MINUTES OF THE BOARD MEETING HELD ON 16 NOVEMBER 2006 AT RENAISSANCE HOUSE, WARRINGTON

Present: 

Bryan Gray (Chairman)
Joe Dwek
Peter Hensman
Dave McCall
John Merry
John Moverley
Vanda Murray
Marie Rimmer
Anil Ruia
Brenda Smith
Mike Storey
Maureen Williams

Also Present: 

Steven Broomhead
Bernice Law
James Berresford (84/05)
Mark Hughes (84/06)
Ian Haythornthwaite (84/08)
David Higham GONW
Phil Robinson NWRA

84/00 PRESENTATION: JEREMY SCUDAMORE, CHAIRMAN NORTH WEST SCIENCE COUNCIL

Jeremy Scudamore, the Chairman of the North West Science Council provided a presentation on the NW Science Council; the revised NW Science Strategy; and the key issues for the future.

The Board was reminded that the NW Science Council was the first to be established; had an excellent reputation; had developed as an influential voice; and was the primary advisory body to the Agency on science matters. 

Since its inception in 2002, the Council had overseen and helped bring about:

• Dramatic improvement in science infrastructure.
• Significant strengthening of research base
• Business start-up support through Venture funds and incubators.
• Success in national and international competition.

The Board was advised that the NW Science Strategy had recently been revised and had been signed off by the Council in October.  It would be presented for endorsement by the NWDA Board in December. A regional launch would take place during the first quarter of 2007.

The Board welcomed the fact that:

• The Strategy had been closely aligned with the RES
• A number of enabling actions had been identified to implement the Science Strategy
• The Strategy focused on Priority Sectors, including for example: Aerospace, Biomedical, Chemicals and Nuclear.

84/01 INTRODUCTION AND APOLOGIES FOR ABSENCE

Apologies were received from David Brockbank and Pauleen Lane.

84/02 MINUTES OF THE MEETING HELD ON 14 SEPTEMBER 2006 AND MATTERS ARISING

The minutes were approved as a correct record.

84/03 ACTION POINTS FROM PREVIOUS MEETINGS  
 
The Board noted the progress made on the action points from the previous meetings.

ITEMS FOR DECISION
 
84/04 KINGSWAY BUSINESS PARK; ANCOATS URBAN VILLAGE; NORTH MANCHESTER BUSINESS PARK
 
The Board was asked to consider revised expenditure approvals for three key projects which were now at a crucial stage in their development. The three projects were:

• Kingsway Business Park, Rochdale, a 192 Ha strategic regional site requiring  Agency investment in land acquisition by CPO, major access infrastructure and site preparation followed by onward development by a private sector developer.
• Ancoats Urban Village CPO, a 170 Ha mainly derelict and underused building in a conservation area within the URC boundary, for which the objective was to provide a sustainable mixed use urban village. Agency investment included complex land assembly by CPO (for 197 plots) and interim estate management ahead of onward development by the private sector under plot disposal and existing implementation agreements.
• North Manchester Business Park Phase 1, a 37 Ha first phase of a strategic regional site (total 160 Ha) within the URC boundary, requiring Agency investment in land assembly by CPO, major access and electrical services infrastructure and demolition, remediation and site preparation for onward development by a private sector partner through plot disposal.

The Board noted that whilst none of the projects had incurred gross expenditure in excess of their existing approvals, an extensive evaluation had revealed additional unforeseen costs.
 
The Board noted that on 4 October a Board Task Group had reviewed in detail the project evaluations. As recommended by the Task Group, the Board received a detailed account of the “lessons learned” from the evaluations, which would be disseminated throughout the Agency. 

The Board noted the detailed risk analysis that had been undertaken for all three projects, and in particular for the risks outlined in respect of the Kingsway Business Park project. 

The Board was advised that as the approvals were more than the Board’s delegated authority a revised approval request for each of the projects would be submitted to DTI/ HM Treasury.

The Board confirmed the recommendations from the Task Group.
 
84/05 VISITOR INFORMATION INFRASTRUCTURE PROJECT
 
Peter Hensman declared an interest.

The Board noted that the region’s Visitor Information Strategy (a requirement in the RES) was being prepared for publication. The Board was advised that the Visitor Information Infrastructure project aimed to enable the implementation of the Strategy and its associated actions.  The project had been designed to help to deliver world class visitor information services that would provide a competitive advantage to the region.

The Board was advised that the project would provide funding support from 2007, for a capital investment scheme to allow opportunity for Tourist Information owners to invest in their facilities and their information provision.  The project would be delivered at three levels:

• Regionally – developing activities such as ICT and essential customer service; training, establishing service standards and performance criteria; and carrying out research, best practice and benchmarking.
• Sub Regionally – enabling the Tourist Boards to fulfil their strategic role in relation to the Visitor Information Strategy; to support improved access to appropriate technologies by tourism businesses; and to increase awareness of opportunities that e-business can deliver.
• Individual project level – supporting capital interventions (at no more than 40% of total capital intervention) to ensure that high quality information is provided in locations of evident need and to respond to changes in information requirements in the following areas:
  o Effective and appropriate orientation and signage.
  o Tourist Information centres and Tourist Information points.
  o Multi media delivery.

The Board noted that the project as a whole would build on the extensive infrastructure investment already made by the Agency under the Regional Tourism ICT project.

The Board approved investment for the lifetime of the project.

84/06 JOINT STRIKE FIGHTER DESIGN ENGINEERING PROJECT AND SALMESBURY AEROPARK PROPOSAL
 
The Board was advised that the JSF programme was a next generation replacement for the F16 and F18 combat aircraft.  4600 F16s and F18s were currently in service and operated by 30 of the global NATO aligned air forces.    

The Board was also advised that the Defence Industrial Strategy, which Government published in 2005, confirmed that the present JSF programme would be the last manned aircraft new build programme currently envisaged; and that at the present time the Ministry of Defence and BAES did not expect a further manned programme to be launched.  The view was that the future of the defence aerospace industry in the North West would be dominated by the JSF programme.

The Board noted that the BAES site at Salmesbury was the manufacturing arm of the Company’s regional defence air presence and its UK Centre of Excellence for advanced aerospace manufacturing operations.  The Board was advised that in the forthcoming years the Company would need to invest heavily to provide the capacity and capability to achieve the JSF build rates. The Company had therefore developed a JSF manufacturing strategy, which included various options that would require overall investment within the range from £450m to £650m.

The Board was advised that NWDA’s support would be in respect of Infrastructure improvements, given that following previous site expansions the Ribble Valley and South Ribble Councils, the Highways Agency and Lancashire Highways had confirmed that no further site expansion would be permitted should it result in increased traffic use of the existing site junctions with the A59. Subsequently NWDA funding was intended to be used to create a new entrance at the site in a different location to the exiting one. The Board was advised that this would improve road safety on the A59 and directly support the development of the aeropark.  The Board was also advised that the BAES would match fund the amount provided by the Agency for an office complex. 

The Board noted the expected outputs from this project.  In addition to reclaiming 36 Ha of derelict land the project would create 600 new, high value design and engineering jobs in the region and was expected to sustain them until at least 2028.  The project was expected to start at the beginning of 2007, once planning permission was received, and would be completed in 2008.

The Board approved Agency investment towards the associated infrastructure works involved in the Salmesbury Aerospace project, subject to grant conditions and suitable clawback provision which had been identified in the detailed appraisal of the project.

ITEMS FOR INFORMATION
 
84/07 CHIEF EXECUTIVE’S REPORT
 
a) Local Government White Paper
The Board received a summary of the key issues contained within the Local Government White Paper that was published on 26 October.  The Board noted the implications and issues for the Agency and that overall, the White Paper was supportive of RDAs’ roles and functions, particularly regarding Core Cities and City Regions. 

b) A Century for Cities: The Priorities for Future Success of the Core Cities in England
The Board noted the summary of the report “A Century for Cities” which had recently been published by the Core Cities Group (a network of the major cities outside London).  The report set out the top priorities for the Core Cities to drive up economic performance, including greater local empowerment, streamlining strategic planning and funding; and increased freedoms and resources at local level.  It also suggested how new ways of working could be developed in respect of

• Transport.
• Supporting Innovation and Enterprise.
• Skills, Worklessness and Social Inclusion.
• Placemaking.
• Climate Change.
• Financial Freedoms.
• Governance. Core Cities and London (known as the Big Nine).

The Board was advised that the report acknowledged the need for division of labour and responsibility at regional, city region, core city and neighbourhood levels and that any new arrangements should ensure that:

• The needs and roles of Core Cities and city–regions were properly understood and that this was better reflected in policy;
• There was a more integrated approach to strategic planning across the board and that Core Cities were better able to influence its outcome;
• Core Cities, working with city–region partnerships, where appropriate, offered a unique opportunity for devolution, piloting new ways of working with Government to boost UK PLC.

The Board was reminded that the role and importance of the core cities and their regions was recognised in the RES and was also reinforced in the Regional and Northern Way submissions to CSR2007.   The Board noted that the Agency had been working with Manchester and Liverpool on the development of their City Region Development Programmes and City Region Business Cases. The Board also observed that the Local Government White Paper provided a new context for the ongoing dialogue with Liverpool, Manchester and Central Lancashire city regions.

c) The Economies of Deprived Neighbourhoods: Summary of Research
The Board noted the summary of a report that itself summarised three research studies on economic issues for deprived areas, namely:

• The Dynamics of Local Economies and Deprived Neighbourhoods, produced in 2004 by the Centre for Enterprise and Economic Development Research (CEEDR), Middlesex University;
• Worklessness in Deprived Neighbourhoods, produced in 2004 by the Policy Research Unit at Leeds Metropolitan University; and 
• Informal Economic Activities and Deprived Neighbourhoods, also produced in 2004 by CEEDR.

The Board noted that three critical conclusions had emerged from the studies, which were as follows:

• There was an increasing concentration of the problem of worklessness among particular groups and neighbourhoods.
• It was clear that the problem was one of multiple disadvantage, combining individual, household and contextual factors – including institutional behaviour.
• Existing policies, while reducing worklessness overall, had not worked as well for those who were least competitive in the labour market.

The Board also noted that the studies had identified a range of implications including the fact that there remained a key role for neighbourhood based economic initiatives to improve employability and self help; that greater attention should be paid to the fine grain of labour demand, including processes; and that there was a need for better alignment of housing and economic policy.

d) Skills in England 2005
The Board received a summary document of the Skills in England document, which was published in July 2006, by the Learning and Skills Council in partnership with DfES and the Sector Skills Development Agency.  The document provided details of the research into demand and supply of skills and evidence of regional and local trends.  The Board noted that the Agency had been represented on one of the research groups.

e) CLUNET
The Board received further details of the progress made in respect of the CLUNET project, which was being developed in response to an EU invitation for all RDAs across Europe to develop and share cluster development related policies and networks. 

The Board noted that contracts had been negotiated and a regional launch of the project had taken place on 26 October 2006. 

f) Government Announcement on Future Structural Funds
The Board was advised that on 23 October 2006, Margaret Hodge, Minister of State for Industry and the Regions announced Government plans for the future of EU Structural Funds, which included:

• The Government’s revised National Strategic Reference Framework (NSRF), including comments on the consultation and the management arrangements
• Allocations of ERDF and ESF to the nations and regions of the UK

The Board was advised that as part of the announcement, it had been confirmed that, subject to negotiation, RDAs would take over some of the management functions in relation to ERDF. Further details would be provided to the Board once they were determined.

The Board noted the allocation of ERDF and ESF for the region and that, as the formula had included a GVA component, the three northern regions had received a higher per capita allocation for ERDF.  The Board also noted that within the overall NW allocation, there was a ring fenced element for Merseyside in recognition of its special status as an ex Objective 1 area.

The Board was also advised that on 30 October 2006 James Plaskitt, the Work and Pensions Minister had launched the consultation on the 2007 - 2013 ESF programme. The Board noted that the consultation would close on 22 January 2007.
 
g) Stern Review of the Economics of Climate Change
The Board received a short summary of the key points contained within the review of the economics of climate change, which Sir Nicholas Stern, Head of the Government Economic Service and former World Bank Chief Economist had recently published.  The Review had received considerable press coverage.

The Board noted that the Review had concluded that there was still time to avoid the worst impacts of climate change subject to actions being taken now and on an international scale. In particular, Stern had observed that strong, deliberate policy choices by governments were essential to motivate change including:

• Carbon pricing, so that people are faced with the full social costs of their actions.
• Technology policy, to drive the development and deployment at scale of a range of low-carbon and high-efficiency products.
• Removal of barriers to energy efficiency and to inform, educate and persuade individuals about what they can do to respond to climate change.
• Adaptation policy to deal with the unavoidable impacts of climate change.

The Board agreed that Carbon pricing was a national / international issue.  However they welcomed the fact that the other issues raised had been incorporated into the Region’s Climate Change Action Plan, which had been launched on 9 November.

h) TVR Cars Blackpool
The Board noted that previously, as a result of extensive efforts by the Agency, TVR Cars had agreed and announced that it would retain its production facility in Blackpool and move to a site near to the airport in around 18 months.  However the Company had recently announced that it would transfer production to Turin, Italy.  This decision would incur the loss of 230 jobs in the town.

The Board was advised that the Agency had engaged in discussion to determine the rationale for this revised decision and as a consequence presented a proposal to the Company, which if successful would retain jobs in Blackpool. The proposal required external investment; and several groups of potential investors had been identified by the Agency. 

The Board noted that the Agency was continuing to work with Blackpool Borough Council to further identify potential investors who might take over the business as it stood; and with Jobcentre Plus to ensure that current employees received all the help available should redundancies occur.

i) National Nuclear Skills Academy
The Board was advised that together with Westlakes Renaissance the Agency was progressing a bid for £6m as a contribution to the NW spoke of the National Nuclear Skills Academy, which was being developed at the Lillyhall site in West Cumbria at a total cost of £18.5m.  Other funders included the Nuclear Decommissioning Authority, the British Nuclear Group and ERDF.
 
84/08 FINANCE DIRECTOR’S REPORT
 
Dave McCall declared an interest in respect of the financial delegations section of the report.

The Board noted the Agency’s financial position as at 30 September 2006.

The Finance Director advised that a half year review of the budget for 2006/07 had been compiled; and that the Agency’s Strategic Investment Plan (SIP) for the period 2007/08 to 2009/10 was now in preparation.  A first draft of the SIP would be presented to the December Board meeting.

The Board received details of the progress made with the implementation of the Agency’s Property PPP:  Ashtenne Industrial Fund had been selected as the preferred bidder; and subject to final negotiations the PPP was expected to be in place by the end of November 2006.

The Board noted that the Agency was presently progressing the Risk Strategy, which had been considered by the Audit Committee at its meeting on 20 October.  The Board was also advised that the Audit Committee would receive the Agency’s Risk Register at its next meeting.

The Board noted the Delegations for the period 19 September to 13 October 2006.
 
84/09 CHAIRMAN’S REPORT
 
The Chairman reported on the following issues:

• Margaret Hodge, the Minister for Industry and the Regions had agreed to the extension to December 2008 of Sir Martin Harris’s appointment as NWDA Deputy Chairman. This would mean that the Chairman and Sir Martin would retire at the same time.  Vanda Murray would become Deputy Chair elect from 1 January 2007.
• The launch of the Climate Change Action Plan on 9 November had been very successful and asked for his thanks to be conveyed to all those concerned in organising the event and the work in pulling together the Action Plan.
• Lord Sainsbury had retired as Science Minister, being replaced by Malcolm Wicks MP.
• The 2007 NWDA Annual General Meeting would take place on 18 October at the MICC.

84/10 MINUTES FROM THE AUDIT COMMITTEE MEETING HELD ON 20 OCTOBER 2006
 
The minutes were noted.

84/11 MINUTES FROM THE REMUNERATION AND APPOINTMENTS COMMITTEE MEETING HELD ON 20 OCTOBER 2006.

The minutes were noted.

84/12 MINUTES FROM THE ENVIRONMENT SUB COMMITTEE MEETING HELD ON 20 OCTOBER 2006
 
The minutes were noted.

84/13 MINUTES FROM THE MARKETING, COMMUNICATIONS AND TOURISM SUB COMMITTEE MEETING HELD ON 20 OCTOBER 2006
 
The minutes were noted.

84/14 MINUTES FROM THE ENTERPRISE, INNOVATION AND SKILLS SUB COMMITTEE HELD ON 20 OCTOBER 2006
 
The minutes were noted.

DATE AND TIME OF NEXT MEETING

The next meeting will take place on Thursday 14 December 2006 at Renaissance House, Warrington.