An external evaluation of the Manufacturing Growth Programme showed that the business support has delivered lasting benefits to SMEs and the improvements made are expected to last for more than five years.
The Interim Report was carried out as part of a wider ‘Summative Assessment’, which will be completed by March 2023. The report undertakes an evaluation of phase 2 of the Manufacturing Growth Progrmamme, delivered by Oxford Innovation Advice. It allows 4 of the 18 Local Enterprise Partnership (LEP) areas that the programme delivers work in to be sampled, of which are – Greater Lincolnshire; Hertfordshire; Leeds City Region and Stoke-on-Trent and Staffordshire.
The Manufacturing Growth Programme (MGP) was designed to overcome some of the market failures and constraints facing SMEs in manufacturing. These failures include constraints of SMEs to access best practice advice, along with a lack of awareness of the benefits of such advice, and limited or no access to affordable best practice advice and grant funding. The total Project budget is £35,954,426 of which ERDF is contributing £18,864,405 directly to SME businesses.
The assistance offered by MGP provides businesses with a comprehensive package of support to help them make improvements to their manufacturing processes and enhance their productivity and competitiveness. MGP assists businesses by providing locally-focused front-line teams consisting of highly experienced Manufacturing Growth Managers (MGMs) who are close to manufacturers and have local knowledge and understanding that businesses can trust alongside access to a manufacturing diagnostic tool called GROWTHmapper.
The design of the programme was informed by early government reports and programmes, such as the Manufacturing Advisory Service (MAS) and was aligned with ERDF Priority Axis 3 – Enhancing the competitiveness of small and medium sized enterprises (and specifically, Investment Priority 3c ‘supporting the creation and extension of advanced capacities for products, services and development’). MGP’s main focus has been to support SMEs in manufacturing that were left without any major government funded support programmes following the closure of the Business Growth Service (BGS) in March 2016.
Key Findings
Overall, the combined qualitative and quantitative evidence suggests that the programme is effective, efficient and is targeting its intended audience. Furthermore, the evidence gathered to date suggests that MGP2 is addressing the market failures that it intended to remedy in the first place.
In summary the MGP2 has sped up business support intervention rates compared to previous programmes, while the programme has simplified the process of getting support to businesses it has also been able to help businesses prioritise their needs and engage with appropriate expertise.
MGP has generated both short- and long-term benefits for businesses within a relatively short period of time. Short-term tangible benefits are exemplified by helping gain accreditations like ISO quality standards. Long-term impact on businesses is exemplified by the effect on business diversification and export strategies.
The programme has delivered lasting benefits – for approximately 40% of the surveyed businesses, improvements made as a result of the programme are expected to last for more than five years. MGP has complemented and increased the demand for other business support programmes too with substantial
cross referral activity by MGMs has been evidenced including referrals to Growth Hubs, HEIs, local authorities and other training, mentoring, innovation and financial training organisations.
In particular, MGP is addressing significant market failures related to the engagement of SMEs with business support. For example, the programme is entirely focused on SMEs – having supported 4,179 businesses to April 2022 (with this number increasing to 5,078 by the end of the programme).
Since the arrival of COVID-19, the delivery of the Project has been faced with unanticipated challenges. The MGP2 Team had to adapt quickly to deliver the Project remotely. This new way of working severely impacted on how MGMs could interact with clients as they were unable to visit them at their business premises and see businesses in operation. There were also additional challenges with specialist advisors and contractors having restricted access into businesses to undertake work and many SMEs having to revisit project priorities. MGP2 reacted quickly and worked with businesses to reassess their priorities. The Project adapted its delivery arrangements to ensure the delivery timetable was not adversely affected. The COVID-19 crisis has not diminished the value of the Project but has arguably increased its relevance within the current economic context.
The business survey indicates that businesses are highly satisfied with 91% of the respondents rating the support as ‘excellent’ and the remaining respondents rating it as ‘good’. The responses suggest that the full achievements and impacts of the Project could be significantly under-estimated at the point of meeting the required MGP2 reporting timescales.
Asked to summarise any business expectations they have for the next 5 years, resulting from the MGP2 support received, 88% of respondents anticipated an increase in turnover and/or employment of new staff in the next 5 years. This is particularly relevant considering the immediate impact COVID-19 has had on the manufacturing sector and the ability of businesses to create new jobs.
The focused approach of the programme and the manufacturing capabilities, impartiality and local knowledge of MGMs are at the centre of its success. The programme is built on a highly targeted intervention, a lean delivery and management model, and financial co-investment by businesses in their business improvement. All these are supported by a well-defined set of Management and Financial Information systems and processes.
The evaluation has shown that this approach has led to efficient and effective delivery. Although this is a relatively short intervention focusing on diagnostic needs assessment, provision of a relatively small grant and advice to be taken forward and implemented by an SME at its own pace, the programme is delivering substantial economic benefits.
MGP2 reports Gross Value Added (GVA) per employee, which at the end of October was £39,385. Up to 31 December 2021, 2,049 net jobs are forecast to be created, resulting in £80,699,865 GVA. The employment increase and gross increase in GVA directly address the Project’s key outcomes, identified in the Project Logic Model (Appendix 1).
In conclusion, the delivery of the Project during the COVID-19 pandemic is presenting unanticipated challenges. However, despite these challenges MGP2 is delivering in a cost-effective manner and is on track to achieve very good value for the ERDF investment, at this interim stage, MGP2 is delivering in a cost-effective manner and is on track to deliver very good value for the ERDF investment.
Read the Interim Summative Assessment report in full here.