accommodation sector in terms of advice on national accreditation, and Welcome to Fylde courses. A Licence to Trade project is under development to assist smaller mainly unaccredited providers to stay on top of legislation requirements (health and safety, food hygiene, etc.). This will complement the range of courses offered by the Council’s Public Protection service. Small and Medium Sized Enterprises that are not achieving high levels of growth, or are striving to maintain turnover and market share, will struggle to access or see the relevance of many of the national/local programmes on offer. Many are still struggling to access finance from banks that have tightened up on lending criteria as well as overdraught facilities. Lack of finance is often cited as a major constraint on investment and growth. Business growth and decline can occur in virtually any sector, so it is hard to target and depends on a number of factors. Many have tried but failed to pick winners in the past. Blackpool’s economy can often witness businesses starting and failing within a single season, often ill-planned, poorly resourced and managed. The future of town centres is the subject of significant debate as the number of high street casualties mount up. Shifting consumer preference towards internet purchase has long been predicted, but appears to have finally reached a tipping point. Blackpool town centre has to find ways of enhancing the retail offer with a cultural experience, as well as measures to develop an early evening economy. The challenge is even higher for South Beach district centre where traders have formed a Business Forum to exchange ideas and develop new ideas for investment. South Shore market has a high turnover and vacancy levels and is losing many of the staples you would expect to see in a traditional market. In considering investing further, the Council should avoid duplicating what is already available, maximise the use of its own assets (skill sets, buildings and equipment), and target resources to viable projects that can achieve real economic impact. Blackpool Investment Fund Whilst Blackpool Council will never be able to provide all of the answers to business difficulties during the recession years we can look to using what resource we have to help to fill some of the void identified above. A combination of interest repayments accrued from Council business loans together with the high street innovation fund has generated a fund of circa £0.5m that can be invested further in key priorities. There are a number of options in terms of how such a fund could be used:1. 2. 3. A revolving loan fund that could cover an investment gap (including equity investments); A grant fund towards capital investment in key areas A combination of the two – a revolving loan and grant fund. Option 3 offers the greatest flexibility with the grant or grant-loan ratio dependent on the needs of each case for investment. Other than £80,000 to be ring fenced for Blackpool Town Centre (a requirement of the High Street Innovation Fund) it is suggested that the fund remain as a single pot whereby any future interest payments can be recycled for other investments, or the fund topped up as required. Investment proposals are to be encouraged for the following priority areas:1. Blackpool town centre – commercial or cultural investment adding value to the existing retail offer. 2. South Beach District Centre – supporting the growth of independent traders with sustainable year round business models. 3. Investing in growth businesses – loan funding towards a financial package to enable an investment project to proceed from established businesses trading for at least 36 months e.g. loan funding needed to unlock external capital grant via the Accelerating Business Growth fund, or Lancashire Business View (LBV) Enterprise Fund. 4. Start Ups with growth potential – subject to quality of business plan. Referred from the Get Started service. The Blackpool Investment Fund will be: Overseen by a senior level Investment Panel guiding investment decisions, and the grant-loan mix. Interest rates will be comparable with commercial rates – business plans will be required. Appraisal of plans will be undertaken in-house under £50,000, with external specialist advice sought on a case by case basis if required. Large loans may be secured via personal guarantees or a charge on a company asset. There will be a minimum fund investment of £5,000 with no set maximum. A maximum loan-grant fund intervention of 25% of total investment value. Job creation/safeguarding will be a requirement of any investment decision. The fund will be administered by the Partnerships and Business Development team, with Public Relations and business plan appraisal support from the Economic Development and Finance teams.