Agenda item

To seek approval to extend the Council’s SME Growth Fund to 31 March 2020 in order to continue to support businesses growth across the District.

To receive an update on the delivery of the Fund to date, details suggested amendments to this and agree to fund the extension by a £250,000 allocation from the existing SME Growth Fund budget.

To agree to receive a future report with options for the use of remaining funds within the initial SME Growth Fund budget for other economic growth activities.

RESOLVED that –

(a)     the Council’s SME Growth Fund Scheme be extended to March 2020 and that the scheme objectives set out in the Portfolio Holder’s report be agreed, with a focus on job creation and growth outcomes;

(b)     the extension be funded from £250,000 of the allocation from the budget allocation already in place;

(c)     the scheme is opened up to all business sectors (with the exception of retail);

(d)     the scheme funding levels are split into two streams, namely Minor (£3,000  - £15,000 and Major (£15,001 - £150,000) grant programmes;

(e)     the intervention rate of up to 50% will be applied to all applications;

(f)       the Corporate Director (Planning and Regeneration) in consultation with the Head of Finance, Revenues & Benefits, be authorised to agree Minor applications (awards of £3,000 - £15,000) which will be published as Officer Decisions;

(g)     the current approval of Major applications (£15,000 - £150,000) via the Grants Panel is maintained and that membership of the Grants Panel is unchanged as set out in the Portfolio Holder’s report;

(h)     the Corporate Director of Planning and Regeneration, in consultation with the Portfolio Holder for Investment and Growth, be authorised to update the scheme’s Project Appraisal Manual and associated materials in order to reflect the changes detailed in the Portfolio Holder’s report; and

(i)       a future report be brought forward with options for the use of the remaining funds within the initial SME Growth Fund budget to support other economic growth activities.

There was submitted a detailed report and appendices by the Portfolio Holder for Inward Investment and Growth (A.4), which:-

1)     sought Cabinet’s approval to extend the Council’s SME Growth Fund to 31 March 2020 in order to continue to support businesses growth across the District;

2)     gave an update to Cabinet on the delivery of the Fund to date, detailed suggested amendments to the Fund and sought Cabinet’s agreement to fund the extension by a £250,000 allocation from the existing SME Growth Fund budget; and

3)     sought Cabinet’s agreement for a future report to be submitted to Cabinet with options for the use of remaining funds within the initial SME Growth Fund budget for other economic growth activities.

It was reported that the SME Growth Fund was one of the key ways in which the Council provided direct support for businesses through grant support to facilitate growth. Support was aimed at small businesses across the District, recognising the vital role that they played in underpinning the stability and growth of the local economy though the provision of services and creation of employment. The SME Growth Fund responded directly to the corporate goals identified within the Council’s Corporate Plan 2016-2020 and to the objectives of the Council’s Economic Development Strategy (EDS). Provision of the Fund also accorded with the Council’s community leadership role.

Specifically the scheme responded to the following Corporate Goals:

Employment and Enjoyment

• To support business growth
• To enable better job prospects

Our Priorities and Projects 2017/2018, Corporate Director (Planning and Regeneration Services)

• Attracting and sustaining employment and business
• Connecting our residents to business opportunities.

The scheme also responded to the following objectives of the Council’s Economic Development Strategy:

• Objective 1: Supporting Tendring’s growth locations by intervening in areas where the potential for economic growth is highest and where there is a strong case for intervention particularly (but not exclusively) in Harwich, Clacton and West Tendring;

• Objective 2: Targeting growth sectors, which are best placed to support growth and job creation within the District’s economy; and

• Objective 4: Supporting modernisation, diversification and growth within the business base, improving innovation and inward investment and creating dynamism in the economy that will make Tendring more competitive and resilient to national and international ‘shock’.

Cabinet was reminded that, to date, five businesses had been supported with awards totalling £138,250. This had created 19.5 FTE new jobs, safeguarded 3.5 FTE and leveraged £262,694 from the private sector (including £93,000 bank finance) and this was felt to be a very positive return.

Members were advised that the above had been achieved from eleven full applications, demonstrating that the scheme delivered very positive outcomes. There had been over 100 initial enquiries about the Fund and this demonstrated a positive return from the promotion of the Fund. However the conversion from enquiries into awards made was low and one of the key reasons for this was that the enquiries were from businesses not operating in one of the targeted key sectors.

Having reviewed the operation of the scheme it was felt that changes could be put in place which would deliver an increase in the take-up of the grants available and support greater growth across the Tendring business base.

The proposed changes to the scheme were summarised as:

•      remove the focus on a specific number of key sectors and promote it to all business sectors (except retail) - the main focus would be job creation and business growth outcomes;

•      change the funding levels within the scheme to create a Minor (£3,000 - £15,000) and a Major (£15,001 - £150,000) grant programme with a maximum intervention rate of 50% across both programmes;

•      authorise the Corporate Director (Planning and Regeneration), in consultation with the Head of Finance, Revenues & Benefits, to agree Minor applications (awards of £3,000 - £15,000);

•      retain the Grants Panel for Major applications (£15,001 to £150,000) which would continue to meet on a virtual / electronic basis thus streamlining the process;

•      redesign the application forms and process to ensure that it was streamlined and did not include overly excessive stages of administration for the businesses and the Council.

Cabinet was informed that the type of activities the Fund would seek to support was outlined in Appendix 1 to the Portfolio Holder’s report and Appendix 2 to the provided a flow chart outlining the stages of the application process.

It was reported that the revised scheme would be funded by a £250,000 allocation from the budget approval already in place and that it was estimated that the revised SME Growth Fund would generate approximately 20 grant awards, create an additional 40 FTE jobs and leverage a minimum of £250,000 private sector investment. This would be monitored through regular reports in line with the corporate performance reporting framework.

Members were advised that adopting the approach outlined above would free up the remaining £236,750 of the approved budget and that a future report would be brought forward with options for the reallocation of remaining funds to support other economic growth activities.

The Cabinet had before it details of the revised budget position which now set out a contribution from Essex County Council (subject to it agreeing to carry their contribution forward) of £53,000 to the funding of the proposed SME Growth Fund.

Having considered the information provided:-

It was moved by Councillor Fairley, seconded by Councillor Honeywood and:-

RESOLVED that –

(a)    the Council’s SME Growth Fund Scheme be extended to March 2020 and that the scheme objectives set out in the Portfolio Holder’s report be agreed, with a focus on job creation and growth outcomes;

(b)    the extension be funded from £250,000 of the allocation from the budget allocation already in place;

(c)    the scheme is opened up to all business sectors (with the exception of retail);

(d)    the scheme funding levels are split into two streams, namely Minor (£3,000  - £15,000 and Major (£15,001 - £150,000) grant programmes;

(e)    the intervention rate of up to 50% will be applied to all applications;

(f)     the Corporate Director (Planning and Regeneration) in consultation with the Head of Finance, Revenues & Benefits, be authorised to agree Minor applications (awards of £3,000 - £15,000) which will be published as Officer Decisions;

(g)    the current approval of Major applications (£15,000 - £150,000) via the Grants Panel is maintained and that membership of the Grants Panel is unchanged as set out in the Portfolio Holder’s report;

(h)    the Corporate Director of Planning and Regeneration, in consultation with the Portfolio Holder for Investment and Growth, be authorised to update the scheme’s Project Appraisal Manual and associated materials in order to reflect the changes detailed in the Portfolio Holder’s report; and

(i)       a future report be brought forward with options for the use of the remaining funds within the initial SME Growth Fund budget to support other economic growth activities.