Telling the truth about SME life today

A manifesto for localising Britain

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Michael Heseltine’s recent ‘No Stone Unturned in Pursuit of Growth‘ report made good reading.

It talks of turning the clock 100 years to when local areas looked after their own economy – “Devolve decisions from Whitehall to local areas… Local people making local decisions on jobs and growth…”

In principle, I agree with all this wholeheartedly, but I also have some concerns and warnings. Particularly, these focus on the effectiveness of local enterprise partnerships, and the business attitudes within local government.

First, some background. In my business, based in Stratford-upon-Avon, we’ve had an epic year: DCS has grown sales by £20m to £150m, creating 50 jobs. We’ve invested £1m in new offices for, which will create ten jobs. And we’ve started a new company called Deal-Track, creating five jobs.

Recently, I resigned as chairman of my local Warwickshire local enterprise partnership (LEP). During my time, I believe I brought private-sector energy and urgency to the role. However, it was taking up three days a week of my time, and I was simply not interested in fighting silly political battles. The public sector will never win over with business people if they try to bully them

Wanted: urgent LEPs

One of former deputy prime minister Heseltine’s main recommendations was that local enterprise partnerships (LEPs) should develop their own local economic plans.

After an 18-month chairmanship of my local LEP in Warwickshire, I have close-up insight.

First, I believe that LEPs are the right way forward of course they’ll have teething problems; there will be LEP winners and losers.

However, a recent Work Foundation report said that LEPs risk losing business engagement. A number of business partners interviewed anonymously for the report expressed “acute frustration at the slow progress” that their LEP has made to date. Some businesses warned that they planned to review their involvement within the next six months if there was no change.

The key to LEPs’ success is they must engage with business, at every level. The LEP boards need strong business leaders who are prepared to put in time and effort, and not just be seen as figureheads. They must not become talking shops and, above all, should not be public sector-led.

LEPs also need to engage both large and small businesses, and then keep them involved. Large businesses tend to be the focus within LEPs but they, too, need small businesses to do well: SMEs and high-growth companies spend money on products, new offices and are often the customers and even suppliers of those large companies.

LEPs need both muscle and money in my case, I spent 18 months with a lack of administration staff, and a lack of funding to employ and choose my own team. The 18 months were spent campaigning and pleading for government funding, which finally came through this year a waste of time on what was, surely, common sense.

Why no incentives to generate jobs?

We are two-and-a-half years into this government, and its aim to create “growth and jobs” hasn’t been an easy ride. They are fast realising that jobs don’t grow on trees.

So it’s truly amazing that local and district councils are not measured on their effectiveness in generating jobs. Is there a ?jobs tracker” monitoring their performance in employment-generation” Absolutely not. In fact, business growth and jobs don’t even come on their list of things to do!

Many councils have no “business development officer” and, more worrying, many have no “jobs and growth” plan at all.

This situation is likely to get worse over time. With an ageing population likely to be change-averse, not much new is likely to happen over the coming years. Few houses or businesses parks will be built, and, therefore, few jobs are likely to be created.

Add “jobs and growth” to council targets. It would make a huge difference.

A new (unflawed) system of local government

To create jobs and growth, we have to “think local”.

District Councils are key to success or failure in boosting jobs and growth. They are basically responsible for allocating land for employment; they are responsible, for example, for parking charges on our high streets. These things can make or break an area.

However, there are too many of them, and they take too long to write (let alone deliver) local plans. They don’t respond to letters and make excuses why things cannot be done. A business could not operate like this.

We need unitary authorities. That means slimming down the number of bodies and getting one organisation to cover a larger area. When you’re trying to cut costs, it make sense to consolidate.

Let’s focus on the real local issues

Planning is, in my view, the UK’s number one barrier to growth.

Unfortunately, planning departments are often unhelpful, obstructive and even aggressive. This has serious economic consequences: I am certain that millions has been invested in other countries due to businesses and individuals just becoming fed up with the UK planning system.

Extensions to houses, new houses, new businesses all of these will create construction jobs as well as expenditure. The construction industry could be so busy if planning was made easier.

In my local town, Stratford-upon-Avon, we have formed a business group called Stratford Vision. The aim is to create a focus on jobs and growth, and to highlight the area’s real problems: lack of affordable houses (the number one request from local businesses in our area who are unable to grow as they are always struggling to get staff); poor transport links so that many employees cannot (or cannot afford) to get in and out of work; and the demise of the high street.

Parking charges are another big issue. Why can’t we have one or two hours’ free parking in towns” Out-of-town parking is free, so why not in towns, too” It’s unfair and it’s killing our high streets. The revival of high streets may be as simple as some “free parking”.

Yet, right now, district councils are run by part-time councillors on £4,000-a-year salaries (not many high-flying business leaders will go for that job!), who are focused on getting re-elected. For them, winning votes is all about playing it safe, making sure you aren’t too controversial, hitting Whitehall targets for bin emptying and recycling; and keeping your nose clean.

Result: Stratford has the best record for bin emptying but the worst record for our planning decisions. Twelve per cent of our high street is unoccupied, and our shopping mall is only 48 per cent occupied.

My messages to councils: work with business to create change; focus on the real issues, and not on refuse collection targets!!

Denys Shortt is the founder and chairman of DCS Europe and the winner of the 2011 Local Hero of Enterprise award at the Growing Business Awards.



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