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MINUTES OF THE 70th MEETING OF THE
SOUTH EAST ENGLAND DEVELOPMENT AGENCY
HELD ON 23 JUNE 2005 SEEDA CHATHAM MARITIME
Present:
James Brathwaite (Chairman), Rob Anderson, Liz Brighouse, Poul Christensen, Rob Douglas, Terry Mills, John Peel, Peter Read, Imtiaz Farookhi, Sarah Hohler
In attendance:
Pam Alexander, Paul Hudson, Paul Lovejoy, John Parsonage, Duncan Straughen, Jeff Alexander, Simon Walker, Donal Galligan, Peter Cusdin (for item 4), Stephen Sadler (for item 6), Ed Metcalfe (for item 15), Sally Goodsall (for item 7), Robert Spencer (for item 7).
Item 1 Welcome and apologies for absence
Apologies had been received from Bill Wakeham, Mary McAnally, Phil Wood and Keith House.
Item 2 Minutes of the last meeting (26 April 2005)
- Subject to minor corrections the minutes of the last meeting were AGREED as a correct record of proceedings.
Actions from previous meetings
- Dates to be provided for all actions from the May Board meeting.
Item 3 Declarations of interest
- John Peel as Chair of EEF South for item 4.
Item 4 Major Projects & Programmes
Woolston
- Peter Cusdin gave the Board an update on progress at Woolston and sought its approval to take forward the next £12.39 million stage of the scheme which will involve site remediation and putting in key infrastructure.
- The Woolston project is a £350 million investment delivering 1500 new homes and a significant amount of commercial space. £19 million has been spent to date since March 2003 to purchase and clear the site, the last key milestone was submission of the planning application in April. Total SEEDA investment is expected to be £30.89 million against expected £31.44 million receipts giving a £0.55 million surplus. Key risks to the project are: managing the high expectations of local stakeholders and partners; partner selection; volatility of the housing market; managing write downs. Local partners are fully engaged and share SEEDA's high design aspirations for the development at Woolston.
- The Board queried the affordable housing element of the development and the criteria for development partner selection (e.g. conditions on quality of units and local employment). Peter Cusdin emphasised that section 106 planning gain is being used to deliver a high level of affordable housing (the target is 28-29%) through renting, shared accommodation and intermediate ownership, and there will be a site specific local construction labour scheme
- Peter Read noted that the MPC had considered and endorsed this project commenting on the need for careful selection and control of the development partner and the need to manage partner expectations.
- Pam Alexander welcomed the MPCs endorsement of what she feels is a challenging, cutting edge project being delivered by a high quality team. It therefore has a high prospect of good returns but the risks need to be recognised and managed.
- The Chairman agreed noting that a key challenge for SEEDA will be to ensure a spirit of real partnership around the quality of and support for the development, which could be transformational.
- The Board APPROVED the further £12.39 million investment in the Woolston project.
SE Manufacturing Advisory Service (MAS)
- As Chair of EEF South John Peel left the room for discussion of the MAS project.
- Jeff Alexander summarised progress to date on the MAS. It is a national (DTI) programme which aims to drive up the productivity performance of manufacturing businesses by delivering targeted advice. Since its creation SE MAS has interacted with 10,000 businesses at the general enquiry level, and 250 companies have been transformed by having LEAN processed embedded in their business systems.
- The Board's approval is now being sought for a £5.9 million investment in 'New MAS' to be launched in September. New MAS will retain the core elements of the existing MAS but will aim to access a far larger cross-section of businesses by targeting nodal companies in the supply chain, and by focussing on enterprise, product development and innovation as well as manufacturing processes.
- To this end SEEDA has conducted a procurement process (in accordance with EU rules) for a contractor to deliver 'New MAS' in the South East. EEF South and BAE have been identified as the front runners and contract negotiations are due to start with the preferred bidder.
- Peter Read noted that MPC had strongly endorsed this project and sees successful delivery of 'New MAS' as vital to contribute to the productivity and skills gains the SE economy needs.
- The Board welcomed the project and saw the focus on the supply chain as particularly positive.
- The Board APPROVED the £5.9 million investment in delivering a new MAS for the South East.
Crossrail
- Paul Hudson sought the Board's approval, in principle, to lodge a petition arguing for the extension of the Crossrail project to Reading in the west and Ebbsfleet in the east.
- The hybrid (i.e. one which addresses both public and private interests) Crossrail Bill is currently before Parliament with Second Reading expected in 2-3 weeks. As drafted SEEDA is concerned that the Bill might not have the scope to debate the desired extension of an integrated rail-link from Reading to London to Ebbsfleet. Therefore, in order to argue its case before the Committee that will scrutinise the Bill, SEEDA might need to lodge a petition against the Bill.
- The Chairman agreed that the full east-west extension of Crossrail is vital to the region and to national rail interconnectivity. He added that RDA Chairs support this view given the national importance of Heathrow, and SEEDA should take every opportunity to lobby Parliamentarians.
- The Board AGREED to a petition being lodged if necessary but delegated the final decision on lodging it to the Chairman, Chief Executive and Executive Director of Development and Infrastructure.
Action: Item 4, Major Projects & Programmes, paragraph 21
Paul Hudson to bring a proposal on whether or not to lodge a petition against the Crossrail Bill to the Chairman and Chief Executive before Second Reading of the Bill.
Item 5 Policy Update: Housing
- Paul Hudson updated the Board on the development of the Regional Housing Strategy (RHS) by the Regional Housing Board. The Strategy sets out the criteria for disbursement of the £850 million housing fund established by the Government. SEEDA supports the Strategy which offers a balance of funding and recognises that private sector renewal of the housing stock needs greater attention. SEEDA's input was successful in increasing the number of Local Authorities to be supported through the RHS.
- The Chairman queried why public money is being used through the RHS to support private sector renewal. Pam Alexander explained that it is more cost effective to renew private sector housing stock through grants than through Compulsory Purchase Orders and re-development.
- Imtiaz Farookhi enquired what leverage is achieved by the money available through the RHS. The Board felt that understanding the totality of housing investment in the region would be useful in building the evidence base for public sector interventions in the housing market, and choices for Regional Funding Allocations.
- The Board NOTED the housing policy update and agreed with the Chairman's proposal to conduct a Housing rummage in the autumn.
Action: Item 5, Housing Policy Update, paragraph 25
Simon Walker to arrange for a Housing rummage at the October meeting of the Board
Item 6 Project Update: Chatham Maritime
- Jonathan Sadler updated the Board on progress at Chatham Maritime and reviewed progress against the milestones set when the Board approved the project in 2001.
- SEEDA investment in Chatham Maritime from 1999 to 205 totals £41.8 million, total investment is expected to reach £50.5 million with leverage of £700 million private sector investment. In addition English Partnerships has invested £118 million from 1986 to 1999. The apparent £4 million under-spend is due to that sum being held back to pay for upgrading the electricity supply infrastructure. A 5:1 leverage of private sector funding has been achieved with an estimated eventual total private sector investment of £700 million.
- Work on Dickens World and the cinema complex is underway. Work on Chatham Quays will begin onsite in September, ING have been appointed as development partner and planning approval has been secured with the full support of the key Local Authorities. The next challenge will be to develop the interface site between the leisure area and the Chatham Quays mixed use development. City Lofts have been hired as development partners for this project and a planning application should be made in 6 months.
- The £50 million Universities at Medway development is proceeding well with a new learning centre being built to be opened in September. Work on the new Learning Resource Centre at the old Drill Hall has started, and Kent County Constabulary will open its new HQ in September.
- The new housing developments at St Mary's Island, Fishing Village, Ventura and Northshore have delivered innovative, high quality places to live. 900 houses have been built, 1000 units remain to be built, production will restart in September aiming to deliver a rate of 100-150 units per annum but a flat housing market is affecting the rate of sales. Consequently the housing mix for the next phase of development is being reviewed, following the full review of CML's strategy that has taken place.
- The Board NOTED the Chatham Maritime project update.
Item 7 Finance SE
- Finance South East Chair Robert Spencer and Chief Executive Sally Goodsall updated the Board on the work of Finance SE and its future plans.
- Finance SE is a specialist organisation established by SEEDA to help companies get the right advice and funding at the right time. It aims to address any equity funding gap for growth businesses. Examples of its programmes include: the Business Accelerator which puts unsecured risk finance (up to £100,000) into small companies; the Alchemists who are mentors with money who get directly involved in business development; the Funding Escalator; and MERLIN which has recruited 60 business people to be trained as mentors to young companies within the Enterprise Hub network. Through these and other programmes Finance SE has raised a total of £20 million for SE businesses over the last three years.
- SEEDA currently contributes £100,000 core funding per annum, on this Finance SE leverages £1million for delivery of projects, and £10 million direct investment for its customers. In 2005/08 SEEDA funding will increase to £250,000 per annum on which Finance SE aims to lever £40 million into its customers.
- The Board welcomed the work of Finance SE in developing and communicating the funding opportunities for small business. The Board also noted that Finance SE might look to the EU for funding for example through the EUREKA scheme which is aimed at young entrepreneurs.
Item 9 SEEDA end year report to GOSE
- Paul Lovejoy invited the Board's comments on SEEDA's draft end year report to GOSE. It indicates a strong performance overall with some over-performance due to SEEDA taking on and delivering new projects during the year and some targets being missed on SRB funded projects (for which it is hard to track outcomes). Nevertheless SEEDA will review its forecasting procedures to ensure greater accuracy.
- Pam Alexander highlighted key successes: taking on and delivering new responsibilities following from SR04; delivering the new Tasking Framework; capital financing of projects in a very difficult climate; securing additional Growth Area funding. She also acknowledged the difficulties SEEDA had experienced in: forecasting; major shifts in central Government programmes (e.g. regional broadband aggregation programmes); and dealing with write-downs on projects.
- The report will be submitted on 12 July and discussed on 14 July by SEEDA and GOSE directors.
- The Board supported the Chairman's suggestion that an executive summary be included with the full report to guide discussions on 14 July.
- Paul Lovejoy noted that this is the last end year report SEEDA will have to submit to GOSE. From 2005/6 RDAs will undergo a Comprehensive Performance Assessment on organisational efficiency which is currently being piloted by EEDA and NWDA.
- The Board AGREED the draft end year report to GOSE, subject to the addition of an executive summary.
Item 9 Lead Roles Report
Broadband
- 2004/5 had been a difficult year nationally with the changed national policy for broadband aggregation programmes but SEEDA had achieved substantial regional success in delivering 97% availability of first generation broadband access. Nevertheless take-up of broadband remains slow and there is a need to upgrade existing infrastructure to support the next generation of broadband technology. SEEDA's efforts will focus on these priorities in the coming year.
Construction
- It has been agreed that the Construction Lead Role will pass to emda with the Manufacturing Lead role in return for Enterprise. SEEDA therefore leaves a legacy of activity in the Construction Lead Role that has focussed on developing the construction best practice document with contributions from all RDAs. Cross-divisional working was, and will continue to be, a priority for SEEDA's own work in this area.
- The Board NOTED the Broadband and Construction Lead Role reports.
Item 10 Financial and Operational Review
- Duncan Straughen noted that the identified variances in this month's report are mainly due to a delayed property acquisition which is being completed in June. Work is underway to benchmark SEEDA's invoice payment performance with other RDAs and the Executive will bring proposals to the Board for revised reporting mechanisms in light of this exercise. Meanwhile the blockages in the process had been understood and were receiving management attention.
- Duncan Straughen agreed to include a quarterly assessment of absenteeism and turnover statistics as part of the reporting pack.
- The Board NOTED the Financial and Operational review.
Action: Item 10, Financial & Operational Review, paragraph 46
Duncan Straughen to include a quarterly assessment of absenteeism and staff turnover in the reporting pack for Board members.
Item 11 Committee Report: Business SE
- Jeff Alexander reported that Business SE had held a productive meeting and dinner on the RES review. They were very concerned that the infrastructure underpinning business performance would not be delivered, from secure energy supply to a skilled workforce to affordable houses and ease of access. The review should take as its starting point a vision for the SE that addresses the question of 'what does future success mean for the region?' and then explore this vision and the necessary steps to achieving it. A Business SE Press Release on the RES review will be released shortly.
- The Board NOTED the Business SE committee report.
Item 12 Projects
- [CONFIDENTIAL: Peter Read reported on the MPC's endorsement of the £1.5 million SFIE grant to Legal & General to facilitate their remaining in Brighton & Hove. The MPC agreed that Legal & General were key employers in this area, which was one of only 2 in the South East where SFIE grants could be awarded. The Board asked the Chief Executive to ensrue that the senior management at Legal & General recognised the value of SEEDA's support.]
- The Board NOTED SEEDA's current projects.
Action: item 12, Projects, paragraph 51
Pam Alexander to meet Legal & General's senior management.
Item 13 Chairmans Report
- The Chairman highlighted his attendance at the Transport & Climate Change Seminar. This is a local authority initiative in collaboration with Oxford University aimed at addressing climate change by conducting 'green audits' of businesses travel arrangements.
- The Chairman confirmed that the Lead Roles swap between SEEDA and emda had been approved by RDA Chairs and Ministers. The small business agenda will be the focus of the next meeting between RDA Chairs and Ministers on 21 July.
- The Board NOTED the Chairman's report.
Item 14 Agency Report
- Pam Alexander drew out two major initiatives for young people.
- The Computer Clubs for Girls (CC4G) initiative piloted by SEEDA had had a tremendous launch nationally, and would now involve 150,000 girls over the next 3 years. Enterprise Insight had supported five teams of schools to enter the Isle of Wight Round Island Race as a business project covering sponsorship, publicity and project management as well as an inspiring training programme with Shirley Robertson, Olymipic medallist. Pam had presented the prizes after an exhilarating day.
- In addition Pam Alexander drew the Board's attention to the recent meeting between RDA Chief Executives and ODPM at which David Miliband had emphasised his evidence-based, pragmatic approach to policy, and his strong interest in community issues and in the potential for city regions.
- Finally she reported that as a result of the visit to China in February an MOU would be signed with SEEDA's Beijing counterparts on Monday when a major delegation from the Pharmaceutical industries was in the South East.
- The Board NOTED the Agency report.
Item 15 Policy Update: Innovation
- Ed Metcalfe gave Board members an update on the Science and Innovation agenda that is being pursued by the South East Science, Engineering and Technology Advisory Council (SESETEC). RDAs, and SEEDA through its lead role on Science and Innovation, are working closely with Government to tackle key national challenges: increasing GVA delivered on R&D to 2.5% by 2014; improving the UK's rating as the second least innovative EU Member State; and improving business interaction with Universities and their exploitation of the knowledge base to bring products to market.
- In response to these challenges RDAs have increased total spend on science and innovation programmes by 50% to £360 million per annum. They have also agreed three innovation priorities with DTI: effective knowledge transfer mechanisms; simplifying delivery of innovation advice; and implementing the Technology Strategy in the regions. Indeed John Parsonage informed the Board that a Knowledge Transfer Network for nanotechnology has been established in the South East and has already attracted £12 million in DTI funding.
- SESETAC will be analysing these issues and the necessary responses in bringing forward detailed projects, having identified three areas for priority action: supporting emerging priorities; advising businesses on access to the knowledge base of the South East; and developing SET skills.
- The Board NOTED the innovation policy update and welcomed SESETAC's work on science and innovation issues noting that action needs to be taken fast order to deliver the 10,000 extra researchers necessary to achieve the increases in R&D sought. They asked for a discussion on the strengths of different parts of the South East n delivering increased R&D.
Action: Item 15, Policy Update: Innovation, paragraph 63
Simon Walker to schedule a Board rummage on strategic science and innovation issues in September.
Item 16 AOB
- None
SEEDA BOARD MEETING 23 JUNE 2005 SUMMARY OF ACTIONS
Action: Item 4, Major Projects & Programmes, paragraph 21
Paul Hudson to bring a proposal on whether or not to lodge a petition against the Crossrail Bill to the Chairman and Chief Executive before Second Reading of the Bill
Action: Item 5, Housing Policy Update, paragraph 25
Simon Walker to arrange for a Housing rummage at the October meeting of the Board
Action: Item 10, Financial & Operational Review, paragraph 46
Duncan Straughen to include a quarterly assessment of absenteeism and staff turnover in the reporting pack for Board members.
Action: item 12, Projects, paragraph 51
Pam Alexander to meet with Legal & General's senior management.
Meeting arranged for Tuesday 12 July.
Action: Item 15, Policy Update: Innovation, paragraph 63
Simon Walker to schedule a Board rummage on strategic science and innovation issues in November.
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