Crunching the numbers
£2,000,000,000 The sum of bids for the first round of RGF
£250,000,000 The total RGF first round funding available.
Only eight times more funding sought than available. Decisions are expected from Lord Heseltine and associates in April. Many should prepare for disappointment. Rumour has it that BIS underestimated the enthusiasm of LEP response and initially only allocated one lonely individual to handle the incoming bids. 450 bids arrived in the end so a swift rethink was needed.
If they hadn’t got the message beforehand then one can only imagine the reaction on deadline day. Apparently BIS then had the brass neck to ask the RDAs if they wanted to lend a hand. Hopefully BIS has beefed up the resources and is now smoothly working its way through the bids. Maybe BIS can borrow some of the many consultants that CLG has not been cutting back on.
Heseltine was pretty clear on his road show about the criteria needed for a successful bid: new sustainable jobs in those deprived places dominated by public sector employment. In other words, Up North. It’s likely that a big slice of the bids will be swiftly rejected. Anything that doesn’t convince about private sector job creation or rank high enough in the deprivation indices should be getting short shrift. Clever LEPs in the south will have resisted the urge to bid in the first place. Brownie points to Hertfordshire and the West of England Partnership for example. They didn’t bid in the first round recognising the likely futility of such action. Their time and that of LEPs in better off areas is more wisely spent building structures of self reliance.
If your chosen economic geography is relatively advantaged then RGF is probably not your funding route. Worcester has plunged in with a huge bid total but I do wonder how well this will be received. Full marks for trying and maybe there will be some reward for ambition.
The big northern and midlands cities have tried to corner the funding with bids totalling tens of millions. Fifteen bids from Leeds for £100m. Nottingham with twenty bids for £137m. Manchester, Newcastle/Gateshead and Birmingham also vying for tens of millions.
Winners and Losers
Considering the short timescales that have existed between LEP approval and the bidding window for RGF, the bidders should be proud of their efforts and the Coalition should be breathing a huge sigh of relief that the response has been as strong as it is. Unfortunate therefore that most bids will be found crying in the corridors after the Heseltine X Factor treatment. Hopefully astute bidders will have developed proposals that may have a future without RGF. An optimistic note has been the engagement of the private sector in many of the bids and what seems a genuine promise of new investment and jobs. The excess of bids compared to actual funds available and the inevitable disappointment needs to be managed to ensure that private sector commitment is not weakened. If at first you don’t succeed…
BIS overall and LEPs individually must maintain the engagement of private sector partners. By that I mean real business people, entrepreneurs, innovators, employers and commercially astute SME owners. You know what I mean – real business people not bankers.
The banks have finally sort of agreed to do what they’re supposed to do and start lending and spending in support of regional growth. We must wait until the successful RGF bids are known to see what the exact value role of the banks will be. Rhetoric needs to be backed up with hard cash and reasonable lending terms.
Regions but Not as we Know It
One of the more jaw dropping recent announcements was the creation of six regional government teams having been repeatedly assured by ministers that regional arrangements are the wrong scale and don’t work in a Localist future.
We’ll have to keep an eye on these bodies to make sure that they do all the right regional things unlike those evil RDAs which did all the wrong things, obviously.
As a helpful starter, Vince’s new regional bodies should be tasked to support to LEPs. Not just those with successful RGF bids but also to work with the LEPs that didn’t bid for RGF or weren’t successful. LEPs know well enough that RGF is by no means the be all and end all. The partners in LEPs can draw on a variety of resources to support local economic growth including all those new fund raising flexibilities that the Coalition keeps promising. The new regional offices should prioritise support to LEPs to find these resources for growth. Equally important, they should be there to lobby upward for the needs of their LEPs and regions. There is a vast space between central government and local community empowerment. This is the place for LEPs to own with the support of the new government offices.