South East England Development Agency (SEEDA)

MINUTES OF THE 61st MEETING OF THE SOUTH EAST ENGLAND DEVELOPMENT AGENCY HELD ON 09th DECEMBER 2004 SEEDA HEADQUARTERS, GUILDFORD

Present:

James Brathwaite (Chairman), Rob Anderson, Clive Booth, Liz Brighouse, Rob Douglas, Imtiaz Farookhi, Sarah Hohler, Keith House – until item 8, Mary McAnally, Terry Mills, John Peel – until item 8, Peter Read, Phil Wood – until item 8

In attendance:

Pam Alexander, Jeff Alexander, Paul Hudson, Paul Lovejoy, Marianne Neville-Rolfe, John Parsonage, David Rawlins, Julie O’Donnell, Paul Martin (GOSE) – until item 8, Jenny Ashby (GOSE) – until item 8

Item 1 Welcome and apologies for absence

The Chairman welcomed Imtiaz Farookhi to his first Board meeting. Apologies had been received from: Poul Christensen, Peter Jones, Janis Kong and Bill Wakeham, who would join the SEEDA board in January 2005.

Item 2 Minutes of the last meeting (27 October 2004)
1. The Minutes were AGREED as a correct record of the meeting.
Actions from previous meetings
2. On the matter of compensation for the overall losses made by closing the Adits, Chairs had taken up this issue robustly with Ministers on 4 November. Pam had also written to DTI as lead RDA Chief Executive and she understood that DTI officials would be making submission to the Secretary of State shortly. The Chairman was also planning to write to emphasise its importance.

All other actions from previous meetings had been completed.

Item 3 Declarations of interest

3. Rob Douglas as a member of Surrey County Scholars with respect to item 11, project no 18
4. John Peel as a member of Sussex Enterprise with respect to item 11, project no 6.

Item 4 Corporate Plan

5. Marianne Neville-Rolfe introduced this paper by saying that the latest draft had taken into account the guidance of the Board at its previous meeting and had involved a considerable amount of challenge to SEEDA staff to justify their bids for resources. There was still more work to do on the geographical focus of SEEDA’s investments (though most would be in areas of greatest deprivation), on targets and performance measurement (reflecting the tasking framework agreed with Government) and on finalising the precise resource allocations. More detail would be made available to the Board in time for its Awayday discussions on 13 January. She gave a short presentation to illustrate some of the data and analytical techniques that could be employed in refining the Plan and set out the 4 Strategic aims:
• A step change in developing innovation for productivity growth;
• A measurable improvement in support for enterprises everywhere;
• maintaining the momentum on regeneration and urban renaissance;
• enhancing SEEDA’s trategic capabilities to influence its partners.

Five cross-cutting areas of work were crucial to delivering all these aims: skills, rural focus, environmental and community sustainability and social inclusion.

6. A “ Boston grid” analysis of programmes had been worked through with Executive Directors and other staff and most were happy with the distribution to the four boxes. She stressed that the “Improve or Exit” box was not the equivalent of the “dogs” in the text-book analysis – rather it contained either programmes like SRB that had a definite end-point or programmes where there was clear recognition within SEEDA that effectiveness could be improved.
7. Commenting on the programmes in the first two chapters, ‘Innovation’ and ‘Enterprise’ Jeff Alexander emphasised that innovation had increased in priority for this Corporate Plan and that it had a key role in promoting competitiveness not just for start-ups but for a broad base of businesses. This was reflected in cross-cutting programmes between Business & International and Learning & Skills Divisions.
8. There were three types of programmes: those building on what was already happening, for example the Manufacturing Advisory Service, where the a greater element of innovation would be introduced to make the programme work harder; those introducing innovation into the new business support activities like R&D Grant taken on with the transfer of Business Links to the RDA; and new innovation programmes responding to the DTI Technology Strategy such as knowledge transfer networks or regional Science, Engineering and Technology Hubs.
9. Delivery of some of these programmes through a more arms length mechanism was being pursued to make them more cost-effective, for example with Sector Consortia (paper at item 9), and he was exploring the scope to extend this approach and to link with the IIIE concept in something he was calling Innovation SE. Again, further work would be done to refine this between now and the January Board Awayday.
10. Paul Hudson said that programmes for ‘Quality Places’ and ‘Priority Regeneration Areas’ showed an unequivocal commitment to the Growth Areas. Substantial funding came direct from ODPM rather than through the single pot. The Corporate Plan proposals maintained commitment to the major sites in the West of the region but gave greater emphasis over the next three years to the East, driven by the AIF priorities. A major element was to develop the urban renaissance agenda and to respond to the Egan review through programmes to increase the professional regeneration skills capability of local authorities. Another was continued commitment to the regeneration advisory service including spending more time on statutory planning (paper at item 12)
11. Much of his Division’s activities were in support of the innovation agenda and it was crucial to bring regeneration and education activities together. Item 5 on the agenda addressed this in respect of coastal towns.
12. Paul Lovejoy, commenting on the chapter on ‘Strategic Influence’ noted that the next review of the RES would start in the early part of the CP period and he would report on the process and timetable in the next few months. SEEDA was starting from a good position in that the process of engagement with stakeholders last time had been recognised as having been done well. Nevertheless, the regional landscape was different now and the review was an opportunity to build stronger links with organisations SEEDA worked with and through, for example RAISE with the voluntary and community sector and the economic partnerships with the business sector.
13. On SEEDA’s strategic influencing role, he thought that engaging with the policy agenda was essential if were to be an effective strategic organisation. The SE Plan and more integrated approaches to regional funding were key examples in the coming year. At the national level, it was important to build on the work of the RDA lead roles and link this closely to the Board’s priorities. At the EU level, SEEDA already had a strong profile with the Commission and should be able to help share good ideas and good practice with other EU regions, including in the new Member States.
14. Finally, the Corporate Plan contained proposals to strengthen SEEDA’s capacity to build an evidence base for its work and to evaluate the impact of its programmes.
15. John Parsonage commented that the Learning and Skills programmes in the Corporate Plan supported the innovation and enterprise work already highlighted. They were about changing the culture towards a much more business demand-driven skills provision in the SE. Examples included leadership and brokerage of demand and supply side through the Regional Skills for Productivity Alliance, implementing the new employer training pilots announced in the Spending Review and programmes for technician training and workforce development more generally. On the schools agenda, highlighted by the Board as important at the previous meeting, there were programmes aimed at introducing youngsters to the business world.
16. In discussion, Rob Douglas noted that SEEDA only had 0.4% of the total public sector spend in the SE and asked if information on who was spending the rest could be found. This would make it easier to see if programmes were critical per se, though with others taking the lead, as opposed to critical for SEEDA. Where could SEEDA add most value and what was the market failure that SEEDA alone could address?
17. John Peel asked about the evidence base. He supported establishing programmes to tackle the lack of interest in sciences among schoolchildren., especially of primary school age.
18. The Chairman read out a note from Poul Christensen in support of programmes to address rural issues. Farmers (18000 in the SE) managed 60% of the land and 50% of high quality landscapes in the region and it was imperative that jobs and businesses in rural areas were supported. There were many opportunities for innovation in both the food and non-food sectors both in terms of production and in supply-chain efficiencies. Sarah Hohler agreed that there were many farmers that felt they lacked support though they were an essential part of their communities.
19. Liz Brighouse found the Boston grid a very helpful way to analyse SEEDA programmes. She thought that describing all the sources of funding in the SE was too big a task and it would be better to be clear about where SEEDA could be sure it was adding most value and focus resources on working with partners capable of delivering more.
20. Rob Anderson welcomed the approach in the Plan to maintain some flexibility for the latter years and using SEEDA resources to lever in mainstream funding. He felt it was right that SEEDA should not seek to replace SRB.
21. The Chairman thought it was important to be consistent publicly about the key statistics underpinning SEEDA’s work, for example the number of Super Output Areas in the bottom 20% in the UK . He supported building up research capacity in collaboration with other groups.

Action: from item 4, Corporate Plan; paragraph 26

Board Members to forward any detailed comments or concerns on the Corporate Plan to Marianne Neville-Rolfe before Christmas.

22. Pam Alexander thanked Board Members for their support for the process so far and also Marianne Neville-Rolfe for creating a coherent package out of many disparate strands of activity. She invited Board Members to send any detailed comments to Marianne.

Item 5 Coastal Towns Action Plan

23. Paul Hudson noted the large amount of work already underway in coastal towns that was described in the paper. In that context, his proposal was in two parts. First, to identify a single location to draw together many bodies development efforts and his proposition was Margate , building on the work already underway, including SEEDA’s potential investment in the Turner Contemporary Centre, and exploiting the Objective 2 funding to Thanet. There was a lot of interest from other partners in this idea.
24. The second strand was to build on the Urban Renaissance programme, which had been strongly supported by the SE Assembly Select Committee, and focus effort on improving the regeneration skills in relevant Local Authorities. Four or five towns would be selected to form a skills partnership programme and to build a collective capacity in the spectrum of professional regeneration skills needed much greater than could be available to any one Authority. The Corporate Plan had not identified specific resources for this so a way would have to be found to use existing activities to take this forward.
25. Sarah Hohler strongly supported these ideas noting that the housing situation in Kent was particularly difficult – it had 3 out of the worst 10 districts in terms of the proportion of vacant dwellings. The Kent Partnership needed more momentum and this type of programme could really help. John Peel noted that travel to market for businesses was 2.5 times higher in the corner of the region than in the middle.
26. Other Board Members emphasised the need for SEEDA to add value through such a programme to make transparent the basis for any choices and to join up with other agencies. Rob Douglas thought it was not a high priority given that SEEDA was already doing a lot and establishing such a programme was likely to lead to requests for funding which SEEDA might not be able to afford.
27. Pam Alexander commented that the proposals were not principally about spending more, though there might be good projects that SEEDA would want to support, but about joining up existing resources more effectively and giving them a focus. The Hastings 5 Point Plan had done this and given a confidence which almost in itself had led to an increase in values in the area. She had been invited by Kent County Council and Thanet District Council to chair a new Partnership for Thanet to help provide leadership and impetus to its work.
28. The Chairman agreed that providing a focus for activity did not necessarily mean more resources and he emphasised the importance of finding solutions for the towns involved – they were undoubtedly dragging back the performance of the SE economy.
29. In response to these points, Paul Hudson agreed that joining up resources and giving them a focus was key. It could in itself provide the catalyst to lever in more resources from other agencies.
30. Summing up, the Chairman concluded that a decision on the Action Plan should await finalisation of the Corporate Plan but that there was support for creating a better focus for existing coastal regeneration activities to improve confidence. This was AGREED by the Board.

Action: item 5 Coastal Town ActionPlan; paragraph 33

Paul Hudson to define the proposition and evidence base for a Coastal Towns Action Plan for the January Awayday

Item 6 Operational Review: Finance Report

31. The Chairman felt that the £6.8 million identified in the paper as potential property write-offs for the Coalfields was part of a national programme funded by English Partnerships and should not affect SEEDA’s single pot resources. He would take this up with Ministers if necessary.
32. Board members had some detailed queries about the forecast expenditure figures which Duncan Straughen agreed to respond to outside the meeting. The Board then NOTED the report.

Action: item 6, finance report; paragraph 36

Duncan Straughen to respond to detailed queries from Board Members about the financial report

Item 7 Report from GOSE

33. Paul Martin and Jenny Ashby gave a presentation on two developing policy areas: the Government’s consultation on integrated regional budgets and the pilot Local Area Agreements. On the former, Government had said that it wanted to look at how three big blocks of expenditure – transport, housing and economic development – might be better joined up in an integrated regional budget (IRB). Current proposals were to introduce this from next April and the consultation ran until 10 March. On the latter, SEEDA was represented on the Public Service Boards of both the SE pilots in Brighton and Hove and in Kent . Current plans were that the Agreements would be negotiated between the Government Office and the Local Strategic Partnerships.
34. In response to a query from the Chairman on the level of regional control over the transport budget, Paul Martin said that Government was trying to balance the wish to devolve decision-making as far as possible with the need to take difficult decisions about spending priorities when there were far more calls for funding than could be met from the available resources. Hence it was proposing that regions should make decision over the funding that was currently unallocated (predicted to grow year on year from 2010) but not the funding that was currently over-committed to projects.
35. In terms of who made the decisions about the integrated regional budget more generally, Paul thought that SEEDA and the Assembly would certainly have a role. There were likely to be tensions, for example when national ministerial priorities were different from regional/local priorities. In such circumstances, it would be essential to brigade local support so that it presented a unified viewpoint.
36. The Chairman commented that the IRB was a way to put back local interest and accountability into public sector spending and he observed that such a rapid integration of the IRB would mean it applying throughout the Corporate Plan period – this would therefore need to be taken into account in finalising the plan. He agreed that it would be essential to help provide leadership on how the IRB should be used & developed.

Item 8 Board Organisation

37. This item was deferred to allow discussion of item 12 before some Board Members needed to leave.
38. The Board AGREED the proposal for future agenda items and committee reports.

Item 9 Sector Consortia

39. Jeff Alexander introduced the proposals in the paper which were to develop a new model for sectoral support based on independent sector consortia.
40. In discussion, Clive Booth asked what evaluation had been undertaken of previous sector support activities – he felt that although SEEDA was rigorous at the front end of the project management process, it was less good at evaluating its impact. In response, Jeff Alexander agreed that more needed to be done on evaluation but that the model being proposed had been shown to be successful in the aerospace sector and there was support among sector partners for it to be extended to other sectors. Marianne Neville-Rolfe commented that the Corporate Plan proposed levels of resource to put project evaluation on a much more secure foundation within SEEDA.
41. Mary McAnally and Peter Read both supported the proposals which they felt would give a stronger business voice to the type of support being provided.
42. The Board AGREED the proposals on sector consortia.

Item 10 Major Projects

Medway Enterprise Hub

43. Paul Hudson introduced this proposal and explained that in order to mitigate the costs of write-down, it was proposed to give a grant to the Chatham Historic Dockyard Trust to purchase the building who would then use SEEDA’s expertise to develop the site. SEEDA would have an option to take back the building in future. In future, he proposed to establish a Special Purpose Vehicle for all the Enterprise Hub assets in order to provide greater flexibility in managing the property estate.
44. Peter Read reported that MPC supported this proposal as it provide an elegant solution to the write-down problem.
45. Pam Alexander explained that discussions between NAO and the Treasury on the accounting of write-downs had left the situation fairly clear – the rules were appropriate in order to put the opportunity cost of a loss of investment value on the revenue side of an organisation’s accounts. The consequences were now being seen as a budget issues and that to take on this sort of projects needed extra resources. The Board had previously made clear that this sort of project was central to SEEDA’s work and this project was the first example of a model that retained some control over the project but left ownership with a partner organisation. Solutions like this would be critical to deliver the Corporate Plan.
46. In response to a query from Rob Douglas about whether the overall cost included an element of restoring an historic monument and therefore should not be paid for by SEEDA, Paul Hudson noted that the development would not cost as much as new build and was comparable with other renovation projects and so was good value.
47. The Board AGREED this project proposal.

TT Electronics site, Northfleet Embankment

48. The Chairman noted the intention to relocate part of the works and that the company had not yet been invited to take up other premises in the SE as part of the negotiations; it was important to bring together the property development and investor development sides of the organisation at an earlier stage.
49. Peter Read reported that MPC had supported the project.
50. The Board AGREED the project proposal, noting that as it exceeded £10 million it was subject to a final decision by the Central Project Review Group.

Action: item 10, Major Projects; paragraph 52

Jeff Alexander to pursue the TT Electronic’s broader needs and to work to keep them located in the South East if possible

Item 11 Project reports

51. The Board NOTED the project reports.

Item 12 SEEDA’s planning role

52. This item was taken earlier in the agenda (before item 8).
53. Paul Hudson introduced this paper by commenting that SEEDA seemed to be being consulted effectively – in time and on appropriate issues.
54. In response to a query from Clive Booth about the lack of referrals from Milton Keynes, Marianne Neville-Rolfe said that she was on the board of the MK partnership committee but that there was nothing that had been particularly controversial which needed SEEDA input.
55. On the progress with the SE Plan, Paul Hudson felt the debate should be much wider than a simple focus on housing levels. SEEDA would want to make a strong input to the consultation process, having been involved closely in the work on the consultation draft.
56. Paul Martin felt that as a result of the decision on housing levels at the recent Assembly plenary, the terms of the debate had moved on, even before the consultation had been launched. The business community had already articulated its views about realistic levels of housing growth as had the voluntary and community sectors and he hoped that SEEDA would make a contribution that could easily be understood. The sooner the better in his view.
57. Responding to this, the Chairman hoped that the consultation was a genuine one and he agreed that key players in the debate in the Assembly were keen to get SEEDA’s views and to see the results of its research on the housing and infrastructure needs for economic growth. Pam Alexander noted that SEEDA had been active in the debate thus far not just on the issue of housing. On that issue, it would not be possible to give a single figure for the number. Paul Lovejoy supported this – he was leading work to look at a range of scenarios about the impact of different housing growth levels: on regional economic performance in prosperous and deprived areas; on housing affordability; and on the scale and pattern of labour supply.
58. The Board agreed to try to finalise a position on the SE Plan on 13 January and to issue a press release

Action: item 12, SEEDA’s planning role; paragraph 62

Paul Hudson & Paul Lovejoy to bring proposals for a SEEDA response to the SE Plan consultation document to the Awayday on 13 th January

Item 13 Minutes of the Audit Committee meeting, 27 October 2004

59. Rob Douglas reported that the NAO was very positive about SEEDA’s performance and had helpfully raised several issues which would improve this still further. Peter Read had stepped down from the Committee to take up Chairmanship of MPC and Phil Wood had joined.
60. Pam Alexander noted that one of the recent audits had identified the needs for recording gifts and hospitality could be tightened up. The Secretariat would re-circulate guidance to all Board Members on this.
61. The Board NOTED the minutes of the Audit Committee

    Action: item 13, Audit Committee minutes; paragraph 65

    Secretariat to circulate guidance on gifts and hospitality.

    Item 14 Chairman’s report

62. The Chairman reported that at the Dimbleby lecture that he had attended, James Dyson had commented on the low levels of chemistry graduates in the UK compared to other science disciplines. Clive Booth and Pam Alexander both commented that this was an issue being taken very seriously by universities and by the Funders Forum.
63. The Board NOTED the report.

Item 15 Agency report

64. The Board NOTED the report.

Any other business

65. The Chairman joined the Board in thanking Clive Booth and Marianne Neville-Rolfe, who were both attending their last meeting, for their very strong contribution, which in Clive’s case was throughout the whole of SEEDA’s existence.