TSEN, Bromley Hall, 43 Gillender Street, London E14 6RN Consultation on the Regional Growth Fund Response of the

e Third Sector European Network The Third Sector European Network Ltd. (TSEN) is a network of sub-regional, regional and national umbrella organisations (and other regional/national organisations) from the Voluntary and Community sectors and Social Enterprise. Our member organisations are active in the promotion of social inclusion and active citizenship through the use of European Structural Funds and other EU funding sources. Since 1997, TSEN has replaced NCVO as the national representative for the Third Sector on the English Programme Monitoring Committee for European Social Fund. TSENs regional members are the Third sector support agencies for European funded projects in all 9 English regions. Some of them have fulfilled this role since 1993. These bodies provide technical assistance and encourage the development of Voluntary and Community sector and social enterprise projects to fulfil the objectives of the Structural Funds. 1. Are there benefits to be had from allocating different elements of the fund in different ways? We agree in principle that the fund will be most effective if it can coordinate as many types of activities that currently support sub-national growth. We also support the view that the fund should not be administered as a one size fits all process but should reflect the needs and priorities of different places. Local Enterprise Partnerships (LEPs) may be the appropriate focal point for identifying priorities in an area but this will depend very much on how these partnerships are constituted. Our view is that they should embrace an approach which ensures that a wide group of partners can influence and input into LEPs thinking and operation so that they gain perspectives from different sources of local knowledge and experience. Partners should include the voluntary sector which is critical to the governments vision of re-building our economy so that it is sustainable

and fair, with opportunities spread across all communities and all sectors (Foreword to the Consultation Document). 2. What types of activity that promote the objectives, should the fund support, and how should the fund be best designed to facilitate this? The fund needs to acknowledge more explicitly the differential impact of the recession and the vulnerability of certain areas and cities in England and then design into its operation specific mechanisms to tackle these problems. We are surprised that, as yet, there is no attempt to make links between the Regional Growth Fund and the Big Society agenda. This agenda has localism at its heart and elevates support from the community up to taking over, running, or being involved in the design of, local services. It promotes co-operatives and mutuals as key ways in which this should happen. We therefore propose that consideration be given to allocating part of the Regional Growth Funding to supporting bids from the VCS, perhaps within a larger partnership project.

3. Do you think that these are the right criteria for assessing bids to the Fund? We would prefer the first criteria create additional sustainable private sector growth including social enterprise to read: create sustainable economic growth, including private sector and social enterprise. We think that there needs to be a wider understanding that social business (encompassing social enterprise), and not just social enterprise, contributes to local economies. Social businesses employ and train people, generate income and trade, and help grow the local economy. We believe that the first two proposed criteria should include a requirement for bids to demonstrate added value and a social return on investment. This will help to ensure the wider objective of sustainable economic development is addressed. It would make sense, especially during a time of financial austerity, to prioritise those areas that are suffering from the long term effects of deprivation and/or that have high concentrations of public sector

employment (which is likely to diminish), so that the worst effects of recession are mitigated and their recovery is not stalled. We are concerned that LEPs should work with a wide range of partners and contributors to the local economy, including the VCS. This will help ensure that the way economies work in practice is taken into account. The point about market failure is important; specific inclusion of approaches that tackle this failure, such as those adopted by social enterprise and enterprising voluntary organisations is crucial. Bids need to demonstrate a comprehensive understanding of local economies and this includes the intelligence and expertise drawn from organisations working in the social sector and, uniquely, through TSENs member networks. TSENs members bring together understanding and action in terms of the core economy, part of the Big Society idea, and the market economy. These core economy activities, such as developing social relations, volunteering, and other human resources, are critically important in delivering successful economies. It is unclear how bids will be assessed in terms of high need but low capacity. What happens if a bid is of poor quality but is from an area of significant need?

4. Do you think we should operate a two-stage bidding process? We have no strong preference about this, except to say that a transparent process which identifies clearly the criteria for approval will be important. Given that Local Enterprise Partnerships will not be up and running by December 2010 it is not clear how local bids can be co-ordinated in the manner proposed in section 1. We also note that the Approval process outlined on Page 11 is very top down, with Ministers making the final decisions. This seems to be at odds with the Governments aim to devolve power and responsibility to local levels.

5. Should a Regional Growth Fund become a long term means of funding activity that promotes growth? Genuine sustainable economic development can only be achieved through long term, targeted investment. Short term initiatives have not worked in

areas suffering from structural deprivation and hardship. We would like to see the Regional Growth Fund closely linked into longer term thinking about the regions outside London and the South East and expect this to be included in the forthcoming White Paper. We note that the London region is keeping its strategic capacity (through the Mayor and Greater London Authority) and would urge that this should not be neglected in areas that also require targeted and coherent investment. There is an ambiguity about the term Regional Growth Fund, when the fund appears to be directed at local areas and communities. The Regional Growth Fund should address the issue of synergy between different spatial levels in terms of economic development. We would like to see appropriate mechanisms in place to co-ordinate economic activity and create coherence between areas with clear identities. This would enable critically important functions like inward investment to be developed, and we support ideas for how this can be achieved. The UK Commission for Employment and Skills Audit 2010 identified key drivers which will shape the future skills demand including demographic change, environmental change, values and identity. We recommend that these skills needs, critical to future prosperity, be factored into the Regional Growth Fund Strategy.

TSEN Executive Director, Sandra Turner