Date 10 May 2017 Version 1.0 (Scrutiny) Approved by KB

ECONOMY AND REGENERATION PORTFOLIO OVERVIEW

Portfolio Summary

In Quarter 4, the Council began the process of developing an agreed framework for delivering Inclusive Growth – that is an approach to economic growth that creates opportunities for all and distributes the financial and other benefits of growth more fairly. This is not something the Council can address on its own however, and discussions involving key partners have begun to look at how they might support this work, which will develop during 2017/18.

We are continuing to address youth unemployment through initiatives such as our work clubs. In addition, during Quarter 4 the Council ran the “Hackfest” event, which aimed to connect young people to businesses that use coding skills, engaging 34 young people and 5 businesses. It also ran a jobs fair specifically for employment opportunities at the airport which 308 people attended. Encouragingly, levels of employment, across all age groups, including the young, are continuing to fall. Work and skills will continue to be key priorities for the council, during 2017/18 and beyond, and these will be key elements of our work on Inclusive Growth.

Town centre businesses voted overwhelmingly in October 2016 to make the town centre a Business Improvement District (BID). During this quarter the Stockport BID Company and an Interim BID Board were set up and an Interim BID Manager appointed. The Stockport BID will unlock almost £2.5m of additional funding over a five year period to be spent on improving the town centre and encouraging more people to visit it. And now that the BID has been established, it is hoped this will enable other contributions to be secured.

A four-storey office building was completed at Stockport Exchange. Three of the four floors have now been completely let, with announcements on the fourth due imminently. Early tenants include Sainsbury’s, Cafélito and Stagecoach. The Holiday Inn, which opened in Quarter 3, has performed extremely well. Future phases will include a further 300,000 square feet of office space. A range of projects and initiatives have been established to improve the Market and Underbanks area. As well as the Council, these involve a number of partners, developers, landlords, agents and businesses. Progress at Redrock continues, with a number of additional lettings during the quarter. Construction is on schedule to be completed in late 2017.

Our museums are performing well, with visitor numbers continuing to rise. Popular events such as the Strawberry Studios exhibition and Hatstock have been key factors in this success.

Work on the A6 to Manchester Airport Relief Road has now been ongoing for two years and is scheduled to be completed in spring 2018. 2016/17 was the third year of the nine-year, £100m, Highways Investment Programme and indications so far are encouraging, with all measures relating to the condition of our roads and footways showing improvement.

Cllr Kate Butler, Portfolio Holder (Economy and Regeneration)

Revenue Budget (Outturn) Capital Programme

£000 £000 Cash Limit 2,792 2016/17 Capital Outturn 187,709 Outturn 2,800 2017/18 Capital Budget 91,869 (Surplus)/Deficit 9 2018/19 Capital Budget 49,151 “Approved Use of Reserves” Total 3,184 Utilisation of “Approved Use of Reserves” 1,035 in the above forecast “Approved Use of Reserves” Balance 2,149

1. ECONOMY AND REGENERATION PERFORMANCE MONITORING AND KEY PROJECTS

1.1. Priorities and Activity Update

1.1.1. Transforming the Local Economy The Council recognises that economic growth has a positive impact; but at the same time work to stimulate growth must also ensure that all residents and all parts of the Borough can benefit from it. For that reason this Council will ensure that its financial and staffing resources are targeted at supporting inclusive economic activity and at improving issues which the private sector alone does not address.

The process of developing an agreed Inclusive Growth Framework for the Borough began during Q4. As this is not something the Council can address in isolation however, discussions involving key partners have begun to look at how they might support this work.

1.1.2. Supporting Business in Stockport

Business Events/Engagement The Growth Service engaged on a one to one basis with 35 businesses during the quarter and an additional 140 directly through networking events and workshops organised by the team. The Council continues to provide two members of the team to work part time as Business Growth Hub engagement officers and to work closely with business support providers with the Manchester Growth Company. Business events held by the team during the quarter included the Finance and Professional Sector network, the Creative Sector network, two workshops with food and beverage providers in the town centre, meetings with Princes Street Traders and one Stockport Economic Alliance meeting. The Business Bulletin is currently emailed to over 5,700 local contacts with issues circulated in February and March, providing information to local businesses about events and investment news relevant to Stockport. The Stockport Business Finance scheme was also launched in January, providing opportunities for businesses to explore a range of finance options via the GM Access to Finance scheme. During Q4 the Business Improvement District (BID) Company was established, an Interim BID Board set up and an Interim BID Manager appointed. Baseline and Operational Agreements between the Council and the BID Company have been completed. BID banding has been agreed and is now being used and BID levy bills have been issued by the Council.

Get Digital Faster The first 2 stages of the fibre broadband project have now completed, bringing 72 new fibre enabled cabinets across Stockport. Average take-up of superfast broadband via the new cabinets across the 8 participating local authorities has now reached 28%, which enables the programme to fully benefit from Gain share funding and further investment by BT in areas that remain unserved. This extended programme starts in April 2017. It aims to build additional fibre enabled cabinets across the borough to reach a further 570 premises.

Stockport Business and Innovation Centre (SBIC) The centre now has 41 office based customers and further 27 are either virtual customers or use the Shared Office facility. Over 137 people are known to work within the facility and there remains potential to grow as larger, unlettable units are divided into smaller units that are aimed at new start businesses. Over the year, the Business incubation director, located on site at SBIC, has supported 70 different business projects, providing around 500 hours of one to one support and delivering 15 business events at the centre. This support has led to 12 new jobs being created by businesses in the centre, 8 have experienced increased turnover, 8 have entered new markets, and 7 are expanding their product range. The final of the Pioneer 10 competition, which has supported a number of new and young businesses, will be held in May 17.

Houldsworth Mill Business and Arts Centre The centre has maintained occupancy above 75%, reaching 84% in March 2017. This centre provides workspace for over 70 businesses, employing in excess of 260 people. The Council’s lease on this property has been extended to June 2017 after which the facility will be transferred to the landlord to continue operating as managed workspace.

Business Investment New business investment announcements during the period include the relocation of Volcanic media into 5,000 square feet at Dale House in the town centre, creating 33 new jobs over the next 2 years, and financial services group Together acquiring No 1 Lakeside at Cheadle Royal Business Park - The 33,000 square foot property was bought to facilitate the company’s growth plans which is based in neighbouring Lake View building.

Economic Assessment/Business Information The Stockport Economic Assessment will be refreshed during Quarter 2017 and work is ongoing to improve access to the council's business web pages.

Brownfield Land and Mills Reviews Work is ongoing to build understanding of Stockport's mills resource and other brownfield land.

Stockport Town Centre Business Improvement District (BID) Preparations for the start of the BID on 1st April 2017 are well underway. A BID Company has been established, an Interim BID Board has been set up and an Interim BID Manager appointed. Baseline and Operational Agreements between the Council and the BID Company have been completed. BID banding has been agreed and is now being used. BID levy bills have been issued by the Council.

1.1.3. Tackling Youth Unemployment The Employment and Skills Advisers continue to support clients in the Supporting Families programme and through the delivery of GOALS courses to wider groups. 30% of the clients worked with have achieved positive outcomes going into either employment, volunteering, training or education. The Council continues to use Employment and Skills plans as part of the planning conditions when agreeing commercial development. This has provided a significant number of jobs, apprenticeships, training and work experience placements for local people. The

Council's work clubs continue to offer a valued service to clients. Recent impact analysis with 70 clients shows that 54% obtained work, 14% are returning for further support and 4% were referred for support from other services. The Council ran a digital Hackfest to encourage young people to connect with business that use coding skills, engaging 34 young people and 5 businesses. The Council also ran a jobs fair specifically for the employment opportunities at the airport. 308 people attended the jobs fair with a number being offered interviews for jobs the following week, as well as employers finding good quality candidates for difficult to fill posts.

1.1.4. Sustainable Employment Work continues to support more inclusive growth and sustainable community development that creates, and connects communities with, local opportunities. In partnership with Equity Housing a new post of Capacity Builder (Social Enterprise) was created and recruited to. The post holder started work at the end of Quarter 4 and has begun work to build an understanding of the development needs of fledging social enterprises and community groups who are interested and able to operate more sustainable business models, with the intention of moving them away from dependence on grant funding. The next phase of this work will be to support these enterprises to develop, and finance, sustainable business plans.

1.1.5. Regenerating Our Town Centre Maximising the potential of Stockport town centre through regeneration is a key priority for this Council and one which will help provide jobs, a diverse retail and leisure offer, and enhance Stockport’s role as a visitor destination and a business location. This quarter saw the completion of Phase 2 of Stockport Exchange and further lettings secured at Redrock and Aurora (more detail on Stockport Exchange and Redrock is included in Section 1.2 below).

A Place Marketing organisation has been appointed to develop a new narrative for the town centre.

1.1.6. Bringing Metrolink to Stockport and Improving Rail Accessibility The 2040 Transport Strategy and initial five year delivery plan have been approved. It is understood that work has commenced on developing a fixed track policy.

1.1.7. Reducing the Cost of Bus Travel Throughout most of 2016/17, the Bus Services Bill was making its way through Parliament and the Bus Services Act 2017 was passed on April 27th 2017. The intention of the Act is to make it easier for local transport authorities to franchise networks of bus services. It will give Local Transport Authorities the powers to plan, develop and regulate bus services offering passengers simpler, integrated ticketing and guarantees on service quality. It also offers the opportunity to remove barriers to improving services and providing simpler fares in areas which do not wish to introduce franchising as well as opening up data on bus services. In 2017/18 the Council will be working with partners to determine how to maximise the opportunities the Act offers for improving bus services locally.

1.2. Reform Programme Updates

1.2.1. Museums and Cultural Attractions Q4 has seen a number of successful exhibitions and events delivered across Stockport Museums. The Strawberry Studios exhibition at Stockport Museum has resulted in record numbers of visitors to the site. Hatstock, an event to promote millinery and give milliners an opportunity for networking and professional development, attracted over 200 participants from across the North of England. Other sites continue to see increases in visitor numbers and income generation on previous years.

1.2.2. Stockport Exchange This quarter saw the completion and letting of Phase 2 of Stockport Exchange. The 115 bed Holiday Inn opened towards the end of the previous quarter and has since performed extremely well). A four-storey Grade A office building with 43,000 square feet of office space and a Sainsbury’s retail outlet with a café and local convenience store on the ground floor was completed. Tenants include Sainsbury’s, Cafélito and Stagecoach. Future phases will include a further 300,000 square feet of office space. Proposals will be brought forward for phase 3 and the following phases will be brought forward in the near future with a view to building on the undoubted success of phase 2.

1.2.3. Redrock Work continues on this 75,000 square foot leisure and retail development in the heart of Stockport Town Centre, scheduled for completion in late 2017. Work will continue to ensure that a wide range of food and beverage offers and other leisure facilities are available within Redrock. Further lettings were secured during the quarter. One knock-on benefit of Redrock already becoming apparent is the increased interest in premises along Princes Street from occupiers and investors who want to capitalise upon the increased footfall which is expected to be generated by this scheme.

1.2.4. Stockport Market Following a competitive process, the Council has appointed Market Place Europe to manage Stockport Market for the period 1st April 2017-31st March 2018. The contract specification tasks the operator with the day-to-day management of the Market as well as introducing initiatives to reverse long-term declines in footfall to the Market area. The Council is also working with stakeholders around the Market Place to sustain successful initiatives such as Foodie Friday and develop new ideas for events and activities which will attract footfall to the Market Place.

1.3 Performance Update

PI Status

2016/17 actual / forecast is significantly below target

2016/17 actual / forecast is below target but within acceptable tolerance range

2016/17 actual / forecast is on or above target or within target range

Measures in bold to be included within the Corporate Report.

* NB - some measures have no targets set as these may be contextual, however key trends are monitored for these and RAG ratings applied based on direction of travel to highlight any issues.

Good 2014/15 2015/16 2016/17 PI Code PI Name perform- Q4 Status Actual Actual Actual Target ance Actual % Occupied managed workspace and incubator floor E&R 01 High 68.0% 72.0% 81% 81% 75.0% space actively managed for start-up/micro-businesses Occupancy figures exceeded targets during 16/17 with all 3 properties performing well throughout the year. The lease at Houldsworth Mill will not however be renewed this year, so as of July 2017 this property will be managed directly by the landlord's agent, Roger Hannah & Co. Merchants House and Stockport Business and Innovation Centre will continue to be managed on behalf of the Council by Oxford Innovation Ltd. Footfall in Market Area: Change Not E&R 02 High -1.4% -6.3% -6.3% +2.5% from Previous Year in Footfall Collected Overall footfall has been on a downward trajectory for a number of years with this becoming more pronounced in the last couple of years. The Council is working with partners to turn this trend round through new occupiers and a programme of events and activities. Overall Employment rate E&R 03 High 77.1% 77.9% 78.9% 78.9% 78.1% (working-age)

The latest available data is for Q2 2016/17, and is 78.9%. This figure is 1.4% higher than the last reported figure.

% working age people claiming out of work benefits (including Universal Credit 9.3% 9.3% 8.2% 8.2% E&R 04 Low N/A* claimants not in work) in the (16,430) (16,465) (14,570) (14,570) borough (number of claimants) The latest available data is for Q2 16/17 and is 8.2%, which is 0.2% lower than the last reported figure. No target was set, but as a reduction was achieved the status is marked as “on target”.

Good 2014/15 2015/16 2016/17 PI Code PI Name perform- Q4 Status Actual Actual Actual Target ance Actual Proportion of occupied retail, commercial and business E&R 10 High 92.0% 91.7% 93.5% 93.5% 92.0% premises within the borough's district centres These figures are based on surveys undertaken by the Council's Planning Policy team during late summer 2016. Average occupancy rates across Stockport's 8 District Centres (Sept 2016) were 93.5%, indicating a slight improvement (from 92.9% earlier in the year). Hazel Grove has the most vacancies and lowest occupancy rate (91.2%) whilst Marple and Cheadle have the highest occupancy rates at 95.2% and 95.4% respectively. The next survey will take place in May 2017. Proportion of occupied retail, commercial and business E&R 11 High 80.1% 80.1% 79.9% 79.9% 80.0% premises within the Town Centre High street shops continue to face major challenges from on line and other forms of retailing. This challenging environment impacts not only on major 'national' retailers but also the independent sector. The town centre continues to face competition from the regional centre, (Manchester city centre), generally robust and attractive secondary centres (especially food and beverage) and out of town retail parks (notably in the South Manchester crescent' Cheadle Royal & Handforth Dean). The town centre is also currently undergoing a major regeneration programme which has resulted in the loss of car parking. All of these factors are having an impact on the level of vacancies in the centre (there are currently 139 vacancies – 20.1%). During 2017/18 several of the major leisure and office-led schemes in and around the Town Centre will be completed and the Stockport Business Improvement District will be established. These developments are expected to contribute to an increased occupancy rate. No. independent businesses in E&R 12 High 334 301 326 326 304 the town centre The number of independents has remained static between the last survey (September 2016) to the latest survey (February 2017). A number of closures were anticipated during 2016/17 and the number of independents was expected to reduce (hence the target of 304). Numbers have not reduced to the extent forecast however, so the end of year target was exceeded. The February survey identified 326 independents in the Town Centre, 47% of the total number of businesses. Square feet of office, retail and E&R 13 industrial space let or sold to High 680,000 513,699 180,000 796,436 700,000 new occupiers Around 180,000 square feet of office, industrial and retail space was let or sold to new occupiers during Quarter 4, taking the figure for the year to 796,436 - almost 100,000 square feet over the forecast figure and almost 300,000 square feet more than the previous year. Lettings and sales during the quarter are expected to lead to 2,000 new jobs and 507 jobs being safeguarded. Lettings and sales in the town centre during the quarter totalled 9,550 square feet, giving a figure of 188,800 square feet over the year. This included Volcanic Media which relocated into 5,000 square feet at Dale House in the town centre, creating 33 new jobs over the next two years. Also Acuma Solutions moving into 4,500 square feet of Applicon House in the town centre. Elsewhere, financial services group Together acquired No 1 Lakeside at Cheadle Royal Business Park. The company is based in neighbouring Lake View building and this 33,000 square foot property was bought to facilitate its growth plans.

The breakdown for the quarter is as follows:  55,000 square feet office.  106,000 square feet industrial.  19,000 square feet retail.

Good 2014/15 2015/16 2016/17 PI Code PI Name perform- Q4 Status Actual Actual Actual Target ance Actual Area of retail / commercial / industrial floorspace let or sold E&R 13a High n/a n/a 188,843 9,950 70,000 to new occupiers in the town centre (square feet) 9950 square feet of office, industrial and retail space was reported as being let or sold in the town centre during Quarter 4 (though it is likely that additional lettings will have taken place but are not available for reporting at this stage). Known lettings were to Volvanic Media and Acuma Solutions. The 114,500 square feet of floor space let or sold to new occupiers within the Town Centre during Quarter 3 however (e.g. to the Travelodge, Holiday Inn Express and the "Where the Light Gets In" restaurant) however has contributed to 188,843 square feet sold or let during the financial year – well in excess of the target. Net number of business start- 420 345 420 420 90 E&R 14 ups – i.e. business ‘births’ minus High (2013) (2014) (2015) (2015) (2015) ‘deaths’ This measure is published annually (a year retrospectively) by the Office for National Statistics (ONS). These were last published during Quarter 3. Business start-up, deaths and survival rates for 2015 were published in November 2016. The net number of business start-ups in 2015 was 420 (this is based on 1,675 new businesses registering for VAT or PAYE against 1,255 businesses de-registering). In 2015 Stockport had 12,565 active enterprises. In 2014 there were 80 net new starts and a total of 12,090 active enterprises. Business start-up survival rates E&R 15 High 57.8% 59.7% 61.1% 61.1% 60% after 3 years Again, this data is reported on an annual basis one year retrospectively. ONS data suggests that 61.1% of businesses that started in 2012 were still operational in 2015 (i.e. 745 remained out of 1,220 new starts). The 3 year survival figure in 2014 was 59.7%.

E&R 16 Number of FTE jobs created High 1,985 1,634 668 2,009 1,500 Sales and lettings of commercial, industrial and retail units has led to the creation of 2,009 jobs during 2016/17 (some figures estimated according to HCA density standards). A further 500 jobs have been safeguarded. Percentage of unemployed 18- 3.7% 3.8% 3.4% 3.4% 3.7% E&R 17 Low 24 years olds in the borough (775) (790) (720) (720) (755) The latest figure is 720 people (3.4%), the position at March 2017. This is a small decrease from the preceding quarter. This figure is promising in that it shows that post-Christmas period employment may have been more stable with fewer temporary workers returning to the labour market. The chart below illustrates longer-term trends.

Percentage of unemployed 18-24 years olds 8 7 6 5 4 3 2 1 0 2012/13 2013/14 2014/15 2015/16 2016/17

Good 2014/15 2015/16 2016/17 PI Code PI Name perform- Q4 Status Actual Actual Actual Target ance Actual Percentage of 16 and 17 year 6.6% 7.6% 7.9% 7.9% 6.8% E&R 18 olds in apprenticeships High (433) (505) (504) (504) (433) (March 2017 figures)

Apprenticeships represent a key route into sustained employment for young people, enabling them to gain vocational skills and qualifications. Data from statutory DfE returns published for March, June and December each year, with the latest published being from March 2017). The provisional March figure for 16/17 year olds is 7.9%. This is based on information provided from various sources to staff employed within the Young People’s Education and Careers Advice Service.

Longer-term trends are shown in the chart below, which suggests the proportion of 16 and 17 year olds in apprenticeships are at a five-year high. The fluctuations over the last four years are likely to be attributable to a number of factors, including lower pass rates for GCSE with English and Maths in 2015 leading more to apprenticeships in that year, along with a smaller cohort size in 2016. Higher levels of progression to FE may also be a factor, whilst the destination of a small proportion of the cohort is unknown, and could include apprenticeships.

Note: From 2017/18 this measure will be included within the Education Portfolio

Good 2014/15 2015/16 2016/17 PI Code PI Name perform- Q4 Status Actual Actual Actual Target ance Actual Number of visitors to Stockport’s E&R 19 High 99,212 106,772 38,455 122,799 120,000 museums Visitor numbers to Stockport Museums overall remain strong and healthy – the number of museum visits in 2016/17 was 15.1% up on the previous year. Comparisons can be made the same quarter last year of 32,784 (even accounting for the fact that Bramall Hall had not re-opened) and the previous quarter of 36,889. Notable increases in visitor numbers were seen at Stockport Air Raid Shelters, Hat Works and Staircase House/Stockport Museum. Popular events such as the Strawberry Studios exhibition and HatStock, successful partnership events with Stockport Libraries Service (e.g. Digifest) and positive media coverage are all likely to have contributed to these increases.

The chart below shows longer-term trends and indicated that current visitor numbers are at their highest levels since 2011/12.

Number of visitors to Stockport’s museums 140,000

120,000

100,000

80,000

60,000

40,000

20,000

0 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

2. ECONOMY AND REGENERATION FINANCIAL MONITORING

2.1 Revenue – Cash limit

Previously Increase Reported (Reduction) Revised £000 £000 £000 Cash Limit 2,792 0 2,792

The Economy & Regeneration Portfolio has finished the year with a slight deficit of £0.009m. The significant change from quarter three is that the provision for dilapidations at Houldsworth Mill, as the Council withdraws from managed workspace, has been increased to provide a prudent provision. Planning income is not at the levels forecast at quarter three, but has been offset by improvements in outturn in Museums and the Directorate budget.

2.1.2 Earmarked Reserves The majority of Earmarked reserves are now kept at a corporate level and services will bid for the use of them. This strategic approach is designed to provide financial resilience for the council. The exceptions to this are the Directorate Reserves and ring-fenced reserves. Listed below are agreed utilisations against reserves directly linked to this Directorate and also the Corporate Reserves:

Reserve / Planned use Balance of Approved of Reserves / Reserve / Reserve Use “Approved Reserve Narration To be used for “Approved Category Balance at Use” Use” Q3 2016/17 £000 £000 £000 Directorate Reserves Directorate Directorate Markets Flexibility Reserve - 100 79 21 Reserve Management Place Corporate Reserves Corporate Third Party Monies Covent Garden 18 18 0 Reserves Reserve Commitments Revenue Grant Corporate Reserve (includes Apprentice 354 354 Reserves ring-fenced Funding reserves) Legislative and Development of a Corporate Statutory new Local Plan 450 11 439 Reserves Requirements approved by the Reserve Executive

Reserve / Planned use Balance of Approved of Reserves / Reserve / Reserve Use “Approved Reserve Narration To be used for “Approved Category Balance at Use” Use” Q3 2016/17 £000 £000 £000 Reserve Transformation - Business Linked to Invest to Save Improvement 60 60 0 Budget Reserve District Reserve Transformation - Markets Linked to Invest to Save 75 75 Consultation Budget Reserve Reserve Transformation - Aurora additional Linked to Invest to Save 15 15 planning support Budget Reserve Reserve Transformation - Regeneration Linked to Invest to Save 100 19 81 Projects Budget Reserve Reserve Transformation - Linked to Invest to Save HLF Bramall Hall 576 334 242 Budget Reserve Strategic Redrock Scheme Capital Programme Priority Legal Fees & 152 43 109 Investment Reserve Reserve Costs Strategic Capital Programme Walking & Cycling Priority 472 436 36 Investment Reserve Projects Reserve Strategic Stockport Place Capital Programme Priority Marketing and 150 150 Investment Reserve Reserve Communications Strategic Capital Programme Priority Flood Investment 662 36 626 Investment Reserve Reserve TOTAL 3,184 1,035 2,149

No further allocations of Reserves have been granted since Quarter 3.

The following Reserves Movements have been approved and as a result are included in the outturn position:

- Markets Management - £0.079m; - Development of a New Local Plan - £0.011m; - Business Improvement District - £0.060m; - Funding of various Regeneration projects - £0.019m - Funding of increased Bramall Hall expenditure during the early period following re- opening after refurbishment works - £0.334m; - Redrock Scheme Legal Fees & Cost - £0.043m;

- Funding of Capital Projects – Walking & Cycling – £0.436m - funding originally from Public Health.

2.2 Portfolio Savings Programme The Council’s savings programme was agreed by the Council Meeting as part of the 2016/17 Budget on 3 March 2016. The Portfolio has contributed £0.400m to the Council’s savings for 2016/17.

The portfolio savings within the Council’s overall approved programme are detailed in the table below with a risk assessment on progress to date and a progress commentary.

2016/17 2016/17 Project £000 Risk Rating 2016/17 Savings Update Museums & Markets 400 Green 2016/17 Savings Achieved TOTAL 400

Risk rating  Green – good confidence (90% plus) the saving is/will be delivered or minor variances (<£0.050m) that will be contained within the portfolio.  Amber – progressing at a reasonable pace, action plan being pursued may be some slippage across years and/or the final position may also be a little unclear.  Red – Significant issues arising or further detailed consultation required which may be complex/ contentious

2.3 Capital Programme

2.3.1 The Capital Outturn for 2016/17 is £187.709m. It includes the following schemes, progress against which is reported in section 2.3.4. A breakdown of the resourcing of the Capital Programme is shown in section 2.3.2. The table below highlights the key schemes in the programme:

Expenditure as at 2016/17 2017/18 2018/19 31 Mar 2017 Scheme Programme Programme Programme £000 £000 £000 £000 Highways 496 Street Lighting 496 560 560 1,327 LTP and SEMMMS Integrated 1,327 1,960 1,000 Transport 753 Highways Structures 753 743 743 Town Centre Structures 500 2,500 31,201 SEMMMS Relief Road 31,201 29,808 10,661 1,375 Section 278 schemes 1,375 2,000 2,000 375 Drainage 375 300 300 41 Studies and Transport Minor 41 30 30 Schemes 0 Air Quality Grant 0 101 0 0 PROW 0 60 60

Expenditure as at 2016/17 2017/18 2018/19 31 Mar 2017 Scheme Programme Programme Programme £000 £000 £000 £000 194 Flood Damage Infrastructure 194 788 0 Programme 162 Pot Hole Programme 162 213 0 113 District Centres 113 200 200 Road Safety Near Schools 200 100 104 Interchange Bridge 104 2,996 400 14,752 Town Centre Access Package 14,752 17,239 14,028 Major Scheme Development 15,138 Highways Investment Programme 15,138 11,882 12,569 66,031 Highways sub-total 66,031 69,580 45,151

Non-highways 621 Offerton Precinct Development 621 0 0 13,539 Stockport Exchange (Phase 2) 13,539 422 0 18 Covent Garden 18 0 0 Supporting local businesses (PIF 7 7 0 0 2011/12) 0 Brinnington Regeneration (PRG) 0 0 0 Portas Pilot Bid match-funding (PIF 4 4 8 0 2012/13) 20,649 Redrock Development Scheme 20,649 15,186 0 Aurora Stockport (formerly Gorsey 6,635 6,635 3,642 0 Bank) 664 Markets and Underbanks 664 1,638 4,000 78,740 Merseyway Shopping Centre 78,740 0 0 2 Brownfield Site Schemes 2 1,393 0 799 GM Broadband 799 0 0 121,678 Non-highways sub-total 121,678 22,289 4,000

187,709 TOTAL 187,709 91,869 49,151

It is worth noting that the figures for TCAP include internal financing adjustments – the total spend for TCAP without those adjustments which match the latest grant claim are:  2016/17 £16.288m;  2017/18 £15.702m.

2.3.2 Capital Financing - Update and Outlook

Resources 2016/17 2017/18 2018/19 £000 £000 £000 Capital Grants 50,041 52,310 29,452 Directly Funded Borrowing 120,194 19,585 4,450 Unsupported Borrowing 14,418 13,297 12,849 Capital Receipts 26 1,034 0 External Contributions 510 2,996 400 Commuted Sums 1,272 2,000 2,000 Revenue Contributions (RCCO) 1,248 647 0 TOTAL 187,709 91,869 49,151

2.3.3 Capital Programme Amendments

Scheme 2016/17 2017/18 2018/19 Funding Source Reason £000 £000 £000 Movement of LTP Grant Street Lighting (64) 0 0 Grant between programme areas. Adjustment of LTP and SEMMMS programme Grant/Ext Integrated 327 (200) (100) including LTP Cont/RCCO Transport movement between areas Movement of LTP Grant Highways (78) 0 0 Grant between Structures programme areas. SEMMMS Relief 1,941 (971) (971) Grant Rephase Road Section 278 Ext Adjustment of 375 (1,000) 1,000 schemes Contribution/Grant programme Movement of LTP Grant Drainage 75 0 0 Grant between programme areas. Adjustment of Studies and programme Transport Minor 11 0 0 Grant/Ext Cont including LTP Schemes movement between areas Air Quality Grant (101) 101 0 Grant Rephase Flood Damage Grant/Borrowing/R Infrastructure (788) 788 0 Rephase CCO Programme

Scheme 2016/17 2017/18 2018/19 Funding Source Reason £000 £000 £000 Pot Hole Adjustment of 11 0 0 RCCO Programme programme Movement of LTP Grant District Centres (87) 0 0 Grant between programme areas. Rephase (also financed by external Interchange Bridge 4 (4) 0 Ext Contribution contractor rather than grant pending agreement) Town Centre (2,949) (1,079) 1,957 0 0 Access Plan Highways Investment 3,036 0 (3,036) Borrowing/Grant Rephase Programme Highways Investment (2) 0 0 USB Funding changes Programme Highways Investment 2 0 (2,050) Grant Funding changes Programme Offerton Precinct Scheme (1) 0 0 RCCO Development Complete Stockport Rephased to Exchange (Phase (422) 422 0 DFB 2017/18 2) Additional Covent Garden 6 0 0 RCCO Funding Supporting local businesses (PIF (7) 0 0 USB Funding changes 2011/12) Supporting local businesses (PIF 7 0 0 Grant Funding changes 2011/12) Portas Pilot Bid match-funding (PIF (4) 0 0 USB Funding changes 2012/13) Portas Pilot Bid match-funding (PIF 4 0 0 Grant Funding changes 2012/13) Portas Pilot Bid Rephased to match-funding (PIF (8) 8 0 USB 2017/18 2012/13)

Redrock Rephased to Development (1,604) 1,604 0 DFB 2017/18 Scheme

Scheme 2016/17 2017/18 2018/19 Funding Source Reason £000 £000 £000 Aurora Stockport Rephased to (formerly Gorsey (333) 333 0 DFB 2017/18 Bank) Markets and Rephased to (33) 33 0 DFB Underbanks 2017/18 Markets and Rephased to (31) 31 0 Capital Receipts Underbanks 2017/18 Markets and Rephased to (22) 22 0 RCCO Underbanks 2017/18 Brownfield Site Rephased to 1 (1) 0 Capital Receipts Schemes 2016/17 GM Broadband (1) 0 0 RCCO Adjustment Road Safety Near 0 200 100 Grant New scheme Schools Town Centre 0 500 2,500 Grant New scheme Structures TOTAL (735) 788 (599)

2.3.4 Progress on Individual Schemes

Street Lighting Planned Programme This programme includes the structural replacement or repair of columns that are reaching the end of their life. Columns are identified for replacement or repair following routine structural assessment and testing. All lighting columns on the network have been structurally assessed and a programme of illuminated sign pole testing is underway. The information is being used to develop whole life modelling of street lighting assets across the network.

The work programme has been successfully delivered for this financial year.

An upgrade of illuminated equipment using LED technology will commence later in 2017. This will lead into a ‘one network’ approach incorporating maintenance of Public Rights of Way and Parks lighting.

LTP and SEMMMS Integrated Transport Programme The funding for this programme comes from the Greater Manchester Local Transport Plan 3 (GMLTP3), developer funded schemes and successful individual scheme bids and aims to improve transport networks and facilities in accordance with the Greater Manchester Local Transport Plan and South East Manchester Multi Modal Strategy (SEMMMS).

Funding has also been secured as part of Transport for Greater Manchester bids for Growth Fund 2. Further funding for a number of cycling schemes has been obtained from Cycle City Ambition (1 and 2) bids. The schemes will be delivered by 2018. A number of local safety schemes are also in preparation as are works to mitigate traffic impact at Stockport Sports Village, Woodley.

Integrated Transport Corridors A scheme has been built to improve the traffic operation of the Marple Road / Lisburne

Lane junction by installation of a MOVA type controller. This work was combined with a surfacing scheme.

Cycling, Walking and Safety Schemes  The Cycle City Ambition Grant (CCAG1) schemes have now all been completed and are in use, with surveys due to be commissioned this summer to determine how popular they are. The £2.2m CCAG 2 scheme in Cheadle Hulme has approval of the Highway elements and planning applications have been submitted for the off Highway Sections;  The majority of the Walking for Health project funded by Public Health has been completed. One scheme, in Bramhall, was damaged by recent floods and will need to be repaired;  Works have been completed to improve the Waterloo Road / Spring Gardens junction;  Works to provide a path at Kingsland Road were completed in Quarter 4 although have since suffered vandalism and have needed repair;  Safety related works on Hulme Hall Road were completed in Quarter 4;  A bid under the GMCRP programme for safety improvements on Crookilley Way has been granted funding for implementation in 2017/18;  Improvements to walking and cycling facilities in the Goyt Valley are being implemented with work on-going on Dark Lane and due to start in Quarter 2 of 2017/18 on Half Moon Lane and Otterspool Road.

SEMMMS A6 to Manchester Airport Relief Road Work is ongoing by Stockport Council Highways on the development of a package of mitigation and complementary measures for the A6MARR; with the package of mitigation measures to be implemented by Stockport Council in 2017/18 Quarters 2-4 prior to road opening. Priority has been given to a significant package of mitigation measures for High Lane which have all been consulted over including:  A new pedestrian crossing of the A6 near the Church;  A footway / cycleway along part of the A6;  Traffic Calming on Windlehurst Road and Andrew Lane;  Quiet Lane measures on Threaphurst Lane and Torkington Lane / Road;  Weight and speed limit changes.

Mitigation measures for Gilbent Road, Cheadle have been consulted upon. Further phases of work (mainly complementary measures) in Hazel Grove, Bramhall and Heald Green are being developed in terms of consultation and design.

Highways Structures The funding for the Highway Structures programme comes from the GMLTP3 maintenance allocation and its aim is to inspect, maintain and replace highways structures including bridges, retaining walls and steps as necessary.

In 2016/17 10 capital projects were programmed for completion including: bridge deck waterproofing; bridge deck repairs; bridge parapet repairs; specialist culvert repairs. 358 General Bridge Inspections & 45 Principal Bridge Inspections have been completed. In 2016/17 the following schemes have been completed:

 Merseyway Concrete Repairs.

 Dan Bank Bridge Culvert Repairs.  Schools Hill Culvert - Confined Space Entry Repairs.  Wellington Road Viaduct – Waterproofing Feasibility Study.  CLC Railway Bridge Parapet Repairs.  Brinksway Bridge Refurbishment.  Park Bridge Refurbishment.  Cheadle Lane Culvert Feasibility Study.  Schools Hill Culvert – Confined Space Entry Repairs.  Manor Culvert - Confined Space Entry Repairs.  Bradshaw Estate Railway Bridge Parapet Repairs.  Tin Brook Culvert - Confined Space Entry Repairs.

SEMMMS A6 to Manchester Airport Relief Road The Carillion/Morgan Sindall joint venture is now approximately 24 months into the construction programme for the delivery of the A6 to Manchester Airport Relief Road. Work commenced on site in spring 2015. Work is progressing on highways and minor and major structures at locations along the length of the scheme, and scheme opening is scheduled for spring 2018. A Councillor briefing session is scheduled for June 2017 to provide further updates on progress and to address relative queries and concerns. This briefing will address in a fuller context the causes of the delays for completion of the works from late 2017 to spring 2018 – this delay has been communicated to Councillors with an overview of the main reasons, including weather events, ground conditions encountered, delays with statutory undertakers and mitigation associated with environmental mitigation.

Work is ongoing by Stockport Council Highways on the development of a package of mitigation and complementary measures for the A6MARR, with the package of mitigation measures to be implemented by Stockport Council prior to road opening. Priority has been given to a significant package of mitigation measures for High Lane which includes traffic calming measures and weight restrictions. Mitigation measures for Gilbent Road, Cheadle have been consulted upon. All mitigation measures are subject to approval prior to progressing to implementation. Further phases of work (mainly complementary measures) in Hazel Grove, Bramhall and Heald Green are being developed in terms of consultation and design.

Section 278 Schemes Funding is obtained from developers as part of a planning consent either as a commuted sum under Section 106 of the Planning Act or for defined off site highway works under Section 278 of the Highways Act.

S106 Public Rights of Ways for Redrow at Woodford and Bellway on the former Mirlees site are being developed.

Works for a scheme on Lisburne Lane being undertaken by Bellway Homes are underway on site.

Highway mitigation works are being carried out for a number of school expansions.

Works have been designed to mitigate traffic impact from the Stockport Sports Village at

Hyde Road / Mill Lane and will start on site in Quarter 1 of 2017/18.

Access improvements for the Barnes Hospital re-development will start on site in Quarter 2 of 2017/18.

Works have been carried out to implement signal control at the A34/Eden Park Roundabout.

Drainage – Flood Risk Management In 2016/17:  The LLFA statutory role for major planning applications is ongoing and standardised advice is currently being produced to assist this process;  The drainage asset management system is continuing to be developed;  The Communications Strategy is continuing to be developed;  Drainage investigation and repair works are continuing to be completed as part of the Highway Investment Programme in advance of planned road reconstruction works;  Highway drainage investigation and repair works are continuing to be completed on behalf of Public Realm on a routine and reactive basis across the Borough;  Flood Modelling works for Cheadle are continuing in support of Grant in Aid applications;  Watercourses/Trash Screens are continuing to be inspected and cleared on a priority basis;  Bramhall Minor Culverts – Phase 1 completion;  Romiley Study - Phase 1 completion;  Barlow Fold Road Culvert investigation - Phase 1 completion;  Section 19 Investigation Report for the June 2016 Flood Event has been completed;  Section 19 Investigation Report for the September 2016 Floods has been completed.

Studies and Transport Minor Schemes The town centre car parking study has commenced.

Flood Damage Infrastructure Programme The funding for repair works to: Highways; Highway Structures; Greenspace; and PROW has been approved following the flooding of June 2016.

Section 19 Investigations in accordance with the Flood & Water Management Act 2010 have been completed for the June and September 2016 flood events.

Works to investigate and repair the surface water drainage system on Bramhall Lane Roundabout have been completed.

Feasibility, Design and Construction pricing has been completed for Happy Valley and Marple PROW 41.

Pot Hole Programme Highway safety inspections identified roads with higher numbers of actionable defects that are in need of programmed repair. The programme was developed to address these sites by resurfacing stretches of highway. All approved schemes are now complete.

Centre Improvements Works were started in Quarter 4 in the Heaton Moor Road/Shaw Road area and will be completed in Quarter 1 2017/18.

A study has been commissioned to determine what improvements to the operation of the highways and public realm may be appropriate in Marple Centre. This has commenced with a design of surveys and modelling work required to assess the current situation.

Interchange Bridge Stockport is taking the lead on the Interchange bridge and highways works, working in close partnership with TfGM.

The bridge scheme now has planning approval and the tender process for commissioning the detailed design and building for the new bridge have been completed. The bridge works are programmed to commence on site in January 2018 following confirmation of funding from TfGM and GMCA.

The Feasibility Design has been completed for the Heaton Lane and Swaine Street- Chestergate highway and junctions.

Town Centre Access Plan Phase 1 This scheme is part of the Investing in Stockport Programme and is to address the difficulties of navigating to and around the town centre. It was awarded funding as part of Greater Manchester Growth Plan. The scheme comprises of two phases of delivery 2015- 2017 and 2017-2020. An Outline Business Case has been approved by TfGM for both phases and a Full Business Case for the Phase 1 elements was approved in March 2015 by the Greater Manchester Combined Authority and the Department for Transport. In 2015/16 the TCAP Phase 1 Schemes started on site in April 2015 and there a number of schemes that have now been completed. Key Phase 1 schemes that are due to conclude during 2017/18 include:

• Princes St / Bridgefield St public realm works for Redrock; • A6 Right turn to Leyland St for Redrock –highways works to be completed in full with completion of Redrock works / multi-storey car park; • St Mary’s Way / Hempshaw Lane schemes – these work packages due to complete end of this financial year as on-line works are being stood down during the A6 closure to accommodate the A6 Structures/viaduct refurbishment works. • Aurora Stockport development –highway/junction works and associated non- motorised user provision.

Phase 2 Phase 2A Full Business Case (FBC) Shift Statement approved by GMCA March 2017.

Highways Investment Programme Year 3 of the 9 year, £100m Highway Investment Programme has been completed. The project is progressing well. Most schemes in the targeted ward areas have been completed this year with only a small number being carried forward. The rescheduling of these schemes is necessary to co-ordinate activities with Public Utility / developer work.

A video survey identifies treated areas of highway (HIP delivered work) and provides an indication of deterioration on the remaining part of the network. The condition data is used to compare the delivery outcome against the agreed target. Recent performance figures show that the footway and carriageway network is improving in line with the investment.

The funding for this programme comes from the Greater Manchester Local Transport Plan 3 (GMLTP3), Council resources and Prudential Borrowing. The aim is to maintain and improve transport networks and facilities in accordance with the Greater Manchester Local Transport Plan and SEMMM Strategies.

Offerton Precinct Development This project is complete. The matter of compensation was finally settled immediately before the proposed hearing upon the advice of Counsel and the professional team. As previously reported the indemnity from Tenbest proved insufficient to cover the total compensation and fees sum, and as such an additional £0.453m has been financed from Corporate resources.

Stockport Exchange Phase 2 Phase 2 of the Stockport Exchange scheme (incorporating Office building and Hotel) was granted Executive Approval on October 1st 2013 (ED1548).

The total scheme cost is anticipated to be £20.582m, which will be funded by Prudential Borrowing. It has been agreed to upgrade the finishes in the public areas to the latest standard, but this additional cost has been contained within the overall scheme budget.

At Quarter 2 £0.665m was added to the programme as a consequence of set up costs being recognised in this area.

Phase 2 commenced on site in September 2015. The offices completed in October 2016 and final possession of the public realm and hotel took place in December 2016. The hotel opened on the 19th December 2016 trading as a Holiday Inn by Express and is trading very successfully.

Three floors of the offices have been let with the remaining (first floor) under offer. The café unit was also let in March 2017, with the shop unit having already been let to J Sainsbury’s and trading since January 2017. The building should be fully let by the end of April 2017 and occupied by the end of summer 2017.

The remaining rephased allocation of £0.422m will be utilised in the early part of 2017/18 for incidental costs and retention/snagging costs.

Supporting Local Businesses (PIF 2011/12 Scheme) “Participatory Budgeting” grants: In 2012 Businesses and Groups of Businesses were invited to put forward proposals for Economic Development related activity, with the business community deciding how best to allocate the grant funding. Seven projects were allocated grant funding support (5 of which required capital funding), with Grant payments not being released until agreed milestones were reached and evidence of eligible expenditure had been received. All seven projects have now completed, and capital grants released.

The remaining £0.007m was allocated during 2016/17 on capital works at Stockport Business and Innovation Centre (SBIC) in Broadstone Mill. The first part of this work was completed in June 2016, with the remainder completing in February 2017. The scheme is now complete and was delivered to budget.

Portas Pilot Bid match-funding (PIF 2012/13 Scheme) As a Portas Pilot, Stockport secured £0.100m funding, plus £0.100m Council capital match funding and £0.100m High Street Innovation funding, with £0.088m of the capital allocation having been spent by 2015/16 leaving £0.012m available.

Whilst the bulk of the capital funds made available to this initiative by the Council have been committed and spent there remains a balance of £0.008m. Discussions are currently underway with the group involved in respect of these remaining funds. It is forecast that all remaining expenditure will occur within Quarter 1 of 2017/18.

Redrock Stockport Development Scheme The Redrock leisure led development scheme (incorporating Multi-screen Cinema, Multi- Storey Car Park, and Retail and Food and Beverage units) was granted Executive approval on December 17th 2013 (ED1447).

The anticipated total cost of the Development is £48.508m. However, elements of the overall scheme (including Public Realm and A6 right turn) will be funded by the separate Town Centre Access Package (TCAP) scheme, thereby reducing the scheme sub-total to £39.348m, of which £1.700m relating to the Spiral Ramp will be funded corporately.

The planning applications were approved in January 2015, with initial enabling works commencing in April 2015. These will continue under the TCAP programme.

A negotiated figure was agreed with Wates and they have started on site. Completion is expected July 2017 with openings in late November 2017 following fit out and TCAP works completion.

An agreement for lease was signed with Light Cinemas in August 2014, with Zizzi’s and Pizza Express in January 2016 and with GBK in late September 2016. A coffee shop (Mango Bean) signed in February 2017 and Units A and B are under offer to Jump Arena. Negotiations are progressing on Unit C and Unit 4. If these prove successful only two units will remain unlet.

The cinema is due to open in November 2017 although this is dependent upon the TCAP works allowing possession and fit out.

The latest programme, with completion falling within 2017/18, has led to £15.186m being rephased to 2017/18.

Aurora Stockport (formerly Gorsey Bank) The full business case was approved in August 2015. A revised planning application was submitted in October 2015 for 154,000 sq. ft. (approx.) of predominantly B2/B8 and employment space. This was approved in January 2016.

A tender from Seddons was accepted in February 2016 and the contract was executed in May 2016. Completion is expected in late July 2017 on the majority of the scheme with unit A being completed in September 2017.

Early market interest in the development remains positive and terms have been issued on 17,000 sq. ft., with a further 20,000 sq. ft. under offer, and interest in all remaining floor space. It is likely that the construction budget will be exceeded which may impact on the overall value (NPV) of the scheme, however this will not be confirmed until the lettings are completed, as a more successful letting process than that originally envisaged may offset the capital overspend.

The latest programme has led to £3.642m being rephased to 2017/18.

Markets and Underbanks The scheme reflects the regeneration strategy for the wider Market Place and Underbanks area approved by the Executive on 30 September 2014 (ED1636): to create a vibrant retail, leisure and residential destination, focussed on the development of creative industries and specialist independent retail, with new residential development. The scheme includes proposals to invest in a rolling programme of measures in the area, including selected acquisition, redevelopment, refurbishment, letting and resale, coupled with public realm improvements, in order to drive delivery of the regeneration strategy.

The phasing of the expenditure is at this time the best estimate and will be regularly updated to reflect the rolling programme of investment opportunities.

Working in partnership with a wide number of partners, developers, landlords, agents and businesses a comprehensive action plan is in place to co-ordinate the programme and support a range of projects and initiatives. The programme is now well underway with progress on a range of sites including:

 Former White Lion: Heads of terms agreed with development partners with legal contracts about to be signed. Shell fit-out/refurbishment to commence during Quarter 1 of 2017/2018;  29-35 Little Underbank: Acquisitions secured through negotiations;  Russell Morley House/6 Lower Hillgate: Options for redevelopment being prepared following acquisition of 6 Lower Hillgate;  Planning applications submitted for 1-3 Lower Hillgate and Dumvilles Bow sites;  A number of other sites progressing including 2–16 Millgate and 14 Market Place;  Successful Heritage Lottery Fund stage 1 submission in January 2017.

Whilst elements within the programme continue to retain a degree of uncertainty, overall, as a result of the work undertaken throughout 2016/2017, there is now greater clarity over the direction on most sites.

Merseyway Shopping Centre Significant work is continuing following completion to ensure maximum occupation and retention of tenants, with current occupation standing at over 90%. Expenditure has been authorised to prepare a full business case looking at the further development and regeneration of the asset and the intention is to report these proposals to the Executive in 2017/18.

A draft outline business case is currently under consideration. Discussions are also being held with key potential occupiers.

Brownfield Site Schemes A range of Brownfield sites are being developed.

The CPO of Swann Lane has been confirmed and possession is expected in April 2017. It is hoped that a disposal can be organised directly.

GM Broadband The GM Rural Broadband Project (known as Get Digital Faster) has eight participating local authority areas. Manchester and Salford are unable to participate due to State Aid eligibility. Stockport Council is the lead authority and accountable local body for the project. Stockport’s responsibilities include:

• Contract signatory (BT); • Funding agreement signatory (BDUK, ERDF funding and GM districts); • Programme finance including collecting funding from other authorities; • Project assurance over the TfGM Programme Team (current Delivery Partner); • ERDF audit management support (with TfGM) – now complete.

BT won the tender to deliver open access fibre broadband to an Intervention Area (IA) within GM that is eligible for funding under State Aid rules (i.e. areas not currently or foreseeably served). The capital expenditure is invested in BT fibre broadband infrastructure which increases coverage and speeds to residential and business premises within the IA. This infrastructure will be owned and maintained by British Telecom and not the Council(s).

As a result Stockport Council will account for the full value of eligible capital expenditure set out in the Funding Agreement as Revenue Expenditure Funded from Capital Under Statute (includes expenditure to finance capital investment by other parties on assets not owned by the Council in line with Section Code of Practice on Local Authority Accounting). Public funding is derived from local districts, European Union and Broadband UK (BDUK) which is part of DCMS.

TfGM are Stockport Council’s Delivery Partner up to the end of April 2017. Broadband UK (BDUK) will then undertake the assurance work for the rest of the contract deployment period under a new Delivery Partner Agreement signed in January 2017.

The current deployment plan and supplier contract, since December 2016, now combines a Phase 1, a re-baseline exercise, a Phase 2 extension and more recently a Gainshare Advance element. To gain economies of scale BT announced nationally that they will bring forward the Gainshare mechanism that exists in the contract. This is known as Gainshare Advance (GSA) and is on the expectation of a take-up of superfast broadband services of some 30% in the long term. The GM project signed a Change Request on 30th December 2016 with BT to add a further £1.4m of capital investment through this mechanism.

The planned budget for the capital element of this is valued at around £14.96m which includes BT’s contribution and Gainshare Advance. As of December 2016 some £13.46m of CAPEX has been spent, assured and claimed. Currently total expected spend, including revenue, is £15.7m.

Deployment of structures is now anticipated to end by March 2018. This mostly comprises Fibre to the Cabinet (FTTC) structures but there are some Fibre to the Premises (FTTP) solutions where this is logistically required and still economical.

At the end of March 2017 Stockport had 72 structures live and ready for connection. There are further Fibre to the Premises solutions currently being deployed. The target is to serve 4,990 premises. This will be extended by the end of the contract with additional Gainshare Advance structures.

Across the GM deployment area 584 structures are now surveyed (excluding Gainshare structures) and 575 are complete. These serve over 47,800 premises out of an end target of 48,100 (99%). Of these premises 38,855 were superfast - this is the contractual metric.

Combined take up across the GM Intervention Area at the end of March 2017 was 30.4% for FTTC. In Stockport combined take-up rate is 29.4%. This is currently ahead of BT’s own projection curve with a minimum aspiration of 20%.

Meanwhile the Gainshare Investment Fund, which accumulates due to take-up, was £0.623m at the end of December 2016. It is estimated to be £0.719m at the end of March 2017. This Fund will be formally reviewed at set periods after the end of the current deployment up to 2024.

3. ECONOMY AND REGENERATION RISKS, OPPORTUNITIES AND CHALLENGES

3.1 National and Regional Policy Drivers

Two particularly significant developments will almost certainly begin to impact on services within the Portfolio during 2017/18. One of these is the triggering of Article 50 of the Lisbon Treaty which begins the process of the UK’s exit from the EU, the other is the election of Greater Manchester’s first directly elected Mayor. At this stage, it is difficult to predict exactly what the implications of these developments (particularly so with Brexit) will be. There almost certainly will be implications however and these may well be significant.

Aside from these, a range of regional and national policies and strategies will also have an impact on the delivery of services within the portfolio.

The first Greater Manchester Strategy (GMS) was launched in 2009 and was “refreshed” in 2013. Work on its next refresh will be undertaken during 2017. Work to develop a Greater Manchester Spatial Framework (GMSF), as well Stockport’s own Local Plan, is also underway.

Assuming it is adopted, GMSF and the Local Plan will also influence the Council’s approach to highways and transport, as will a range of transport specific policies. For example the Greater Manchester Transport Strategy 2040 sets out a vision for the transport network required across the city region to deliver “World class connections that support long-term sustainable economic growth and access to opportunities for all”. Other influential GM-wide policies include the Local Growth Deal Transport Programme and proposals to devolve control of GM’s railway stations to Transport for Greater Manchester (TfGM). National strategies affecting transport include Highways England’s Road Investment Strategy 2015 to 2020, Network Rail's 2014–2019 Investment Programme and the Bus Services Act 2017 which became law in April 2017.

Work is underway across Greater Manchester that is aiming to maximise and make best use of the Apprenticeships Levy (a small tax on employers above a certain size). Funds raised for the levy, which came into force in April 2017, are to be used to train new apprentices. This GM-wide work is also looking at scope for developing consistency of approach to public sector apprenticeships across the conurbation.

The “Working Well” pilot, funded via ESF, started in Greater Manchester in 2014. It aimed to support those with health needs that were significant barriers to them securing and maintaining employment to overcome those barriers and get into work. In 2016 funding was secured to expand the pilot to continue until January 2018 when the GM Work and Health Initiative (also funded largely through ESF). Ingeus are the organisation providing this service and this support will continue.

3.2 Portfolio Risks

This section provides an update on each of the risks identified within the Portfolio Agreement during the fourth and final quarter of the year. Details of the projects and activities which are helping to mitigate the Portfolio risks are included in Section 1 of the report.

Risk Description (and potential Update on controls and mitigating actions impact) E&R 01 - Unemployment Rates - Unemployment rates have remained low and stable in Increased unemployment rates recent months. Work continues to invest in activities to (particularly youth support long term unemployed (e.g. Working Well) and young unemployed (Apprenticeships and Jobs with unemployment) as a result of Training), as well as general activity to help address the prevailing economic unemployment such as the Jobs Fair, Work Clubs and conditions Employment & Skills Agreements on new developments. The GM Working Well pilot programme has concluded the E&R 02 - Effectiveness of referrals phase and has exceeded the target for job starts. Government welfare to work The data on sustained work (more than 6 months) for the programmes - Government client cohort will be available in March 2018. Support for Welfare to Work programmes the expansion phase of Working Well in Stockport has not effectively reaching the right provided a good start for the provider. The commissioning people and priority of the successor Health and Work programme for GM is neighbourhoods under way and the contract award will take place in the autumn of 2017. The programme continues to be closely monitored and updated accordingly, with detailed annual programmes E&R 03 - Capital Programme giving a clear indication of anticipated spend. Project Allocation management systems ensure changes are communicated across all areas impacted, with opportunities identified for working across services and Directorates. All facilities performed better than forecast during 2016/17 as demand for small office units continues to be strong. Officers are in the process of negotiating an agreement with the landlord to handover the facility at Houldsworth Mil E&R 04 - Managed workspace/ Business and Arts Centre at the end of the current lease term (extended to June 2017). The landlord will continue to business incubator financial provide managed workspace for existing tenants and will sustainability TUPE staff from the existing managing agent (Regus). Stockport Business and Innovation Centre and Merchants House will remain managed by Oxford Innovation (OI) on behalf of the Council, providing new business incubation space for young, growing businesses. To be deleted, as this risk is linked to the Asset E&R 05 - Maintenance of assets Management Plan, reported under the Reform and Governance Portfolio. Performance against income targets is closely monitored, with services promoted to maximise take up along with E&R 06 - Income generation timely recovery of charges. Opportunities for external funding continue to be researched.

Risk Description (and potential Update on controls and mitigating actions impact) E&R 07 - Management Data is collected on an ongoing basis to inform the Information (absence of leisure and cultural offer, along with close performance accurate, current and detailed monitoring of Life Leisure. Customer and complaints data management information sets is also reviewed regularly with surveys conducted to supplement this. could result in development of an offer which fails to engage customers)