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MINUTES OF THE 76th MEETING OF THE
SOUTH EAST ENGLAND DEVELOPMENT AGENCY
HELD ON 23 MARCH 2006 SEEDA GUILDFORD
Present:
Peter Jones (Chair), Rob Anderson, Liz Brighouse, Poul Christensen, Imtiaz Farookhi, Sarah Hohler, Keith House, Mary McAnally, John Peel, Peter Read, Bill Wakeham, Phil Wood
In attendance:
Pam Alexander, Jeff Alexander, Paul Hudson, Paul Lovejoy, John Parsonage, Duncan Straughen, Donal Galligan, Peter Rockhill, Eileen Armstrong (for Item 4), Mark Gibson (for Items 5-9), Lewis Scott (for Items 5-9), Ed Metcalfe (for Item 6), Graham Tubb (for Item 8), Stephen Sadler (for Item 11)
Item 1 Welcome and apologies for absence
- Apologies had been received from James Brathwaite and Rob Douglas.
Item 2 Minutes of the last meeting (26 January 2006)
- The minutes of the last meeting were agreed as a correct record of proceedings.
Matters arising
- Imtiaz Farookhi queried whether there had been any consultation on the extension of the Mayor of London's powers in respect of the Learning & Skills Council (LSC).
Action: item 2 – Matters arising
John Parsonage to report back to the Board on the changes in the LSC in regards to the Mayor of London's powers.
Item 3 Declarations of interest
- Mary McAnally as member of Sport England for Item 7.
- Peter Jones as a member of East Sussex County Council and Hastings Bexhill Renaissance Ltd for Item 11.
- John Peel as Chair of Central Sussex College for AOSEC (Association of SE Colleges) in Item 13.
Item 4 Regional Economic Strategy (RES)
- Paul Lovejoy summarised the paper put before the Board which he reiterated was not the draft RES itself, rather a working paper that sets out the targets, objectives and actions in the RES, moving beyond the language of regeneration towards implementation.
- Three headline targets were highlighted to measure the progress of the Strategy: achieve an average annual increase in GVA per capita of at least 3%; increase productivity per worker by 30%, from £39,000 in 2005 to at least £50,000 by 2016; and reduce the rate of increase in the region's ecological footprint and stabilise it by 2016.
- The main body of the Strategy is structured around the three objectives of Global competitiveness, Smart growth and Sustainable prosperity. An overall goal is set for each objective, along with 5-6 specific targets, which in turn provides a structure for a series of 83 actions in total. As SEEDA will lead on only 20 of these actions other partners in the region are clearly crucial. A number of transformational activities which have the potential to make a strong contribution to achieving the Strategy's objectives, such as next generation broadband, were also highlighted.
- Paul Lovejoy drew the Board's attention to the concerns that had arisen in the consultation process over the map that was being used of the South East, regarding the hardness of the boundaries and apparent disjointedness between sub regions, and circulated a revised map which he felt addressed those concerns. He also highlighted that cross cutting issues such as culture and rural issues would be embedded into existing actions.
- The Board welcomed the paper as an exciting development. There was a full discussion of the South East's ecological footprint and the targets set with views ranging from them not being inspirational or ambitious enough to concern that we would not meet them. Paul Lovejoy explained that the target was a regionalisation of the Kyoto targets and was aspirational, as we could not control all of the factors involved. Poul Christensen voiced his concern that there was no reference to biodiversity and Peter Read drew attention to the role of desalination plants in water conservation.
- Phil Wood reminded the Board that in respect to infrastructure we should not focus purely on BAA airports but look to supporting smaller airports such as Manston. Imtiaz Farookhi drew attention to the need to improve energy efficiency in existing housing stock if we were to meet our targets and not to refer exclusively to new build.
- The Board ENDORSED the proposed scope and content of the draft RES.
Item 5 Global Regions
- Jeff Alexander introduced Lewis Scott, Director of Trade & Investment, and explained the new consolidated structure of UKTI in the South East and the joint SEEDA/UKTI branding to external partners, which preceded the Chancellor's statement of restructuring central UKTI.
- Lewis Scott reiterated that there was now 1 regional team in the South East, replacing the previous 6, under the brand UK Trade & Investment. Lewis Scott informed the Board that the South East has been outperforming all other UK regions and was achieving higher targets than those set by UKTI central headquarters. John Peel noted that if we were achieving our own targets with ease then they should in fact be set higher.
- Jeff Alexander explained to the Board the importance of the work done by the Investor Development Managers to retain foreign investors once we have initially attracted them, but conceded that with contact with only 600 of the 7,750 foreign owned operations, SEEDA was only touching the tip of the iceberg.
- The Board heard how inward investment invigorated the economy and that a positive churn effect, where one foreign investor moves out and is replaced by another, is crucial to maintaining the same level of competitiveness and success. In 2004/05 the South East secured the second highest number of inward investment projects after London and the investments of Huawei Technologies and Astellas Pharma in 2005/06 were also highlighted.
- It was recognised that SEEDA now had to be more targeted in its approach to inward investments, analysing the technologies the South East needs, identifying the best companies in those fields and then proactively pursuing them. To achieve this SEEDA will need to demonstrate that alongside having the workforce, infrastructure and quality of life necessary, the region is also the best environment for a business to grow internationally.
- Lewis Scott reassured the Board that there was now a much more holistic approach by UKTI to helping foreign owned businesses and that by utilising a Global Regions Network we could benefit from the experience of other regions.
- The Board NOTED the update on SEEDA's work in Trade & Investment.
Item 6 Lead role update: Innovation
- Ed Metcalfe summarised SEEDA's work as RDA lead role for Science & Innovation, which working with an effective network from all RDAs, coordinates responses and influences policy development on the Government's science and innovation agenda. Much of this work is done in partnership with the DTI through the Regional Innovation Science & Technology Group (RIST).
- The Board were informed of the positive role SEEDA plays in influencing developments in areas such as Higher Education Innovation Funding (HEIF). It was pointed out that a key challenge for RDA input into CSR07 will be highlighting exactly what work the RDAs undertake on innovation and how much value is added by this work.
- Four areas were RDAs could work together more closely were highlighted: Science Cities, with the point made that a different model was needed for the Greater South East; Knowledge Transfer, where it was identified that longer lead times were required; Innovation Support, where a better service needs to be provided; and Skills for Innovation, for which national-regional planning is needed.
- Bill Wakeham welcomed the focus on encouraging children at an early age into science but noted that this would not produce the required manpower for a further 20 years. Ed Metcalfe informed the Board that work was needed with 16-19 year olds to encourage them to choose the right degree course alongside work with graduates through a retention scheme.
- The Board NOTED the lead role update on Science & Innovation.
Item 7 Lead role update: Enterprise
- Jeff Alexander summarised the activities of the Enterprise lead role for the Board, including work with Business Links, the High Growth SME Coaching programme and the Phoenix Fund. The Board were informed that SEEDA takes over the lead for Women's Enterprise on 1 st April 2006.
- The Board's attention was drawn to the Chancellor's reference in the Budget statement on the deproliferation of business support, with the aim to reduce the number of organisations offering business advice from 3,000 to 100 by 2010. The Board was informed that RDAs were integral to the delivery of this simplification, with SEEDA leading on delivery channels, but were warned that the process would not be without some considerable pain.
- Poul Christensen drew attention to the particularly poor service that businesses in rural areas had received, especially from the Business Links.
- The Board NOTED the update on the Enterprise lead role.
Item 8 Lead role update: Energy
- Graham Tubb outlined to the Board the progress that had been made in delivering the lead role on Energy, with the Government's Energy Review high on the agenda. It was noted that the RDAs had not taken an explicit stance on nuclear but stressed the need for security of supply. There was however concern over the lack of joined up government across Whitehall, partly due to the fragmentation of responsibility between DTI and Defra. The difficulty of engaging with ODPM on home energy efficiency was also highlighted, as was the need for public buildings to set the highest standards, a vision that needed to be incorporated from the early planning stages.
- The Board expressed concern over the lack of engagement with the RDAs on the Energy Review and with the organisation of the regional seminars in particular. The Board were informed that Richard Ellis of EEDA will chair a review looking at how businesses can be supported in achieving energy efficiency.
- Rob Anderson pointed out to the Board that we have a window of opportunity to drive growth through energy efficiency, but highlighted that the behavioural change needed could only be achieved through strong political leadership.
- Peter Jones reminded the Board that a uniform local opinion on issues should not be assumed, pointing out that the local population near Dungeness power station supported the building of a third reactor in preference to wind turbines. The Chair also drew attention to the incinerator in Newhaven which will produce enough electricity to supply all the homes in Newhaven and Peacehaven, and pointed out that 10-15% of demand could be supplied by an incinerator in every county.
- The Board NOTED the progress being made on the Energy lead role.
Item 9 DTI Update: Comprehensive Spending Review 2007 (CSR07)
- Mark Gibson, Director General of Business at the DTI, then gave the Board a DTI view of the work that SEEDA had been doing on its lead roles. The Board were told that DTI relied heavily on SEEDA to implement its policies and felt that the work on the Enterprise lead role was particularly good, especially the Business Link board. On the Innovation lead role it was felt that there was more to do and that spending should be more joined up with central Government. On the Energy lead role it was recognised that the 2003 Energy Review had not addressed the supply/demand balance, which had now become a very serious issue. It was noted that the RDAs had become more joined up on Energy because of SEEDA's work.
- Mark Gibson then summarised to the Board the issues facing RDAs in the forthcoming spending review. It was highlighted that in previous years the aim had always been to increase the RDAs budget and devolve more responsibility, but that in CSR07 tougher questions would be asked about how the RDAs had been performing and if they had been providing value for money. It was pointed out to the Board that budgets were not secure for the next 2-3 years and that there was a general cut back in public spending, but it was also reiterated that RDAs were perceived to have done a good job. Pam Alexander made the point that if DTI did cut budgets, SEEDA's priorities would be to committed projects and that there should be no net impact on SEEDA's baseline budget.
- The Board expressed their deep concern at any last minute cuts to the budget and the potential adverse effects it would have on SEEDA's commitments and projects. It was pointed out that when businesses face cuts they respond by investing in success and that the DTI should draw parallels with SEEDA's position.
- The Board NOTED Mark Gibson's update and welcomed his openness.
Item 10 2006/07 Budget
- Duncan Straughen introduced the operational budget for 2006/07 for the Board's approval. He explained that SEEDA is moving from structuring the budget on a divisional basis to presenting it under the themes identified in the Corporate Plan, pointing out that 2006/07 is the second year of the Corporate Plan.
- Duncan Straughen reassured the Board that the in the 2007/08 budget £25 million would be retained and unallocated to accommodate the commitments made in the RES. Poul Christensen queried what proportion of the overall budget was made up of administration costs.
- Each Executive Director then highlighted the major programmes in their areas. Jeff Alexander emphasised the increased spending on innovation that will be ramped up further next year. John Parsonage drew the Board's attention to the work that will be carried out by the LSCs to improve Further Education in the region and the links that will be utilised with businesses and Higher Education to act as a stimulus to regenerate areas, highlighting the major science campus at Harwell-Chilton, the Imperial campus at Wye and QinetiQ. He also drew attention to the pilot programme with Jobcentre Plus to wean people off incapacity benefit by, among other things, providing the means for someone to set up their own business.
- Paul Hudson pointed out that a large section of his division's work consisted of externally funded projects and so did not show up in the budget. He highlighted the continued importance of the regeneration of town centres such as Oxford and coastal towns like Margate and Hastings and drew attention to the crucial transport upgrade from Southampton to the West Midlands.
- Paul Lovejoy informed the Board that there was a continued effort to prepare for the 2012 Olympics and that a Regional Action Plan would be presented to the Board for their approval. He also highlighted that the Rural budget was expanding, as SEEDA inherited programmes from Defra and that the BREW budget in particular was being doubled.
- The Board APPROVED the operational budget for 2006/07.
Action: item 10 – 2006/07 Budget
Duncan Straughen to report back to the Board on administration costs.
Paul Lovejoy to bring an Olympic's Regional Action Plan to the Board in June.
Item 11 Major Projects & Programmes
Buckland Mill
- Stephen Sadler presented to the Board a request for an additional expenditure of £395,000 (increasing the total budget from £3.44m to £3.835m) to help generate the optimum regeneration solution for the site and deliver best value for money.
- SEEDA bought the former Buckland Mill site in Dover in 2002. The original budget of £3.19m was to acquire the freehold interest, undertake demolition and essential remedial works and prepare a masterplan and Planning Brief. Additional expenditure of £250,000 was approved in July 2004 to enter into a joint venture with Gillcrest Homes to secure a long term equity stake and a greater capital return from the project.
- In 2003 SEEDA became involved in protracted negotiations with Dover District Council to relocate the town centre bus depot to the Buckland Mill site. This had the potential to seriously reduce the redevelopment value of the site and eventually a suitable site elsewhere in Dover was identified. However this complication added costs and at least 12 months to the project lead time. The further funding is required to cover the additional costs of concluding negotiations with Gillcrest Homes and deliver best value for SEEDA.
- Peter Read informed the Board that there had been a robust debate in MPC regarding the extra funding and Board members expressed concern over the need for any further funding. Paul Hudson reassured the Board that no further funding would be required and that the project would play a major part in halting the decline in the town centre.
- The Board APPROVED an additional expenditure of £395,000 for the Buckland Mill site.
Unwins Depot acquisition
- Paul Hudson presented to the Board for its approval a project to acquire the Unwins Depot site with ODPM funding as a continuation of the Northern Gateway site assembly, and proceed with the proposed re-development which will include high quality flexible employment premises, sustainable housing and a study into re-instating the town lock on the River Darent to create a new water environment.
- The total cost of the project is £8,920,915 and will be funded entirely by ODPM, outside SEEDA's single pot. The purpose of the project is to start catalytic, high quality mixed use development in Dartford town centre and is a continuation of the land assembly and masterplanning work already carried out by SEEDA in the Northern Gateway area of Dartford.
- Peter Read informed the Board that MPC had visited the site the day before and were impressed by the potential. He pointed out that the key challenge was to effectively replace GSK, whose consolidation in the last 6 years had resulted in a loss of 1,860 jobs in the area.
- The Board APPROVED the acquisition of the Unwins Depot.
Neats Court
- Paul Hudson also presented to the Board for its approval the bridging investment of £6.8m by ODPM and SEEDA to open up the Neats Court employment site to accommodate two relocations, both inward investments, as part of the Queensborough & Rushenden Regeneration Scheme.
- In July 2003 the Deputy Prime Minister announced a series of projects to promote sustainable development within the Growth Areas, and as part of the programme SEEDA was allocated £7m by ODPM to bring forward the Queensborough & Rushenden Regeneration Project. The Board were informed that the Neats Court site is a gateway to both the island and the regeneration area and would establish a high quality environment as an exemplar from the start. £3m of the funding for the Neats Court site will come from the current ODPM allocation, with the remaining £3.8m being funded from the SEEDA single pot. The SEEDA money is bridging finance and is programmed to be spent and returned within the financial year 2006/07, which will be achieved through land sales.
- Peter Read registered MPC's support for this project and highlighted the link road as crucial to its success. Poul Christensen noted that we should retain a mix of businesses and be careful not to be too exclusive in our developments. John Peel drew the Board's attention to the need for training for the long term unemployed on the Rushenden housing estate.
- The Board APPROVED the bridging investment of £6.8m for the Neats Court site.
Millbrook Combined Heat and Power (CHP)
- Duncan Straughen presented to the Board for its approval the payment of a Single Regeneration Budget grant of £5m to Southampton City Council to contribute to the district heating network element of a Combined Heat and Power station and distribution system to houses and businesses in Southampton.
- The project is the key element of a Single Regeneration Bid that received approval in principle in July 2000. The 50 MWe liquid bio-fuelled CHP district heating scheme will provide all the space heating and domestic hot water needs for 3,440 tenants in the Millbrook and Redbridge wards in Southampton. The scheme will also supply eight schools and nine social services buildings with their heating and hot water requirements. The project aims to showcase the use of renewable energy; lift local residents out of fuel poverty; contribute to carbon dioxide emission reductions and provide job opportunities in the area.
- Bill Wakeham questioned if the scheme would in fact reduce carbon dioxide emissions, as emissions would only be cut if a crop such as willow or rape seed was planted in conjunction. The Board were reassured that although initially palm oil would be imported from overseas to power the scheme, the key was that it would create the market for any future domestic fuel supply.
- The Board APPROVED the payment of a £5m grant to contribute to the Millbrook CHP scheme.
Coastal Strategy
- Paul Hudson summarised the paper which set out the developing approaches to a coastal strategy for the region in the context of the new Regional Economic Strategy.
- The Board NOTED the development of the coastal strategy.
Action: item 11 – Major Projects
Paul Lovejoy to provide further information on the carbon footprint of CHP projects.
Item 12 Financial & Operational Review
- Duncan Straughen summarised the February Financial and Operational Review and the progress that had been made against the profiled expenditure for 2005/06. Indications were that although expenditure for February was below forecast, the pace of spend was picking up, especially with the approval of several major projects, including HMS Daedalus and the Margate regeneration. In the event of other delays it was noted that there were projects in reserve ready to spend.
- The Board were reassured that SEEDA had performed well against its output targets for 2005/06, but it was conceded that more work needed to be done on regeneration leverage where we will fail to meet our targets.
- John Peel congratulated the team on the improvement on payment of invoices.
- The Board NOTED the Financial and Operational Review.
Action: item 12 – Financial & Operational Review
Duncan Straughen to report back to the Board on outcomes.
Item 13 Projects
- Sarah Hohler drew attention to Project 15, the development of a regional indicator of 'Sustainable Economic Well-being' for the South East. Paul Lovejoy informed the Board that this was being developed with Professor Tim Jackson and would be incorporated into the RES if possible.
- Peter Read requested that the Board be made aware of the total investment in a project as many that appeared in the list referred to additional spending on existing projects.
- Jeff Alexander summarised for the Board the Health Map project which had been strongly endorsed by MPC that morning. The £3m project will help diagnose any faults in aircraft whilst airborne, avoiding the need to land, and ties into the ‘Integrated wing'. The project will help retain Britain's international competitiveness in aerospace.
- The Board NOTED the summary of SEEDA's projects.
Action: item 13 –Projects
Duncan Straughen to provide a ‘total investment' element in the list of projects.
Item 14 Chairman's Report
- In the Chairman's absence Pam Alexander highlighted the SE Conference, the Diamonds for Growth conference and the Thames Gateway Strategic Partnership meeting as the key events in February and March. The Board were also informed that SEEDA's presence at MIPIM had been extremely effective and that we had established our credentials as the leading RDA.
- The Board NOTED the Chairman's Report.
Item 15 Agency Report
- Pam Alexander summarised for the Board the Agency report for February and March.
- Pam Alexander also drew attention to the Chancellor's budget statement and its implications for SEEDA. The review of Business energy efficiency, restructuring of UKTI and value for money studies were specifically highlighted. On the issue of de-proliferation in Business support it was pointed out that SEEDA needed to ensure that there wasn't re-proliferation at a later date. In relation to CSR07 and budget cuts it was noted with interest that the Department for Work & Pensions had settled for a 5% drop in budget.
- The Board were informed of the progress being made on the Independent Performance Assessment (IPA). It was agreed that a draft report would be presented to the Board in May for feedback, with the final report coming back to the Board in June. Board members were also told that the National Audit Office may be contacting some of them in September when they carry out their audit of SEEDA.
- The Board NOTED the Agency Report.
Item 16 AOB
- The Board extended their congratulations to Paul Hudson on his new position as Chief Planning Officer at ODPM and thanked him for his hard work at SEEDA.
SEEDA BOARD - SUMMARY OF ACTIONS
23 MARCH 2006 MEETING
Action: item 2 – Matters arising
John Parsonage to report back to the Board on the changes in the LSC in regards to the Mayor of London's powers.
Action: item 10 – 2006/07 Budget
Duncan Straughen to report back to the Board, in June, on administration costs.
Paul Lovejoy to bring an Olympic's Regional Action Plan to the Board in June.
Action: item 11 – Major Projects
Paul Lovejoy to provide further information on other CHP projects.
Action: item 12 – Financial & Operational Review
Duncan Straughen to report back to the Board on outcomes.
Action: item 13 –Projects
Duncan Straughen to provide a 'total investment' element in the list of projects.
26 JANUARY 2006 MEETING
Action: item 13 – Projects; paragraph 69
John Parsonage to provide further information on Project 4, the South East Proof of Concept Fund (outputs from SEPOC to date).
In progress.
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.
To be taken in Autumn 2006 to take account of forthcoming Government White Papers on Local Government reorganisation and City Regions (expected Summer 2006).
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