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MINUTES OF THE 80th MEETING OF THE
SOUTH EAST ENGLAND DEVELOPMENT AGENCY
HELD ON 21 SEPTEMBER 2006 LAND SECURITIES, EBBSFLEET
Present:
James Brathwaite (Chairman), Rob Anderson, Liz Brighouse, Poul Christensen, Rob Douglas, Imtiaz Farookhi (left at 12.30), Keith House, Sarah Hohler, Peter Jones, Mary McAnally, John Peel, Fiona Pollard, Peter Read, Bill Wakeham, Phil Wood.
In attendance:
Pam Alexander, Jeff Alexander, Ben Allen (NAO), Rolande Anderson (for items 1-6), Raymond Fawcett (NAO), Donal Galligan, Paul Lovejoy, Chris Moore (for item 8), John Parsonage, Peter Rockhill, Jonathan Sadler (for item 4), Stephen Sadler (for item 4), Duncan Straughen, John Tatham (EMDA – IPA Team), Simon Walker, Nick Young (for item 4)
Item 1 Welcome and apologies for absence
- The Chairman welcomed the Board to Ebbsfleet and compared the parts of the Thames Gateway they had seen that morning to the potential and opportunities in northern New Jersey. A special welcome was also extended to Fiona Pollard who joined the Board on 1 st September to fill the position of the late Terry Mills.
- The Board were introduced to Raymond Fawcett and his team from the National Audit Office who were observing the meeting as part of their Independent Performance Assessment work.
Item 2 Minutes of the last meeting (20 July 2006)
- The minutes of the last meeting were agreed as a correct record of proceedings, with the clarification that Sport England were not promoting the Brighton Ice Arena project, but were supportive of any major sports development.
Matters arising
- Pam Alexander updated the Board on the potential merger of English Partnerships and the Housing Corporation. Further analysis is being carried out by the Department of Communities and Local Government (DCLG).
- The Chairman drew attention to the extensive landscaping that Land Securities had done and noted that SEEDA should encourage other developments in the Thames Gateway to source their plants from the British horticultural sector. John Parsonage informed the Board that Robert Hillier Nurseries were bidding for the contract to provide the plant life and foliage for the 2012 Olympics development. Poul Christensen pointed out that the horticultural sector needed to maintain its competitiveness and avoid developing a dependency culture and was reassured that SEEDA's horticulture sector consortium would address those issues.
- Jeff Alexander updated the Board on the achievements of the SE Proof of Concept Fund (SEPOC). With the help of the Higher Education Innovation Fund, SEPOC had managed to fund 64 projects (against a target of 60), 47 of which had successfully received patents and 13 of those had then gone on to commercialisation. The Board were informed of the forthcoming Innovation Funding escalator project, which tied into SEEDA's commitments in the Regional Economic Strategy (RES), and would be coming to the Board for approval later in the year.
- Rob Douglas updated the Board on further developments in the reorganisation of the Learning & Skills Council (LSC). Statutory obligations had now moved to the Regional Board, which would be made up of business representatives, and the local councils would disappear entirely. The Chairs of the existing bodies would be meeting with Bill Rammell before the end of September to discuss the changes. Liz Brighouse noted that there was some concern amongst local authorities of the regionalisation of important issues such as adult and community learning. Rob Douglas agreed that as the LSC's structure became more regional it was more important than ever for SEEDA to retain close links with them. John Parsonage informed the Board that he had been in discussion with Henry Ball and Norman Boyland at the LSC as to whether Local Skills Partnerships could provide the business led local community service that was now being lost, without duplicating the LSC's work, and planned to bring a paper to the Board in the new year.
Action: Item 2, Matters arising
John Parsonage to bring a paper to the Board on LSPAs.
Item 3 Declarations of interest
- Rob Douglas in respect of item 8, Business Link, as a member of the SBS Board, and Phil Wood for the same item as a Sussex Enterprise Board member.
- Poul Christensen drew the Board's attention to his new role as Deputy Chairman of Natural England.
- John Peel noted for the Board's information that he was no longer a member of Sussex Enterprise.
Item 4 Area Update: North Kent and Medway Regeneration
- Rob Douglas reiterated the constructive nature of the Board dinner the previous evening which had been well attended by various Thames Gateway partners. Sarah Hohler noted that there had been huge progress made in the Thames Gateway, but agreed with Rob Anderson that local authorities still looked to SEEDA for leadership rather than taking it on themselves.
- Reference was made to David Cameron's recent comments in the Yorkshire Post questioning the value that SEEDA brings to the region and it was noted that it is often forgotten that the South East has also had to contend with the loss of coal mining and ship building and the associated problems that this brings.
- Jeff Alexander introduced to the Board the work that was being down in the Thames Gateway by the Greater South East RDAs (SEEDA, EEDA, and the LDA), highlighting the complex nature of the various partners involved. The Greater South East (GSE) is leading on the economic element of DCLG's Thames Gateway Strategic Framework. The aim is to make the area a gateway to international trade and investment between UK, Europe and the World; to create a world class landscape for world class people, unlocking the existing potential and creating new opportunities for enterprise and innovation; and ensuring a well connected network of regional cities, large towns and smaller settlements supporting London's role as a global city.
- It was pointed out that investment was needed because although the GSE is the driving force of the UK economy, it is slipping down global league tables. The Thames Gateway itself is underperforming within the GSE because of clear market failures so public and private investment could make a huge difference not only to the region but to the country as a whole. It was made clear that this growth can only take place in the Thames Gateway, rather than elsewhere, because of its proximity to London.
- There were four key transformational areas highlighted for this regeneration to be a success: for Canary Wharf to continue its development as a major finance/business centre through the development of Crossrail; Stratford and Lea Valley to take the opportunity to develop a new commercial district through the delivery of the Olympics; for Ebbsfleet to develop a new commercial district through the development of the Channel Tunnel Rail Link and Crossrail; and to ensure, through Shellhaven, that the UK secures a port of global importance and reach linked effectively to UK, European and global markets.
- Jonathan Sadler then presented to the Board an update on SEEDA's work in Medway. Medway, with a population of 500,000, is the eastern anchor of the Ebbsfleet diamond. SEEDA's vision is to create a city of culture, learning and entertainment focused on the previously underused waterfront.
- SEEDA's regeneration of Chatham Maritime had brought in £200million of investment in the past year, as companies such as Lloyds of London and mhs homes relocated to the area, securing an additional 1,700 jobs. It was noted that there were still some vacancies in the existing office stock and it was hoped that a 4 star hotel may be located in the Colonial House site. There was disappointment that ING had pulled out of the J5/J6 site at the last minute despite the advanced stage of plans, because of rises in contractor prices and the scaling back of ING's property portfolio. But SEEDA had managed to agree Heads of Term with the construction partners Ardmore to step into ING's shoes and the Board were reassured that the team would ensure that the vision and high quality of the project was kept despite the change in partners.
- The interface land, jointly owned by SEEDA and Chatham Historic Dockyard, was described as the key hinge to the success of the whole site, consisting of a 100 bed 3 star hotel, 1,200 Conrad designed units and the soon to be built National Museums at Chatham project. The key contribution of the Universities at Medway to the regeneration of the area was also highlighted and SEEDA are in discussions as to the provision of student accommodation.
- The Board discussed the importance of building regulations and the need to encourage Local Authorities to only grant planning permission to schemes that go further than just meeting the bare minimum of standards required. Jonathan Sadler drew the Board's attention to the Environment Agency's new requirements, in relation to flood risks, prohibiting the sitting of bedrooms on the ground floor. Poul Christensen highlighted the need to avoid building homes that may become uninsurable as a result of changes in regulations.
- Jonathan Sadler updated the Board on progress being made at Rochester riverside. SEEDA has invested £16 million in the area, with strict conditions attached to ensure the quality of development and joint working in the area, shown by the setting up of the joint Rochester riverside and Strood Board. The development, comprising of 1,800 new homes and a hotel, involves opening up the area through the numerous creeks and the creation of a river walkway. The Board were assured that the flood wall, at 6.2m, would withstand a one in a thousand years flood.
- The Board were also informed of developments in Chatham to help realise its potential as the new city centre for Medway, including the doubling in size of the shopping centre and the scrapping of the one-way system to allow the shopping centre to be linked to the waterfront.
- John Parsonage expanded for the Board on the skills element of development in the Thames Gateway. It was explained that the work done in the Leitch review was linking skills levels with GDP for the first time. It was noted that although the skills levels in the sub region were rising rapidly, they were improving from a very low base and would not catch up with the South East average until 2011. It was also highlighted that key to improving the skills levels was to fill the large 'university gap' that existed in the Thames Gateway between Greenwich University in London and Universities at Medway in the east. The Board were informed that a research led university was needed to truly achieve transformational action.
- Mary McAnally questioned if culture and sport were being tied into developments in the area, referring to the work done in Crawley and the support that Sport England provided and highlighted the need to include health facilities at the early stages of design. Nick Young reassured the Board that quality of life was a central theme, citing the funding of improvements at Dartford Orchid Theatre, the provision of playing fields and funding for Gravesend and Dartford FC as examples. Reference was also made to the village hall in Chatham Maritime which is fast becoming the focus of the community.
- Bill Wakeham welcomed the hugely impressive physical developments in the area but queried what the overall economic model was. The Chairman underlined that connectivity with London was the key, with the aim of creating a 'Pudong' by encouraging financial services to base their back offices in the area and hopefully attracting Imperial University and University College London to relocate activities. It was noted that 50% of Dartford's population, and 40% of Medway's, commuted into London every day and one sign of success would be if those commuters were to instead work in the immediate area. Jeff Alexander suggested that the GSE RDAs were ready to raise their game in the Thames Gateway and highlighted that UKTI were now using Ebbsfleet as a honey pot to attract inward investment to the area.
- The Board NOTED the progress being made in North Kent and Medway and the Chairman expressed his thanks to the Area and Property Teams both for their work in ensuring a successful Board meeting and for their work in the sub region overall.
Action: Item 4, Area Update: North Kent and Medway Regeneration
Jonathan Sadler to ensure SEEDA feed into the Environment Agency's consultation on planning regulations.
Item 5 Public Sector reorganisation: rummage
- Paul Lovejoy summarised for the Board the information in the paper on the reorganisation of public services. It was not expected that the Government would be announcing a formal reorganisation of local government in its forthcoming White Paper, but rather to encourage greater collaboration across unitary and district boundaries much as the Partnership for Urban South Hampshire (PUSH) has achieved. It was also explained that the South East is the only region to have two Strategic Health Authorities (SHAs), South Central and South East Coast, recognising the size of the region. The SHAs will place a greater emphasis on the health of the workforce and delivery of services, but will face substantial financial constraints – although the SE Coast SHA's funding has been increased it will still operate at a deficit. The consolidation of three rural agencies into one body, in the form of Natural England, was welcomed.
- The Board were informed that although there were no changes in the make up of the South East's Police forces, possible mergers were still being mooted. The Board also noted that the nine Fire and Rescue Control Rooms in the region were being consolidated into one Regional Control Centre in Fareham and there was some uncertainty as to what effect this may have on emergency planning issues.
- There was a full discussion amongst Board members around possible impacts of these changes. It was noted that the UK was unique in constantly changing the structure of its public bodies, projecting an appearance of continuous revolution and instability that may discourage long term investment by businesses. It was highlighted that there were political legitimacy issues with Regional Assemblies and also that there was a lack of trust in local authorities by central Government, which seemed to believe that corporations were more fit for purpose than the current system to deliver services on time and on budget. It was noted that for local authorities to operate effectively they needed to have power as well as responsibility, including more control over finances, as current funding cuts resulted in reduced levels of services and insecurity.
- The Board agreed that it was crucial for central Government to be clear and open about whatever reorganisation was to take place and for SEEDA to have the flexibility to work with whatever partners emerged. Regarding David Cameron's recent comments on the usefulness of RDAs, it was commented upon that the attendance and outcomes of the dinner the previous evening showed that SEEDA is valued in the region for the strategic added value it brings.
- The Board NOTED the reorganisations in the public sector.
Item 6 RES: Final submission
- Paul Lovejoy informed the Board that the Regional Economic Strategy (RES) for 2006-2016 had now been finalised and asked for the Board to formally adopt the strategy.
- The Board were informed that the RES had been endorsed by the Executive Committee of the Regional Assembly and, following the Board's endorsement, would be submitted to central Government. It was explained that the Assembly had accepted SEEDA's position on growth targets and policy of Diamonds for Investment and Growth, whilst highlighting the known difference between the RES and the draft South East Plan regarding aviation policy.
- The Board welcomed the RES, praising the framework that had been used and in particular the incorporation of cultural issues, thanking Paul Lovejoy and his colleagues for all their hard work on producing the strategy.
- Pam Alexander reiterated that with the strategy agreed the real work now had to be undertaken to deliver the targets and milestones by working with partners and ensuring a balance between investing in success and lifting performance in underachieving areas. The Board were also informed that the Executive team were looking at how SEEDA could ensure that it was fit for purpose to deliver the RES, e.g. through the LEAN process, and were engaging closely with the Agency's internal Leadership Group to bring forward proposals.
- The Board ENDORSED the Agency's adoption of the RES and noted its official launch at the Open Public Meeting on 31 st October and at the Parliamentary reception on 9 th November.
Action: Item 6, RES: Final submission
Paul Lovejoy to produce a clear summary and briefing for Board members to promote the RES.
Item 7 CSR: SE submission
- Paul Lovejoy summarised for the Board the key points of SEEDA's joint submission with the Regional Assembly for the Comprehensive Spending Review 2007 (CSR07). The Board were reminded that the Agency has two other opportunities to provide input to CSR07: as the Greater South East RDAs and in the joint RDA submissions being made.
- It was noted that HM Treasury's expectation was that the submission would focus on how to better utilise existing levels of funding, rather than be a bid for more funding.
- Peter Jones expressed his support for a Regional Infrastructure Fund and noted the need to lever in, and gear up, private sector funding for infrastructure projects. The mounting pressure on local authorities core funding was also highlighted and the resulting cut backs in services and tightening up of eligibility criteria for benefits.
- Peter Read highlighted the necessity for clear guidance from Government for the regulatory authorities, particularly in the water industry and Bill Wakeham stressed the need for more emphasis on public procurement. John Peel pointed out that the Gershon review had highlighted that a third of the possible savings identified could be achieved through a better procurement policy.
- The Chairman noted that HM Treasury's figures showed that the South East received the least amount of funding from central Government and highlighted the need to protect this existing funding from further cuts.
- Paul Lovejoy thanked the Board for their comments and agreed to incorporate them into the submission. On this basis, the Board AGREED the key points of the CSR submission.
Item 8 Major Projects & Programmes
Dover Town Centre
- Pam Alexander gave the Board a brief history of the Dover town centre investment strategy. SEEDA has been working with Dover District Council since 2002 to identify an appropriate development plan for the area in the town centre known as St James. In June 2006 a proposal was brought to MPC recommending an investment of £2.95million. Concerns were raised as to whether the proposed scheme represented best value for money and it was agreed that a more comprehensive scheme, albeit with a requirement for a higher level of funding, could achieve much better outcomes.
- The revised proposal was for the Board to approve a capital grant of £8.2million to Dover District Council to purchase the necessary property interests to enable the comprehensive masterplanning and redevelopment of the St James area. The Board were also asked to consider the option of a £12.3million option, which in net terms would represent the same investment (£6.5million). However, this needed to be fully appraised to identify whether the increased momentum would justify the higher investment and partners' attitudes tested.
- Chris Moore explained to the Board that Dover town centre represented a classic case of market failure, with historic dereliction and general retail leakage. The proposed scheme comprises a comprehensive mixed use scheme with retail, housing and leisure uses, underpinned by an ASDA pre-let and incorporating a hotel, river walkways and a new town centre car park. Whilst the broader proposals were considered it was important to maintain the confidence of commercial partners.
- Peter Read informed the Board that MPC members had visited the site and were under no illusions as to the challenge posed by the regeneration of this transit town, but offered their unanimous support for the scheme and were interested in seeing the £12.3million proposal taken further. Pam Alexander reassured the Board that although the funding would be given to Dover District Council as a grant, SEEDA would maintain control over the nature and quality of the design.
- The Board APROVED the revised 'in principle' agreement to a significant investment in the major redevelopment proposals which would be worked up in more detail whilst SEEDA sought parallel increases in investment from partners.
Action: Item 8, Dover Town Centre
Dover Town Centre proposal to return to the Board for approval.
Business Link
- Jeff Alexander presented for the Board's approval the proposal to provide core grant funding of £24million per annum, for three years, for the delivery of Business Link 'services' in the South East for the period 2007/08-2009/10.
- The Board were reminded that SEEDA had inherited the contracts between SBS and Business Link contractors when responsibility for the programmes was transferred to the RDAs in April 2005, and that it had been agreed that these contracts would complete in March 2007 to give the RDAs greater flexibility. The Board had endorsed the proposal put before them in October 2005 for SEEDA to engage in ongoing negotiations with the existing six Business Link Providers for the delivery of services post April 2007, subject to each provider's: continued full commitment to the Joining Forces Programme; adherence to the principles of the National Business Link Framework; and clear targets and the assessment of each provider's plans for achieving efficiency gains and improvements in performance.
- As all of the pre conditions had been met, the existing contract holders were invited to put forward their proposals in March 2006. The preferred model, which has undergone a rigorous external economic appraisal, consists of a single regional Business Link service delivered by six different providers with business led boards. The new legally constituted consortium would have a central regional Performance Unit and a regional marketing and promotions campaign which should yield a significant improvement in service and efficiency gains.
- Peter Read informed the Board that there had been a robust discussion at MPC on the proposals. Several issues were raised, including the questioning of retaining the format of six providers, how close the six separate providers had been pulled together and the need to look closely at protocols and contracts if the federal model was opted for. It was noted by MPC members that the level of quality across the providers was variable and the need to ensure that advice was of a high quality was stressed. The credibility of customer satisfaction results being used as one of the key performance indicators was also queried, in the context that first time users wouldn't know if they had received excellent advice or not.
- Phil Wood pointed out that unlike with ONE North East, the South East was too large to effectively operate a Business Link service on a single regional basis. It was noted that the question of whether there should be four, five or six providers was not the key issue, but rather that the service as a whole needed to be improved through greater cooperation and setting specific milestones. Rob Douglas reiterated the need to monitor performance of the providers more closely to pull the standard of those underperforming up to the level of the most successful ones, and to look at cost savings in the back offices.
- The Chairman drew together comments from other Board members, highlighting that the Agency was required to support a Business Link service, and that the current service was valuable, but that it needed to be improved and that a review process should be built in to include specific targets against which performance could be measured.
- The Board APPROVED the new federal structure to deliver the Business Link service. SEEDA would negotiate a three-year framework contract with each BL Provider. Funding would be subject to performance and agreement of annual funding plans with each Provider. The SEEDA Executive will report annually to the Board on the performance, collectively and individually, of the Providers prior to funding for the year to follow being confirmed.
Item 9 Financial & Operational Review
- Duncan Straughen summarised for the Board the progress made against budget and profiled expenditure. Spend achieved had been disappointing with an overall slippage against forecast. A substantial proportion could be attributed to a small number of projects that will go through later in the year and it was hoped that a more balanced picture should appear in the half year review.
- The Board were informed that the RDAs' budgets had only just been confirmed by DTI and Treasury, half way through the financial year, and that had been a cut on what had been expected. The Chairman had written to the Secretary of State on behalf of the RDAs expressing concern at how this process had been handled. Duncan Straughen clarified that the Agency's profiling had excluded End of Year Flexibility (EYF), so the cuts would be absorbed by EYF and other contingencies.
- On Outputs the Agency would not be able to meet its target on redeveloping Brownfield land because of slippage on the Snowdown colliery project, but this would be delivered in the corporate plan period, although not in the financial year.
- A summary of expenditure and core outputs for all the RDAs was also circulated to the Board. Peter Jones noted that if the Agency has to wait 6 months into the financial year for its budget, partners will be cautious in committing money and taking projects forward, suggesting that the answer may be to have indicative budgets for partners of perhaps 80% so as not to delay delivery.
- The Board NOTED the financial review.
Item 10 Projects
- Peter Read informed the Board that MPC had endorsed the National Museums at Chatham project and noted that it looked to be an exciting project for the area.
- Paul Lovejoy explained for the Board the reasons behind the additional expenditure for the EXODUS project, a programme designed to assist ex-offenders back into employment. The Prison Services in London and the SE had committed to providing match funding, but had then pulled out, leaving SEEDA to plug the funding gap as the lead partner. As a result of this development SEEDA has since renegotiated contracts so that the various providers have to provide their own match funding. Lessons had been learnt from this experience and would be taken to Audit Committee as a case study.
- The Board NOTED the summary of projects.
Item 11 Chairman's Report
- The Chairman gave an overview of his recent meetings drawing attention to those with Chris Seymour-Prosser concerning the London Array. The Board were informed of the desire to make Ramsgate the ' Aberdeen of the offshore wind industry' and the interest shown by Chairman Hao of Chinamex ( China's outward investment arm) in the project.
- As SEEDA came to the end of their period as Chair of Chairs of the RDA network it was noted that this was a particularly busy time to keep the RDAs' ideas at the forefront of Ministers' minds during the CSR period.
- The Board were informed that SEEDA was becoming more involved in the work of the NHS, especially as the Health Service is crucial to delivering the RES aim of getting 200,000 of the 800,000 economically inactive in the region back into work. Also mentioned was the scope for the NHS to become more sustainable in several areas including procurement, and the Chairman would be meeting with Caroline Flint to discuss these issues further.
- The Chairman also reported back on the launch of the SE Multi-Ethnic Development Agency's website, which had been well attended by, amongst others, Francis Maude and Keith Vaz, and highlighted the need to ensure that bodies like the Business Links were engaging with ethnic minorities.
- The Board NOTED the Chairman's report.
Item 12 Agency Report
- Pam Alexander reported back to the Board on the work the Agency had been doing as Chairs of Chairs of the RDA network. The HM Treasury fact finding visit to the USA had been particularly useful in exploring examples of cross boundary working in Atlanta and Denver. It was noted that the Chairman and Chief Executive had several meetings with Ministers across Whitehall in the past months. A strong forward agenda had been planned through autumn and winter that the LDA would be taking forward and SEEDA would be able to give more attention to their lead roles with DTI, including follow through meetings on the Energy Review.
- It was brought to the Board's attention that the RDAs had inputted to the DTI's Capability Review and were also due to contribute to the DCLG's.
- The Board were informed that attendance at the Rep PSA meetings had been informative. These focus on the target that each region's GVA should grow by 2.6% on the base year by 2016 and also that the differences between the regions should be closed. The latter was being achieved, but more as a result of a slowing of growth, so the South East was not likely to achieve the former.
- The Board NOTED the Agency report.
Item 13 AOB
- Duncan Straughen informed the Board that the process of awarding this year's pay increase to staff had been particularly slow and that the Agency were still in discussion with DTI, but that a cost of living increase of 2.5% was proposed.
- The Board were also informed that Lee Amor would be joining the Agency on 2 nd October as Director for Infrastructure and Development, filling Paul Hudson's vacated position. Lee's previous experience includes European Director of Land Lease Europe and Head of Special Projects at Lambeth Council.
- Poul Christensen drew the Board's attention to the launch of Natural England on 1st October.
SEEDA BOARD - SUMMARY OF ACTIONS
21 SEPTEMBER 2006 MEETING
Action: Item 2, Matters arising
John Parsonage to bring a paper to the Board on LSPAs.
To be taken at the January 2007 Board meeting.
Action: Item 4, Area Update: North Kent and Medway Regeneration
Jonathan Sadler to ensure SEEDA feed into the Environment Agency's consultation on planning regulations.
Action: Item 6, RES: Final submission
Paul Lovejoy to produce a clear summary and briefing for Board members to promote the RES.
Required for October Board meeting.
Action: Item 8, Dover Town Centre
Dover Town Centre proposal to return to the Board for approval.
To be taken at the December Board meeting.
20 JULY 2006 MEETING
Action: Item 4, Global Regions
Jeff Alexander to lead on a full discussion on SEEDA's international trade policy with the BRIC countries.
To be taken at the January 2007 Board meeting.
Action: Item 5, 2012 Olympics regional action plan
Paul Lovejoy to provide the Board with a timeline for implementing the regional action plan.
To be provided at the December Board meeting, following the Nations and Regions Group meeting in November.
23 MARCH 2006 MEETING
Action: item 11 – Major Projects
Paul Lovejoyto provide further information on other CHP projects.
A CHP carbon equation for the South East is being worked up and will be reported to the Board in October.
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