Please ask for: Antony Spouse Telephone: 01482 613712 Fax: 01482 614804 Email: [email protected] Text phone: 01482 300349 Date: Wednesday, 05 February 2020
Dear Councillor,
Economy and Investment Overview and Scrutiny Commission
The next meeting of the Economy and Investment Overview and Scrutiny Commission will be held at 09:30 on Thursday, 13 February 2020 in Room 77 .
The Agenda for the meeting is attached and reports are enclosed where relevant.
Please Note: It is likely that the public, (including the Press) will be excluded from the meeting during discussions of exempt items since they involve the possible disclosure of exempt information as describe in Schedule 12A of the Local Government Act 1972.
Yours faithfully,
Scrutiny Officer for the Chief Executive
Town Clerk Services, Hull City Council, The Guildhall, Alfred Gelder Street, Hull, HU1 2AA www.hullcc.gov.uk Tel: 01482 300300 Page 1 of 66
Economy and Investment OSC
To: Membership: Councillors Abbott, Brabazon (DC), Burton, Chaytor, Drake-Davis, Dunstan, Gardiner, Healand, Herrera-Richmond (C), Williams
Portfolio Holders: Councillor Brady, Leader of the Council Councillor Craker, Portfolio Holder for Culture, Leisure and Tourism Councillor Hale, Portfolio Holder for Economic Investment, Regeneration and Planning, Land and Property
Officers: Mark Jones, Director of Regeneration Alex Codd, Assistant Director Economic Development and Regeneration Malcolm Relph, City Economy Manager Antony Spouse, Scrutiny Officer (x5)
Public Set: Reference Library
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Economy and Investment Overview and Scrutiny Commission
09:30 on Thursday, 13 February 2020
Room 77
A G E N D A PROCEDURAL ITEMS
1 Apologies To receive apologies for those Members who are unable to attend the meeting.
2 Declarations of Interest To remind Members of the need to record the existence and nature of any Personal and Discloseable Pecuniary interest in items on the agenda, in accordance with the Member Code of Conduct.
(Members Code of Conduct - Part D1 of the Constitution)
NON-EXEMPT ITEMS
3 Minutes of the meeting held on Thursday, 23 January, 2020 5 - 16 To approve the minutes as a true record.
4 Better Business for All (BBfA) Initiative 17 - 22 To provide the Commission with an update on the implementation of the Better Business for All Initiative over the course of the past 12 months.
5 GrowMySME Update 23 - 30 To update the Commission on the delivery of the three GrowMySME schemes funded through the European Regional Development Fund.
6 Director of Regeneration Presentation 31 - 38 To update the Commission on any strategy, performance or service delivery issues that fall within the remit of the Commission.
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7 Enterprise Update 39 - 46 To provide more detail on business birth and deaths, including how Hull compares to other areas of the Country as well as providing information on activity and programmes supporting women into enterprise or engineering.
8 Albion Square Development – Project Delivery 47 - 66 To undertake pre-decision scrutiny.
9 Exclusion of the Press and Public To consider the exclusion of the press and public for the items listed as exempt.
EXEMPT ITEMS
10 APPENDIX A - Albion Square Build Costs Analysis
• Information relating to the financial or business affairs of any particular person (including the authority holding that information);
11 APPENDIX B - Albion Square Phase Block Plan
• Information relating to the financial or business affairs of any particular person (including the authority holding that information);
12 APPENDIX C - Albion Square Concept design
• Information relating to the financial or business affairs of any particular person (including the authority holding that information);
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Economy and Investment Overview and Scrutiny Commission
9:30 a.m. Thursday, 23 January, 2020, Room 77, The Guildhall, Alfred Gelder Street, Hull, HU12AA
Present: Councillors Abbott, Burton, Chaytor, Drake-Davis, Gardiner, Healand, Herrera-Richmond (Chair) and Nicola (substituting for Councillor Williams)
In attendance:
M. Jones, Director of Regeneration, Hull City Council A. Codd, Assistant Director, Economic Development and Regeneration, Hull City Council G. Taylor, Assistant Director, Major Projects and Infrastructure, Hull City Council P. Holloway, Arts and Culture Manager, Hull City Council A. Dix, Hull Truck Theatre Board Chair M. Babych, Artistic Director and Joint Chief Executive Officer, Hull Truck Theatre J. Mills-Ward, Executive Director and Joint Chief Executive Officer, Hull Truck Theatre A. Spouse, Scrutiny Officer, Committee and Scrutiny, Town Clerk’s Service, Hull City Council
Apologies: Councillors Dunstan and Williams
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Minute Number Action to be Taken by 29 DECLARATIONS OF INTEREST (a) Scrutiny Officer - AS
No declarations of interest were received in regard to the following agenda items.
30 MINUTES OF THE MEETING HELD ON THURSDAY, 14 (a) Scrutiny Officer - AS NOVEMBER, 2019
The Scrutiny Officer submitted the minutes from the November meeting for consideration and approval.
Recommendations: Reasons for Recommendations:
Agreed:
a) That the minutes of the meeting held on Thursday, 14 a) N/A November, 2019, are agreed, and having been printed and circulated be taken as read and correctly recorded.
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31 CITY CENTRE LOCAL PLAN AND UPDATE (a -c) M. Jones / A. Codd / G. Taylor / A. Yates
M. Jones, Director of Regeneration, Hull City Council, A. Codd, Assistant Director, Economic Development and Regeneration, Hull City Council and G. Taylor, Assistant Director, Major Projects and Infrastructure, Hull City Council, attended for the item.
The Commission discussed:
i. The upcoming Planning Committee Workshop (scheduled for the 18 th of February), which would consider many of the issues covered in the paper, and which all Members were welcome to attend.
ii. How the climate emergency declaration and drive to become a carbon neutral city fitted with current planning policy, and the focus on zoning. The Director of Regeneration acknowledged the comments and informed the Commission that a Local Plan refresh was about to get underway, and would cover issues such as the move to a low carbon economy; the Environment Bill, bio diversity and water management. Radical change would be required if we were to respond to the challenges posed by climate change.
iii. The difficulties associated with improving biodiversity in the City and the observation that Queens Gardens was the only major green space in the city centre. The Director of Regeneration acknowledged the comments and suggested that biodiversity needed to become central to the Organisation’s thinking. There was an opportunity to bring a number of different strands together. The Assistant Director, Economic Development and Regeneration highlighted the recent competition to identify a new housing scheme for the Wellington Street and Ice Arena area which was focused on flood resilience. The Assistant Director, Major Projects and Infrastructure explained how the Council was in contact with the Wildlife Trust in order to seek advice in regard to the Queens Gardens development.
iv. The potential value in introducing a circular bus service to the city centre and whether it was a practical option. The Director of Regeneration believed a city centre service would be of benefit but we also needed to change behaviour so people chose public transport over private transport and for that to happen, the transport infrastructure needed to be improved and modernised. He was confident that new bus services would emerge in the future.
v. The raised flowerbeds that used to be prominent in the city centre and whether there would be opportunities to improve biodiversity as part of the Albion Square development.
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vi. The need for cities to modernise and develop efficient public transport networks in order to encourage people to leave their cars at home. The Director for Regeneration outlined how the current roadworks were adding to traffic congestion and impacting on air quality in the City. More effort needed to be put into encouraging a behavioural shift, rather than trying to enforce one. The Council had invested in the Smart City platform and that would present new opportunities. Work was taking place to create an intelligence led database which would enable businesses and other partners to respond to fluctuating demand. The City currently operated on a hub and spoke system, which meant there were opportunities to improve connectivity between the east and west of the City. vii. The amount of space given over to motor vehicles in the city centre and whether there were opportunities to make design changes to the road network with a view to making the city centre more pedestrian and cycle friendly. The possibility of introducing a new cycle hire scheme to support any changes to the wider infrastructure. viii. Positive news in regard to the regeneration of Whitefriargate and options moving forward; the fact that the Infrastructure and Energy Overview and Scrutiny Commission was due to focus on transport strategy at its February meeting; the benefits associated with Passenger Transport Executives. ix. How footfall in the city centre had fallen slightly, but was holding up well against the national data, despite the closure of the Mark and Spencer’s and House of Fraser stores. The hope that the Albion Square Development and the new ice arena would help to increase footfall in the city centre. The Director of Regeneration explained how the Council had always envisaged a major scheme for the Albion Square site. Whitefriargate no longer met the needs of major retailers which was borne out by Marks and Spencer’s departure. Marks and Spencer had withdrew its interest in the Albion Square development but it did not mean they would not return to the city centre in future. Recent capital investment meant more people were choosing to live in the city centre, including residents with a high skills set. Those residents tended to be employed by large corporates and only stayed for a couple of years before moving on to further their careers. City centre office space was becoming more popular as businesses recognised the benefits of city centre working. The demand for city centre office space was not there five years ago but the recent purchase of Europa House demonstrated how the market had changed and demand was rising. The car was no longer god in all cases, potential tenants often wanted to know if there was secure cycle storage. It was now anticipated that the Albion Square development would include ‘large plate’ high quality office space and no longer include a large retail footprint. The Staples site would still be available for largescale retail. The future of the ‘Three ships’ mural needed to be resolved in order to ensure the scheme could progress. Everything possible was being done to reduce the risks associated with the development and it would go back to Planning Committee as part of that process.
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x. Whether it might be possible to keep the high skilled workers in the city centre rather than seeing them leave after two years. The Director of Regeneration explained that it was natural for employees to move on as part of their career development. The longer term aim was to attract more largescale businesses into the city centre so demand for high quality city centre living would continue to rise. xi. The challenges facing the retail sector and the impact on the city centre footfall figures. The Assistant Director, Major Projects and Infrastructure advised the Commission that the footfall figures had held up well, when compared to data from other cities. xii. If businesses were being kept in the loop in regard to the latest public realm works. The Assistant Director, Major Projects and Infrastructure confirmed that the Council and Hull BID were in constant communication with businesses and traders affected by the works. The contractors were also using a new construction technique that they hoped would reduce the length of the works, and in turn minimise disruption. xiii. The welcome reference to the City Centre Task and Finish Panel, coupled with a desire to see more information on how the Council and partner organisations were using online content and social media to communicate and market the City and city centre. xiv. Hotel capacity within the city centre; data which showed occupancy rates in Hull were hitting the 80% mark on a more regular basis; whether existing provision could meet peaks in demand. The Assistant Director, Major Projects and Infrastructure advised the Commission that most cities hotel occupancy rates operated at between 75% and 90%. Hull’s average occupancy rate used to be below 70%. We did need to increase capacity in regard to three star and three star plus hotels which was extremely positive. xv. Hotel provision around the Bonus Arena and if it limited our ability to attract major events and large conferences. The Assistant Director, Major Projects and Infrastructure confirmed that organisers did look for hotel clusters but lots of work was taking place to attract more events to the City. More hotel provision near the arena would be welcome and planning consent was already in place. xvi. When the Council was likely to hear if the Future High Streets bid had been successful. The Director for Regeneration explained that the Future High Street Fund bid was subject to a competitive process, something that had not been evident when the Government had allocated funding to certain areas of the country, prior to the General Election. They hoped to hear something by March or April. Bid aside the Council was already working hard with partners to regenerate Whitefriargate and that work was generating a lot of interest amongst potential investors/tenants. Some of the interest was dependent on the Government funding but
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the outlook was positive.
Recommendations: Reasons for Recommendations:
Agreed:
a) The Commission notes the update and welcomes the latest performance data, which remains broadly positive, a) N/a despite the challenges facing city centres across the country.
b) The Commission also welcomes the ongoing work to attract new investment and grant funding into the city b) N/A centre.
c) That following the recent City Centre Task and Finish c) As per the minute Panel, the Commission receives an update on how the Council, and partners, are working together to promote and market the city centre; including online content and social media, with a view to increasing visitor numbers.
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32 DIRECTOR OF REGENERATION PRESENTATION (a -c) M. Jones / P. Holloway
M. Jones, Director of Regeneration, Hull City Council, attended for the item and introduced the presentation. He advised the Commission that in terms of the latest economic figures, the JSA figures (Job Seeker Allowance) were up slightly but so were the figures for the number of people in employment, so the overall picture remained positive.
Priorities for 2020 included the development of the Carbon Neutral Strategy 2030; encouraging good growth with a focus on microbusinesses, entrepreneurship and supply chain development; continuing to develop the City as a visitor destination, which included growing the cultural offer.
Plans to develop a Carbon Neutral Strategy for the City would go to Cabinet in the near future and then out to consultation over the course of the next 12 months. It would be supported by the establishment of a Climate Change Team and the Capital Programme would be restructured to support the process.
The Council had acquired land to the west side of West Carr Lane. The land covered an area of 4.4 hectares and had cost the Council £2.95 million. The site was adjacent to the Council’s Stockholm Road depot and was currently occupied by a vacant factory. It was envisaged that some of the land would be used to alleviate storage issues at the Stockholm Road depot, but it would also provide space for new economic development, helping to keep businesses in the City. There was also scope to use the site for sustainable development and help the City reach its carbon neutral targets.
The Commission discussed:
i. If progress was being made in reducing the City’s packaging footprint. The Director of Regeneration believed progress was being made and local companies were playing their part. Producers were becoming more aware of consumer concerns.
ii. If there were plans to increase support for microbusinesses e.g. developing business villages. The Director of Regeneration confirmed that was the case, outlining the work that was taking place to support microbusinesses, including a new facility on the
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West Carr Lane site. It was an area the Council had not always invested in in the past but others had stepped in to fill the gap.
iii. If wages were rising and if more people were entering high skilled jobs. The Director of Regeneration advised the Commission that the City had made great strides in closing the wage gap but there was no room for complacency. Highly skilled jobs required high levels of capital investment.
iv. More details behind the plans for the newly acquired site on West Carr Lane. The Director of Regeneration highlighted opportunities to extract value from waste streams. Rather than sending waste to be recycled in other parts of the country, we could do it ourselves or for others. The Commission had already discussed the microbusinesses centre and focus on low carbon.
v. Timescales for developing the West Carr Lane site. The Director of Regeneration advised the Commission that work was already underway to generate capital through the Council’s land and property portfolio, with a view to developing the site, and creating an industrial estate fit for the 21 st century.
Recommendations: Reasons for Recommendations:
Agreed:
a) The welcomes the update on the health of the local a) N/A economy; the Carbon Neutral Strategy 2030; and plans to develop land on the west side of West Carr Lane.
b) The Commission looks forward to feeding into the b) N/A development of the Carbon Neutral Action Plan, and exploring new opportunities to grow the local economy. .
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33 HULL TRUCK THEATRE – ANNUAL UPDATE (a -d) M. Jones / A. Codd
P. Holloway, Arts and Culture Manager, Hull City Council, A. Dix, Hull Truck Theatre Board Chair, M. Babych, Artistic Director and Joint Chief Executive Officer, Hull Truck Theatre and J. Mills-Ward, Executive Director and Joint Chief Executive Officer, Hull Truck Theatre, attended for the item.
The Artistic Director and Joint Chief Executive Officer introduced the presentation and outlined the theatre’s ‘vision’ and the desire to position the City at the beginning of the line rather than at the end of the line. The theatre was proud of its local roots, remained aspirational and wanted to help grow people and develop new ideas. The theatre was more than just a building, it was a community hub. As a community hub the theatre sought to produce high quality theatre made in Hull; grow audiences; increase participation; develop talent; expand partnership work; ensure its work was recognised at a regional and national level; show ambition.
Producing high quality work ensured the theatre maintained its status as a key regional theatre; they wanted to present stories that were relevant to a modern Britain and resonated in Hull; it remained a producing theatre; they continued to commission new writers; they hosted a wide variety of visiting works.
Work included increasing residents access to the arts and included building relationships with local communities; engaging with less traditional theatre audiences, with 25% of audiences coming from the lowest engaged segments of society; running audio and caption described performances so as many people as possible could attend productions; putting on live streams for people who could not physically attend the theatre but still wanted a theatre experience.
Initiatives to increase participation included running youth theatre groups; entering into school partnerships; working with Royal Shakespeare associated schools; running an over 55 theatre group; working with learning disability groups; expanding opportunities to learn and perform; supporting the disengaged and helping people pursue a career in the arts.
Work to develop talent included an artist development programme that supported 76 artists; hosting ‘Be Our Guest’ residencies; participating in an artist exchange with the British Council and Sierra Leone; encouraging career development through various means, such as apprenticeships and technical summer schools. The theatre was also hoping to develop a degree course in acting with Hull University. The
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theatre continued to work with a host of partners including key art and culture groups, local business and community groups.
The theatre was always looking for ways it could increase its commercial income. Funding from the Arts Council and Hull City Council was vital in helping the theatre generate increased commercial income. Annual turnover was £2.4 million. The theatre continued to receive recognition for its work at regional and national level. Future ambitions included developing a large scale community production in 2020; further developing the theatre’s role as a learning theatre; securing a further four years of Arts Council England funding in 2021; celebrating 50 years of Hull Truck Theatre in 2022.
The Commission discussed:
i. Whether productions that had a Hull based theme still toured around the country. The Artistic Director and Joint Chief Executive Officer explained that productions were staged elsewhere and the theatre also co-produced with other theatres from around the country.
ii. The work Hull Truck did to engage with harder to reach groups; how they knew that a quarter of their audience was from the least engaged sector of the population; whether there was scope to increase the level of engagement with ward councillors. The Executive Director and Joint Chief Executive Officer advised the Commission that the theatre used postcode data to support the audience analysis and they would welcome closer worker ties with ward councillors.
iii. If the audience figure of 71,000 was up on previous years. The Executive Director and Joint Chief Executive Officer explained that the figures suggested there had been a general increase but interpreting more recent trends had proven difficult on the back of City of Culture.
iv. The range of groups the theatre worked with and whether it included people who were experiencing mental health related issues. The Artistic Director and Joint Chief Executive Officer outlined how the theatre’s Act 3 group worked with a cross section of the population aged over 55, and inclusivity was at the core of everything they did. People who were involved in arts and culture reported huge benefits. The Executive Director and Joint Chief Executive Officer informed the Commission that they had also had people referred to them by their doctor. The Chair of the Board explained that the theatre was also trying to be more cross cutting and was looking at how they could work with partners to offer residents more than just a straightforward cultural offer.
v. Youth theatres groups that were active in local communities across the City and whether they had links to Hull Truck. The Artistic
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Director and Joint Chief Executive Officer explained that the theatre ran an open door policy and they were always happy to sit down with local groups to see if they could offer any support.
vi. The fact Hull Truck Theatre was a key part of the cultural economy and more people were looking for an experience. If there was anything more the Council could do to support the theatre and help it increase audience numbers. The Executive Director and Joint Chief Executive Officer confirmed that they were in regular dialogue with the Council. They also did a lot of work around public perception and the pricing policy was intelligence led. They believed the Bonus Arena had had a slight impact on audience numbers as the Arena scheduled events 12 months ahead, and if people had already committed to one event, they may not be able to afford a theatre ticket. The Arts and Culture Manager, confirmed that discussions were always taking place. He also felt there was a broader question around the development of the city centre and the area that included Hull Truck Theatre and the Hull New Theatre. The Chair of Board explained that Arts Council England was firmly behind the development of the City’s Cultural Compact, which was reliant on good communications between partners.
vii. The next round of Arts Council funding and whether the theatre was confident in its bid. The Chair of the Board explained that if you looked at the grant funding figures, the theatre had been operating on a standstill budget for the past 7 years. They were not expecting any major surprises in regard to future funding but there was some pressure on the Arts Council to increase investment in the north east, so there was lots to play for, and the theatre needed to ensure it submitted a strong bid. The Executive Director and Joint Chief Executive Officer advised the Commission that she was confident Hull Truck was offering what the Arts Council wanted. The Chair of the Board explained that the building itself was only the tip of the iceberg.
Recommendations: Reasons for Recommendations:
Agreed:
a) The Hull Truck representatives are thanked for attending the Commission and presenting the Annual Update to a) N/A Members.
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b) The Commission welcomed the update, and the opportunity to learn about the community based work, b) N/A and in particular, initiatives to engage young people and harder to reach groups within the City.
c) That in order to help develop their understanding of local c) As per the minute communities across the City, the Commission would encourage Hull Truck to develop closer links with local Councillors and Area Committees. .
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Briefing Note to the Economy & Investment Overview & Scrutiny Commission 13 th February 2020
Better Business for All (BBfA) Initiative
Briefing Paper of the Director of Regeneration
1. Purpose of the Report and Summary
1.1 This briefing paper provides a 12 month update on the Better Business for All (BBfA) initiative and how in particular the Regeneration and Public Protection service areas are ideally placed to help deliver the impacts that BBfA seeks to achieve, by working with businesses, the Humber LEP, the fire & rescue service, other local authorities in the Humber and other relevant stakeholders.
1.2 The Council, continues to support the BBfA initiative in partnership with relevant stakeholders, ensuring that all officers with relevant job roles have been briefed, fully conversant, and are engaged with the BBfA objectives.
2. Introduction
2.1 BBfA is an initiative formulated and led by the Government Department for Business, Energy and Industrial Strategy (BEIS). BBfA seeks to build a partnership approach that can in turn develop new relationships between businesses, local regulators and business support agencies. BBfA fits with the current Government Agenda as set-out in the approach to an Industrial Strategy, and complements the existing business support landscape where the emphasis is firmly upon increasing Productivity. To this end, steering groups were founded within the LEP areas across the UK in the summer of 2017, which in turn, report into wider regional steering groups. Officers from the Council’s Regeneration and Public Protection service areas have been active members of the BBfA Humber steering group since its inception, reflecting a wider approach to joint working by their two service areas and other partners and as an illustration of the Council’s varied interfaces with business.
2.2 The wider context for BBfA is that Government, as highlighted, has identified the review and reduction of regulation, in a generic sense, as part of pursuing their wider Productivity Agenda, negating in one sense a perceived potential barrier to growth. Government is therefore actively encouraging local authorities to work with their business community in a more co-ordinated approach across diverse service areas. In return, the expectation is that local authorities will benefit from a growing and increasingly diverse business base.
2.3 BEIS have put forward a number of key reasons why Local Authorities should engage with the BBfA initiative, including:
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• We [Government, local authorities etc.] can speak with one partnership voice ensuring consistency across the patch, avoiding silo working and sharing best practice.
• Together we can access robust information on what businesses needed to comply and grow, ensuring our limited resources are focused to provide best outcomes.
• By blending our regulatory functions with a BBfA business support ethos we greatly enhance our standing both locally and nationally.
• We can offer a more joined up approach with our Economic Development teams – as far as businesses are concerned regulatory services and business support are the same.
• We can help more business comply freeing up time to tackle other priority work
2.4 The overall aim of the Humber BBfA partnership, reflective of the national intention, is to support economic growth by making it easier to do business in the region by supporting compliance and helping remove regulatory barriers. The Humber BBfA Steering Group have outlined the following objectives in their Terms of Reference document:
• Help every business have easy access to regulatory advice/business support
• Tackle the barriers to growth
• Develop businesses’ and regulator’s understanding of the reasons for business failure
• Encouraging more compliant business
• Raise awareness of the business support available
• Facilitate proactive referrals between partners
• Encourage communication between partners- ‘better together’
2.5 Regulatory services officers, which may have been seen previously as undertaking primarily enforcement actions, are effectively part of the business support package, capable of offering compliance solutions to business to meet relevant regulations, thereby directly contributing to local economic growth by enabling local business growth in all localities and diverse business interests thereby mitigating the often adversarial nature of regulatory frameworks and their implementation. Clearly one
2 Page 18 of 66 potential outcome of this approach is reduce enforcement and appeal based activity in services where resources are at a premium and decisions can be overturned at appeal.
3. Activity Update
3.1 During the last 12 months the BBfA Humber Steering Group has completed the following actions:
• Continued to meet on a quarterly basis in order to review, discuss and refine the rolling three-month delivery action plan.
• The Group was awarded £9995 from BEIS to undertake a pilot study exploring innovative ways to simplify and enhance engagement with businesses with a focus on the wider promotion of access to regulatory service support. The study found that an online/virtual/video platform/concept as the favoured option and the Group continue to look into accessing additional funding to further develop this project.
• Findings from this study were shared at the BBfA Shared Learning day in London on 26 th November 2019. A workshop that was attended by over 20 other LA/LEP areas was well received and 5 or 6 areas expressed an interest in discussing the idea further.
• The BBfA Steering Group was also represented at the Annual Regulatory Excellence Awards 2019, where it was “Commended” in the Better Business for All category.
• The BBfA Steering Group has developed a Humber Z-card resource, covering all areas of business/regulatory support & advice. 2000 copies were produced and have been disseminated to each LA and wider steering group members and networks to utilise.
• Three Regeneration officers (Growth Hub Advisors) have recently completed accredited training programmes (SFEDI) to improve its service delivery and engagement.
• The Council seeks to continually identify and disseminates areas of good practice embracing BBfA principles of closer working between business- facing service areas. This includes functions such as planning, building control, waste and business rates where good communication and relationships help ensure that referrals are made between service areas and the business receives a joined up and complete service.
• The Council as lead delivery partner for Hull of the Humber wide #GrowMySME programme of business support has embedded the principles of BBfA in ensuring Council service areas continue to work effectively together, strengthening relationships as they refer and broker support for businesses across the Council.
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• The Council’s joined up approach to dealing with issues arising from Brexit is very much based on the fundamentals of BBfA. For example, any eventuating changes to Trading Standards regulations will require Hull businesses to review and amend their compliance activities and support can be provided in partnership between the Council’s Regeneration and Public Protection service areas. Essentially, the BBfA initiative can be utilised to help ‘future proof’ the Council’s business-facing service areas in the context of a disruptive Brexit.
• Public Protection Officers have implemented a ‘coaching style’ approach to the inspection of local businesses for food safety and health and safety. This approach is now embedded with staff during their preventive work, and feedback from businesses has been very positive. In January we were able to announce the highest number of food premises rated 5 “Very Good” (1400) and the lowest number rated 0 “Urgent Improvement Necessary” (5).Raising standards like this ensures public safety and benefits the economy given the growing importance of the food and drink offer in Hull.
• Public Protection Officers also engaged in Food Standards Agency national research over 18 months and were able to demonstrate a positive link between providing advisory visits when businesses first register and higher compliance standards. Officers have provided 109 advisory visits since 1 st April 2019 and we are now an early adopter of the new central food premises registration scheme.
4. Summary
4.1 This briefing paper provides an outline of the BBfA initiative, current delivery arrangements and an update on activities that the Humber steering group has delivered since January 2019. This Council will continue to support the BBfA initiative in both its own business-facing service areas and across the Humber more widely, seeking to build on an expanded range of business growth initiatives.
4.2. Appropriate Business regulation is often perceived as a compliance issue for business recognising the ability of local authorities to change any regulations for local economic benefit can be very limited. However, with an increasing focus on local Industrial Strategies, economic growth and latterly fair growth, it is incumbent upon the Council to examine every aspect of local economic and business competiveness and support enhancements wherever practical. National initiatives to reduce and adapt regulatory frameworks present the Council with the opportunity to apply such principles locally thereby supporting business growth and employment. The Council, through the relationships outlined, has a sound basis upon which to continue to progress this initiative and optimise the local impact of the BBfA.
4 Page 20 of 66 Mark Jones
Director of Regeneration
Contact Officers: Paul Burnley/Ian Archibald/Trevor Todd
24 th January 2020
Telephone No. : 3336
Officer Interests: None
Background Documents:
Regulatory Simplification Projects Case Study - Humber 2019
“Commended” in the Better Business for All category Letter
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Briefing Note to the Economy & Investment Overview & Scrutiny Commission 13 th February 2020
#GrowMySME Update
Briefing Paper of the Director of Regeneration
1. Purpose of the Report and Summary
1.1 This briefing paper provides a progress update for the three European Regional Development Fund (ERDF) funded schemes that form the #GrowMySME Programme which is delivered by Hull City Council in partnership with East Riding of Yorkshire Council, North East Lincolnshire Council and North Lincolnshire Council, on behalf of the Humber Business Growth Hub. Hull City Council is the accountable body for the programme but there is a Partnership and Risk Sharing Agreement in place between all parties. In addition to this agreement, each partner along with the Humber LEP is represented on a steering group (chaired by the Hull City Council representative) that oversees progress of the three schemes.
2. Introduction
2.1 The three projects that combine to form the #GrowMySME Programme are the Business Growth Scheme, Finance for Growth Scheme and the ICT for Growth Scheme. All three schemes are focussed on providing support to small and medium sized enterprises (SMEs – less than 250 fte employees and either a turnover of less than €50m or a balance sheet of less than €43m) that enables them to grow their business.
2.2 All three schemes are available to eligible SMEs operating within the Humber sub- region (paying business rates to any of Hull City Council, East Riding of Yorkshire Council, North East Lincolnshire Council or North Lincolnshire Council).
2.3 The ICT for Growth Scheme supports business growth through the adoption of new digital technology, the Finance for Growth Scheme assists by helping businesses to overcome barriers to being able to access the finance required to undertake growth projects and the Business Growth Scheme is a wraparound scheme that covers more generic issues. To date more than 1,100 businesses have submitted an enquiry in to the #GrowMySME Programme.
2.4 ICT for Growth, Finance for Growth and the Business Growth Scheme are supported by the 2014 to 2020 European Regional Development Fund Programme.
1 Page 23 of 66 3. The ICT for Growth Scheme
3.1 The project started delivery on 1 st June 2018 and is due to run through until 31 st May 2021. It was awarded just over £2m (60%) of ERDF funding towards a total expenditure of almost £3.39m with the match funding coming from the private sector. Delivery is split in to the following five categories: One-to-One Advice, Workshop Programme, Digital Catalyst, ICT for Growth Grants and New Business Start-Up Grants. The project currently has 318 clients that have submitted enquiries and this is against a target of 451 businesses assisted (1 business assisted equates to receiving 12 hours of support or a grant in excess of £1,000).
3.2 One-to-One Advice
A team of ICT Business Advisors who assist SMEs to better understand how introducing new technology can enable the business to grow whilst also advising how to better utilise their existing technology. The advisors will also support the business to submit applications for grant funding available through the scheme. To date most companies engaged have prioritised grant funding rather than direct support from the advisors who are helping them develop their projects.
3.3 Workshop Programme
After some initial difficulty with the procurement of an appropriate workshop deliverer we have recently commissioned Winning Moves Ltd to deliver a comprehensive programme of ICT related subjects such as CRM Systems, ERP Systems, Big Data Analytics, Internet of Things, Cyber Security, Artificial Intelligence and many more. It is planned that at least one event a week will be delivered from the beginning of March onwards and this combined with the One-to-One Advice will produce at least 90 businesses assisted.
3.4 Digital Catalyst
Digital technology has the power to enable businesses to grow faster than ever and to transform themselves. And the great news is that increased accessibility means that every business, regardless of size, has the opportunity to benefit. The Digital Catalyst service will help you to identify how you can deliver higher levels of performance in your business, including:
• Generating competitive advantage over your competitors. • Accelerating the rate of finding new customers. • Growing the financial value of your existing customers • Lowering costs and delivering operational efficiencies. • Working more effectively with your customers, suppliers and partners. • Attracting, developing and retaining talent. • Keeping ahead of the competition by keeping your offer fresh and up-to-date.
Winning Moves Ltd have been commissioned to deliver the Digital Catalyst Programme and this element of the scheme will produce a minimum of 60 business assisted.
2 Page 24 of 66 3.5 ICT for Growth Grants
Provides support for ICT related investments of between £2,500 and £24,999 with a 40% grant is available towards all eligible expenditure (minimum grant £1,000 and maximum grant £10,000). Companies must be registered with the #GrowMySME Programme and be working with one of the ICT Business Advisors to develop their application. To date 63 grant applications have been approved against a target of 150, with £310k awarded from the £798k available.
3.6 New Business Start-Up ICT Grant Scheme –
This grant is available to all ERDF eligible SMEs that are less than 12 months old, to help towards ICT related business start-up costs, for example, getting connected to superfast broadband services (minimum of 30mbps) purchase of a PC or laptop etc. Grants of £1,000 are available for projects totalling £2,000 - £2,500. This is a new element of the scheme that was introduced in December 2019 and was developed as a result of the difficulties experienced in the delivery of the Broadband Connectivity Vouchers due to the introduction of the national Gigabit Voucher Scheme that provides 100% funding rather than the 50% we were able to offer. Interest in this element of the scheme is growing fast. It is anticipated that this element of the scheme will deliver at least 150 businesses assisted outputs.
3.7 Potential extension of the Scheme
In July 2019, a call for projects under Priority 2b which provides the funding for the scheme, was issued by the Ministry for Housing, Communities and Local Government (MHCLG) that administer the ERDF funding with up to £349k available to apply for in the Humber Region. After submitting an Expression of Interest in September we have now been invited to submit a Project Change Request by 21 st February, to formally apply for this additional funding. If successful this additional funding would enable the project to continue delivery of all elements of the scheme until 31 st March 2022 extending the project by 10 months and will assist a further 50 businesses across the region.
4. The Finance for Growth Scheme
4.1 The Finance for Growth Scheme supports businesses to overcome barriers to being able to access the finance required to undertake growth projects. The project started delivery on 1 st June 2018 and is due to run through until 31 st May 2021. It was awarded £1,562,987 (60%) of ERDF funding towards a total expenditure of £2,604,978 with £750,000 of match funding coming from the private sector and the remaining £291,991 being provided by officer matched time across the delivery partners. Delivery is split in to the following three categories: One-to-One Advice, Workshop Programme and the Finance for Growth Grants. The project currently has 272 clients that have submitted enquiries and this is against a target of 250 businesses assisted (1 business assisted equates to receiving 12 hours of support or a grant in excess of £1,000).
3 Page 25 of 66 4.2 One-to-One Advice
A team of Investment Readiness Business Advisors who assist SMEs to understand the finances of their business and can enable the business to grow by helping to develop their business plans, financial strategy and financial forecasts which in turn makes them investment ready. The advisors will also support the business to submit applications for grant funding available through the scheme as well as applying for other sources of finance available. To date most companies engaged have prioritised grant funding rather than direct support from the advisors who are helping them develop their projects. The team are currently working with approximately 220 active clients.
4.3 Finance for Growth Grants
Provides support by helping businesses to overcome barriers to being able to access the finance required to undertake growth projects. The grants can be used to help fund the cost of professionally produced business plans, the development and implementation of financial management systems, the production of marketing strategies as well as the attainment of industry recognised standards and accreditations. For projects of between £2,500 and £24,999 a 40% grant is available towards all eligible expenditure (minimum grant £1,000 and maximum grant £10,000). Companies must be registered with the #GrowMySME Programme and be working with one of the Investment Readiness Business Advisors to develop their application. To date 21 grant applications have been approved against a target of 120, with £110k awarded from the £500k available.
4.4 Workshop Programme
After some initial difficulty with the procurement of an appropriate workshop deliverer we have recently commissioned Winning Pitch Trading Ltd to deliver a comprehensive programme of Finance related subjects such as Negotiating Skills, Business Networking for Financial Growth, Building an Investable Sales Plan, Presenting and Pitching with Confidence and many more. It is planned that at least one event a week will be delivered from the beginning of March onwards and this combined with the One-to-One Advice will produce at least 130 businesses assisted. In addition to this commissioned work, the Investment Readiness Business Advisors have developed their own programme of four workshops covering alternative topics and delivered them three times so far with another two in Hull and Scunthorpe starting in late February. This programme will also continue to be delivered in tandem with the commissioned work.
4.5 Potential extension of the Scheme
In July 2019, a call for projects under Priority 3c which provides the funding for the scheme, was issued by the Ministry for Housing, Communities and Local Government (MHCLG) that administer the ERDF funding almost £2.5m available to apply for in the Humber Region. As the Business Growth Scheme is also funded through this priority, it was agreed by the steering group that the Finance for Growth Scheme would apply for £1m with the Business Growth Scheme applying for the
4 Page 26 of 66 balance. After submitting an expression of interest in September we have now been invited to submit a Project Change Request by 31 st July, to formally apply for this additional funding. If successful this additional funding would enable the project to continue delivery of all elements of the scheme until 30 th June 2023 extending the project by more than two years and will assist a further 140 businesses across the region
5. Business Growth Scheme
5.1 The Business Growth Scheme supports businesses to overcome barriers to being able to access the finance required to undertake growth projects. The project started delivery on 1 st October 2018 and is due to run through until 30 th September 2021. It was awarded £2,494,141 (60%) of ERDF funding towards a total expenditure of £4,156,666 with £598,864 of match funding coming from the private sector and the remaining £1,063,661 being provided by officer matched time across the delivery partners. Delivery is split in to the following six categories: One-to-One Advice, Workshop Programme, The Scale Up Business Development Project, the Business Growth Grants scheme, Supply Chain Support and Sector Development. The project currently has 714 clients that have submitted enquiries and this is against a target of 400 businesses assisted (1 business assisted equates to receiving 12 hours of support or a grant in excess of £1,000).
5.2 One-to-One Advice
A team of nine business advisors provide support to conduct deep dive Business Needs Analysis and to provide ongoing wraparound business support.
5.3 Workshop Programme
Having completed an extensive pilot project to deliver workshops on a vast nature of subjects we have recently commissioned Client Marketing Services Ltd to deliver a series of Sales & Marketing workshop programme along with Blue Orchid Enterprise Solutions Ltd who will deliver both the Business Processes workshop programme and the Leadership, Innovation & Culture workshop programme. It is anticipated that each of the workshop programmes will deliver an average of one workshop per week and that this will help greatly to achieve the 12 hours of support provided to a business required.
5.4 The Scale Up Business Development Project
Tailored business support delivery to the senior management team of businesses with strong scale-up potential. Varied delivery will include One-to-One mentoring, One-to-many masterclasses, facilitated peer learning session, and inspiration leadership talk from veteran entrepreneurs. Winning Pitch Trading Limited have been commissioned to deliver this project on behalf of the scheme and are responsible for recruiting companies to participate and to deliver a minimum of 75 businesses assisted.
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5.5 Business Growth Scheme Grants
A grant scheme to support SMEs to access specialist sources of business consultancy & services. 40% of eligible project costs totalling between £2,500 and £12,500 can be covered (minimum grant £1,000 and maximum grant £5,000). Companies must be registered with the #GrowMySME Programme and be working with one of the Growth Hub Advisors to develop their application. The grants became available in late November and to date 3 grant applications have been approved against a target of 60. However, the advisors are currently working with 49 businesses that are potentially looking to access the grant scheme.
5.6 Supply Chain Support
The Business Growth Scheme’s partnership with the Supply Chain Network operated by the East Riding of Yorkshire Council on behalf of the York, North Yorkshire and East Riding LEP area is now formalised after the completion of the recruitment exercise for the Supply Chain Business Advisor, who is based within the Supply Chain Network’s office and represents the Business Growth Scheme to provide delivery of this valuable service across the Humber Region. A forward programme of supply chain events is currently being compiled.
5.7 Sector Development
Sector development interventions for the Social Enterprise sector have been procured. Firstly, Northbank Forum has been awarded the contract to deliver the Humber Social Enterprise Accelerator (SEA) pilot programme. This will see 16 social enterprises receive tailored support from Northbank Forum in order to help them grow and become more productive and sustainable. With delivery ranging from one-to-many workshops, mentoring, and facilitated peer learning sessions. Secondly, a discrete series of four workshops aimed exclusively at social enterprises commenced on 30 th January, with the first workshop entitle ‘Finance and Trading for Social Enterprises’; these workshops will also be delivery by Northbank Forum after a separate procurement exercise.
5.8 Potential extension of the Scheme
In July 2019, a call for projects under Priority 3c which provides the funding for the scheme, was issued by the Ministry for Housing, Communities and Local Government (MHCLG) that administer the ERDF funding almost £2.5m available to apply for in the Humber Region. As the Finance for Growth Scheme is also funded through this priority, it was agreed by the steering group that the Finance for Growth Scheme would apply for £1m with the Business Growth Scheme applying for the balance. After submitting an expression of interest in September we have now been invited to submit a Project Change Request by 31 st July, to formally apply for this additional funding. If successful this additional funding would enable the project to continue delivery of all elements of the scheme until 30 th June 2023 extending the project by 21 months and will assist a further 140 businesses across the region
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6 Summary
6.1 The briefing paper provides details of each of the three ERDF funded schemes that form the #GrowMySME Programme along with an update regarding progress being made against target.
6.2 Regular progress reports will be provided to this Scrutiny Commission.
Mark Jones
Director of Regeneration
Contact Officers: Phil Hall
31 st January 2020
Telephone No. : 613188
Officer Interests: None
Background Documents:
7 Page 29 of 66
Page 30 of 66 ALEX CODD ASSISTANT DIRECTOR (ECONOMIC DEVELOPMENT AND REGENERATION)
Economy and Investment Overview and Scrutiny Commission
13 th February 2020
Page 31 of 66 State of Economy
1 The Alternative Claimant Count was introduced following the roll out of Universal Credit to give an estimate of the number of people claiming unemployment related benefits by modelling what the count would have been if Universal Credit had been fully rolled out since 2013 (when Universal Credit began) with the broader span of people this covers.
Page 32 of 66 City Centre Planning Development
Page 33 of 66 City Centre Planning Development
Site Local Plan Current Situation Allocation Albion Square and Mixed use Albion Square - outline planning application Kingston House allocation. The area approved April 2019. Vinci Construction UK excluding Kingston appointed in September 2019. ‘Three Ships’ House is allocated mural Grade II status, November, 2019. Investigations into the structural as within the condition and asbestos contamination of the Primary Shopping building and mural are on-going, and a Area. detailed scheme for full planning permission for the site is being prepared.
Kingston House undergone significant refurbishment, which includes new apartments, a gym, yoga, studio, cafés, offices and restaurants.
Page 34 of 66 City Centre Planning Development
Site Local Plan Current Situation Allocation Blackfriargate Mixed use Full planning permission granted April 2019 for Arco HQ office (c.550 staff) and a car park. Outline permission for 34 dwellings and additional flexible commercial floorspace. Development commenced in November 2019, with a targeted completion date of Oct/Nov 2020. Portside Mixed use Invalid application recently submitted for a temporary car park use. Humber Quays (west) Housing RIBA international design ideas competition as part of the Living With Water partnership. In the short term (anticipated 5 years), the site of a proposed construction compound for the A63 Castle Street Improvement Scheme.
Page 35 of 66 City Centre Planning Development
Site Local Plan Current Situation Allocation Osborne Street / Mixed use Bonus Arena completed and opened in Myton Street including retail, August 2018. hotel, and other main town centre Planning permission and listed building consent approved for the demolition and uses, as well as partial rebuilding of the Earl de Grey public residential. house granted in June 2019 for mixed uses including a hotel. Commercial agreement for the relocation of the Earl de Grey as Phase 1 understood to be in hand.
The Council is in the process of acquiring Myton Retail Park and will be exploring further redevelopment opportunities
Page 36 of 66 City Centre Planning Development
Site Local Plan Current Situation Allocation East Bank River Hull Residential-led Former Clarence Mills site purchased by the mixed use Council with the planning appeal submitted by the former owner has been withdrawn. including leisure, Currently working with housing developers, office, or hotel. Homes England and other landowners on approaches to mixed use housing-led redevelopment. Funding bids being made in order to help facilitate the likely heavy infrastructure requirements for the site. Flood defence works commenced last year. High Street / Dock Housing Permission granted for Hull Yorkshire's Office Row Maritime City Project in September 2019. Various planning permissions for flats and apartments approved but not substantively progressed
Page 37 of 66 City Centre Planning Development
Site Local Plan Current Situation Allocation High Street II Housing Permission granted and implemented for temporary car park until April 2021 to cover for loss of Blackfriargate and until Fruit Market MSCP completed. Wincolmlee Housing No current permission for redevelopment. Colonial Street Housing Southern half currently occupied by a car park – planning permission granted January 2016. Anlaby Road / Park Housing Outline permission for mixed use Street residential, hotel, health and fitness, and restaurant lapsed.
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Briefing Note to the Economy & Investment Overview & Scrutiny Commission 13 th February 2020
Enterprise Update
Briefing Paper of the Director of Regeneration
1. Purpose of the Report and Summary
1.1 This briefing paper follows earlier discussions and a request to provide more detail on business births and deaths, including how Hull compares to other areas of the Country as well providing information on activity and programmes supporting women into enterprise or engineering.
2. Introduction
2.1 The key role of Enterprise Development is devising, leading and implementing relevant interventions from the Council and key partners in order to meet future business/enterprise needs resulting in a robust local economy and increased levels of enterprise and job creation.
2.2 Whilst a core offer is open to all types and size of business, some delivery is aligned with specific project funding streams (ESIF for example). There is a focus on:
• increasing the number of sustainable enterprises in the city and supporting scale up businesses/ those with the capability and potential to grow quickly. • young people into enterprise • women into enterprise • Supporting SME’s
2.3 Detailed below are the latest enterprise statistics together with information on women into enterprise and engineering initiatives and how we continue to develop appropriate access and support. A separate report presented today, details performance of the GrowMySme programme, one of our core business support/enterprise interventions.
3. Enterprise Statistics
3.1 Business Count
According to ONS UK Business Counts 2019 there are a total of 8,295 VAT and/or PAYE based local units in Hull (individual sites e.g. a factory or shop) and 6,055 enterprises (overall businesses, made up of all individual sites or workplaces). There was a rise in local units between 2013 and 2017. This has now dipped slightly as per the graphic below.
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3.2 Business Births and Deaths
In 2018 there were a total of 825 enterprise births in Hull; which is a birth rate of 12.1% compared to 13.2% nationally. Conversely there were 725 enterprise deaths; which is a death rate of 10.6% compared to 11.5% nationally. The result was an annual change in active enterprises of - 0.80% compared to +0.24% nationally.
Enterprise Enterprise Enterprise Enterprise Annual Change in Number of Births 2018 Births (%) 2018 Deaths 2018 Deaths (%) 2018 Active Enterprises (%) 2018
Kingston upon Hull, 825 12.1 725 10.6 -0.8 City of
Yorkshire and 23,405 11.8 21,595 10.9 -0.2 Humber
England 340,045 13.2 297,895 11.5 0.2
3.3 Survival Rates
Business survival rates in Hull in the first two years of business are broadly in line with regional and national averages, however the gap between local and national survival rates widens after three years.
Kingston upon Hull, Yorkshire and Humber England City of
One year survival (%) 90.5 89.18 89.07 2017
Two year survival (%) 67.36 69.04 67.96 2016
Three year survival (%) 52.87 55.49 55.19 2015
Four year survival (%) 46.3 49.95 49.35 2014
Five year survival (%) 38.76 43.38 42.48 2013
2 Page 40 of 66 3.4 Business by Industry
The majority of businesses in Hull are in Retail (1,130; 13.6%), Construction (905; 10.9%), Professional, Scientific and Technical industries (720; 8.6%), Health (710; 8.6%), Accommodation and Food Services (695; 8.4%), and Manufacturing (675; 8.1%).
Compared to nationally, businesses in Hull are over represented in the Retail, Health, and Manufacturing industries and under-represented in the Professional, Technical and Scientific and Information and Communication industries.
Between 2010 and 2019 the largest increase in businesses has occurred in the professional, scientific and technical sector (+160). Conversely, the largest decrease in businesses has occurred in the public administration and defence (-410) and health (-320) sectors.
Kingston Kingston Change upon Hull upon Hull 2010 2019 1 : Agriculture, forestry & fishing (A) 15 25 10 2 : Mining, quarrying & utilities (B,D and E) 40 55 15 3 : Manufacturing (C) 685 675 -10 4 : Construction (F) 835 905 70 5 : Motor trades (Part G) 265 320 55 6 : Wholesale (Part G) 445 380 -65 7 : Retail (Part G) 1,190 1,130 -60 8 : Transport & storage (inc postal) (H) 315 385 70 9 : Accommodation & food services (I) 665 695 30 10 : Information & communication (J) 170 240 70 11 : Financial & insurance (K) 190 175 -15 12 : Property (L) 235 255 20 13 : Professional, scientific & technical (M) 560 720 160 14 : Business administration & support services (N) 605 615 10 15 : Public administration & defence (O) 585 175 -410 16 : Education (P) 220 225 5 17 : Health (Q) 1,030 710 -320 18 : Arts, entertainment, recreation & other services (R,S,T and U) 580 605 25 8,635 8,295 -340
More detailed analysis by 3 digit SIC code shows business growth and decline in Hull since 2010 has focussed on the following sectors:
3 Page 41 of 66 Business Growth Since 2010 Business Decline Since 2010 561 : Restaurants and mobile food service activities (+205) 841 : Administration of the State and the economic and social policy of the community (-405) 829 : Business support service activities n.e.c. (+80) 889 : Other social work activities without accommodation (-300) 960 : Other personal service activities (+75) 562 : Event catering and other food service activities (-130) 494 : Freight transport by road and removal services (+60) 812 : Cleaning activities (-95) 471 : Retail sale in non-specialised stores (+55) 477 : Retail sale of other goods in specialised stores (-80) 711 : Architectural and engineering activities and related technical 563 : Beverage serving activities (-55_ consultancy (+55) 432 : Electrical, plumbing and other construction installation 861 : Hospital activities (-50) activities (+50) 452 : Maintenance and repair of motor vehicles (+50) 910 : Libraries, archives, museums and other cultural activities (- 45)
3.5 Business by Size
Three quarters of businesses in Hull (75.5%) are small; employing less than ten people. Approximately one third (32.9%) have a turnover less than £100k, a third (30.6%) have a turnover between £100k and £249k and a third (36.5%) have a turnover of £250k or more.
The table below shows these enterprises by size (number of employees per business) and the same information for Yorkshire & Humber as a whole.
Kingston upon Hull Kingston upon Hull Yorkshire & Humber Yorkshire & Humber (Numbers) (%) (Numbers) (%) Micro (0 to 9) 5,010 82.7 163,740 88.1 Small (10 to 49) 830 13.7 17,990 9.7 Medium (20 to 249) 175 2.9 3,295 1.8 Large (250+) 45 0.7 765 0.4 Total 6,055 - 185,795 -
4. Women in Enterprise
4.1 Women entrepreneurs make a huge contribution to the UK economy both creating jobs and driving economic growth. It is estimated that in the UK, women-led SMEs contribute about £85 billion to economic output. However, this translates into only 16% of GVA contributed by all SMEs in the UK. Given the wide disparity between the GVA contribution of male and female owned businesses, it is therefore important to support more women into this environment, ensuring appropriate information, provision and
4 Page 42 of 66 access. As indicated earlier, the Council is now placing greater priority on supporting women into enterprise.
4.2 Female-led SMEs – with and without employees
According to a recent (December 2019) Government briefing paper – Business Statistics “17% of SME employers were led by women, a similar proportion to all years since 2014. The proportion of female leaders is higher for SMEs with no employees: 23%. The UK has a relatively high gap between the proportion of women involved in early stage entrepreneurial activity, and the proportion of men involved in this activity: 5.7 percentage points”. There is also considerable variation in the proportion of female entrepreneurs by industry.
According to the results of a survey carried out by the People’s Panel (Oct 19), this appears to be a similar picture to the one in the local area. The results show that “Females are significantly less likely than males to say that they currently run their own business (-4%)” and “Significantly less likely than males to say they used to run their own business (-8%).
4.3 Encouraging Women into Entrepreneurship
Whilst the Peoples Panel survey suggests that there are a similar number of males (51%) and females (54%) that have not considered running their own business, there appear to be significant differences in the reasons why they feel it is difficult to start their own business. The largest barriers that females identify to self-employment are lack of affordability (32% female, 26% male), lack of knowledge on running a business (20% female, 11% male) and a lack of confidence (30% female, 23% male). There also appears to be a lack of awareness of the access to support that is offered by Hull City Council and partners (30% female, 23% male).
Generally, the barriers to self-employment are the same amongst females as they are amongst males. However, when compared to males, more females identify these as barriers.
4.4 Enterprising Youth
It is interesting to note that the Council managed MC4C (Managing Changes for Careers) enterprise programme which is aimed at those aged 13 to 29 has significantly different proportions.
Here the gender split for young people developing their enterprising idea since May 2016 is 65% (Female) and 35% (Male). The gender split on those that have received grants via the Youth Enterprise Bank is 58% (Female) and 42% (Male), over its 14 years of operation.
5 Page 43 of 66 4.5 Women’s Business Networks
There are a number of business networks specifically for women. These networks offer events, support, advice and more. They range from very broad memberships to those targeted at more specific audiences, such as Women in Rural Enterprise (Wire).
There are online networks and networks that meet in person. Networks in the Hull and Humber area include the following:
• Women’s Enterprise in the Humber - for women in business in Yorkshire and the Humber region. Members range from company owners/directors to sole traders promoting their own businesses.
• Women in Business - Membership reflects a diverse range of businesses – from sole traders to large corporates, from all sectors of the business community. The only criteria is that members are decision-making females within a profession or business, living in Hull, East Yorkshire or Northern Lincolnshire.
• Hull Business Women’s Breakfast Club - Membership is limited to 60 and is made up of women in senior positions working within a 25 mile radius of Hull City Centre.
• SWIISH (Supporting Women in Industry Surrounding the Humber) - Inspiring and supporting women to develop and grow their careers whether as an employee or a business owner.
4.6 Way Forward
The Peoples Panel findings are helpful and are being used to address issues identified, such as improving awareness about services and support available to start-ups and businesses. A review of marketing and messaging is being undertaken, as suggested in the conclusion of the Peoples Panel preliminary results paper.
A targeted approach has been successful in the MC4C programme, which shows a significantly higher proportion of female participants have started their own business.
A programme of marketing and messaging across the board would increase the knowledge of the support services available for those thinking of starting their own businesses. It will also serve to increase awareness across the city of the possibilities of self-employment and heighten the entrepreneurial ambitions of the resident population.
In addition, a programme of contact with local networking groups, particularly those specifically aimed at women is being undertaken and this should heighten awareness of the support available to established businesses/start-ups. Additionally, it allows the opportunity to discuss how women within established businesses view the barriers for women entrepreneurs – and more specifically the barriers for women starting businesses.
We will continue to collect and review the number and composition of enquiries/applications for support across all our programmes.
6 Page 44 of 66 5. Women into Manufacturing & Engineering
5.1 The Women into Manufacturing and Engineering (WiME) programme came into being in 2016 as an initiative by Green Port Hull, Siemens Gamesa, Airco and Jobcentre Plus to encourage women to choose a career in these industries. Since this time the programme has gone from strength to strength, and there are now over 45 regional companies involved and the project is Chaired by Dr Kirsty Clode who is a driving force within the initiative.
WiME is now funded and managed by the four Humber local authorities (Hull City Council, East Riding of Yorkshire, North Lincolnshire and North East Lincolnshire) with a public/private sector steering group. The programme has developed into a recognised force, opening the eyes of those in education to the opportunities for women in the sector as well as invigorating interest in those in higher age groups.
Plans for this year include the annual Careers Events to be held in Scunthorpe’s Baths Hall (3rd March 2020) and a similar event in Hull (Guildhall, 20 th October 2020). These aim to encourage girls and women to consider STEM subjects and careers in related industries. They are normally attended by 300-400 girls from local primary and secondary schools and the university as well as working age females looking to enter or change career paths into manufacturing and engineering.
6. Summary
6.1 The briefing paper highlights a number of issues including business stock levels, formation rates, survival rates and the approach to supporting and encouraging higher levels of female entrepreneurship and employment in manufacturing and engineering sectors. These areas will continue to be a focus going forward.
6.2. Regular progress reports can be provided as required by Scrutiny.
Mark Jones
Director of Regeneration
Contact Officers: Anne Stark/Paul Burnley
22 nd January 2020
Telephone No. : 613336
Officer Interests: None
Background Documents: People Panel Survey October 2019 House of Commons Briefing Paper - Business Statistics - Number 06152 December 2019
7 Page 45 of 66
Page 46 of 66
Report to Cabinet
Wards: Riverside 24 February 2020
Albion Square Development – Project Delivery
Report of the Assistant Director, Major Projects and Infrastructure on behalf of Corporate Director of Regeneration
This item is not exempt
Appendices A, B, C are exempt. They contain information relating to the financial or business affairs of any particular person (including the authority holding that information)
This is a non-key decision. Insert forward plan number reference (delete if not applicable)
1. Purpose of the Report and Summary
1.1 The purpose of this report is to seek the relevant authorisations and delegations to progress the next stages of delivery for the Albion Square development.
1.2 To present an update on progress with outline costings and a proposal to deliver a phased scheme approach to development of the site.
1.3 The report sets out the background to the Albion Square redevelopment and outlines the costs which have been received for both a retail-led (Senario 1) and ice and leisure-led scheme (Senario 2). The report highlights the key benefits of the revised ice and leisure-led scheme and requests the associated capital allocation and progression of an agreement with the Citywide LDP residential partner to progress with the phases of the scheme.
1.4 Based on the scenario proposed it is estimated that this would support 900 gross direct annual jobs and 600 gross indirect annual jobs in supply chains. This would generate annual local contributions of £39m in Direct Gross Value Added (GVA), new money spent within the local economy, and £36m in indirect GVA.
Page 1 of 20 Page 47 of 66
2. Recommendations
2.1 I. That approval is granted for the Assistant Director for Major Projects and Infrastructure (ADMP&I) to progress with the revised Senario 2 to deliver a commercially viable ice, leisure and residential led scheme with office space and smaller scale retail, responding to the current retail market trends and conditions in city centres.
II. Subject to all of the financial parameters set out within the preferred option being met, that the scheme be incorporated into the Council’s Capital Programme, as a self funded project to develop: a. Phase A - 3000 sqm of commercial space (retail and office - use classes A1-A4 and use class B1) b. Phase B1 & B2 -160 residential units and ancillary commercial space c. Phase C: ice arena, leisure facilities and multi- storey car park To be financed from a mix of exiting and submitted capital grants, capital receipts from the sale of the retail, office and residential elements of the scheme with the remaining funded through the tax and direct income derived from the scheme including the additional income uplift from the allocated Economic Development Zone. These costs to include: • Legal fees, surveys, ground investigations and other due diligence required for the site; • Early contractor involvement with the construction contractor; • Site Remediation; • Delivery of the facilities and associated infrastructure, including highways works, and any ancillary construction works to deliver the above phases of the scheme.
III. That, subject to the target cost for the construction works as submitted by Vinci Construction UK Ltd not exceeding the allocated budget, the ADMP&I in consultation with the Director of Legal Services & Partnerships (DLS&P) and the portfolio holder for Economic Investment, Regeneration and Planning, Land and Property, is authorised to proceed to the construction stage of the NEC4 Senario C contract.
IV. That the ADMP&I and DLS&P are authorised to agree suitable terms with the Citywide Lead Developer Partner (LDP) to deliver Phase D1 and D2 housing comprising circa 80 residential units within the Albion Square development, in accordance with the land disposal
Page 2 of 20 Page 48 of 66 procedure set out in the LDP Development Agreement, and purchase Phases B1 and B2 housing units within the Albion development, with the Local Authority acting as construction partner, being subject to the LDP agreed terms (Minute 62, Nov 2014).
V. That the (ADMP&I), in consultation with the Director of Finance, be authorised to bid for any available external funding to facilitate the delivery of the Albion Square mixed use development and, where successful, in consultation with the DLS&P to enter into the necessary funding agreements.
3. Reasons for Recommendations
3.1 The original outline planning permission for the Albion Square redevelopment scheme was based on a retail led scheme. Since gaining this permission, the retail and leisure landscape, whilst still strong within the city centre, continues to adapt and this marked change in focus on retail within the city centre is a trend that is tangible nationally.
3.2 In response to this reduction in large scale retail within city centres, design development for the Albion Square scheme has explored how a strong leisure and ice arena focus, with residential and complementary commercial and food and beverage offer, can strengthen the site as a visitor destination, supporting a long-term strategy to ensure the vitality of the city core.
3.3 In undertaking this exercise with Vinci Construction and FaulknerBrowns architects as part developing the RIBA 2 designs, the scheme currently encompasses an ice arena and leisure led scheme, acting as the anchor use and catalyst for attracting high levels of footfall to the site. Complementary uses within the proposal currently include a climbing wall, gym, commercial units to accommodate a food and beverage offer, residential and office.
3.4 The proposed significant residential development of circa 240 units, comprising a mix of townhouses and apartments will provide a continuous animation of the city centre site and complementary smaller scale retail and food and beverage units would benefit from the strengthened urban residential community.
3.5 Although retail would no longer be a core function within the Albion Square development, retail uses of a smaller scale would support the residential and leisure components within the site.
3.6 The Hull Local Plan (2016-2032) identifies at 6.53 that the
Page 3 of 20 Page 49 of 66 redevelopment of the Myton Street retail site could provide around an additional 6,000 sqm of net sales floorspace and, should it be redeveloped, could strengthen its links to the city core.
3.7 The costs identified are based on outline costs prepared by Vinci for the separate phases of the Albion Square scheme (See Appendix A and associated Phase Plan Appendix B).
3.8 In November 2018 the ADMP&I was granted an allocation of £1 million from the Capital Programme to procure a construction contractor on a phased early contractor engagement basis to develop design, establish timeframes and ascertain real development costs. The additional capital allocation outlined in the preferred Senario and recommendations will serve to complete the scheme developed through the early involvement stage.
3.9 The Council appointed Vinci Construction Ltd as the construction contractor for the Albion Square redevelopment in August 2019, after a competitive tender process. The NEC4 Senario C (target cost) contract, which is being utilised for the Albion Square development, facilitates early contractor involvement and Vinci, in collaboration with their architects, FaulknerBrowns, are currently developing designs to RIBA Stage 2.
3.10 In line with the contract, should the RIBA Stage 2 designs be acceptable to the Council and the costs provided by the contractor fall within the affordability envelope, in accordance with Minute 67 (a) of Cabinet 26 November 2018, the ADMP&I seeks authority to instruct the contractor to proceed to RIBA Stage 3, and to the construction stage of the contract, in order to deliver the scheme in phases, as envisaged by the contract scope.
3.11 The Citywide LDP was appointed in November 2014 (Cabinet Minute 62), with a contractual structure that provides the flexibility to add sites into the development agreement, subject to viability and approval. This mechanism supports the Council to deliver residential schemes within a constrained timeframe and is a suitable fit for the housing proposals at Albion, which seeks to deliver circa 240 dwellings across the site. In November 2018 Cabinet approved:
“(c) That authority is given to the City Major Projects and Infrastructure Manager in conjunction with the City Neighbourhoods and Housing Manager and in consultation with the Town Clerk to commence negotiations with the Citywide Lead Developer Partner (LDP) to deliver the housing within the Albion Street development in accordance with the LDP agreement and the Outline Planning Application and Development Brief.”
Page 4 of 20 Page 50 of 66
3.12 The housing offer has been developed with the LDP architects and Vinci construction and is distributed across three phases; Phase B1, B2 and D (D1 and D2 inclusive) (See Appendix B).
3.13 Phases B1 and B2 comprise of apartments, which have been designed to accommodate the LDP’s approved sub-contractor Home Group’s layouts and specifications, with the intent to construct these o n behalf of Home Group for them to purchase. Subject to agreement, Home Group will be granted the freehold of Phase B1 and B2 including the ground floor commercial space, in line with the development agreement.
3.14 Phase D is located to the north of the Albion Square development site, fronting onto Albion Street and is a suitable parcel of land to dispose of for Strata, as LDP, to take freehold and develop for private residential units.
3.15 The contract also allows for a proportion of delivery by other developers and, as such, the LDP will be encouraged to work with a range of developers on large sites. Any disposal of the land would be subject to planning consent, which is programmed to be gained in 2020.
3.16 Cabinet approval was granted in November 2018 (minute 67) for the following:
“(e) That the City Major Projects and Infrastructure Manager, in consultation with the Town Clerk and the City Property and Assets Manager, be authorised to procure a Retail Operating Partner (excluding operation of the Ice Arena) using the competitive dialogue procedure under the Public Contracts Regulations 2015 with evaluation criteria of 70%/30% quality/price.”
3.17 In line with this approval, the MP&I team invited bidders to express interest in participating in a competitive dialogue process in 2019, to select a commercial operating partner and subsequently received a very narrow range of responses, all non- compliant.
3.18 The low level of market response represents a significant shift in the appetite of investors to invest in retail led schemes in the current retail environment. It is, however, also of note that there is a level of active individual operator interest in the Albion Square development for retail, leisure and commercial space.
3.19 The Senario recommended within this report sees a reduction in retail space within the scheme with the LDP taking the lower floor commercial space with the housing allocation, as permitted under
Page 5 of 20 Page 51 of 66 the terms of the Development Agreement and the remaining retail and office space being put out for reconsideration to the market as a final phase for direct purchase.
4. Impact on other Executive Committees (including Area Committees)
4.1 Whilst the redevelopment would be in the Riverside Area, the impact of the new build as part of the Visitor Destination Programme would benefit the wider community of Hull in terms of the regeneration and economic benefits. Consultation with the relevant members is on-going throughout the delivery programme.
5. Background
5.1 Outline planning consent was granted on 26 April 2019 for the mixed use redevelopment of Albion Square site (Ref: 18/01094/OUT) and since this time, works have been progressing to clear the development site. The Edwin Davis building has been demolished and the asbestos strip is underway within the former British Homes Stores building.
5.2 One of the conditions attached to the outline planning consent required a method statement setting out how the, then locally listed, Three Ships Mural would be recorded, structurally assessed, supported, protected and integrated into the Albion Square redevelopment.
5.3 In response to this condition, and prior to the results of the asbestos analyst’s survey, an extensive feasibility study was undertaken by Wentworth House Partnership to identify the potential Senarios to retain the Three Ships Mural.
5.4 Whilst the licensed asbestos removal contractor was undertaking the asbestos strip in the BHS building, they brought to the attention of the Council that asbestos containing materials had been identified on site, which were additional to those found during the original asbestos survey.
5.5 Following this, the Council’s asbestos analyst and expert advisors were commissioned to ascertain the risk associated with the contamination within the structural elements of the building, which revealed that it cannot be confirmed that cavities around the mural structures are or will be asbestos free to the extent that the murals can be removed without risk of asbestos fibre release. In addition, the findings stated that, in relation to preserving the mural, it is becoming apparent that the asbestos is not accessible
Page 6 of 20 Page 52 of 66 enough to be removed or mitigated to allow the extraction of the murals until the point of demolition, and that the building is heavily contaminated with asbestos spray coating and impregnated Amphibole asbestos to an extent that it appears structurally impossible to remove under normal controlled measures.
5.6 Because of these findings, it was identified that the Local Authority could not safely and economically retain the Three Ships Mural and approval was gained by Leader Decision Record (Ref: SB/048/2019) to demolish it.
5.7 Following this approval, the next step was to submit a Section 73 planning application to seek an amendment to the aforementioned planning condition 7, to remove the requirement to retain the Three Ships Mural and enable demolition to proceed.
5.8 On the 18 November 2019, the DCMS confirmed that the Three Ships Mural has been Grade II Listed, which has altered the approach to the planning process.
5.9 In response to the listing, the project team is undertaking further investigations into the mural, and has instructed consultants to progress with intrusive testing, including concrete cube testing and carbonation testing to identify the quality of the concrete within the substrate of the mural.
5.10 In parallel with the ongoing mural investigations, the design development continues, to achieve a RIBA Stage 4.
5.11 The current proposed scheme includes a quantum of uses which include a greater focus on the ice and leisure element of the scheme, with a scaled down retail floor space develop by Hull City Council with Vinci following market engagement.
5.12 In line with the National Planning Policy Framework, the overarching strategy for the redevelopment of a key city centre site such as Albion Square should aim to “promote their [city centre] long-term vitality and viability by allowing them to grow and diversify in a way that can respond to rapid changes in the retail and leisure industries, allows a suitable mix of uses (including housing) and reflects their distinctive characters.”
5.13 It is also of significance that the structural changes in city centre economies, specifically changes in shopping and leisure patterns and formats, has led to a review of the use mix at Albion Square as part of the Hull City Councils design development.
5.14 The proposal to reduce retail by removing first floor retail within Phases A, B1 and B2 and replace with commercial office and residential space, responds to the current fragile retail market
Page 7 of 20 Page 53 of 66 conditions and would promote activation of the city core throughout the day and nighttime.
5.15 The ice arena and leisure offer with complementary food and beverage units, gym and climbing wall will act as an anchor of the development, attracting a significant level of footfall to animate the city core.
5.16 The Hull Council Local Plan sets out at 6.48 that “there is clear opportunity within such a large site [Albion] to provide for a wide range of uses, creating sufficient critical mass to repair the built environment, including public realm and creating a scheme that contributes to the city centre as a whole. Albion Square provides a significant opportunity to expand the current retail offer of the city centre with clear linkages to the existing Primary Shopping Area.”
5.17 The proposed revised scheme aligns with the Local Plan in relation to providing a mix of uses to strengthen the city core and enhancing the urban fabric.
5.18 Although this scheme would reduce the retail accommodation, this is responding to the current retail market and would strengthen the retail provision across the wider primary retail areas in the city Centre, reducing competition for existing retail.
5.19 This proposal would also limit the retail offer to being accommodated in the ground floor of the separate blocks within the development. This approach would facilitate the separate construction of Phases A, B1 and B2 to be developed as discrete phases.
5.20 This is a key benefit compared to the retail-led scheme, which would result in the ground and first floors of A, B1 and B2 phases being co-joined to accommodate a large floorplate for a large scale retailer, removing the opportunity to successfully phase the development.
5.21 The ice and leisure led scheme would provide a balanced mix of residential, commercial, ice, leisure, retail and associated car parking, which would strengthen the diversification of city centre uses in the core of the city, acting as a visitor destination, that provides a place to eat, work, live and enjoy leisure activities.
5.22 There is a strong demand in the city for commercial office space, which has been demonstrated by the uptake for the office space in recent developments such as K2 and the Fruit Market.
Page 8 of 20 Page 54 of 66 5.23 This preferred Senario would place Albion at the focus of place- making in the city centre and reflect key principles set out within the NPPF, which seek to create cityscapes with long-term viability and vitality.
5.24 Furthermore, by purchasing and developing the Myton site adjacent to Princes Quay, the large scale retail provision offer can be accommodated at a location which would support and strengthen an existing retail shopping centre.
5.25 The scheme has been the subject of two pre-application planning meetings to date.
5.26 In line with the overall project programme, the demolition of the former BHS and Co-Op building was originally due to commence in January 2020. However, due to the recent listing of the Three Ships Mural, the approach to planning has had to be reviewed, and a full planning submission is scheduled to be submitted in spring 2020.
5.27 Residential Lead Developer Partner (LDP)
Negotiations with the residential Citywide LDP are ongoing, with negotiations progressing to deliver the Albion Square residential offer and the ground floor residential block commercial space. In line with the existing LDP Development Agreement, the intention is that Strata will take freehold of the parcel of land forming Phase D, fronting onto Albion Street (See Appendix B) to develop circa 80 properties, with the remaining circa 160 apartment units being built by Vinci Construction UK, subject to agreement.
5.28 Design development has progressed since Vinci was appointed as construction contractor and the scheme encompasses the elements approved within the outline planning permission, whilst amending the quantities to reflect current market conditions.
5.29 Vinci has submitted outline costs for both the retail-led scheme and the revised ice and leisure-led scheme.
5.30 As demonstrated within the outline cost appraisal, there is a significant affordability gap anticipated for Senario 1 - the retail- led scheme, which also includes residential unit provision.
5.31 In additional to the financial aspect of the scheme, the retail-led scheme would require Phases A, B1 and B2 to be built concurrently, as the ground and first floor would be co-joined to provide a deep floorplate suitable for a large-scale retailer. Commercial office would occupy the remainder of Phase A and residential would occupy the remainder of Phases B1 and B2; however, the Council would have to approach the construction of
Page 9 of 20 Page 55 of 66 these three phases as one development phase.
5.32 The alternative scheme, Senario 2, which would provide an ice and leisure-led scheme with scaled down retail accommodation, would comprise of separate Phases A, B1 and B2, as outlined above. This would support a reduction in financial risk exposure to the Council.
6. Issues for Consideration 6.1 Programme The original construction programme included demolition of the BHS / Co-Op building commencing in January. However, due to significantly more asbestos materials being identified on site, the current asbestos removal contractor is delayed and scheduled to complete their non-structural asbestos strip by March 2020.
6.2 Whilst the asbestos strip continues, the structural asbestos (which is embedded in elements of the building, which would require demolition and asbestos removal activities to be undertaken concurrently), will not commence until the current asbestos contractor has completed their work and when planning permission has been granted to demolish the BHS / Co-Op building. This is currently anticipated in May 2020.
6.3 Retail Operating Partner
As set out above, in mid 2019 the Council invited bidders to express interest in participating in a competitive dialogue process to select a commercial operating partner and subsequently received a very narrow range of responses. In some of the public contracting procedures available under the Public Contracts Regulations 2015 (PCR2015), there is ability to drop into direct negotiation with bidders without further competition where no suitable requests to participate are submitted. However, this is not available where a competitive dialogue procedure has been advertised, therefore where no suitable requests to participate are received, i.e. expressions of interest fail to meet the stated selection criteria, the Council has no Senario other than to abandon the process and to explore alternatives.
6.4 By engaging with the Citywide LDP, the Local Authority will reduce the potential financial exposure for the residential element of the scheme, as Phase D will be delivered through Strata taking the freehold of the northern portion of the site, to build and dispose of the dwellings in accordance with the terms of the Development Agreement. The proposal for the remainder of the residential offer is for Vinci Construction to build the apartments to the LDP’s layout requirements and specification in order that when the construction is complete, subject to agreement, the LDP will purchase the units at a pre-agreed price with the Council,
Page 10 of 20 Page 56 of 66 mitigating the financial risk.
7. Senarios and Risk Assessment 7.1 Senario 1: To p roceed with a retail -led Albion Square redevelopment scheme, encompassing large floorplate retail units. Allocate capital to progress the scheme to commence construction in line with the NEC4 contract, implement the provisions of the Citywide LDP Development Agreement to progress the residential phases of the scheme and to grant authority to bid for funding for the Albion Square redevelopment.
By progressing with this Senario, the Albion Square development would be at significant risk of not proceeding beyond design. The commercial viability of the scheme is signisficantly impeded by the large scale retail floorplate in Phases A, B1 and B2, which would also need to be conjoined, removing the opportunity to phase the development and manage the risk exposure to the Council. At this stage, it is also clear there is inadequate commercial operator interest in the market to deliver and manage the scheme as originally envisaged at this scale while there does remain a number of smaller retail and leisure operators interested in a scaled down proposition.
7.2 Senario 2: Proceed with a commercially viable revised ice and leisure-led Albion Square mixed-use redevelopment scheme. Allocate £87m capital to progress the scheme to commence construction in line with the NEC4 contract, implement the provisions of the Citywide LDP Development Agreement to progress the residential phases of the scheme and to grant authority to bid for funding for the Albion Square redevelopment.
This is the preferred Senario.
The preferred Senario would be to grant authority to progress with the revised Albion Square proposals which includes an Ice and Leisure-led scheme, with complimentary retail units, offering space for food and beverage and supporting convenience uses in addition to circa 271 residential units and 7000sqm of retail, leisure and commercial floor space.
Page 11 of 20 Page 57 of 66
As outlined above, this scheme responds far better and more opportunely to the current market conditions whilst promoting a development which will attract a significant level of footfall to the city core, animating what is currently an underused and unattractive blight on the cityscape.
By proceeding with Senario 2, it allows the Council to progress with a scheme which falls within the affordability envelope and mitigates the commercial risk which the Council would be exposed to should Senario 1 still be progressed.
This option would be financed from a mix of exiting and submitted capital grants, capital receipts from the sale of the retail, office and residential elements of the scheme with the remaining funded through the tax and direct income derived from the scheme including the additional income uplift from the allocated Economic Development Zone. The tables below provide a summary of the key financial parameters, the detail of which is included within the exempt appendix. Provided that all of the expenditure and income parameters remain within those outlined in the next stage of delivery this scenario both delivers the desired planning outcomes for the site and returns just under £10m net to the authority over the 40 year business plan.
Senario 2 Overall Cost/Financing Table
Ref £’000 A Total Construction Costs 87,034 B Capitalised Borrowing Costs 2,699 Total Costs 89,733
Less: C - Capital Receipts -24,968 D - External Grants -7,350 - Existing Programme -2,600 Total -34,918
Total Borrowing Requirement 54,815
Summary Financial Appraisal
Ref Year 40 NPV 1 Years 40 £’000 £’000 Years £’000 Expenditure: Cost of Borrowing 2,567 100,107 54,167 (Interest/MRP) over 40
Page 12 of 20 Page 58 of 66 Years
Income: E Non-direct Council Risk (Office/Retail/Residential) - Council Tax/Business -2,574 - - Rates 132,014 49,850 F Direct Council Risk (Ice and Car Park) - Business Rates -277 -13,711 -5,287 - Income Uplift (net of rates -391 -25,748 -8,443 uplift) Total Income -3,242 - - 171,473 63,580 Net Cash Flow -675 -71,366 -9,413
Construction Costs A Build £’000 £’000 Total 87,034
Capitalised Borrowing Costs
B £’000 Authorities are able to capital borrowing costs 2,699 where these costs are directly attributable to the acquisition, construction of a qualifying asset. A qualifying asset is an asset that takes a substantial period of time to get ready for its intended use. This is a change in Accounting Policy
Capital Receipts
C Capital Receipts £’000 £’000 Total 24,968
External Grants
D Grants £’000 £’000 LGF Grant 1,450 High Street Grant 5,000 HCA 900 Total 7,350
Income - Non-direct Council Risk
E £’000 £’000 EDZ Rates Offices 984 EDZ Rates Retail 1,312
Page 13 of 20 Page 59 of 66 Residential Council Tax 278 Total 2,574
Income - Direct Council Risk
F £’000 £’000 EDZ Rates Ice Commercial 92 EDZ Rates Ice Arena 92 EDZ Rates Car Park 93 277 Income Uplift – Ice Commercial 119 Income Uplift – Ice Arena 174 Income Uplift – Car Park 98 391 Total 668
Other Benefits to capture: This option also releases the existing Ice Arena Site and George Street site for commercial and residential regeneration following demolition and site clearance. For which the Council will receive capital receipts and long-term revenue income from tax receipts.
Based on the scenario proposed it is estimated that this would support 900 gross direct annual jobs and 600 gross indirect annual jobs in supply chains. This would generate annual local contributions of £39m in Direct Gross Value Added (GVA), new money spent within the local economy, and £36m in indirect GVA.
7.3 Senario 3a & b : Do nothing
a) This Senario would result in no redevelopment of a key city centre site and would require significant security to be deployed to secure and protect the former BHS/Co-Op building, which is currently undergoing asbestos removal.
Furthermore, the asbestos present within the structural components of the BHS and Co-Op building can only be removed as part of demolition activity. Consequently, any halt on the demolition and subsequent development would require all structural asbestos to be encapsulated in line with Health and Safety legislation to ensure air test clearances are achieved.
The roof is also in a poor state of repair and would require bracing to support and avoid risk of collapse.
Given the recent Grade II listing of the Three Ships Mural, regardless of whether the scheme was progressed, a significant programme of work would have to be undertaken to protect and maintain the mural.
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The derelict building would be susceptible to vandalism and arson, which would pose a risk to public health and safety and demand robust security. The cost to mothball the building would be circa £3.55m to stabilise, secure and maintain and would leave the city centre site with a significant eyesore in a primary development zone. The Council would also have to pay back all grants received to date for the site’s redevelopment, this equates to a further £2.5m bringing the Do Nothing, stand still option cost in at circa £6m.
b) As above, however, given that both George Street and the Current Ice Arena have reached their reasonable life span the authority would still need to replace these with new facilities, the estimated cost of which is in the region of £30m. In this instance there would be no EDZ income nor any income uplift from the sale of assets or tax revenues. Therefore, in this option the cost of borrowing would need to be met from the Councils baseline revenue, therefore would be an unviable option.
Do Nothing, option b Financial Scenario
Ref £’000 A Total Construction Costs 30,000 B Capitalised Borrowing Costs 930 Total Costs 30,930
Total Borrowing Requirement 30,930
Ref £’000 Expenditure (per annum): Cost of Borrowing (Interest/MRP) 1,450
Income (per annum): Direct Council Risk (Ice and Car Park) - Council Tax/Business Rates -277 - Income Uplift (net of rates uplift) -391 Total Income -668 Net Cash Flow 782
8. Comments of the Monitoring Officer(Town Clerk)
8.1 Receipt of initial costings from the construction contractor has revealed an affordability gap that is unlikely to be closed, should the original scheme be left to proceed. Whilst the Council has a general power of competence bestowed by the Localism Act 2011 and may acquire land for any of its purposes under S. 120 Local Government Act 1972, it is also subject to an overarching
Page 15 of 20 Page 61 of 66 duty to secure best value under S. 3 Local Government Act 1999, using a combination of economy, efficiency and effectiveness. It is therefore opportune to review the viability of the original proposals for the site and realign the objectives to capture and build upon the current emerging trends in terms of diminishinig demand for retail but more buoyancy in leisure and housing sectors, with supporting and ancillary commercial outlets.
As stated in the report, attempts both by publication of Prior Information Notice and then a subsequent call for requests to participate in a dialogue procedure elicited minimal response from the commercial operator market, clearly indicating that there is little or no appetite for commercial risk in the current climate. By responding to this signal from the market and reviewing the Senarios for delivery of a viable scheme, the Council will be much more likely to be able to achieve best value and a sustainable offer at Albion Square. The contractual Senario selected by the Council minimises cost over-run risk to the Council, whilst also incentivising the contractor to keep to, or fall below, target costs. Any changes required to the existing contract as a result of this review of the scheme viability can be dealt with as compensation events and managed and priced accordingly.
It is the case that the Citywide LDP contract allows for the construction and operation of commercial units as part of a housing scheme. Within the context of the Development Agreement, it appears that this can deliver sufficient quantum of retail space to bring forward a mixed-use scheme that will be sustainable and support and enhance the housing and leisure offer. The LDP was procured from a framework compliant with the PCR 2006 and development sites can be added or removed, subject to the terms of the contract. The contract also contains mechanisms for the development of shared schemes, i.e. part Council-part LDP and for disposal to a permitted sub-contractor such as Home Group.
9. Comments of the Section 151 Officer (Director of Finance and Transformation)
9.1 The recommended way forward provides, subject to confirmation of technical viability, planning permission, capital costs and partner commitments, a means of redeveloping a critical city centre site. However, the proposed scheme requires a significant level of Council borrowing and therefore exposes the authority to a level of financial risk. Under the proposal, this risk can be mitigated, subject to contractual agreement, by the sale of the housing, office and the majority of the retail elements of the scheme to partner organisations. This will provide both, through capital receipts, a contribution to the construction costs and a significant future income stream by way of Business Rates and
Page 16 of 20 Page 62 of 66 Council Tax in order to meet the borrowing costs incurred by the Council in funding the balance of the capital costs.
As shown in the financial tables under Scenario 2, the expected cash flows indicate that over 40 years (discounted) the scheme will provide a potential positive benefit £9M. Although this a marginal benefit over the time frame it should be noted that the majority of the expected annual income of c£3.2m will be at the risk of the office and retail owners, £2.30m, with a further £0.25m in Council Tax which assumes the new properties will be occupied. As such the annual costs incurred by the Council in servicing the associated debt, £2.50m, can be covered before reliance is placed on income uplifts from Council operated facilities.
It is also necessary to consider the alternative options. As shown under scenario 3a, “doing nothing” incurs significant additional cost to protect the Mural and given the structural condition of the existing facilities, the loss of these facilities in the near term. Under scenario 3b, replacing the ice arena / car park on separate alternate sites would incur significantly greater costs than the proposed way forward
On balance, given the risk mitigations set out above and the absence of a low cost alternative the proposed scheme can be supported.
10. Comments of the Assistant Director, HR and compliance with the Equality Duty
10.1 The recommended action for an Ice/leisure offer will have a knock on effect to Hull Culture and Leisure, this has not been examined in the report. If there is a move to the Albion site then staff would have a move of base. An equality impact analysis would be required to move service provision from one site to an alternative and should be completed before a decision is taken to build new facilities so the decision can be informed by the analysis.
11. Comments of Overview and Scrutiny
11.1 This report is due to be considered by the Economy and Investment Overview and Scrutiny Commission at its meeting on, Thursday, 13 February, 2020. Any comments or recommendations agreed at the meeting will be submitted to Cabinet for consideration alongside the report. (Sc5725)
12. Comments of the Portfolio Holder for Economic Investment, Regeneration And Planning, Land And Property, Cllr Hale
Page 17 of 20 Page 63 of 66 12.1 Councillor Hale will provide his comments on the day of Cabinet Working Group.
Garry Taylor, Assistant Director – Major Projects & Infrastructure
Contact Officer: Gary Collinson Telephone No.: 01482 615522
Officer Interests: None
Background Documents: - A list of background documents must be included. These documents are then available (if not exempt) for public inspection.
Appendices – All exempt:
Appendix A: Financial Appraisals Appendix B: Phase Block Plan Appendix C: Proposed concept visuals
Page 18 of 20 Page 64 of 66 Implications Matrix
This section must be completed and you must ensure that you have fully considered all potential implications
This matrix provides a simple check list for the things you need to have considered within your report
If there are no implications please state
I have informed and sought advice from HR, Yes Legal, Finance, Overview and Scrutiny and the Climate Change Advisor and any other To be included within the key stakeholders i.e. Portfolio Holder, consultation section of the report. relevant Ward Members etc prior to submitting this report for official comments I have considered whether this report Yes requests a decision that is outside the Budget and Policy Framework approved by Council Value for money considerations have been Yes accounted for within the report Financial appraisal has been included. The report is approved by the relevant City Yes Manager I have included any procurement/commercial Yes issues/implications within the report Financial appraisal has been included. I have considered the potential media interest Click here to enter in this report and liaised with the Media Team to ensure that they are briefed to respond to To be informed ahead of publication media interest. of report. I have included any equalities and diversity No implications within the report and where necessary I have completed an Equalities Not required. Impact Assessment and the outcomes are included within the report Any Health and Safety implications are Yes included within the report Specific H&S referenced in the document. Any human rights implications are included No within the report Not relevant to the report. I have included any community safety Yes implications and paid regard to Section 17 of the Crime and Disorder Act within the report I have liaised with the Climate Change No Advisor and any environmental and climate change issues/sustainability implications are This will be dealt with as part of the
Page 19 of 20 Page 65 of 66 included within the report planning application submission.
I have included information about how this Yes report contributes to the City Plan/ Area priorities within the report Specific reference to local planning policy within the report. I have considered the impact on air quality, No carried out an appropriate assessment and included any resulting actions or Not required at this stage. opportunities necessary to improve air quality in the report.
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