REV (Rural Enterprise Valley) Programme Budget Review (Agenda Item 6)
Report of the Deputy Chief Executive.
This report is as requested by the Cabinet following its consideration of proposed match funding for the REVActive Project at its meeting on 27 October, when it was recommended to Council as follows:
1) the investment of up to £228,000 in the REVActive project over four years starting in the financial year 2009-10 as set out in the project budget spreadsheet within the report be approved, subject to:
a satisfactory review of the REV programme budget being carried out
by the Audit Committee at its meeting on 13 November 2009;
b) external funding being secured;
2) an annual report be received on the performance of the project and a final evaluation report be received at the end of the project.
The recommendation from Cabinet will be considered by the Council at its meeting on 12 November 2009 but its decision will be subject to this Committee’s review of the REV Programme Budget, as requested by Cabinet.
The Economic Development Manager presented the report, which was made in response to a request by Cabinet for the Committee to review the REV Programme Budget on behalf of the Council and make any comments or recommendations to Council on the current and future use and management of the budget.
The Economic Development Manager gave a presentation outlining the background to the REV Programme, achievements to date, and setting out the details of the RevActive Project, which was a proposed scheme being initiated under the REV Programme.
The REV Programme was an economic development umbrella programme focused on the A11 corridor from Thetford to Norwich, the vision for which was to “establish an exemplar area for local people to live, work and play, whilst contributing significantly to the regional economy, with the lowest possible environmental impact”. The REV Programme was not a project in itself but was an enabling programme for other projects. It was a long-term programme over 10-15 years.
Over the period 2006-208, the first phase of the REV initiative (Rev 1) had achieved £1.2m inward investment and supported over 400 businesses, leading to creation of an additional 40 jobs.
The REV Programme was aimed at addressing issues and barriers important to sustaining and enabling growth of the economy of the area, as follows:
- Strategic site development
- Overcoming utility and infrastructure challenges
- Attracting inward investment / funding
- Supporting and growing local businesses
- Supporting the creation of quality local job opportunities
- Leading on the low carbon agenda
Intrinsic to this was the promotion of these issues both regionally and nationally. The Programme was also relevant having regard to the award of Growth Point status to Thetford and the regional planning targets for housing and employment growth.
To date, the current REV Programme (Rev 2) had successfully:
§ Prompted recognition of the A11 corridor as an area of significant growth and importance
§ Enabled potential of £100m of inward investment
§ Raised local energy supply issues national and regionally through the Snetterton Utilities project and the Snetterton Prospectus
§ Developed the RevActive Project which is set to attract £3m in funding for Breckland businesses
In addition, the Programme supported the Moving Thetford Forward programme and had enabled the creation of a three-year Economic Development Trainee post to support the Programme and projects.
For the future, the Programme would continue to support ongoing delivery of projects in the following areas:
- To attract Government funding through the Integrated Development Plan (local investment plan)
- Master planning for Snetterton / Attleborough
- Snetterton Utilities Project (energy supply)
- To attract further and convert current inward investment opportunities
- Providing specialised consultancy support as and when needed
As mentioned above, the RevActive Project was a major scheme under the umbrella of the REV Programme.
This project was aimed at creating a resource efficiency network for businesses to assist business growth and sustainability. It was a proactive project covering the Thetford area and in a one mile radius of the A11 from Thetford to Norwich, with further sample work in Norwich and one other area to assess regional potential. The project would run for 42-45 months, commencing in January 2010. The overall budget for the project was £3m. The Council’s budget contribution to this was £228,000, with the remainder of the investment coming from business, European funding and other sources.
Details of the project were given, together with the results taken from an existing case to show the benefits of the scheme.
The following issues were then raised and discussed by the Committee:
The REV Programme and the RevActive Project were felt to be an essential tool for enabling business and the value for business investors was evident. One member raised the value to the local taxpayer which he felt, however, did not appear so clear.
The Economic Development Manager replied that the Council’s economic development priorities were delivered through the gaining of external funding, which was supplemented by a small internal budget. The European-funding Objective 2 programme was a very successful example of this.
The role of the Council’s economic development function was to support and enable businesses to create jobs, which in turn helped the local economy to thrive, with the aim of providing communities with access to good quality employment nearer to the areas in which they lived and thereby helping to create sustainable communities.
It was becoming ever more competitive to obtain funding for specific areas and the Council’s role in this, therefore, remained important.
In answer to a question, it was noted that the figure of approximately 1000 jobs was projected over the 5-7 years life of the programme and would contribute towards the regional planning target for employment for Thetford.
In looking at the RevActive project, it was noted that its primary aims were to help businesses become more competitive through cost reduction, including reducing their energy and other resource costs. Carbon reduction solutions would also reduce the environmental impact to the benefit of the wider community.
The Economic Development Manager explained that the Carbon Trust had expressed great interest in the concept of a low carbon A11 corridor and were keen to participate in the project and were looking at what resources they might be able to contribute.
The projected outcome figures on carbon reduction were subject to verification with the Carbon Trust and UEA (University of East Anglia). It was also noted that a part of the project was to develop more accurate models for assessing a company’s energy resource and other savings.
A member asked about the risk to investment from competition in other areas. The Economic Development Manager agreed there was a risk, as there was competition for investment for regional schemes such as the A11 dualling and the outer harbour at Great Yarmouth. In addition, Breckland did not have many brownfield sites for development and there were other constraints in the District.
In Breckland’s favour, however, land costs were cheaper in Snetterton than Norwich and there was advantage for certain types of businesses in a location away from built up areas. The one current disadvantage, however, was the issue of energy supply.
When looking at the Thetford area, even in recession, there was strong demand for good land and premises, which highlighted the importance to the area of the Thetford Enterprise Park project.
Overall operating costs in the area were also still relatively low.
The Council was not able to access national funds the level of finance needed to attract major business investment as the area did not qualify and therefore it helped in other ways – through provision of strategic sites, solving utility service problems and increasing confidence in job skills available.
In answer to another question about the time being taken to produce the business plan from the Prospectus, it was explained that the REV Programme had a term of 10 – 15 years. The IDP was, in effect, the business plan for the Programme and was being produced with the assistance of consultants. A priority had also had to be given to commencing work on the Snetterton Utilities project within this period.
Given the size of the Programme, the Chairman highlighted the relevance of ensuring a comprehensive risk assessment had been carried out and asked whether there was confidence that the investment needed could be obtained during the recession.
The Economic Development Manager replied that so far as RevActive was concerned, the risk would lie in ensuring business confidence in the project. However, the Economic Development Team had built up good relations with businesses and the first year of the project would be concerned with ensuring that confidence was in place, with delivery targeted in year 2.
The project would also have business champions, who would be those who had already made significant savings as part of a previous pilot scheme.
Energy savings on costs to business was felt to be a huge incentive.
As part of the risk assessment for the project, there was a contingency for businesses to drop out. The base target for successful delivery of the project was 300 businesses to invest an average of £4,500. The Council’s budget for the project was up to £228,000. If the target investment was not reached or if there was insufficient take up, then a proportion of the budget would not be used and, if necessary, the project could be terminated.
The following points were noted in response to further questioning:
- The REV Programme had secured funding of £342,000 from the LABGI settlement (not from Breckland core budget).
- RevActive Project funding from the Council was for up to £228,000 over three years.
- The Rev 1 project was a revenue business support programme separately funded by the Council and based on the success of which the current REV Programme had been developed.
- REV Programme funding had been used to develop the RevActive Project, which had been identified to meet local need.
The Chairman was of the view that, while the proposed investment could be supported based on the previous achievements under the REV initiative, the Committee should nonetheless have the opportunity to see the detailed background papers on risk assessment and to monitor progress on a regular basis.
A member felt that while he was happy to accept the position regarding the RevActive project, he was less so about the value overall of the REV Programme and agreed the need for thorough risk assessment.
The Economic Development Manager explained that there was not a risk analysis for the REV Programme development budget as such because the risk analysis came from the individual projects and initiatives that emerged from the umbrella of the REV Programme. A very detailed risk assessment did, therefore, exist for the RevActive Project and this could be circulated to members for their information.
In conclusion, the Committee
support be given to the investment in the RevActive Project;
a copy of the risk analysis for the RevActive Project be circulated to members for
(3) the Committee receive quarterly risk monitoring reports in future.
- A06a_RevProgBudgetReviewReportNov09, item 73. PDF 70 KB
- A06b_Appendices 1 REV Prospectus, item 73. PDF 924 KB
- A06c_Append2RevBudgetAuditFinal2009 v2, item 73. PDF 126 KB
- A06d_Append3 REV - ESG PID - V1 4, item 73. PDF 171 KB