Supporting councils with business engagement
Relationships between local government and businesses have always been essential to securing and sustaining a business voice to inform local policies and place-based decisions and guide action to enable businesses to thrive. The pandemic has accelerated and emphasised the importance of that relationship and has become even more central to maintaining quality place-shaping and vibrant local economies.
Councils work with businesses in a variety of guises. Pre-pandemic there were two core dimensions to this relationship and the pandemic brought about a third. The first role is through statutory functions such as trading standards, environmental health, business rate collections and planning. These are all essential to keeping places and businesses running smoothly and safely. The second is through a set of non-statutory functions including inward investment, developing local skills and jobs as well as business support. The third, which emerged as part of the pandemic, was a new set of functions – distributing COVID-19 recovery funding to businesses as well as discretionary grants and advising on PPE and social distancing requirements to protect and safeguard the public. Local authorities became a vital single point of public sector contact with businesses, building on their economic development and public protection roles.
The scale and nature of business engagement during this time has been more significant than ever before. Councils stepped up to ensure they could support their local business base, in many cases, beyond the distribution of government grants. Businesses also came to realise the strength of what the local authorities could do to support them. Where in the past they have sometimes criticised councils for being a bit slow and difficult to navigate, during the pandemic they found the offer was streamlined and responsive. Councils now have more contact with businesses than ever before and maintaining this relationship will deliver more benefits for the future.
How councils capitalise on this positive action will be essential to cementing relationships with businesses going forward. Uncertainties around changing work and travel patterns will remain in the short to medium term and this will undoubtedly impact on wider regeneration and place-shaping ambitions. Key to navigating this uncertainty will be the coordination of effort and a closer working relationship with businesses locally to inform and influence the “what next”.
Policy and partnership landscape
The long-term policy landscape has almost been on hold during the pandemic as the issues of the day have been addressed as a priority. However, this has strengthened relationships across the public and private sector. There are both challenges and opportunities as a result of this and the relationship between central and local government and business has become ever more important.
During the pandemic, many councils relied on local business support organisations to help to identify where funding from central government should be channelled. Not all places, however, have a business support network, and, in some cases, the existing network isn’t strong enough to deal with the volume or range of business need.
Adding to this is the changing policy landscape. The Levelling Up white paper and recently published Net Zero Strategy are two key pieces of policy which will require careful engagement between local government, Mayoral Combined Authorities (MCAs) and businesses.
The White Paper, Skills for Jobs, identifies chambers of commerce as the main vehicles for articulating the business voice. This in itself is a challenge as not all places are represented by an active chamber offer so, in many cases, councils are taking on a leadership and convening role. Also, in many places where there is a chamber presence, the relationship with the their council needs to be strengthened. There is also a commitment to build on the work delivered by Local Enterprise Partnerships (LEPs) through, for example, Skills Advisory Panels (SAP). Mayoral Combined Authorities (MCA) and LEPs have created 36 SAPs which bring together employers, skills providers and local government to resolve mismatches between skills supply and employer demand at a local level. There is a potential role for councils in supporting this partnership to enable the business voice to influence education and training provision.
The outcome of the LEP review will also have an impact on the future role of councils with regards to business relationships. We have already witnessed a changing role of LEPs across funding and skills programmes and a more central role for councils to coordinate activity. The role that continues to be played across LEPs in relation to ensuring a business voice is present through decision making will continue to be vital to local governance and decision-making.
There are also opportunities at a county-level to work closely with business to understand the benefits of county devolution. Having a strong business input into future plans and strategies can only strengthen place-based thinking.
A further consideration is the relationship with business when bidding or accessing funding. Councils have had to build capacity to prepare and craft funding bids for large scale projects, and the local intelligence gathered through the pandemic has made this process somewhat easier. Preparing evidence bases for funding opportunities such as the Levelling Up Fund as well as the Community Renewal Fund has encouraged an open dialogue around local needs. This has been supported by more dialogue with businesses than before at a local government level.
This shifting policy and funding landscape is both a challenge and an opportunity. On the one hand, it allows councils to reset the relationship with businesses and use new local intelligence gathered over the past 18 months of engagement. It also allows a more substantial use of local business intelligence in local decisions and future strategy development. We have heard through our research that the views of businesses are becoming more important in setting policy at a local level and the evidence gathered during the pandemic is being used well to inform funding bids and emerging strategies. This high-quality business intelligence is critically important in the future of local decision-making and could bring benefits in areas by promoting economic success to drive inward investment and develop new supply chains bringing forward jobs.
Whatever the outcome of these emerging policy and funding opportunities, securing and sustaining a business voice to inform local policies and decisions will continue to be central to maintaining quality place-shaping and vibrant local economies.
The research into relationships between councils and businesses
The purpose of this report is to identify and capture the learning from councils’ extensive contact with businesses over the last 18 months in the context of COVID-19. It is also to identify how councils can engage more effectively with businesses in the future to support economic recovery. This firm foundation built through the pandemic gives an opportunity to bring a strong business voice into local action and policy making.
The rest of this report highlights some of the challenges faced during the pandemic but focuses on the positive practices put in place by councils and their partners. It shares a number of case studies that illustrate proactive action taken by councils and draws on some aspects which, as we emerge from the pandemic, should continue to be front and centre of local engagement with businesses. Finally, it gives thought to what action can be taken to build on this positive impact and provides a checklist for areas to consider in addressing the needs of their own localities.
Themes emerging from the research
The pandemic has had an adverse impact on local economies, particularly on businesses within certain sectors such as hospitality and leisure where businesses closed for long periods of time. Also within particular communities, especially across more deprived areas, which has contributed to raising the level of need. Subsequently, this has put more pressure on local authorities to support their local businesses and has led to marked changes in councils’ approach to business engagement.
The actions that individual authorities have taken to improve engagement with their local businesses varies depending on the make-up of their local business base; resource and capacity; location and many other factors. However, in our research we have distilled the themes which have emerged via our scoping interviews and roundtable discussions. This explores how councils engaged with business in the urgency of the pandemic, offering messages for more extensive and fruitful engagement during recovery and future strategic activity.
Strengthening the evidence base and better use of data
As the pandemic moved from stage to stage and restrictions started loosening, councils were able to engage more with their businesses. With challenges of out-of-date information around business dynamics nationally, many used this as an opportunity to get to know their local business base better, document changes and ensure that they had clean data going forward. This guided councils to move away what had often been transactional relationships previously, and to shift focus to providing targeted support to their most affected sectors and industries. The core of an economic strategy involves knowing which businesses have the potential to grow or prosper, where they are, what challenges and opportunities they face and how the local authority and other bodies can support them. The key to this is good business intelligence and contacts.
This stimulated councils to explore new data collection techniques during the pandemic and multiple councils did this via surveys, experimental data and through door knocking. For example, Essex County Council (ECC) undertook a survey to help understand the needs of their business base better. This included questions to help identify the impact that the pandemic has had; impact of the furlough scheme; identifying who businesses go to for support; and identifying what support businesses needed to help them recover. Using information collected, ECC was able to host a series of roundtables events for businesses most impacted by the pandemic to support them with their individual and sector needs.
Likewise, Lambeth Council established a Business Taskforce during the pandemic to collect more local data but also to allow them to tackle live issues. They were able to collect data on footfall; business closure rates; mobility data via 02; and consumer spend data via Mastercard. All of these channels contributed to a greater understanding of their local business base.
Using data collected, councils were able to target resources more efficiently and provide focused support to sectors or specific business communities which were particularly struggling. This in turn enabled many councils to draw on this local knowledge to develop robust funding proposals and target their support much earlier. The pandemic has shown an increased appetite from councils to try to understand the needs of their local business base better and set up bespoke groups to support targeted communities and sub-sectors to help improve survival rates of those groups.
Division of labour
Since the pandemic, relationships with businesses have also been spread more widely among officers, members and across different council departments which has acted as a key contributor to giving councils a greater understanding of the needs of their businesses. We heard from a number of councils that cross-council engagement fora were established, ranging from licensing to planning to business rate collections. This helped to establish a one-voice one-approach across the borough and ensured a consistent message could be shared between officers and members. It also encouraged a holistic understanding of local need and encouraged councils to focus more activity on engaging with businesses in most need to ensure, for example, they were able to access funding or be part of future support programmes.
The role of local councillors, given many of them are themselves business owners, can also provide a unique perspective. Their links with businesses in their wards bring an additional place dimension to the dynamic and councils could do more to capture and use this.
In the longer-term, there is a question about sustainability of the wider business engagement. In many areas, council officers were seconded from their substantive roles to support businesses during the pandemic and will, if they have not already, return to their regular roles. Therefore, there is a need for councils to consider their proposed future focus and balance of resource for business engagement.
Improvement to reach and communications
The pandemic has helped expand councils’ reach into business communities – especially via the use of webinars and roundtables which have allowed councils to reach out to and engage with businesses from all parts of their locality. Using online platforms rather than face-to-face meetings has helped councils to engage with more businesses and has helped provide a granular level of local business intelligence. Many councils reported that business engagement events saw a significant increase in attendee numbers than they did at regular “town hall” events. This was particularly beneficial where new and important information needed to be shared quickly as businesses closed and reopened.
Some councils identified a lack of contact and engagement with certain groups of businesses, such as those from BAME communities. Taking time to understand the cultural dynamic and challenges and opportunities facing business owners from different communities was essential to ensuring what was on offer was accessible to all. Having built those links and a better comprehension of need, work must continue to ensure equity of offer.
Councils also reported a shift in their channels of communications. Predominantly focused on communications to residents and communities, many councils reported a large increase in the delivery of messages directly targeted to employers. This included sectioning off messages to business audiences through newsletters, social media, and forums. There were examples cited of newsletters providing information to smaller businesses, big business leaders’ groups to discuss issues specific to their businesses. These were:
- structured around key business audiences, talking to individual businesses in a more structured way, and tailoring support services to businesses to specific types of businesses, e.g. by size of firm, sector of firm, etc
- flexible in delivery – with councils accommodating flexible hours when hosting business meetings/events
- designed to improve council social media profiles and platforms as a medium to engage with businesses and share information with them.
We heard in our research that communication of the support offer with businesses was at times fragmented and unclear, especially where there were multiple organisations providing various levels of support. Many councils have focused on improving their communication with businesses to ensure that there is clarity in the offer and businesses are clear on what their local council can assist with. Likewise, our research found there is a shift in behaviour to a more open and honest dialogue about what councils can do and how they can help businesses to develop and also a shift in communications from being resident focussed to having elements which are businesses focussed.
Understanding where strengths lie and taking advantage of them
While a challenge in the short-term as resources became stretched, the deepening of engagement has provided a better basis for building or rebuilding relationships and encouraging further dialogue with business support providers. Using locally generated evidence gives a prime opportunity to councils and business support partners to identify what and how they need to support businesses going forward. Lessons raised in the research include:
- the need to coordinate activity across business support partners and ensure information filters across to enable contributions to shaping growth and strategy
- that councils must work more closely with partners to develop an ecosystem of business support, bringing together all business support outlets for the benefit of the wider business community and smaller businesses.
Challenges of council engagement with businesses in the future
A number of concerns and challenges were raised in relation to the way councils will engage with businesses in the future. Some more practical issues arose, such as:
- the continuing short-term funding opportunities and pressure to allocate support grants
- the difficulty for councils in maintaining engagement in areas with a high number of SMEs. This is more challenging than engaging with a relatively small number of corporates
- capacity gap within councils – the preparation of bids by councils in order to carry out business support has highlighted the capacity gap of some councils and has required them to contract consultants. This is not considered to be a sustainable approach
- difficulty in joining up internal council services – e.g. many departments such as trading standards, business rate teams etc. all have routine contact with a business audience but do not always connect internally with economy teams.
Examples from the research
In the research, we heard from councils that are connecting with businesses in new and creative ways using hyper-local evidence to create a plan to support businesses in the short and medium-term. In this section of the report, a number of illustrations of the innovations delivered by councils have been identified as well as four case studies from councils across the country.
Some innovations include:
- convening a Net Zero business group to ensure employers are at the forefront of carbon reduction ambitions (Lambeth Council)
- identifying and using the exact issues facing businesses through bids to the Community Renewal Fund (Norfolk County Council)
- developing sector profiles and inviting sector leads to present at statutory committees to encourage a better understanding by elected members of the issues facing industry (Gloucestershire County Council)
- information campaigns to engage black and minority ethnic (BAME) business leaders (Lewisham Council)
- task and finish groups to identify future perspectives of young entrepreneurs (Hull City Council).
All of these examples are encouraging a healthy conversation intended to collectively solve some of the issues of the day.
Case Study – Maldon District Council
Maldon District is a small rural coastal district in Essex with around 3500 businesses, of which a very high proportion is micro-sized.
Pre-pandemic the council’s relationship with businesses was limited and tended to focus on the provision of statutory services. The area also did not have any formal structures in place, such as Business Improvement Districts, due to the nature of the local business characteristics. However, the small and localised nature of businesses within the district led to the natural creation of multiple small business groups – these groups represented a sub-sector or a particular area of interest. These groups were self-created and coordinated by businesses themselves and were used to identify common issues and requirements which were occasionally bought forward to the council.
During the pandemic
The pandemic had a very adverse impact in the district, with high streets and a large hospitality and tourism sector particularly affected. Acknowledging the importance of the high street, the council, as part of its Sense of Place initiative facilitated the creation of the Maldon Business Board – which acted as a “network of networks”. This board helped bring together representatives from each of the local business groups to identify where support needed to be focused within the town and which areas were most resilient. It also proved vital in helping both the council and businesses understand COVID-19 restrictions; business support; and the grants programme but also for the council to share that information with business groups who may have been unaware. The council undertook webinars and assigned volunteer high-street stewards to ensure that the dissemination of information and guidance during the pandemic was communicated well with all businesses within the area.
Looking ahead, the council would like to move towards a place-based and asset-based community development model enabling businesses to work together, with the council acting as a partner and stakeholder in economic prosperity and community cohesion. With Sense of Place, they are working to establish a second town focused business board in Burnham-on-Crouch and further sector-based networks as part of the Maldon District Business Network. The council appreciates that the pandemic has shown the importance of local businesses in their communities and would like to act as facilitators and enablers, rather than being ‘sovereign’.
An example of this is the Totally Locally Fiver Fest which businesses coordinated and ran themselves in the high street. This proved to be a highly successful campaign to get people back to the high streets. However, the council understands that it has a key role to play in signposting businesses to the correct information but also to other business services. Thus, it intends to continue providing its monthly newsletter to businesses - which helps signpost them to external support services (i.e. BEST Growth Hub, SELEP); and inform them about local campaigns and initiatives.
Maldon District Council via its grassroots approach has been able to reach out to more businesses, especially the small independent high-street businesses and hopes to bring together more via the Sense of Place initiative, supported by the Magnox Socio-economic Scheme.
Case study – Gloucestershire County Council
Gloucestershire County Council established a statutory joint committee in 2014 to ensure that the seven constituent members could co-ordinate action to deliver the strategic economic plan (SEP) and the growth deal. Partners include Cheltenham Borough Council, Cotswold District Council, Forest of Dean District Council, Gloucester City Council, Gloucestershire County Council, Stroud District Council, Tewkesbury Borough Council and the GFirst Local Enterprise Partnership.
The county council took a strategic leadership role in establishing a committee across district, borough and city council partners. The Gloucestershire Economic Growth Joint Committee (GEGJC) also has responsibility for the monitoring and scrutiny function for the recently produced economic recovery plans, to support the local economy in its recovery from the pandemic.
Pre-pandemic, there was limited direct input from business on the topics considered at the GEGJC although there was strong representation from and through the local enterprise partnership, GFirst LEP.
During the pandemic
During the pandemic, direct contact between the county council and its partners identified a series of issues across different sectors. Tourism businesses struggled, and continue to struggle, to recruit the workforce needed to operate hotels, restaurants and bars to satisfy the visitor economy; the agriculture sector is facing uncertainty around the reduction in the Basic Payments Scheme and climate change priorities are encouraging a review of the potential for green jobs across the county.
In 2021, the county council adopted a new approach to engage with businesses to better understand the issues impacting the county. This also coincided with a number of newly elected members joining the joint committee and a desire to inform them of the local issues and opportunities. This approach involved:
- theming individual meetings by sector based on the key employment generators in the county
- conducting a deep dive into that sector to highlight the size, value and employment across the sector as well as setting out the challenges and opportunities facing those businesses locally
- inviting sector leaders to present their particular perspective, drawing on the reality of operating a business in Gloucestershire
- stimulating debate with elected members to explore how businesses can be supported with their key challenges and making links with wider activity across the county to support their growth and sustainability
- continuing to work with sector groups to ensure that actions identified can be followed through with economic development officers from the districts and the county.
Over the year, the sectors that have presented to GEGJC include cyber, tourism and hospitality, and farming and agriculture. The next sectors in the programme are green jobs and manufacturing and engineering.
Case Study – Hull City Council
Kingston upon Hull is a small city in East Yorkshire with around 6,335 enterprises, of which the majority are from either the science, retail or construction sector.
Pre-pandemic, the Kingston upon Hull City Council relationship with businesses was at a strategic level with membership-based organisations and centred on business support via Humber Growth Hub and product related programmes as well as on statutory services, such as collecting business rates. Communication between the council and business community was limited, with discussions mainly taking place between council representatives and business owners at chamber meetings. Though for the Top 50 businesses there was a key account system in place. Many micro businesses in particular found the local authority difficult to navigate and as a result, many businesses were reluctant to engage with the council.
During the pandemic
During the pandemic however, there was a shift in this relationship as engagement increased. Businesses came to realise the strength of the support offered by the local authority as council services became more focused on their needs. The council began to understand more about the different types of businesses and their working patterns, the particular challenges of micro and small businesses struggling to keep solvent, and ineligibility issues for the pandemic support funding.
Overall, the council has come to understand more about the key role business owners play in the economic wellbeing of local communities and by providing jobs for local people. The enterprise panel, which existed before the pandemic, gained heightened engagement during the pandemic. The panel, split between big businesses, smaller businesses and support organisations, acted as a route to consultation. This enabled the council to gather general information on the local economy, information on how particular sectors were performing, and local intelligence from the chamber of commerce. Kingston upon Hull City Council is now building on this and has set up a business group under the young people’s enterprise champion which aims to produce a better relationship between businesses and the council.
The pandemic highlighted how business support is often delivered in competition between support partners and the council, and to overcome this, the council aims to create a support network that directs businesses towards the most appropriate type of support. Kingston upon Hull City Council also aims to develop links between the council and businesses so the council can refer businesses to the public for services that the council itself cannot offer. It also intends to make business support more flexible, by delivering activities online outside of standard 9-5 Monday to Friday hours, in particular for enterprising young people.
The pandemic has shown the ease and practicality of digital communication, and the council seeks to capitalise on this by engaging more through online means with businesses and business support partners and look at more effective use of its linkages via its key account model.
Looking ahead, the council aims to further develop a culture of understanding and support of businesses, by triangulating information through local knowledge built during the pandemic by business support partners and the council and in terms of young entrepreneurs has established a Business Engagement group chaired by a young entrepreneur and involving elected members.
Case study – Walsall Council
Walsall is a metropolitan district situated in the West Midlands with 8,000 registered businesses. The local economy is comprised of manufacturing, human health and social care activities, wholesale and retail trade repair of motor vehicles, and transport & logistics. Walsall Council’s Business Growth Team deal with mostly SME manufacturers, transport & logistics firms, skills & training providers and start-ups.
Pre-pandemic, Walsall Council’s capacity to engage with local businesses related directly to European Regional Development Funding (ERDF). Due to the associated eligibility criteria, Walsall Council’s Business Growth Team largely focused efforts on local SMEs who were eligible for such support. The government’s COVID-19 Support Grants meant that the council had to act quickly to put processes in place to administer grants and rate relief. This was a particular challenge as pre-pandemic, the local business base engaged with the council in a limited capacity, for statutory services.
During the pandemic
The pandemic changed the relationship between Walsall council and its businesses on a strategic, operational, and technical level. The council strengthened its internal communications to address businesses, with the public health, business rates, and environmental health teams all collaborating to deliver on a targeted and local level. This involved distributing both COVID-19 related guidance to businesses and items such as testing kits and PPE. On a broader level, to deliver grants Walsall council brought in an IT company to set up a portal which enabled them to address the high volume and complexity of business queries, which led to increased engagement with businesses and better long-standing relationships with businesses.
The council utilised its social media profiles and its newsletter, as well as contacting businesses personally through council members, to pass information from the office level to local businesses. The Black Country Economic Group was set up during the pandemic which brought together the key local stakeholders of business support, such as the Growth Hubs, Chambers of Commerce, and Universities, with the council for monthly virtual meetings and allowed for the learning and information to be shared on business support.
Already collaborating well across the Black Country, the pandemic strengthened collaboration, both within the council and among the council and business support organisations. This has been underlined in the ongoing review by the West Midlands Combined Authority which aims to identify and cultivate a business support eco system involving LEPs, enterprise agencies, universities and councils together.
As a result of the pandemic, Walsall council has interacted and supported more businesses than it would have previously, and such businesses have gained greater understanding of what the council can do to support them. As membership organisations bring membership fees and some businesses cannot afford them, it is thought that businesses will look to engage more with councils for support without cost. Moreover, as the economy transitions post-Brexit and while moving from EU funds to the UK Shared Prosperity Fund, Walsall Council recognises the opportunity to build local packages for the targeted needs of local businesses. To maintain this increased level of engagement, communication is imperative, and the council as well as elected members aim to engage more regularly with its business base whether that be speaking at events or quarterly visits.
Future considerations and practical recommendations
A core challenge emerging from both within and outside the sector beyond the short-term is one of sustainability. Engaging with businesses in a time of need is different to continuing to do so in the long-term. Understanding growth ambitions, the conditions required to employ people locally and investing in hard and soft infrastructure for the future is a growing part of regeneration and place-shaping.
Adding to this complex perspective is the uncertain future of local enterprise partnerships as well as government policy and funding for business support programmes. However, there are also opportunities for reshaping or resetting this business dynamic. Social value for example provides opportunities for understanding the local market and building capabilities within the local business base. This should be treated not just as a legal duty through the Social Value Act but also as a chance to build capacity and growth in local markets.
In considering what steps need to be taken to understand how individual councils can continue to engage with businesses in a way which complements the existing eco-system, this research has developed a series of questions against which councils can consider their role. This is set out below in the form of a checklist which has been developed to strengthen relationships between councils and businesses at an individual and collective position.
- Are there governance arrangements in place which involve businesses at the heart?
- Are they fit for purpose? Do they include representatives from a range of business audiences including for example, size of business, priority sectors locally, geographical range and are they representative of the local demographic?
- Is there a mechanism for ensuring the business voice can influence local strategy development?
- How is this built in? Does it include a range of businesses and business representative organisations? Does that voice include representation from key sectors and all communities?
- How does this relate to social value and the considerable buying power of each council? Is this more than just a legal requirement providing opportunities and stimulating the local market?
- Is there a forum for local partners to come together to discuss and coordinate the offer?
- Is it appropriate to have an internal council officers’ forum across departments? Are members involved or is it clear when members need to be involved? Does this involve other councils locally?
- Is the council involved in helping to develop links between business and education and training providers?
- How does this dynamic work at different spatial levels, for example hyper-local to sub-regional?
- Is there a mechanism in place to ensure businesses can inform the needs of local skills provision?
- Is there regular dialogue with businesses to maintain a continual flow of information on skills needs and employment opportunities?
- Is this clearly communicated with Further Education and Higher Education partners?
- Is there an evidence base that is current and covers a coherent geography?
- Is there an opportunity for businesses to help make sense of the evidence and ensure that the statistics can be interpreted locally?
- What is the evidence saying about each phase of business – from pre-start through to start-up and growing micro businesses to the corporate market? What does this tell you about how each place needs to channel business support?
- Can data gathered during the pandemic be used to inform future strategy development and the business case for investment?
- Consider if data sharing protocols can be put in place with other business support organisations and anchor organisations.
- Do you know what the local offer is across business support organisations such as enterprise agencies, universities, growth hubs and LEPs?
- What does this tell you about the gaps in the offer? How can you work together with these agencies to ensure there is a streamlined offer? Is it appropriate to have a single point of contact?
- Is there a communications plan which encourages dialogue and input from businesses?
- How accessible is this? Does it allow businesses to engage at a point that suits them? Is there sufficient content across platforms to draw interest of local businesses?
- What other messages need to be delivered to the local business base? Can messages around “good work” standards, offering a living wage etc. be passed on through these channels? What else is important to the economic vision of the locality?