Report of the Group Chief Executive, The Growth Company attached

This report provides an update on the GC Business Growth Hub’s delivery to support businesses across Manchester and provides detailed information on Start-up provision, as well as information on Manchester’s business demography, particularly in terms of business survival rates.

The Committee considered a report of the Group Chief Executive of the Growth Company, which provided an update on the Growth Company Business Growth Hub’s delivery to support businesses across Manchester and provided detailed information on start-up provision, as well as information on Manchester’s business demography, particularly in terms of business survival rates.

The main points and themes referred to in the report included:-

·                The GC Business Growth Hub’s vision was to create a thriving and productive economy by unlocking and accelerating the growth potential of businesses across the whole of Greater Manchester;

·                Since its establishment in 2011, the Hub had engaged with over 48,000 businesses, provided intensive support to 11,000 businesses and had  helped to create in the region of 10,000 jobs;

·                Since 2012 the Hub had supported over 1,000 individuals to start a business, facilitated over £200m in funding offers, had an GVA impact of £55m and reduced carbon emissions by 1.6m tonnes;

·                Examples of the business support services available to help businesses with growth potential find the support they needed;

·                Work that had been undertaken in raising the awareness of self-employment and business start up to people who may not traditionally consider this as an economic option as well as supporting businesses in the 0 to 3-year trading window; and

·                Details of Manchester Start-up and Business Survival Rates since 2012.

Some of the key points that arose from the Committees discussions were:-

·                What impact were the jobs being created through the Growth Hub having on Manchester residents, with specific reference to reducing the gap between well paid jobs and jobs that were low paid and also for residents who faced multiple challenges with entering meaningful employment;

·                What work was being undertaken in relation to embedding the low carbon workstream across employment sectors;

·                Could more granular information in relation to the jobs that were being created be provided, such as the sustainability of sectors that these jobs were being created in;

·                How were the measures of inclusive growth being addressed;

·                Taking into account the slight underperformance of Manchester’s survival rates for new businesses, was the Growth Hub focussing on the right type of businesses to support in terms of start-up;

·                What was the impact to Manchester’s economy and Manchester residents of the lower than average survival rate of businesses in terms of employment opportunities;

·                How were the Growth Hubs resources of support being used to help businesses create resilience and sustainability and was this support getting to the sectors that needed it most;

·                There was concern in relation to the impact to existing businesses by the creation of new business start-ups;

·                How did the Growth Company respond to business failures;

·                Was there a potential conflict for the Growth Hub between its universal offer to all businesses and its focus on particular growth sectors;

·                Were any business sectors not engaging with the Growth Hub; and

·                What was the governance structure of the Growth Hub.

The Head of Strategic Relationships for the Growth Company advised that Appendix 1 of the report provided detail of locations of all businesses which had created jobs and where the beneficiary of those jobs resided.  The Leader commented that one aspect of the work of the GM Good Employment Charter aimed to address the narrowing of the gap in pay between high paid positions and those positions in the high employment/low productivity sector.  The Charter would also look to address security in the workplace, address the payment of the real living wage as a minimum standard and good management/working practices.  It was reported that a supporter network had been launched in July and since then 150 employers had engaged with the employment charter.  The Group Chief Executive for the Growth Company added that through the work of the Growth Hub, the majority of the jobs being created in Manchester were going to Manchester residents and the Growth Company was now starting to obtain more granular data on where people resided, who had secured employment with businesses who had engaged with the Growth Hub and would be able to provide this level of data to Committee in future reports.  A commitment was given to provide granular level data around start-up businesses to Committee Members

In terms of measuring inclusive growth, it was reported that in all interactions of Growth Hub Advisors with businesses, a series of questions were asked which looked at a range of inclusive growth indicators and it was through this process that the Growth Hub started to promote discussion and debate with employers around the real living wage, secure work and giving something back to the community.

The Head of Strategic Relationships for the Growth Company advised that there were a number of streams of activity in terms of the green agenda taking place, as well as the traditional resource efficiency work to help reduce the carbon footprints of businesses.  They also supported eco innovation in terms of the design of products and packaging by businesses and also had a sector specific support programme to support the green sector. 

The Leader advised that the more entrepreneurial the City was, the more likely there would be business failures, however, rather than this being viewed as a negative, the Council and its partners should promote the entrepreneurial nature of the City.  He also added that a fundamental cornerstone of the Growth Company was to support those businesses that had the potential to grow.

The Group Chief Executive for the Growth Company commented that in terms of failure rates of new start-ups, when compared to London, the number of new businesses that did not survive should not be viewed as a concern if viewed in isolation.  He added that it was difficult to know precisely which businesses were going to grow and as such it was challenging to know who required support.  It was noted that the Growth Company had some restrictions in terms of who it was able to work with due to certain funding schemes limiting it in terms of which sectors and size of businesses it could engage with.

The Leader advised the Committee that the Growth Company was owned solely by the Combined Authority (CA).  The Board was comprised of an Independent Chair, five representatives appointed by the CA and a further five representatives appointed by the Local Enterprise Partnership (LEP), two of which were nominees of Greater Manchester Chamber of Commerce and Industry.  The Growth Company’s Business Plan was subject to approval by the CA and it reported regularly to the CA and the LEP. In terms of funding, the Growth Company received European funding which was matched by the CA and it also received funding through government contracts.  All contracts that the Growth Company bid for that were over £5,000,000 required approval by a Sub Group of the Board and there also needed to be some form of benefit to Greater Manchester in order to gain approval.

In terms of support offered to business failures, it was reported that traditionally the Growth Company had responded as and when required and more recently it had worked with other business representative organisations, Job Centre Plus and the Combined Authority, around a more structure intelligence gathering process of what business might be at risk. 

It was also explained that with the Growth Company being able to offer universal and targeted support, it allowed the ability to offer an initial service to everyone, whilst reserving its more intense resource for achieving the  broader policy objectives, which were focussed on improving growth and inclusion.

The Head of Strategic Relationships for the Growth Company advised that he could provide the Committee with information relating to the take up of the Growth Company’s services at a Ward level.

Decision

The Committee:-

(1)       Notes the report

(2)       Requests that the Committee is provided with a breakdown of the take       up of the Growth Company’s services at a Ward level; and

(3)       Agrees to add the following items to its Work Programme:-

·           Report on the skills gap in the hospitality sector

·           Report on Business survival rates and the impact on the economy