South East England Development Agency (SEEDA)

MINUTES OF THE 74th MEETING OF THE
SOUTH EAST ENGLAND DEVELOPMENT AGENCY
HELD ON 08 DECEMBER 2005 SEEDA GUILDFORD

Present:

James Brathwaite (Chairman), Rob Douglas, Rob Anderson, Poul Christensen, Imtiaz Farookhi, Mary McAnally, Terry Mills, John Peel, Peter Read, Bill Wakeham, Phil Wood

In attendance:

Pam Alexander, Paul Hudson, Paul Lovejoy, Duncan Straughen, Simon Walker, Donal Galligan, Peter Cusdin (for item 6), Chris Moore (for item 6)

Item 1 Welcome and apologies for absence

1. Apologies had been received from Sarah Hohler, Peter Jones, Keith House, Liz Brighouse and Jeff Alexander

Item 2 Minutes of the last meeting (27 October 2005)

2. The minutes of the last meeting were agreed as a correct record of proceedings.

Matters arising

3. The analysis, requested at the last meeting, of the Regional Transport Board’s work according to the emerging RES priorities will be considered under item 4.
4. The Chairman raised the issue of the disappointingly low attendance at this year’s Open Public Meeting. Board members pointed out that the live webcast of the Open Public Meeting has received a high number of hits in previous years, and suggested that excellent turnout for the recent RES consultation events might have contributed to a lower turnout this year.
5. Whilst recognising the important public accountability function of the Open Public Meeting the Chairman suggested that it might be beneficial to focus future meetings on a particular regional issue.

Item 3 Declarations of interest

6. Rob Douglas, item 5, member of Surrey County Scholars board.
7. Pam Alexander, item 6, Queensway, Chair of the Hastings & Bexhill Task Force Steering Group, and item 6, Town Centre Margate, Chair of the Margate Renewal Partnership.

Item 4 Regional Economic Strategy – consultation draft

8. Paul Lovejoy presented the Consultation Draft of the Regional Economic Strategy (RES) for the Board’s comment. He noted that the brevity and focus of the draft had been well received by stakeholders, as had the spatial analysis, and the priority now was to fine tune the objectives and targets. The focus now would turn to active consultation with stakeholders during the formal 12 week consultation period, and to intensive scenario testing to interrogate the assumptions and targets in the Consultation Draft.
9. Overall the Board welcomed the Consultation Draft and offered the following specific comments.
   • The next stage of analysis during the formal consultation that will ascribe owners to particular actions will be vital. The RES needs to be clear on ‘who does what’ not least to ensure that SEEDA’s role is both clear and limited.
   • The, strong, spatial analysis needs to be supplemented by a consideration of cross-boundary Greater South East issues.
   • The draft must show no complacency on the skills issue, in particular the skills levels needed to deliver sustainable prosperity.
   • Rural issues should be dealt with across each driver of productivity rather than in a separate chapter.
   • Dealing with infrastructure issues will be vital in delivering the housing numbers needed to support smart growth in the South East.
   • The breadth of the RES should not be too great, and should provide sufficient focus on the issues facing high tech businesses.
   • Much greater efforts to engage business across the region needed to be made during the consultation period.
10. The Board NOTED the update on the Regional Economic Strategy Consultation Draft.

Item 5 Regional Funding Allocation

(i) Regional Transport Priorities

11. Paul Hudson presented an analysis of the schemes identified by the Regional Transport Board (RTB) against the emerging RES priorities. In brief there are six priority schemes identified by the RES that are not in the RTB’s list. He recommended to the Board that SEEDA should make every effort to get these schemes ready for bringing forward by 2011, if not sooner. For example SEEDA could expedite projects by contributing to the project definition phase to ensure that finalised projects can be brought forward for funding.
12. The Chairman welcomed the analysis of the RTB’s work and recommended that it be turned into a lobbying document for use more widely in Whitehall. He suggested that this document should set out the consequences of not funding the priority schemes identified by the RES. The Chairman also welcomed the suggestion that SEEDA should get involved in bringing projects to the point of readiness, this would help to shorten the timescales for action on infrastructure projects.
13. The Board warned that even with the RTB’s list of schemes and those identified by the RES the South East would only maintain rather than improve its transport infrastructure position.
14. Pam Alexander noted that the Barker review of planning announced in the Pre-Budget Report offered a chance for RDAs to argue the case for reducing constraints on infrastructure projects and for using the new Planning Gain Supplement to address local and regional priorities.

(ii) RFA draft submission

15. Paul Lovejoy updated the Board on the current timetable for submitting the region’s advice to Government on the Regional Funding Allocation. A final draft will go to the Regional Assembly’s Executive Committee and the SEEDA Board in mid-late January for approval. The submission will be made by end January. The RES provides the conceptual framework for the submission, and work is currently focussing on looking across the three strands (transport, housing and economic development) to get exploit synergies and get maximum leverage for regional priority schemes. For example the submission identifies eight major centres of economic activity in the South East and asks what needs to be done to unlock growth in these areas using the potential flexibilities of the RFA.
16. The Board AGREED the approach to transport priorities in the new RES and these priorities being put forward as part of SEEDA’s input to the South East’s Regional Funding Allocation submission.

Item 6 Major Projects & Programmes

Daedalus Airfield, Hampshire

17. Peter Cusdin presented the purchase of the Daedalus site in Hampshire for the Board’s approval. The rationale for SEEDA’s investment is based on the strategic significance of the site for the economic development of Gosport and South Hampshire, and on the specific nature of the market failure in this area. There is no evidence that in developing the Daedalus site the market would deliver a mixed-use development that secures the employment outcomes SEEDA wants for Gosport, and it would be difficult to guarantee such a result through the planning systems of the local authorities.
18. The Chairman of the Major Projects Committee (MPC) noted that his Committee had considered this project twice due to the size of the investment proposed, and had expressed concern about the robustness of the evaluation procedure and SEEDA’s capacity to take on projects of this size. Nevertheless, he confirmed that the MPC commended this project to the Board.
19. The Board commented that the SEEDA should pursue a local procurement strategy in developing the site to leave an economic as well as physical legacy from the development.
20. The Board APPROVED SEEDA’s investment in this project.

Queensway

21. Duncan Straughen presented for the Board’s approval SEEDA’s involvement in a financing arrangement that will enable the development of the Queensway site in Hastings (as a facility for General Dynamics UK Ltd.). Under the arrangement SEEDA would take the risk of the potential assignment of the lease at year 5, which subject to various mitigations constitutes a potential exposure of £8.5 million. This risk is assessed as small due to GDUK’s long term commitment to the area.
22. The Chairman of the MPC welcomed this innovative form of project financing and commended it to the Board.
23. Rob Douglas recommended a revision of the contractual arrangements between HBRL and SEEDA to ensure that SEEDA has appropriate influence over HBRL as the lessor to ensure that they had an incentive to mitigate the risk of lease re-assignment.
24. Duncan Straughen agreed that this, along with SEEDA’s share in HBRL would be the best means of mitigating risk in the financing arrangement.
25. The Board AGREED that the financing arrangement for the Queensway development in Hastings should go forward to DTI for approval subject to a revision of SEEDA’s contract with HBRL to ensure SEEDA has appropriate influence over HBRL as the lessor.
26. The Chairman congratulated the SEEDA Executive on the innovative financing scheme for Queensway and left the meeting. Rob Douglas took the Chair.

    Eurokent Business Park

27. Paul Hudson presented for the Board’s approval plans to fund the acquisition and development, by means of a joint venture with Thanet District Council, of a site to provide small business units to accommodate the expansion needs of local businesses in an area planned for economic development in Thanet.
28. The Chairman of the MPC commended the project to the Board although MPC had been dissatisfied with the quality of the paperwork supporting the proposal.
29. Rob Douglas requested an update on how the income stream from letting the business units would be handled in the joint venture.
30. The Board APPROVED SEEDA’s investment in this project.

Action : Item 6, Major Projects, paragraph 33
Paul Hudson to update the Board, at key milestones, on progress in the Margate Town Centre and Eurokent projects.

Item 7 Financial & Operational Review

31. Duncan Straughen presented the Financial & Operational Review. He noted that the October performance on expenditure against profile had been the best to date, and that a full spend (of single pot and End Year Flexibility funds) is still being projected by year end. Confirmation had come from DTI that SEEDA would receive £7.7 million End Year Flexibility for 2005/6. Nevertheless a large sum remains to be spent to reach this target and efforts are continuing to address this.
32. The Board commended the clarity of the report and NOTED the Financial & Operational Review.

Item 8 Chairman’s Report

33. The Board NOTED the Chairman’s Report.

Item 9 Agency Report

34. Pam Alexander informed the Board that SEEDA will take the Chair of the group of nine RDAs (‘Chair of Chairs’) from April to end September 2006.
35. The third meeting of Business South East on 9 November had focussed on the RES Consultation Draft with business leaders supporting the need for the South East to meet the challenges of global competitiveness. In particular they had stressed the need to find ways of bringing forward vital infrastructure projects in the South East in order to protect the competitive advantage of existing businesses and enhance the offer to potential investors.
36. As part of ongoing work to emphasise the South East’s success in delivering the EU’s Lisbon (productivity) agenda SEEDA completed a mapping exercise of the Lisbon goals against the emerging RES priorities. Paul Lovejoy was invited to present the findings of this exercise to a European Commission seminar.
37. The Board NOTED the Agency Report.

Action : Item 14, Agency Report, paragraphs 41, 42
Jeff Alexander to bring an update on SEEDA’s international engagement, with a focus on Europe and India, to the March Board.

Item 10 Committee Report: Audit Committee

38. Rob Douglas reported that the Audit Committee is content with the action being taken by SEEDA to address any outstanding actions. He also reported the positive views of the National Audit Office that SEEDA has a very robust Audit Committee which benefits from the full commitment of the Board and the Executive in taking forward agreed recommendations.
39. The Board NOTED the report of the Audit Committee.

Item 11 Projects

40. The Board NOTED the summary of SEEDA’s projects.

Item 12 AOB

41. None.
    

SEEDA BOARD SUMMARY OF ACTIONS 

8 DECEMBER 2005 MEETING

Action : Item 6, Major Projects, paragraph 33
Paul Hudson to update the Board, at key milestones, on progress in the Margate Town Centre and Eurokent projects.

Action : Item 14, Agency Report, paragraph 41, 42
Jeff Alexander to bring an update on SEEDA’s global engagement, with a focus on India, to the March Board.

27 OCTOBER 2005 MEETING

Action : Item 3, Matters Arising, paragraph 3
Paul Lovejoy to bring a paper to the Board on public sector reorganisation in the South East.
Scheduled for March 2006.

23 JUNE 2005 MEETING

Action : Item 15, Policy Update: Innovation, paragraph 63
Simon Walker to schedule a Board discussion on strategic science and innovation issues in November.
Provisionally scheduled for March 2006.

26 MAY 2005 MEETING

Action : item 6, Project Update – Sustainable Rural Communities, paragraph 20
Valerie Carter to report back to the Board on the innovation and enterprise agenda for rural areas and on the analysis of the Countryside Agency programmes.
Originally scheduled for October Board to coincide with NT visit, now rescheduled for March 2006.