Many thanks to those who joined us for very helpful workshop in Leeds on Monday to discuss our forthcoming evidence review of business access to finance policies. We had about thirty people from central government, local authorities, LEPs, umbrella groups and consultancies. And the discussion was lively and productive as we explored the research and policy implications of the review’s findings.
We’ve already reviewed the evidence on ‘softer’ business support programmes measures such as information, advice and mentoring where some clear conclusions emerged. For example, these measures are better at raising productivity than employment, and hands-on, intensive support seems to work best. By contrast, it is harder to pull definitive lessons from the business finance literature. Our 27 shortlisted evaluations suggest that loan guarantees and the like are pretty effective at easing credit constraints, which is encouraging but not surprising. But access to finance tools seem less effective as a local economic growth policy. And we have little idea about how such programmes actually affect productivity, jobs or profits.
These inconclusive findings reinforce the need for more access to finance experiments to figure out what works best and why. As a number of the workshop participants pointed out, the imminent launch of the next round of JEREMIE funding and the establishment of the British Business Bank as well as the devolution agenda more generally are opening up multiple opportunities to do this. They also recognised that whilst this might mean more work upfront, the payoff will be much more credible findings that can be used to inform local policy as well as future funding discussions with central government.
Reflecting on the workshop, it’s clear that we need to continue to work with as many policy-makers and practitioners as we can to make sure strong evaluation is embedded in LEP and LA strategies. Several people at the event asked for more help with this. We’ll soon be publishing an evaluation guide, which will set out some of the key steps for developing the policy ‘logic chain’ and then designing an evaluation around this.
Also, look out for the full review of access to finance tools, which we’ll be launching before the end of the month.