Contrast:

The Issue

Croydon has the largest population of all London boroughs. Its retail and office centre is one of the four main economic centres in London (the others being the City and West End, Heathrow, and Canary Wharf). The realisation that Croydon’s economy, whilst growing in line with the national average, has not been keeping up with the growth that of London, has led it to consider setting up an economic development company and behaving more like a northern city in promoting its economy, rather than just another London borough.

Its recent economic development strategy reports a number of challenges, including the following:

• Employment declined by three per cent in Croydon between 2003 and 2005. At the same time, employment increased in the majority of Croydon’s benchmark boroughs (Lewisham, Bromley, Lambeth, Sutton, Merton, Kingston-Upon-Thames and Southwark), and in London and Great Britain as a whole. Within Croydon, employment change was extremely variable.
• Business density in Croydon has been lower than in most of its benchmark boroughs, and Great Britain as a whole. In 2005, there were around 25 VAT registered businesses in the borough per 1,000 of population – considerably below the Great Britain average business density of over 30 per 1,000 of population and the London density of nearly 40 per 1,000 of population.
• The rate of enterprise in Croydon (30 VAT registrations per 10,000 population in 2005) is average when compared to Great Britain but low when compared to London and many of the benchmark boroughs. This is compounded by poor business survival rates. The 65.5 per cent survival rate of new businesses in Croydon is lower than the England average (71.2 per cent).
• Unemployment rates vary extensively within the borough of Croydon. The wards of South Norwood and Thornton Heath have high unemployment levels of five per cent. This contrasts with just over one per cent seen in the ward of Selsdon and Ballards and the borough average of around three per cent. Deprived parts of the borough, particularly in the north, attracted Neighbourhood Renewal Fund (NRF) in recent years.

Croydon has enjoyed good partnership working particularly in health and crime, but has not always realised its economic potential in the past, as the economic development strategy acknowledges:

“Croydon faces a challenging future. As a key economic hub within the greater South East, Croydon has the potential to achieve significant and sustained growth, developing into a highly competitive economic location of international renown. Croydon has not yet fulfilled its full potential economically and has in fact recently experienced something of a decline in the overall scale of the local economic base”.

The LSP partners attribute this in part to the weakness of private sector involvement in the past. The partners formed the view that Croydon could do much more in economic development if it could “put the private sector in the driving seat”, as Croydon’s Divisional Director put it, driving the business agenda. The Urban White Paper 2000 “Our towns and cities: the future. Delivering an urban renaissance”, which proposed strategic partnerships and community strategies, helped to crystallise the borough’s thinking on partnership development and its subsequent actions.

What they didTop of page

Developing Croydon Strategic Partnership

Croydon Strategic Partnership had a predecessor, ‘Croydon Partnership,’ which needed to be revamped to accommodate the requirements of the LSP. The initial trio of the council leader, chamber of commerce chief executive and chair of Croydon Voluntary Action met and built the LSP’s institutional framework around three nominees from each of the three sectors: statutory, business and third sector. The LSP, Croydon Strategic Partnership (CSP), was to embody all the family of partnerships, not just the board, an inclusive approach that gave the business and third sectors equal weight in the partnership.

Existing partnerships such as Healthy Croydon Partnership and Safer Croydon Partnership, were built on and melded into the new structures. Croydon also set up new partnerships for other topic areas (culture, environment, lifelong learning), although not at that stage, an economic development partnership. The LSP structure itself was designed with help from the private sector and modelled on a parent company with subsidiaries (theme partnerships) that have a great deal of autonomy. Croydon Council had established links with Philips, who at the time were based in Croydon, who then invited Business in the Community (BITC) to help explore the scope for a business group to focus on greater corporate community involvement. BITC expertise from late 2003 helped to establish the need for a business broker to form the interface between business and CSP. This was a business service which local firms were asked to finance. Meetings were arranged with around 20 local companies to discuss their own community needs and ask them for contributions towards the costs of a brokerage, estimated at around £60,000 a year. The business broker role is still in place.

The CSP now comprises a board, a chief executives’ group, a number of theme partnerships, community network, neighbourhood partnerships, and a business development partnership. From the outset each of the three sectors was to have five members on the board. The five business representatives on the board provide a range of business interests in terms of size and sector and currently include a local business owner, the regional director of a major retail bank, the director of the Centrale shopping centre, and other representative organisations. Businesses have been involved in the development of the Community Strategy for Croydon, which has allowed the key local issues for businesses to be included as priorities within the strategy.

While the council was responsible for developing the strategic partnership, a key partner was the Health Authority, whose chair and chief executive were very supportive and who funded half the salary of the strategic partnership manager. Croydon has encouraged joint appointments so that no single agency has the responsibility for the support arrangements for the partnership. They also find it helps give the partnership an identity in its own right, inclusive of all sectors.

Business organisations also have two representatives (Croydon Business and the Chamber of Commerce) on the chief executives’ group that supports the board. The Croydon Economic Development Partnership consists of people at main board level in major local companies, with the council’s cabinet member for economic development. It gives a voice for business in major local initiatives. The chief executives’ group, which first met in 2001, meets monthly to think through practical aspects for their budgets of implementation and delivery, including the community strategy, the LAA, the economic development company proposals, neighbourhood partnerships, and use of Croydon’s relatively modest Neighbourhood Renewal Fund (NRF) allocation. The Government Office representative observes these meetings as well as the LSP itself.

Analysis of performance

One of the partnership’s actions was to commission in depth analysis of how the local economy was performing, and development of an enterprise strategy framework for Croydon Enterprise and an economic development strategy and implementation plan, all using the same consultants. The processes have involved wide and deep consultations across the sectors, which have helped to develop understanding of the issues and to broker a set of priorities which all sectors could agree.

This culminated in the economic development strategy working draft of March 2008 which maintains:

“There are a number of essential factors that will support successful, inclusive and sustainable economic growth in Croydon. These factors include development of more effective business functions and networks, improved skills development, provision of sites, premises and infrastructure, successful marketing and the attraction of high value added inward investment. Business base diversification and skills development, in particular, are of paramount importance to Croydon’s economic future. Without a significantly improved skills base, existing businesses will struggle to diversify and generate new employment and the area will fail to attract additional investment”.

Developing capacity

The business sector had the Croydon Business Development Partnership – a group of firms working in partnership with the council. The council funded a worker (separate from the business broker) to help build business input and facilitate joint working in Croydon. This was an important element in ensuring equal partners in a balanced relationship. Council officers stress that while the council has a responsibility to make sure certain things happen, this does not mean that the council should dominate the agenda or the partnership.

The LSP paid attention to developing personal leadership qualities and joint ownership: some of the motivation for this originated in a Common Purpose seminar involving key partners. The Common Purpose charity has been active since 1989 running seminars to improve and inspire leadership in towns and cities. The LSP developed capacity in equal proportion across the three sectors (statutory, voluntary/community and business), partly by making sure that each of its subgroups and committees had a vice chair from each sector. Chairs and vice chairs have met regularly and developed a change programme.

Efforts are also made to get full representation of local firms, so that subgroups and focus groups have a cross section of small and larger firms and different interest groups. There have been efforts to blur the boundaries between sectors, for example by co-funding some management posts, especially with the police and voluntary sector, and moving individuals around the various partner bodies. This shifts the focus away from specific interest groups and towards a Croydon locality focus.

In looking to learn from other LSPs Croydon looked north, towards cities such as Sheffield, Leeds and Manchester because they had established records in economic development and in working effectively with the private sector.

Working with the business sectorTop of page

In 2005 local business leaders (who were already involved in the LSP) launched a new company, Croydon Business, to work and speak for the local business community. Board members are drawn from local business leaders. The council no longer has a seat on the board to avoid conflicts of interest in awarding LEGI contracts. The council has a seat on the board and part-funds the venture. Croydon Business, run by the former LSP manager, was set up to deliver business support. The chief executive of Croydon Business sits on the CEX group, which is the operational group supporting the LSP. Croydon Business also has a representative on the LSP board and helped to bring the private sector into the Local Enterprise Growth Initiative (LEGI) bidding process in 2006, which resulted in the Croydon Enterprise LEGI programme (click here for link to Croydon Enterprise), a £77 million programme, the largest LEGI programme in the country. Croydon Business, a delivery partner in supporting and sustaining new and existing business, was initially funded half by the council and half by the private sector. It has grown to the point where it is delivering almost a third of the LEGI programme.

The ten year LEGI programme seeks to regenerate Croydon’s target areas as identified in the borough’s earlier neighbourhood renewal strategy, and use entrepreneurship to narrow the gap between them and the rest of the borough. It has three main outcomes and objectives:

• Outcome 1 - to increase the entrepreneurial potential of key target groups
• Outcome 2 - to support and sustain new and existing businesses, and reduce their failure rate
• Outcome 3 - to attract inward investment and franchising into target areas, making use of local labour.

While the council remains the accountable body for Croydon Enterprise (whose programme director had previously been head of regeneration in the council), there is what partners described as a “unique relationship” with Croydon Business, which was set up as a voice for business in 2005 and which is independent of the council. It is now the lead delivery partner on the LEGI programme and has taken on a leading role bringing together other, smaller business development organisations.

The Croydon Enterprise steering group membership that led the bid included the local newspaper business editor, a local IT firm, Business Link London, Croydon Council and the Asian Resource Centre and the various advisory groups created when the programme began, have strong private sector involvement. The Local Government Minister at the time was quoted as saying that the Croydon bid was "one of the strongest submitted and the national assessment panel were particularly impressed with the level of integration with the private sector.”

The LEGI programme, in turn, makes it easier for the business sector to stay at the heart of strategic decision making – a virtuous circle. With complex public procurement regulation, Croydon Enterprise had to take great care in preparing a rationale for the tendering process for procurement, but managed to develop a suitable system of preferred suppliers.

Based on an American model, Croydon Business has set up a business improvement district (BID), of which there are now more than 50 in the UK, in central Croydon. Local firms voted to pay a levy – and extra business rate – to bring about improvements in the town centre. This followed a lengthy dialogue with local firms and a ballot which took place 18 months later. It is the second biggest BID after London’s West End. The BID, which was established in 2007, aims to improve the competitiveness of Croydon Town Centre and develop its position as a commercial and cultural centre in the South East by tackling issues of crime, environment image and access by delivering a range of new and enhanced services to the area.

Croydon has set up district business forums, much like town centre forums, in target areas where there is a perceived need to accelerate business development. These bring a stronger business focus to district regeneration plans and to spatial master-planning. The LEGI programme has responded to a local need to develop a more business friendly planning service and has established district centre management teams working in Thornton Heath, Crystal Palace, Purley, South Norwood Coulsdon, New Addington and Purley Way. These teams are helping to revitalise trade and have an important role as ambassadors for Croydon Enterprise, organising events, developing local business partnerships and producing newsletters.

It was while preparing the LEGI bid, and to some extent the BID proposal, that the partners realised that Croydon did not have a strong sense of direction for its own economy. This has subsequently been corrected by the formation of an economic development partnership for Croydon, and the subsequent development of a strategy.

A programme is also being launched to have business and third sector partners as ambassadors speaking out in support of Croydon on regional and national platforms, particularly in promoting inward investment. The partners are working up an inward investment strategy to bring investors to the town centre and districts, and already reporting some successes. Ambassadors will be briefed in close co-operation with London First (the business membership organisation seeking to make London the best city in the world for business) and South London Business (the voice of South London’s business community). Inward Investment is a key strand of the LEGI programme.

Towards an economic development company

Having developed a robust economic development strategy based on detailed research and analysis, Croydon is now one of six UK areas looking at setting up an economic development company, and is in discussion with Communities and Local Government (CLG) other councils about best practice and emerging models to inform the set up process. Croydon’s vision, as London’s third city, is to secure significant and lasting growth, with economic development complementing physical regeneration to create a buzzing, sustainable, diverse place. The partners have decided that an economic development company could bring a more co-ordinated approach to economic development, through a single focussed delivery vehicle, joining up some of the existing operational partnerships.

The new company is expected to have responsibility for both commissioning and direct delivery of economic development activities and programmes, as well as the borough wide co-ordination of other economic development related agencies at a local, regional and national level. It would undertake the following functions:

• Implementing the economic development strategy
• Business/enterprise development and support
• Inward investment (to include development and marketing of Croydon’s inward investment proposition and the management of the offer)
• Skills development and employment brokerage
• Town centre and district centre management
• Grant bidding (the company will be expected actively to seek out bidding opportunities for those areas within its remit from a range of potential funding sources such as the LDA, European Social Fund and European Regional Development Fund
• Image, brand development and marketing of the borough (ownership of the brand and overall strategy would remain with the Economic Development Partnership of the LSP)
• Business greening (supporting business to realise their and their customers’ environmental aspirations and keep downward pressure on costs)
• Lobbying (to influence regional and national policy for the benefit of Croydon, and for maintaining a strategic oversight of the business environment in Croydon.

Croydon Business as the lead partner for business support has had an important role in relation to the emerging economic development company, which the partners hope to start by the end of the year. This would see the merging of Croydon Business and Croydon Enterprise, which could lead to efficiencies in reduced overheads and bringing some projects together. While the council and LSP would retain their strategic function in relation to economic development, the company would become the delivery arm for the economic development strategy, private sector led and independent of the council. The partners expect this to simplify delivery, bring it together coherently, but aligned to the economic development strategy.

The impactTop of page

Croydon remains unusual in having a local strategic partnership board with the three main sectors – public, private and community/voluntary – in equal proportion. This was done deliberately to ensure that businesses are seen as equal partners on the board.

There is now a strong ‘business community’. As Croydon has a fairly distinct identity, businesses people tend to know each other and work with the council and each other to develop business in the borough. Croydon has achieved exceptionally high levels of business involvement, including:

• one third business membership of the LSP
• an economic development partnership, half of whose membership is from business
• three partnership dealing with key aspects of economic development: employment, enterprise and 14-19 year olds
• The enterprise partnership has four sub groups mainly comprising business people

Operationally Croydon has developed a number of geographical partnerships:

• The biggest being the Town Centre BID
• Business forums in each of its district centres

It has separate groups dealing with corporate social responsibility (Croydon Commitment), environmental sustainability for the business sector (ENVIBE), business involvement in schools (Croydon Education Business Partnership) and business crime partnerships (Pub Watch, and Safer Croydon radio).

It also has some more formal public-private sector partnerships between the council and businesses such as for IT, facilities management, development (for example urban regeneration vehicle), residential care homes etc.

LEGI, BID and local businessesTop of page

The LEGI programme has started delivering significant impact in the local economy. In 2007/08, 227 new businesses were started up in Croydon, 38 new retail outlets opened in the district centres and significant training and support was offered to help businesses grow. All these achievements contribute to achieving the LAA targets for Croydon.

Business involvement in CSP has led to major improvements to the town, including the LEGI and BID. The council was awarded beacon status for town centre regeneration in 2001-02 because of its work with private sector developers to achieve its vision for the town centre creating a variety of commercial, leisure and housing uses. This vision is on the way to being realised, with continued strong partnership with developers, and the support of the Business Development Partnership. Businesses therefore now have a real stake in Croydon’s future, helping to create an environment where existing and potential employees will want to live and businesses will thrive, for example an improved image of the area, good transport links including the tram network, affordable housing, a vibrant town centre and a pleasant living and working environment.

The LSP partners attribute Croydon’s success in the LEGI bidding to the strong relationships and trust which the partners have nurtured. The process only gave LSPs four months to prepare a bid, and was so demanding that half of the eligible LSPs were unable to submit proposals, but the strong business-led partnership enabled them to meet a tough timetable and the business input added to the bid’s appeal. Likewise Croydon’s business improvement district was reported (by Croydon Business) to be possible only because of the close working relationship which had developed with local businesses.

The LSP decided it needed to set up a Croydon Observatory which could support more evidence based work, supplying key information to anyone planning services or improvements. The information is structured around the LAA themes, and the intention is gradually through partner and user feedback to build a one stop information shop about the borough and its communities.

There is consensus that the relationship with business has matured over time, building mutual trust and real understanding, which now permeates Croydon’s strategy and implementation. It has also helped to break down bureaucracy and develop more business friendly systems, which are welcoming to investors.

Challenges, Barriers, LessonsTop of page

In its search to learn from other LSPs Croydon set its sights further afield than London, towards Sheffield, Leeds, Manchester and Liverpool. In a sense, Croydon was seeking to establish a distinctive identity and brand, separate from London.

The partnership has been fortunate in having some key individuals: board members with immense personal commitment and like-mindedness. After some ten years of working in smaller partnerships there is a real sense that the partners are using their long standing relationships to good effect. Clarity about the issues in Croydon, spelt out in a suite of consultants’ research studies, helped to develop a consistent understanding of the issues and made it easier to align all the partners' positions..

The quality of relationships has also tended to mean that when issues arise, direct and robust discussion can help to resolve them before they become problems.

ChallengesTop of page

Among the challenges Croydon faced was not so much getting businesses involved but stopping partnerships springing up everywhere and getting them to relate to each other. There have been some improvements with the advent of the economic development partnership. This has dispensed with Croydon Business Development Partnership as the members are now either on the Economic Development Partnership, Croydon Business board or the BID board. The partners are now looking for the economic development company to join up some of the existing operational partnerships that still exist.

As with most towns and cities there are sometimes tensions about where resources are allocated, but the partnership has found that openness and clarity about targeting area of greatest need can keep these to a minimum.

There are some perceptions that the LAA’s local economy indicators (NIs 171 and 172) are something of a bureaucratic exercise which stops short of being able to reflect any real ambitions. This has made it harder to engage business in the detail of the LAA process. The approach taken in Croydon acknowledged the (natural) cultural differences across the sectors, and gradually worked to build consensus and cooperation between the partners.

There is recognition that while progress has been made, Croydon could perhaps have done more to connect with the regional and national agenda. This is now being addressed by developing stronger relationships with key partners including the London Development Agency. In London Development Agency terms it is the largest metropolitan area with the largest youth population - and one of the city’s “four pillars”. With Transport for London, Croydon is working towards extensions to the tram links and there are also hopes of getting LDA to fund work on the proposed economic development company.

Part of Croydon’s success appears to be its ability to develop and use individual talent by moving people into different roles where their experience may be able to help break down barriers.

The LSP has gradually changed its style of operation and set up mechanisms to fulfil the requirements of the business sector, while recognising the council’s continuing need for transparency and accountability. Presentations tend to be shorter and “punchier”, and meetings not so paper driven, though regeneration jargon does not seem to have presented any particular problems. Partnerships tend to work in a more informal way than is often the case in central and local government, and at meetings managers take care always to have at least one agenda item that is directly relevant to each sector.

LessonsTop of page

Those seeking to learn from the Croydon experience should note the following key success factors:

• There needs to be a genuine commitment to partnership and equality of representation at board level. Many LSPs only have a token board member from the chamber of commerce and their voice is lost.
• The LSP structure itself can use private sector models such as the parent company with fairly autonomous subsidiaries (theme partnerships).
• The involvement of the private sector would probably not have happened if the council had not dedicated a member of staff to support the business development partnership, and funded the production of the economic development strategy. If LSPs want to involve the private sector they need to put some resources into making it happen.
• They also need to invest in developing trust among the leaders.
• Agendas should be geared to include issues of relevance to the private sector so they can contribute meaningfully to the discussion. As much as possible partnership meetings should be run in a ‘business like’ manner – with actions coming out of the discussions.
• They must be prepared to be challenging with one another, but without falling out: agencies should be able to push each other, and the challenges and tensions will not always be comfortable.
• They need to develop an absolute sense of ambition – after a long period of Croydon “punching below its weight”, partners are now inspired.
• The council should have a substantial role as a catalyst for economic development, but that does not mean it has to dominate or lead. There has been a programme to focus on investing in leadership.
• There needs to be flexibility around roles to build on the skills, experience and expertise of the different partners.

Data/EvidenceTop of page

The 2008-2011 LAA focuses on the two local economy indicators which are directly relevant:

• NI171 on VAT registrations the LPSA proxy indicator of 109 for 2008/09 is the net change in VAT business stock and represents growth of 1.4 per cent on the  2005 baseline.
• NI172 for VAT registered businesses in the area showing growth. The current LPSA target of 300 for 2008/09 (number of new businesses created, and showing growth after 12 months) is being used as a proxy.

Targets for both of these new National Indicators are to be agreed in Autumn 2008.

In addition to the national indicators Croydon has three local indicators that better reflect the full extent of programme activity:

• The number of businesses starting as a direct result of the LEGI programme, (which applies in disadvantaged areas, and will be measured against key target groups).  From the 2007/08 baseline of 227, agreed targets for the three following years of 250, 275 and 302 represent a ten per cent year on year increase.
• The number of businesses assisted by the LEGI programme showing growth (using the LDA’s indicators). In 2007/08 there was a total of 2,043 business assisted and start ups. A baseline is to be set in 2008/09 identifying those demonstrating growth. Targets are to be set in 2009.
• The number of clients able to get into further training or jobs and the number of jobs created. The 2007/08 baseline is estimated at 1,055. Targets for the three years of 1,076, 1,130 and 1,186 respectively will set targets for specific target client groups.

Contact and further informationTop of page

Damian Roberts
Divisional Director - Service Transformation and ICT
7th Floor, Taberner House
Park Lane
Croydon
CR9 3JS

email: Damian.Roberts@croydon.gov.uk
telephone: 020 8604 7008

Stella Okeahialam
Croydon Enterprise Programme Director
5th Floor, Park House
Park Street,
Croydon
CR0 1YE

email:stella.okeahialam@croydonenterprise.com
telephone: 020 8090 1687
Croydon Enterprise website

Brian Stapleton
Chief Executive
Croydon Business Limited
Park House, 22 Park Street
Croydon
CR0 1YE

email: bstapleton@croydonbusiness.com

tel: 020 8686 2233