1. How successful have the previous contracts been in securing effective business support services?

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1 SUBMISSION FROM WEST LOTHIAN COUNCIL 1. How successful have the previous contracts been in securing effective business support services? The current contract delivery has integrated broader public sector and private sector economic development provision providing greater added value to clients. This is demonstrated through the performance of the Lothian Consortium over the period of the current contract. Between 2007 and 2011 the Lothian Consortium supported 266 businesses into the Scottish Enterprise Growth Pipeline or DRM. During this period these 266 growth businesses projected additional growth in turnover of 699m and the creation of an additional 3082 jobs. The table below shows the actual delivery against targets for the numbers of businesses start up s supported between 2008 and August Actual 2008 to Aug 2011 Target 2008 to Aug 2011 Business Start Up's VAT potential Start Up's Between October 2007 and September 2011 the Lothian Consortium has delivered in excess of 1264 events and business skills workshops. Over this four year period this has resulted in around 17,700 clients attending individual events and workshops. Recent analysis of a sample of 191 clients attending events has shown that 94.3% reported overall satisfaction levels with these events and workshops as either very good or good. In the same survey 99.5% of respondents reported the trainers knowledge of the subject as very good or good and 99% reported the relevance of the event to their current position as very good or good In the most recent IBP Strategy and Research report, Business Gateway Quality Assurance Monthly Customer Feedback Quarterly Report April to June 2011, 90% of Business Gateway clients in Edinburgh and Lothian were either very or fairly satisfied with the service they received, which was one of the highest figures achieved across Scotland, and was 5% higher than the average national level of customer satisfaction (85%) The same report shows 92% of the Business Gateway clients in Edinburgh and Lothian s had their expectations met or exceeded by Business Gateway. This is 7% higher than the average national average of 85%. 90% of Business Gateway clients in Edinburgh and Lothian s felt that the support they have received from Business Gateway is of significant or some benefit to their business. This is 7% higher than the national average of 83%. 1

2 In January 2011 the Lothian Consortium was successful in securing ERDF funding stream Priority 2 Business Gateway Plus - South East Scotland. This program is primarily aimed at supporting sub growth pipeline businesses through the delivery of additional consultancy support in areas such as e-business, environmental and the third sector. Since the start of this program in January 2011 this project has supported 353 new enterprises as well as the creation of an additional 354 jobs. 2. What should comprise the core services in the new contracts, at a time when resources for local economic development, which are not ring-fenced, may be in decline? One to one advisor support is also essential in delivering specific advice and support to businesses at all stages of their development from start up s through to high growth businesses. One to one advisory support is also a critical element in delivering additionally through the delivery of relevant and effective advice to growth companies within priority sectors. In order to ensure continuity of the successful and effective business support delivered through the current contract a number of core services should be maintained and developed with in the new contracts. The Business Gateway website has been an excellent tool in delivering high quality business information to Scottish businesses. The range of one to many workshops have also been an excellent, cost effective, core business training provision, delivering one to many services (frequently in excess of 1:20 ratio), one to one specialist advice and one stop integrated services for SME businesses. In addition to the core workshops delivered to support start up businesses, there are increasing levels of demand for core business skills such as sales and marketing and bookkeeping, as well as e-business skills, such as social media and marketing. 3. What flexibility will be necessary within the new contracts to allow for changing economic circumstances? It is essential that future contracts are flexible enough to allow for local service delivery to be tailored to evolving local needs. Business requirements can vary across demographic areas and social groups, with variations between urban and rural areas, as well as across individual business sectors. Flexibility is also required in relation to payment points and contract delivery to allow future services to be adaptive to changes in economic and technological changes, such as the use of social media, over the period of the contract. Local Authorities and existing service providers must be involved in setting realistic delivery targets that reflect previous business start up and growth rates, as well as changes to the ongoing economic circumstances. Benchmarking against areas with similar economic circumstances may allow targets to be more flexible when the state of the economy changes over the contract delivery period. 2

3 4. What is the optimum length for the contracts? It is important that contract lengths support sustainability and continuity of service delivery, as many businesses engage with advisers over a significant length of time and this continuity can be threatened both by frequent re-tendering and by narrow definition of core services preventing advisers from engaging in meaningful post start aftercare. It is recommended that future contracts should be for a 3 year period with a 2 year extension period. 5. Are improvements to the marketing of services necessary to enable BG to reach out to all eligible potential clients? The majority of Business Gateway marketing spending remains a central responsibility while the output targets are devolved to individual contractors, which means that central decision can impact on local delivery. The ideal is a marketing hierarchy of complementary marketing messages, with national marketing programs focused on developing brand awareness and promoting core services, supported by local marketing programs promoting specific local events and services. Through Local Authority flexibility, Business Gateway marketing has developed under contractor influence to reflect existing and future client groups BG is looking to engage with. Over the period of the contract, local contractors have developed greater use of social media marketing with added value created through the development of Biz Edinburgh, Biz West Lothian and Biz East Lothian social media pages.. 6. How can the contracts a minimum quality of service provision across the country? It is important for contracts to have a focus on the delivery of economic impacts and outcomes. Contracts should contain levels of standardisation through the delivery of core services to ensure continuity of services and quality of delivery. Currently all Business Gateway advisors are trained to a high standard through the ILM Premier Advisor training which ensures delivery of a high level of professional business advice. Local stakeholder involvement in contract delivery ensures that services are tailored to local business needs. Existing business organisations such as Chambers of Commerce and the FSB have a role to play here but Local Authorities are also important as small businesses are often vocal constituents and councils can assist in ensuring provision meets local requirements. The Business Gateway web site also provides a consistent form of business information to all Scottish businesses. 3

4 7. Should/must BG contracts be based entirely on the Scottish Government s economic strategy or is there room for local flexibility? The Scottish Government s Economic Strategy must provide the core definition for any future contract strategy, however there must also be room for individual authorities to tailor the support required to meet regional variations and local priorities within frameworks such as local Single Outcome Agreements, and Community Planning Partnerships. 8. What targets are appropriate for assessing growth? Should growth be expressed in terms of turnover or are numbers of jobs created or export potential more appropriate? It is important to use targets which can be consistently measured and collated to ensure continuity. It is recommended that future targets should include Forecast Jobs (including jobs supported and created) Forecast T/O and profitability Forecast Export T/O and profitability 9. How can the contract be designed to ensure BG services are fit to meet the needs of non-standard companies, such as social enterprises, cooperatives, not-for-profit firms etc? How should they work alongside the new Just Enterprise service? Business Gateway products and services are equally suitable for non standard companies in supporting commercial sustainability through the development of improved core business skills. Business Gateway advisers and workshops can deliver business support appropriate for not for profit clients; however any engagement must be meaningfully measured. Growth and turnover targets appropriate for existing companies do not on their own always easily translate into equivalent measures for Social Enterprises, therefore measuring factors such as Social Return on Investment (SROI) also needs to be considered. It is important for future Business Gateway contracts to be designed to support the business needs of all forms of business to ensure cross sectoral networking between a cross range of business. This will allow healthy and constructive cross fertilisation of ideas and actions 10. What is the most desirable method of contracting for future services (i.e. is there a risk that, under competitive tender, local knowledge and expertise could be lost)? What are the legal and cost implications? In depth understanding of local diverse economies is crucial in delivering the Business gateway contracts. In Edinburgh and the Lothians the contract is currently delivered through a consortium of Local Authorities, Private, and Not for Profit organisations. Each of the partners has years of experience of what works in the 4

5 delivery of effective and successful service delivery. This must be taken into account with in the development of future contracts to allow for the inclusion of local decision making rather than any central procurement process. 11. Is re-tendering over such a long timeframe necessary? What is the risk of disruption to delivery and damage to the morale of staff delivering services? The current economic climate does not necessarily benefit from major re-structuring of services as this can create confusion and add concern in the market place. The current service works well as was demonstrated in the recent independent analysis carried out for the EKOS GEN report. 12. How do experiences of in-house delivery compare with outsourced delivery models? The Lothian Consortium is an excellent model of good practice. Having West Lothian Council as a lead partner in a consortium of public, private and third sector partners has helped demonstrate good practice in bringing together a range of Local Authority services which support business, such as planning and licensing, and incorporating them into easily accessible front end delivery of businesses support to Business Gateway clients. Both in-house and outsourced forms of delivery have value. The Lothian Consortium partners believe added value has been created through partnership working between a mix of consortium members operating in the public, private and third sectors. The combination service delivery through the consortium has created added value by both sharing best practice, and in efficient cost management through the delivery of shared administration services. Such efficiencies have allowed maximum levels of resources to be targeted at front end service delivery. 13. Has the transfer of services to Local Authorities promoted a more business-friendly ethos within Local Authorities as a whole? In authorities with experience of in-house delivery of Business Gateway services, high level of engagement with other business focussed council services, such as licensing and planning has led to a more constructive Business Friendly experience for Gateway clients. The transfer of services to Local Authorities also supports the alignment of the delivery of local business support services to local priorities within frameworks such as local Single Outcome Agreements, and Community Planning Partnerships and supports the delivery of these services through a one-stop shop approach to service delivery. West Lothian Council 23 September