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MINUTES OF THE 59th MEETING OF THE
SOUTH EAST ENGLAND DEVELOPMENT AGENCYHELD ON 23 SEPTEMBER 2004
SAÏD BUSINESS SCHOOL, OXFORD
Present:
James Brathwaite (Chairman),
Rob Anderson,
Liz Brighouse,
Poul Christensen,
Rob Douglas,
Janis Kong,
Mary McAnally,
John Peel,
Peter Read,
Phil Wood,
In attendance:
Pam Alexander,
Jeff Alexander,
Charlotte Dixon,
Paul Hudson,
Marianne Neville-Rolfe, John Parsonage,
Paul Lovejoy,
Duncan Straughen,
David Rawlins
Item 1 Welcome and apologies for absence
- The Chairman thanked Members for their participation in the preceding Open Meeting which he thought had gone very well.
- He then introduced Paul Lovejoy and Duncan Straughen as the two newly appointed Executive Directors who would be taking over from Marianne Neville-Rolfe and Charlotte Dixon. The Board and Chairman congratulated then thanked Marianne and Charlotte for their excellent contribution to SEEDA's work and welcomed Duncan to SEEDA.
- Apologies had been received from Clive Booth, Sarah Hohler, Keith House, Peter Jones and Terry Mills.
Item 2 Minutes of the last meeting (22 July 2004)
- With this amendment, the minutes were AGREED as a correct record of the meeting.
Actions from previous meetings.
- On broadband, John Parsonage reported that DTI were undertaking a review of the Regional Aggregation Boards. The draft report had put forward options that were misconceived in his view and he was feeding SEEDA concerns to the review team and to DTI. He would report to the Board again in October, with proposals for the South East Regional Aggregation Board.
- With respect to the actions from the June and March meetings to provide data on the geographic distribution of SEEDA expenditure, the Board was content with the information contained in the Corporate Plan paper at item 4.
Item 3 Declarations of interest
- John Peel as a member of Sussex Economic Partnership with respect to item 5b on Business Support.
- Phil Wood as a member of Sussex Economic Partnership with respect to item 5b on Business Support.
Item 4 Corporate Plan
- By way of context, Pam Alexander introduced the following issues for Board Members to keep in mind during the discussion:
- In terms of delivering the Regional Economic Strategy over the Corporate Plan period, SEEDA had a new focus on both the Government's 10 year science and innovation strategy and the new arrangements for managing the Business Links.
- Government was now looking for Local Authorities to put forward plans for new growth areas as part of the continued funding of the Sustainable Communities Plan. South Hampshire was keen to get involved.
- Although the negotiations on the new tasking framework for RDAs were going well, with a recognition that Public Service Agreements and RDA contributions to them should be at the head of future assessment of RDA performance, there was now an increased tension in some parts of Government between allowing RDAs flexibility in delivering their RESs in ways that suited their particular regional needs and a wish to retain some control over their impact on PSA targets. Delivering business support was one example (see discussion of item 5b).
- The political landscape was changing with Local Authorities coming up the ODPM agenda and the forthcoming referendum in the North East likely to create renewed focus on democratic accountability.
- The Government's efficiency reviews and challenging targets applied to the RDAs. In addition, the RDAs faced a particular challenge on current accounting rules with respect to property assets which could force SEEDA and the other RDAs to make difficult choices about future spending priorities.
- Marianne Neville-Rolfe asked the Board for its initial views on the issues raised in the paper, prior to the development of a first draft of the Corporate Plan to be discussed at the next meeting.
- On the guiding principles, Rob Douglas emphasised the importance of championing quality of life and raised the issue of how to judge whether SEEDA investment would be likely to result in sustainable solutions in the long term. On RES priorities, he felt that SEEDA was the only organisation, in many cases, that could play a catalytic co-ordination role and should retain capability and willingness to do this. On the other hand, while it was right that SEEDA focused on addressing market failures, there was a need to recognise and “reward” parts of the region that were successful – something we often argued for from Government. Other activities should be pump-priming, not permanent.
- Mary McAnally asked for a list of the PSA targets to which SEEDA would contribute.
Action: from item 4 – Corporate Plan; paragraph 14
Secretariat to provide Mary McAnally with a list of PSA targets to which SEEDA contributed.
- Poul Christensen thought that SEEDA should be prepared to take more of a risk with investments than would the private sector, including underwriting where the market would not.
- Several Members felt that the Board needed to set a clearer strategic framework for SEEDA's activities. Poul Christensen observed that the Board was usually asked to look at projects on a case by case basis and it was difficult to judge these against SEEDA's strategic priorities. Liz Brighouse thought that that the Board needed to get further “upstream” than it currently was in terms of anticipating future priorities, particularly with respect to the South East Plan. SEEDA's corporate plan needed clearly to add value to the plans of other partners. Rob Douglas felt that the Board was often reactive rather than proactive. Janis Kong had found a simple categorisation of projects into A (must do) and B (could do) very helpful in her business in terms of keeping stakeholders engaged and on board with difficult decisions.
- Phil Wood asked whether the Executive could develop a balanced scorecard approach to assessing progress on strategic objectives. The Chairman noted that there were already a lot of metrics used – the need was to make them more useful to the Board in managing SEEDA's overall agenda.
- Pam Alexander agreed that the Executive should develop a more strategic process of examining the pipeline of projects and deciding which should be brought forward. She would bring forward options for consideration as part of the Corporate Plan.
- Peter Read commented that in terms of efficiency savings, 2.5% looked unambitious, and he would hope that more could be delivered.
- In terms of SEEDA's spending power, Pam Alexander commented that an issue had arisen resulting from new accounting rules which required agencies developing land without a resultant increase in its value, as was the case with many brown field land projects, to write down the cost of development against revenue in addition to any holding costs associated with the capital involved. This effectively meant paying for the development twice and, if not resolved, would put intense pressure on SEEDA's revenue budget such that SEEDA's ability to continue much of its development work would be under threat. There were possible ways round the issue, including not taking on ownership of the land (Local Authorities and Universities were currently not affected by these accounting rules) and the team was exploring every avenue with the National Audit Office and Office of the Deputy Prime Minister. The Board emphasised that continuing such development activities was central to SEEDA's agenda.
Action: from item 4 – Corporate Plan; paragraph 18
Chief Executive to bring forward a strategic framework for SEEDA's projects as part of the Corporate Plan.
Item 5 SEEDA's Business and International Programmes
- On the first of the three topics in this item, Engagement with Business, Jeff Alexander introduced his proposal to create a new high level council that was representative of the region's business interests: ‘Business South East'. The membership of the current Business Development Committee and its subgroup, the Regional Business Development Board was explicitly non-representative and while this had served a function, it no longer gave SEEDA enough clout in negotiation with other stakeholders, eg over the South East Plan. Informal soundings had indicated that the business community was keen that SEEDA should take a leadership role and should champion business interests.
- Janis Kong thought that business leaders would only get involved if they could see what they would get out of it. Gaining a more coherent voice to Government would not be enough on its own unless businesses could see the results, in terms of improving the South East Economy and/or offering real accountability.
- Rob Douglas suggested that there was considerable fatigue among businesses at being consulted on their priorities numerous times by different public sector bodies. The proposed new council would be more attractive to businesses if it acted as a one-stop-shop, channelling all such requests. This would mean gaining the agreement of a range of other agencies, however, including those responsible for Skills.
- The Board AGREED the establishment of the new council to replace the existing committees and recommended the one-stop-shop approach be pursued.
- On the second of the topics on this item, Business Support, Jeff Alexander commented that after a lengthy meeting earlier in the week, the SBS and RDAs had come to an agreement over the approach to maintaining Business Links (BL) as a national brand but SBS co-owning the brand with RDAs. This should allow SBS to maintain quality control over the brand but also allow RDAs the flexibility to develop a service that was right for their regions. He asked the board for its endorsement of the framework proposals in Annex A so that they could be presented to BL chairs at the end of the month.
- In response to a query by the Chairman, Jeff Alexander said that BLs were in agreement that sharing back office services was right in principle and they were already in discussion about how it might work in areas such as marketing, call centres, customer relationship management and perhaps finance and HR. This should create useful efficiency savings.
- John Peel and Rob Douglas raised the issue of governance – how would this Board interact with the boards of the individual Business Links? The Business Links in the South East were performing well and this issue ought to be resolved, to avoid future confusion.
- Mary McAnally asked whether the BLs were being set specific targets. They were, both in terms of contributing to SEEDA's objectives and specific performance targets. Phil Wood suggested that, in the same way that RDAs were arguing for flexibility of action from Government, BLs should be set targets but then left to decide how to achieve them.
- The Board ENDORSED the framework proposals described in the paper.
- Finally, Jeff Alexander presented an update on the Global Regions programme for information. With respect to overseas offices, he preferred a model whereby there was a national presence with people from English regions participating as part of the national effort.
- The Board agreed with this approach and NOTED the report.
Item 6 Review of SEEDA Board Committees
- David Rawlins introduced this paper by explaining that it contained a mix of specific proposals for changes to the remits or mode of working of some of the existing Committees as well as more aspirational ideas for change to meet a need identified as part of his review process.
- The Chairman then read out a written communiqué from Terry Mills opposing the proposal to merge the Sustainable Development and Inclusion Committees.
- Liz Brighouse commented that although there could be arguments for this proposal, and it had been discussed at the last meeting of the Inclusion Committee, the type of expertise on each group was quite specific and there was not a lot of overlap. Rather than merge the two, they could meet together on specific issues. She felt that the ideas needed further discussion.
- Rob Douglas agreed that the landscape in which the Learning and Workforce Committee was operating in had changed and wondered whether the one-stop-shop approach suggested for the business council (item 5a) could be used here. John Parsonage thought that the Executive could draw on advice from experts. Again, he would take this idea away for further consideration.
- Janis Kong agreed with the proposal to abolish the Infrastructure Committee. It would still be open to SEEDA to seek the views of transport experts directly and Paul Hudson thought that SEEDA's involvement in the Regional Transport Board or committees on infrastructure that might be set, for example by the Assembly, ought to allow SEEDA to have sufficient influence on policy development. Mary McAnally suggested that Task and Finish Groups of experts might be used from time to time as needed, rather than Standing Committees.
- Janis Kong was clear that the role of the Major Projects Committee was to provide assurance to the Board on the Chief Executive's use of her delegations joining the executive to the non-executive governance of SEEDA, as well as to make recommendations to the Board on larger projects. Pam Alexander agreed that it was very helpful to the Board to be advised on her use of her delegated responsibilities; this had not come out quite clearly enough in the paper. And it was also a great reassurance to her to have Major Project Committee's advice.
- The Chairman agreed with the proposal to replace Advisory Council meetings with an annual South East Conference.
- On the Remuneration Committee, the Chairman reminded the Board that the final decision on the Chief Executive's remuneration was for the Secretary of State. Pam Alexander advised that all other RDAs had such a committee to advise their Chairman on their recommendations to Ministers.
- Mary McAnally remarked that the Board did not currently get any reports about staff morale or high level Human Resources issues such as retention and turnover. Pam Alexander noted that the current Staff Liaison Committee had not met for years and she would prefer to bring such issues to the Board's attention herself, as proposed in the paper. The Audit Committee might also have a useful role in advising her and the Board on issues like job evaluation and pay audits.
- The Chairman then summarised the discussion as follows. The Board AGREED:
• to replace the Business Development Committee and Regional Business Advisory Board with a representative business council;
• to abolish the Infrastructure Committee [with further consideration of whether a non-transport infrastructure group was needed];
• to abolish the Staff Liaison Committee and take reports on HR issues from the Chief Executive as appropriate;
• to merge Advisory Council meetings with the annual South East Conference;
• that the role of Major Projects Committee should be clarified to staff;
• to widen the remit of the Remuneration Committee as proposed in the paper;
• to retain the Rural Advisory Committee, Social Dialogue Forum and Joint Europe Committee in their current form;
• that the Executive should take forward the proposals in the paper for improved organisation of the Committees, including regular reports from the Committees to the Board;
• That other proposals for change to the Sustainable Development, Inclusion and Learning and Workforce Committees should be discussed further with the Committee chairs and brought back to a future Board meeting.
Action: from Item 6 Review of Board Committees; paragraph 41
Pam Alexander to report back to the Board at its October meeting on implementation of the changes to the Board Committees.
Item 7 Energy
- Charlotte Dixon introduced this paper by noting that the UK used twice as much energy per £ of Gross Domestic Product than some of our competitors. Improvements in energy efficiency ought to provide a lot of opportunities for business and it was important that the energy agenda should be considered closely alongside other SEEDA agendas.
- Rob Douglas supported the Action Plan proposals. He thought that the Board would need to take a view on when and what to champion, for example a research-based view in future nuclear energy provision in the South East.
- Poul Christensen thought that renewable energy should be a top priority for SEEDA and that generating confidence in potential markets for energy from biomass should be supported. Innovative approaches were needed to underwrite some pilot projects to generate confidence that a market could be developed. Phil Wood thought that further pilots should be done within the context of a community project.
- Mary McAnally thought that an analysis of exemplar projects (such as those in the West Midlands) should be undertaken. She agreed that security of energy supply should be a top priority and wondered whether there should be a major South East conference on energy. This could be a topic for the 2005 South East Conference.
- The Chairman noted that there were very well-funded organisations with whom SEEDA might work on this agenda.
- Janis Kong supported the action plan as a bottom-up list of activities leading towards a goal but, returning to the earlier theme of taking a more strategic approach, thought that the Board should be looking top-down on these activities, seeing whether they defined an overall vision and then seeing if the bar could be raised further, to activate it to activate it.
- The board AGREED the priority areas for action in the paper.
Item 8 Major Projects
- Janis Kong reported that Major Projects Committee recommended that the Newhaven Enterprise Gateway project be supported providing that a way could be found to avoid a write-down against the revenue budget which created a double expenditure. Rob Douglas offered to lend the Audit Committee's expertise to this problem. The Board AGREED this project subject to the same condition.
- Pam Alexander explained that the paper on Hastings and Bexhill Renaissance Ltd (SeaSpace) set out a proposed approach to transferring development sites from SEEDA to Seaspace in order to remove them from SEEDA's balance sheet and thereby to allow the company to borrow against the assets as proposed in the Business Plan. In response to a query from Mary McAnally, Pam Alexander replied that SEEDA had a 19% interest in the company. The Board AGREED to the transfer, noting that it was subject to DTI approval of the particular transfer process being proposed.
Item 9 Audit Committee
- Pam Alexander commented that she had been concerned that the minutes of the June meeting concerning compliance implied an endemic failure of staff to comply with procedures; she was now confident that the issues picked up by the auditor were detailed issues which had in part been addressed by the introduction of the new project management systems.
- Rob Douglas commented that in his view, compliance had improved over the last two years.
- John Peel asked whether there was a system for dealing with complaints. The Chairman replied that they were normally dealt with by letters from himself or the Chief Executive. In his view, Area Directors often defused issues before they got to the complaint stage.
Action: from item 9 – Audit Committee; paragraph 53
Secretariat Mary McAnally asked for a copy of the top 10 corporate risks provide
Item 10 Project reports
- Pam Alexander commented that MPC had seen the Marine Pavilion proposal at its meeting earlier that day.
- On Enterprise Hubs, the Board noted that it was important that partners' expectations were managed well so that they were clear that endorsement of the establishment of a Hub was not a guarantee of future funding for workspaces.
- The Board NOTED the reports.
Item 11 Chairman's report
- The Chairman reported that he had been supporting efforts to achieve an agreement between GE and Chiltern Borough Council over the proposed facility at Amersham.
- He congratulated Detlef Golletz for organising a highly successful High Speed Train launch.
- The Board NOTED the report.
Item 12 Agency report
- The Board NOTED the report and commented that the format was a very useful one.
Item 13 Operational Review: finance and performance reports
- Marianne Neville-Rolfe introduced the finance review by saying that SEEDA's new monitoring systems were now delivering bottom-up forecasts and there was growing confidence in the reports being generated. They showed that the early very slow start to expenditure had been resolved and that spend had now almost reached the levels at the same point last year.
- The Board NOTED the report and asked that this item be put higher up the agenda in future. The performance review should be summarised and, where possible, outturn compared with previous years.
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