Board Papers
JANUARY 2021 AGENDA
Dear Member
CUMBRIA LOCAL ENTERPRISE PARTNERSHIP
The next meeting of the Cumbria Local Enterprise Partnership will be held as follows:
DATE: Friday, 22 January 2021 TIME: 9.30am VENUE: Via Videoconferencing – Details within the Invitation
Lord Inglewood CHAIR – CUMBRIA LOCAL ENTERPRISE PARTNERSHIP Board Members
Name Richard Inglewood Chair Jim Jackson Deputy Chair (Private Sector) Stewart Young Vice Chair (Public Sector) Peter Allen Public Sector Graham Booth Private Sector Steve Cole Private Sector John Coughlan Private Sector Steve Curl Private Sector Carolyn Dodwell Private Sector Julie Mennell Private Sector Emma Porter Private Sector Lee Roberts Public Sector Mary Robinson Public Sector Mike Smith, OBE Private Sector Lorrainne Smyth Third Sector Network Mike Starkie Public Sector Sarah Swindley Private Sector Rebecca Weston Nuclear Sector Nigel Wilkinson Private Sector Andrew Wren FE Sector
PART I ITEMS – THOSE CONSIDERED IN PUBLIC
1. APOLOGIES FOR ABSENCE
To receive any apologies for absence.
2. DECLARATIONS OF INTEREST
For members to make any declarations of interest in relation to items on today’s agenda.
3. MINUTES OF PREVIOUS MEETING
To receive the minutes of the previous meeting held on 20 November 2020.
4. UPDATE FROM THE CHAIR, DEPUTY CHAIR AND VICE CHAIRS
To receive an update from the Chair, Deputy Chair and Vice Chair on any issues.
5. MATTERS ARISING NOT COVERED ELSEWHERE ON THE AGENDA
To discuss, if needed, any relevant matters not covered elsewhere on the agenda.
6. CREATIVE AND CULTURAL SECTOR PANEL UPDATE
To receive a report and presentation from Colin Glover, Chair Creative and Cultural Sector Panel and Cumbria’s Museum of Military Life, Andrew Mackay; Tullie House Museum and Gallery and Miriam Randall, The Brewery Arts Centre. FOR ACTION/DECISION
7. NET ZERO CARBON – STANDING ITEM
To receive a verbal update from Mark Johnson, Head of Strategy and Policy
8. FINANCE, AUDIT AND RESOURCES COMMITTEE REPORT
To receive a report from Nigel Wilkinson, Chair of the Finance, Audit and Resources Committee. 9. INVESTMENT PANEL UPDATE
To receive a report from the Deputy Chair.
10. REDUNDANCY POLICY
To receive a report from the Chief Executive.
11. FREEPORT UPDATE
To receive a report from the Chief Executive.
12. EU EXIT ANALYSIS
To receive a report from the Chief Executive.
FOR INFORMATION
13. 2020/21 ANNUAL PERFORMANCE REVIEW
To receive a report from the Chief Executive.
14. STEP MINI-SITING COMPETITION
To receive a report from the Chief Executive
15. FUTURES FORUM
To receive an update from the Futures Forum.
16. EXPORT PLAN UPDATE
To receive a report from the Export Manager.
17. COMMUNICATIONS UPDATE
To receive a report from the Head of Communications
18. CHIEF EXECUTIVE’S REPORT
To receive an update from the Chief Executive
STANDING ITEMS
19. RISK REGISTER
To receive a report from the Chief Executive
20. LEP COMMUNICATIONS
To decide if there are any communication actions required from today’s meeting.
21. FORWARD PLAN
For Board members to consider and update the Forward Plan.
22. ANY OTHER BUSINESS
To discuss any other items of business.
23. DATE AND TIME OF NEXT MEETING
The next meeting will be held on Friday 22 January 2021 at 9.30am.
PART II ITEMS – THOSE CONSIDERED IN PRIVATE
24. GOVERNANCE UPDATE
To receive a report from the Chief Executive.
APOLOGIES FOR ABSENCE
Agenda DECLARATIONS OF INTEREST
Agenda MINUTES OF PREVIOUS MEETING
Agenda
CUMBRIA LOCAL ENTERPRISE PARTNERSHIP
MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS OF CUMBRIA LOCAL ENTERPRISE PARTNERSHIP HELD BY VIDEO CONFERENCE ON FRIDAY 20 NOVEMBER 2020 AT 9.30AM
DIRECTORS PRESENT
Lord Richard Inglewood, Chair; Jim Jackson, Deputy Chair; Cumbria County Council represented by David Southward; Barrow Borough Council represented by Lee Roberts; Graham Booth; Copeland Borough Council represented by Mike Starkie; John Coughlan; Steve Curl; Carolyn Dodwell; Eden District Council represented by John Mallinson, Carlisle City Council until Item 11 and from Item 12 by Mary Robinson; Julie Mennell; Emma Porter; Lake District National Park Authority represented by Peter Allen MBE; Mike Smith OBE; Lorrainne Smyth, Chief Executive ACTion with Communities in Cumbria; Sarah Swindley; Rebecca Weston; Nigel Wilkinson and Andrew Wren.
IN ATTENDANCE
• Lucy Clarke, Media and Communications Officer, CLEP • Harry Colwell, Baines Wilson LLP • Sami Falou, Cities and Local Growth Unit, BEIS • Daniel Hamilton, Futures Forum • Alison Hatcher, Representative of Cumbria County Council, Accountable Body • Jen Hewitt, Office Manager, CLEP • Andrew Hill, Company Secretary • Craig Ivison, Head of Employment and Skills, CLEP (Item 15) • Mark Johnson, Head of Strategy and Policy, CLEP (Item 6) • Miranda Kirschel, Head of Business and Innovation, CLEP (Item 17) • Laura Kay, Futures Forum • Jo Lappin, Chief Executive, CLEP • Mitchell McCombe, Futures Forum • Ken McEwan, Head of Clean Energy Sector, CLEP (Item 11) • Karla Thomas, Futures Forum
1 APOLOGIES FOR ABSENCE
1.1 Apologies for absence were received from Stewart Young, Vice Chair (with it being noted that David Southward was representing Cumbria County Council in Stewart Young’s absence) and Steve Cole.
2 DECLARATIONS OF INTEREST
2.1 The Chair disclosed an interest in the Kick Start Scheme, as he is involved in making an application under the Scheme. He also mentioned that he was applying for a digital scheme under the Rural Broadband Voucher Scheme. He would therefore take no part in discussions on either of those matters.
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2.2 Emma Porter disclosed an interest in Lakes College as Story Contracting Limited is a contractor, with CLEP providing funding. She would therefore take no part in discussions on the matter.
2.3 Nigel Wilkinson disclosed an interest in Optimising Connectivity 2 – South Windermere, in that the company he manages has an interest in property that the path and cycle track may cross. He would therefore take no part in discussions on the matter.
2.4 David Southward made a general disclosure in relation to all matters in which Cumbria County Council has an interest. He would therefore take no part in discussions on any such matters.
2.5 Julie Mennell declared an interest in the Citadels, and she would therefore take no part in discussions on the matter.
2.6 Jim Jackson and Peter Allen both declared an interest in any matters in which the Lake District National Park Authority has an interest. Accordingly, they would take no part in discussions on any such matters.
3 MINUTES OF PREVIOUS MEETING
3.1 The minutes of the previous Board meeting held on 18 September 2020 were discussed. The Chair asked the Board if they had any additions or amendments to make to the minutes.
3.2 The Board had no additions or amendments to the minutes and agreed the minutes were an accurate and correct record of the previous Board meeting. Accordingly, IT WAS RESOLVED that the minutes be approved in the form provided.
4 UPDATE FROM THE CHAIR, DEPUTY CHAIR AND VICE-CHAIR
4.1 The Chair provided an update to the meeting on the following matters:
(a) He had attended an NP11 Board meeting on 19 November 2020, at which there were clear concerns about plans for the future. NP11 is committed to progressing matters in the interim.
(b) The Chair has been involved in the Brexit Goods Committee in the House of Lords and has also had some input in relation to the Internal Market Bill, in the context of which he has made specific reference to Cumbria.
(c) The Chair has been in correspondence with Lord Gardiner, Parliamentary Undersecretary of State for Rural Affairs and Bio Security.
(d) He has been looking into Borderlands, as there was an opportunity for a second representative of CLEP to become involved. The Chair emphasised that the Borderlands project was likely to be very important.
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(e) The Chair attended a presentation from Christopher Pincher MP, Minister of State at the Ministry of Housing, Communities and Local Government, to discuss the Planning White Paper. He had taken the opportunity during the discussion to raise an issue in relation to listed buildings.
4.2 The Deputy Chair informed the Board that his focus has continued to be on the Investment Panel and Clean Energy, both of which were on the agenda for discussion later in the meeting.
4.3 David Southward provided a brief update to the meeting on behalf of Stewart Young, Vice-Chair. He mentioned that Cumbria County Council launched its digital infrastructure strategy last week.
5 MATTERS ARISING NOT COVERED ELSEWHRE ON THE AGENDA
5.1 The Board noted the update on the matters arising from the CLEP Board meeting held on Friday 18 September 2020.
6 NET ZERO CARBON (STANDING ITEM)
6.1 Mark Johnson, Head of Strategy and Policy, joined the meeting at this point to provide the Board with an update in relation to Net Zero Carbon.
6.2 The Board was advised that the most recent meeting of the Zero Carbon Cumbria Partnership took place on 10 November 2020. The meeting (held via Zoom) was well attended and a representative from the Lottery Fund provided positive feedback on the Cumbria bid, describing it as a stand-out submission. The Partnership has agreed a position of support for the 2037 date and it was noted that the Mike Berners-Lee Cumbria Carbon Baseline document will be published shortly.
6.3 Mark Johnson mentioned that, since the last Board meeting, CLEP has responded to the Business Rates Review Consultation, to support the development of incentives to help businesses to decarbonise. He mentioned that work was also underway on developing the actions to support the delivery of the Net Zero Touchstone Priorities and that the Prime Minister’s recent 10 Point Plan for a Green Industrial Revolution were now being considered, in relation to this.
6.4 The Chair mentioned to the meeting that the Government’s 10 Point Plan made no reference to Cumbria or the North West region, more widely. He had therefore written to local MPs and Jake Berry to stress the important offer that the North West had to make on this agenda. He was hopeful that this was an oversight.
6.5 Rebecca Weston asked how CLEP could help with coordination. Mark Johnson said that in his view a mapping exercise needs to be undertaken to understand the various activity carried out by various groups.
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6.6 David Southward advised the meeting that the Cumbria County Council Cabinet approved its own strategy the previous week, which formalised its previous plans. Its focus is on reducing use, making use more efficient and looking at off-setting.
6.7 The Chief Executive reminded members that whilst CLEP had confirmed its absolute commitment to net zero it had as yet not made a formal commitment to the 2037 target and as such had made this clear to partners. It was also important that CLEP was clearly focused on the issues where it could make the greatest impact – clean energy generation and supporting businesses to decarbonise.
6.8 The Chair emphasised that this is a complex and complicated topic and it is essential that there is some coherence across the piece.
6.9 Lee Roberts informed the Board that Barrow has recently been awarded its second tranche of funding for its walking and cycling strategies and emphasised the importance of engaging with the public on carbon reduction measures.
6.10 Sarah Swindley suggested that, as this is a grassroots upwards initiative which is moving all the time, the danger is that any mapping exercise could very quickly become out of date.
6.11 The Chief Executive concluded discussions by emphasising that the focus needs to be on issues in relation to which CLEP as an economic body can make a difference and in identifying the mechanism for bringing all of the different strands together.
7 FINANCE, AUDIT AND RESOURCES COMMITTEE REPORT
7.1 Nigel Wilkinson referred the meeting to the Finance, Audit and Resources Committee report forming part of the Board papers and emphasised that there is a projected income deficit of £184,000 for the year ending 31 March 2021, with projected net assets as at 31 March 2021 of £525,000, including £331,000 of restricted reserves in respect of funds transferred by the Accountable Body on incorporation of CLEP.
7.2 Nigel Wilkinson emphasised to the Board, that based on the projected figures, it is clear the business model operated at the moment is not sustainable. He assured the meeting that a full review of income and expenditure was underway.
7.3 The Board was informed that it is proposed that two temporary members of staff or equivalents are appointed to deliver the EU Transition Support Activity, the cost of which will be met by BEIS funding. After discussion, IT WAS RESOLVED to approve the appointment of two temporary business adviser posts or equivalents, for the remainder of the financial year and that any additional funding that may be provided for this purpose may also be used to deliver the EU Transition Support Activity.
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7.4 Nigel Wilkinson informed the meeting that work on CLEP’s redundancy policy was under way and that the outcome of this work would be presented to the Board at its meeting in January 2021. This was noted by the Board.
7.5 Mike Smith asked whether the projected 31 March 2021 deficit of £184,000 included the £100,000 contribution from Sellafield. He raised concerns in relation to the Peer to Peer Network given that CLEP will be paid quarterly in arrears.
7.6 Nigel Wilkinson confirmed that the £100,000 Sellafield contribution is included as anticipated turnover and, accordingly, if it is not received/receivable in the current year the deficit in the current year would be increased by £100,000. In relation to the Peer to Peer Network, Mr Wilkinson stated that he was confident the contract could be dealt with within CLEP’s existing cashflow.
7.7 The Chief Executive emphasised that CLEP had raised concerns about the Peer to Peer funding and that, as a result, significant concessions had been made, including monthly rather than quarterly invoicing.
7.8 John Coughlan asked whether CLEP has received any notification from Sellafield in relation to the payment of its contribution. The Chief Executive advised the meeting that CLEP has been asked to submit its invoice and that she has been advised that payment should be received by CLEP on 25 November 2020.
7.9 Steve Curl emphasised that a critical issue is getting core funding in by mid- May and that a working capital facility could ease pressure during the early months of the year.
7.10 The Chief Executive advised the meeting that the possibility of bridging finance via the restricted reserves has been discussed with the Accountable Body and that numerous conversations had taken place with Government in relation to funding. The fundamental issue was that there had been no increase in CLEP funding almost since LEPs were established and yet its expenditure has increased. For instance, as a result of being required to incorporate, CLEP was now required to pay VAT and has to incur the costs involved in the preparation of audited accounts.
7.11 Sami Falou assured the meeting that Government was still working on the best way to move things forward next year.
7.12 Nigel Wilkinson advised the meeting that the MHCLG Core Funding had been received in May 2020 and was included in the 2020/21 income. The £200,000 BEIS Additional Funding would be received quarterly in arrears.
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8 INVESTMENT PANEL REPORT
8.1 Jim Jackson, Deputy Chair, advised the meeting that good progress had been made in relation to the Growth Deal and that CLEP’s funding was fully committed for this year. There has been some slippage on programmes as a result of COVID-19 and he urged all Board members to provide any help that they could in this context.
8.2 The Deputy Chair emphasised that there had been some changes to the quarter to 2020/21 Dashboard, although CLEP remained on target, adding that the Grizebeck Improvement Project business case had now been signed off and further monies had been released.
8.3 The meeting noted the Deputy Chair’s update on Growth Deal Performance and the approval of the A595 Grizebeck Improvement Scheme under the Investment Panel’s delegated approval and IT WAS RESOLVED to approve the quarter to 2020/21 Dashboard for submission to BEIS.
8.4 The Deputy Chair then provided the meeting with an update in relation to the £10.5 million Getting Building Fund. He expressed concern with regard to the funding request for the Vertical Farm of £5.5million as it was now 2 months since the business case had been expected to be submitted. He emphasised that CLEP would provide as much help as possible and that the Investment Panel would be as flexible as it could be. However, time was now running very short.
8.5 The meeting was advised that the full business case for the Bothel A595 Improvement Scheme was received in August 2020 in relation to a proposed investment of £5million, with a proposed 100% intervention rate.
8.6 Mike Starkie asked that for the record he advised that he did not agree with the funding for the Bothel A595 scheme. This was noted.
8.7 After further discussion, IT WAS RESOLVED that an investment of £5million to Cumbria County Council for the Bothel A595 Improvements Project be agreed, that a 100% intervention rate for the project be approved and that the funding was paid in full to the applicant in 2020/21 for delivery of the project by March 2022.
9 LOCAL GOVERNMENT REORGANISATION
9.1 The Chair proposed to the meeting that this item be moved to the end of the meeting and that before it is discussed that Public Sector members left the meeting. Cllr Mallinson questioned this but after further discussion agreed to this.
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10 DIGITAL STRATEGY
10.1 The Chief Executive reminded the meeting that a draft Digital Strategy was presented to the Board at its meeting in May 2020. Since then further work has been carried out on the Strategy, although the document still required further development and to be professionally re-set.
10.2 The Chief Executive informed the meeting that since the Board paper had been produced Cumbria County Council had issued a Cumbria Digital Infrastructure Strategy and therefore there was some alignment work to be completed. Additionally, it raised questions about the scope of CLEP’s Digital Strategy, which need to be addressed.
10.3 The meeting was informed that Steve Curl had volunteered to assist with the finalisation of the Strategy, as had Julie Mennell via her team. The Chief Executive emphasised that any other Board members who may wish to assist would be very welcome.
Action Point: Board members to advise the Chief Executive if they wished to assist with the Digital Strategy
10.4 Jim Jackson offered his assistance with regard to the Physical Infrastructure Build section and Andrew Wren volunteered to provide support in relation to the skills element.
10.5 Mike Smith felt that digital manufacturing was under played in the Strategy and emphasised that the skills element needed to be developed further with PESSG members. Mike Smith stated that he would be happy to play a part in the task and finish group.
Action Point: Chief Executive to convene ae Task and Finish Group to finalise the Digital Strategy.
10.6 Julie Mennell agreed that there were gaps in relation to higher level skills and digital skills. She mentioned that a Centre for Digital Transformation is a focus for the University in order to address skills gaps.
10.7 Steve Curl emphasised that software was not referenced within the Strategy. There needed to be a focus on how best to encourage the economy to pick up software. He suggested that Cumbria has a chance to break new ground in this context.
10.8 After further discussion, IT WAS RESOLVED that the Digital Strategy be finalised by the Task and Finish Group.
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11 CLEAN ENERGY FUTURE OPPORTUNITIES FOR CUMBRIA
11.1 Rebecca Weston emphasised that the paper presented to the Board builds on the previous paper submitted to the Board in March 2020. 8 months on, the small virtual team (the creation of which was supported by the Board at its March 2020 meeting) had done good work and had broadened its remit into clean energy, such as offshore wind.
11.2 The Chair expressed concerns with regard to potential capacity issues for CLEP, both in terms of its funding and its remit and emphasised that it is not helpful to make clear commitments, whilst the Energy White Paper was still awaited. Rebecca Weston acknowledged this but emphasised that there were opportunities in offshore wind, SMRs and electric vehicles and that CLEP’s focus is on coordinating and bringing parties together that can deliver.
11.3 David Southward expressed concern that the Country doesn’t appear to have a coherent strategy on electrical generation. A funding model is required that enables matters to move forward.
11.4 Mike Smith, OBE emphasised that some idea on the timeframe for the various opportunities was needed, including nuclear opportunities at the Sellafield site. The question was where Cumbria should put its priorities.
11.5 Jim Jackson stated that Cumbria needs to demonstrate that it is open for the opportunities and that Cumbria’s advantages need to be sold. His view was that a light touch approach was needed, as the bulk of the work would need to be done by industry. Opportunities could be maximised by a wind, nuclear and hydrogen combination.
11.6 Rebecca Weston agreed that nuclear was not the sole focus and that the natural capital and industrial mix in Cumbria should not be underplayed.
11.7 Ken McEwan, Heads of Clean Energy Sector, advised the meeting that wind farms would be operational by 2030 off the Cumbria coast and that £220 million had been allocated to new SMRs by government. There was potential for 4 to 6 of these to be located on consented sites in West Cumbria and which could be operational by 2030. The supply chain could start to be built next year.
11.8 In relation to hydrogen, Ken McEwan mentioned that there was agreement from Cadent to fund a study to create a pathway for hydrogen in Cumbria.
11.9 Ken McEwan concluded by stating that he was confident that there was a way of moving the Clean Energy agenda forward using CLEP’s current resources and that CLEP’s role should be to act as the glue that brings everything together.
11.10 The Chief Executive stated that CLEP’s focus should be on strategy, investment, coordination and advocacy and that CLEP should follow the policy and the money as that was most likely to deliver results for Cumbria.
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11.11 Rebecca Weston emphasised that the paper produced to the Board clearly envisages that CLEP’s role is to coordinate and not to stray into the delivery activity of private sector businesses.
11.12 Sami Falou stated that the issue is about resourcing and priorities. He mentioned that there had been a meeting earlier in the week with BEIS colleagues in Clean Energy and that a meeting was being arranged with Rolls Royce. He emphasised that he will work with CLEP in relation to Clean Energy opportunities.
11.13 John Coughlan questioned the use of secondees and the need to ensure that this did not result in CLEP being seen to favour one technology or organisation over any other technologies.
11.14 The Chair proposed that the paper provided to the Board be endorsed and that time was then spent working out how to move this forward once government’s priorities became clearer. The end result would be a framework for Cumbria to take forward any emerging opportunities that fit with policy and investment. IT WAS RESOLVED that this be agreed.
12 RESTART, REBOOT, RETHINK – A PLAN FOR CUMBRIA’S ECONOMIC RECOVERY
12.1 The Chief Executive emphasised the draft “Restart, Reboot, Rethink – A Plan for Cumbria’s Economic Recovery” document remained ‘work in progress’ given that we continued to move between response and recovery. However, irrespective of this work is continuing on implementation.
12.2 The Chair emphasised that one of the objectives of the Plan was to progress back to the priorities in the Local Industrial Strategy, as agreed by the Board. He suggested that if any Board members had any specific comments, they provide these to the Chief Executive.
Action point: Board members to provide any specific comments on the latest draft of the Restart, Reboot, Rethink Recovery Plan to the Chief Executive.
13 RETHINKING NATURAL CAPITAL
13.1 Sarah Swindley introduced a paper to the Board, the purpose of which was to clarify where CLEP’s focus should be in relation to Natural Capital in Cumbria. She emphasised that one of the key challenges was identifying how to take advantage of the various opportunities and for CLEP to identify its specific role based on its economic responsibilities. The Board was advised that a Green Recovery Environmental Prospectus was being produced.
13.2 Julie Mennell mentioned to the meeting that she has shared the paper with some of her University colleagues, who have volunteered to provide comments.
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13.3 The Chair emphasised that it is important to ensure that the measurements and metrics were right.
13.4 The Chief Executive said that conversations were being held with the Rural Sector Panel. One theme that members were looking to explore was the economic value of Cumbria’s water and how this was delivering a return for Cumbria. There was a view that the Board needed to engage on this issue with United Utilities.
Action Point: Chief Executive to convene a discussion with United Utilities involving the Chair and other relevant Board members.
13.5 Peter Allen emphasised that health and wellbeing forms part of Natural Capital and that it was important that United Utilities was engaged in the conversation.
13.6 IT WAS RESOLVED that the Board supports the proposed focus on where and how CLEP can engage on the Natural Capital agenda.
14 CODE OF CONUCT AND CONFLICT OF INTEREST POLICY
14.1 Andrew Hill, Company Secretary, emphasised that the Local Assurance Framework requires Board members to confirm their commitment to the Code of Conduct and Conflict of Interest Policy set out in Annex A in the Board paper. Amongst other things, the Code emphasises the overriding obligation for Board members to act in CLEP’s best interests, sets out various Public Service Values which need to be adhered to and requires Board members to disclose their private interests, including at the start of each Board meeting. He stated, therefore, that Board members are asked to confirm their commitment to the Code of Conduct and Conflict of Interest Policy and to review and update as appropriate their Declarations of Interest.
14.2 Each Board member present confirmed their commitment to the Code of Conduct and Conflict of Interest Policy and confirmed that they would review their Declarations of Interest and send updated declarations to the Chief Executive. The Chief Executive confirmed that those Board members not in attendance would be asked separately to confirm their commitment to the Code and to review their Declarations of Interest.
Action Point: Board Members not in attendance at the meeting to be asked to confirm their commitment to the Code of Conduct and Conflict of Interest Policy and all Board members to review and update their Declarations of Interest.
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15 PLANNING FOR THE FUTURE OF SKILLS
15.1 Craig Ivison, Head of Skills, joined the meeting at this stage to provide the Board with an update on progress with skills priorities and the development of the Local Skills Report. He emphasised that following the Board meeting in July 2020, the Board requested that the People, Employment and Skills Strategy Group (PESSG) focus on the simplification and co-ordination of a complex and complicated skills offer. Progress had been made in relation to this. PESSG had reviewed a range of tools that would bring together the skills offering employment opportunities across Cumbria. PESSG was developing the Local Skills Report, which was required by the Department for Education. The deadline for production is 31 March 2021. The report would identify employers’ skill needs and address any gaps.
15.2 Craig Ivison made specific mention of the Institute of Technology bid, which had moved forward to Stage One proposal (and is being led for CLEP by Andrew Wren) and the Cumbria Careers Hub. He went on to mention that in order to support schools, a partnership has been formed with Speakers for Schools.
15.3 Andrew Wren emphasised that the Speakers for Schools Partnership needs input from Board members and Sector Panels and that a Local Skills Report would result in more authority being given to local areas to drive curriculum development to ensure local skills needs are met.
15.4 Mike Smith stated that the report was critical and that input from Sector Panels was required, not only in relation to current skills needs but also future needs. If the report did not get things right at this stage, there might not be an opportunity to re-address matters subsequently.
15.5 Julie Mennell agreed that it was necessary to understand both near and far future skills requirements and that a pan-sectoral approach was required to identify skills needs.
15.6 Emma Porter mentioned that the Construction Sector Panel had identified skills gaps at an early stage but had found it difficult to obtain any specific data.
16 FUTURES FORUM
16.1 Mitchell McCombe, Karla Thomas, Laura Kay and Daniel Hamilton from the Futures Forum presented to the meeting the “Futures Framework”.
16.2 Daniel Hamilton emphasised that the Framework set out why the Futures Forum exists and how it can offer support to CLEP. He emphasised in particular that the Futures Forum will work to energise Cumbria’s future generations and to help do this it had broken down Cumbria’s young people into two categories – settlers (young people who want to settle down, buy their first home etc.) and upcomers (young people who are in education or at the very start of their careers and still exploring their career opportunities).
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16.3 Laura Kay emphasised that the Forum will work around three work areas – Empowering Cumbria, Promoting Cumbria and Sustainable Cumbria.
16.4 Karla Thomas mentioned the Forum’s six values – we play our part, we are critical friends, we are respectful and open minded, we are all equal, we are trusted, and we are a team.
16.5 Mitchell McCombe outlined the structure of the Futures Forum for the meeting, emphasising that opportunities were being taken to reflect members’ interests and to help to develop their skills.
16.6 Mike Smith said that, as Chair of PESSG, what he had heard was ‘music to his ears. He asked who from the Futures Forum he should invite to PESSG. Mitchell McCombe said that he would come back to Mike Smith in relation to this.
Action Point: Futures Forum to agree an attendee for PESSG and to notify Mike Smith.
16.7 Rebecca Weston emphasised that she welcomed the contributions that the Futures Forum was already making to clean energy.
16.8 Julie Mennell suggested that the Forum may want to give some thought as to how they might be able to future proof their approach.
16.9 The Chair emphasised that the Board would always value and appreciate the Forum’s contribution, whilst emphasising that clearly there could be no guarantees that the Board would always resolve to take forward the Forum’s recommendations.
16.10 After discussion, IT WAS RESOLVED that the Board endorse the “Futures Framework” that had been produced by the Futures Forum.
17 BUSINESS SUPPORT UDPATE
17.1 Miranda Kirschel, Head of Business and Innovation joined the meeting at this point to update the Board on Government funded business support activity in Cumbria. She advised that current support is:
• £246,000 for core business support, which is being delivered as Cumbria Growth Catalyst by the Chamber of Commerce
• £216,000 supplemental funding to strengthen business support programme, known as BSAP, which is delivered by CLEP
• £135,000 for the Peer to Peer Network, which is being delivered by CLEP through five delivery partners, with the intention that one hundred businesses will benefit
• £54,000 for EU Transition business advisors, with three advisors being recruited;
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• separate support for an Export Manager, who has been seconded by DiT to CLEP.
17.2 Miranda Kirschel mentioned that there may be additional funding for EU Transition, which could be as much as twice the amount of the EU Transition funding provided to date of £54,000. She emphasised that other than the £246,000 for core business support, all other funding was new and must be defrayed with delivery activity completed by March 2021. She emphasised that funding for next year is not yet known.
17.3 Andrew Wren asked how the impact that the various contracts were having was measured. Miranda Kirschel explained that a breakdown of support is provided to BEIS, the Chamber provides an update on achievement and CLEP carries out its own independent evaluation. Andrew Wren said that he thought it would be useful to have sight of the evaluation. Miranda Kirschel confirmed that she would circulate the completed evaluation to members.
Action Point: Miranda Kirschel to circulate to Board members the independent evaluation of the Growth Catalyst contract.
17.4 The Chief Executive in closing advised members that it might be necessary to convene a special meeting of the Board, at short notice, to discuss Business Support activity, once government had confirmed its intentions.
Action Point: Chief Executive to convene a special meeting of the Board at short notice to discuss future business support activity, should this be necessary.
18 END OF YEAR REPORT 2019/2020 AND ANNUAL DELIVERY PLAN 2020/2021
18.1 The Chief Executive outlined the purpose of these reports to the Board, which had only been requested in September 2020. Members were advised the whilst both documents were required by Government, these were merely noted. Members agreed that these reports should be submitted, subject to a final review and presentational improvements by the Chief Executive.
Action Point: Chief Executive to finalise the presentation of the End of Year Report 2019/20 and Annual Delivery Plan 2020/21 and submit these to government.
19 COMMUNICATIONS UPDATE
19.1 Lucy Clarke, Media and Communications Officer, joined the meeting at this point to provide the meeting with a communications update.
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19.2 She mentioned in particular that CLEP continues to support the multi-agency response to Covid-19, that wider media coverage continues to be secured utilising press releases and direct approaches, as well as responding to reactive requests. Social media channels were still being heavily utilised, that the first addition of CLEP’s re-launched newsletter had been produced that month, the multi-channel communications campaign had been launched in relation to “Think Local” and that CLEP has commissioned a one week TV advertising campaign supporting the “Think Local” message. There was a weekly themed communications plan running through to Christmas.
20 CHIEF EXECUTIVE’S REPORT
20.1 The Board considered the report from the Chief Executive, which updated it on items not covered elsewhere in the Agenda.
20.2 The Chief Executive specifically mentioned that the application guidance for Freeport status had now been issued and that it is clear there will be some challenges around the proposed multi-centre approach, given the 45 kilometre limit, other than in exceptional circumstances. However, CLEP and CCC were looking to develop the best possible case and this would be presented to the January 2021 Board meeting.
Action Point: The Chief Executive to bring the draft Freeport application to the Board for its January 2021 meeting
20.3 The Chief Executive mentioned that the North West has now been identified as a Space Cluster supported by the UK Space Agency. She would keep Board members updated in relation to this.
Action Point: The Chief Executive to keep Board members updated in relation to the North West Space Cluster.
20.4 Graham Booth mentioned that a further six units had been added to the MOD Village at Kingmoor Park and that the priority for the Kingmoor Park management at this time was the building leased to Edinburgh Woollen Mills.
21 RISK REGISTER (STANDING ITEM)
21.1 It was noted that Risk 18 in relation to CLEP as a going concern had been escalated from amber to red, given the lack of confirmation from government on future funding. It was agreed that EU Exit Post Transition risks would be a specific agenda item at the January Board meeting.
Action Point: EU Exit Post Transition to be a specific agenda item on the January Board meeting
22 CLEP COMMUNICATIONS (STANDING ITEM)
22.1 The Board agreed that communications should be issued in relation to the approval of the Getting Building A595 Bothel project and the endorsement of the Futures Framework.
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23 FORWARD PLAN (STANDING ITEM)
23.1 The Forward Plan was noted, and IT WAS RESOLVED that non-Board member Sector Panel Chairs be invited to present at future Board meetings.
Action Point: Sector Panel Chairs to be invited to present at Board meetings from the January Meeting onwards.
24 ANY OTHER BUSINESS
24.1 The Chair advised that CLEP was going to undertake an informal expression of interest exercise for new Board members, in anticipation of future changes in Board membership. This would be progressed over the next month or so.
Action Point: Chair and Chief Executive to take forward a Board membership Expression of Interest exercise.
24.2 Emma Porter expressed concern about the size of the Board pack and suggested that this could act as a barrier to people joining the Board. The Chair assured the meeting that this was something that was being looked at and reviewed but did emphasise that Public Sector Boards are different to Private Sector Boards and that generally more documentation and records are required for Public Sector bodies, given the need for accountability and transparency. The Chief Executive added that the Board had been clearing a lot of strategy documents over the past 12-18 months and going forward there should not be the same level of documents for consideration.
25 DATE AND TIME OF NEXT MEETING
25.1 The next CLEP Board meeting is scheduled for Friday 22 January 2021 at 9.30 a.m.
25.2 The meeting then returned to item 9 on the Agenda, Local Government Reorganisation.
9 LOCAL GOVERNMENT REORGANISATION
9.1 Once it had been confirmed that all local government members had left the meeting, the remaining members of the Board in attendance discussed the proposed Local Government Reorganisation.
9.2 The Chair mentioned that he and the Chief Executive had spoken to Cumbria County Council and South Lakeland and Barrow District Councils to explore LGR, recognising that CLEP as an apolitical organisation would not offer views on the form of reorganisation. However, in principle his view was that CLEP should be in favour of Local Government reorganisation.
15
9.3 The Chief Executive said that, while the structure of local government is an issue for central and local Government, members in endorsing the principles that were discussed at CLEP’s Board Bird Table in August had implicitly agreed that LGR was desirable in order to increase capacity. However, this position needed to be formalised.
9.4 After further discussion, IT WAS RESOLVED that CLEP was in favour of Local Government Reorganisation, whilst recognising that the structure of this was for Local and Central Government to decide. IT WAS ALSO RESOLVED that CLEP’s agreement to the 10 principles for Local Government Reorganisation as previously discussed at one of its Bird Table meetings in August 2020 be confirmed.
The meeting closed at 1.00 pm
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UPDATE FROM THE CHAIR, DEPUTY CHAIR AND VICE CHAIRS
Agenda MATTERS ARISING NOT COVERED ELSEWHERE ON THE AGENDA
Agenda
Matters Arising from the CLEP Board Meeting held at 9.30am on Friday 20 November 2020
Action Point: Board members to advise the Chief Executive if they wished to assist with the Digital Strategy
Outcome: Steve Curl, Mike Smith OBE and Andrew Wren volunteered to offer support, alongside Karla Thomas from the Futures Forum. Alison Hatcher and Andrew Atherton, University of Cumbria, also volunteered to join the Group.
Action Point: Chief Executive to convene a Task and Finish Group to finalise the Digital Strategy.
Outcome: A Task and Finish Group has been formed and met twice, resulting in a revised draft, which is undergoing further modifications. A consultation event will be scheduled once the business community have managed through the current lockdown and end of EU transition period.
Action Point: Board members to provide any specific comments on the latest draft of the Restart, Reboot, Rethink Recovery Plan to the Chief Executive.
Outcome: No comments were received following the meeting.
Action Point: Chief Executive to convene a discussion with United Utilities involving the Chair and other relevant Board members.
Outcome: This meeting is scheduled for 26 January 2021.
Action Point: Board Members not in attendance at the meeting to be asked to confirm their commitment to the Code of Conduct and Conflict of Interest Policy and all Board members to review and update their Declarations of Interest.
Outcome: The two members who offered apologies at the meeting, have been invited to confirm their agreement to the Code of Conduct. Updated Declarations of Interest have been added to the CLEP website.
Action Point: Futures Forum to agree an attendee for PESSG and to notify Mike Smith.
Outcome: The Futures Forum has nominated Liam Edgley to join PESSG as its representative.
Action Point: Miranda Kirschel to circulate to Board members the independent evaluation of the Growth Catalyst contract.
Outcome: This was circulated to Board members, for information.
Action Point: Chief Executive to convene a special meeting of the Board at short notice to discuss future business support activity, should this be necessary.
1
Outcome: The Board Bird Table on 13 January 2021 was used for this purpose.
Action Point: Chief Executive to finalise the presentation of the End of Year Report 2019/20 and Annual Delivery Plan 2020/21 and submit these to government.
Outcome: These were finalised and submitted to government, as agreed.
Action Point: The Chief Executive to bring the draft Freeport application to the Board for its January 2021 meeting
Outcome: An update is provided as a specific agenda item.
Action Point: The Chief Executive to keep Board members updated in relation to the North West Space Cluster.
Outcome: This is an ongoing action. Nothing further to report at this time.
Action Point: EU Exit Post Transition to be a specific agenda item on the January Board meeting.
Outcome: This is included as a specific item.
Action Point: Sector Panel Chairs to be invited to present at Board meetings from the January Meeting onwards.
Outcome: The Creative and Cultural Sector Panel is providing a presentation at the January Board meeting.
Action Point: Chair and Chief Executive to take forward a Board membership Expression of Interest exercise.
Outcome: This will be taken forward in February 2021.
2
CREATIVE AND CULTURAL SECTOR PANEL UPDATE
Agenda
CREATIVE AND CULTURAL SECTOR PANEL UPDATE
1. ISSUE
1.1 Updating the Board on activity undertaken by the Creative and Cultural Sector Panel in 2020, and planned actions for 2021. 2. RECOMMENDATION
2.1 That the CLEP Board note: a) this report; and b) that a presentation will be provided by Colin Glover, Chair of the Creative and Cultural Sector Panel and Cumbria’s Museum of Military Life; Andrew Mackay; Tullie House Museum and Gallery and Miriam Randall, The Brewery Arts Centre.
3. BACKGROUND
Creative and Cultural Strategy
3.1 The Creative and Cultural Strategy was agreed by the CLEP Board and adopted by the Creative and Cultural Sector Panel early in 2020. Despite the immediate effects of Covid-19 early in the year, it was agreed that the strategy and accompanying action plan was still relevant and would help frame economic recovery and the development of the creative and cultural sector within Cumbria. Recovery Planning 3.2 The Creative and Cultural Strategy was published in summer and alongside this Sector Panel members worked collaboratively throughout the summer and autumn to produce a cohesive economic recovery plan, using the MACMAP Matrix. This recovery plan, together with those from the other Sector Panels, forms a fundamental plank of the “Restart, Reboot, Rethink: A Strategy for Cumbria’s Economic Recovery”. 2021 Activity 3.3 The Sector Panel has a full programme of activity for 2021 based on the Recovery Plan and the Strategy. A sub-group of members will meet in between Sector Panel meetings to progress key actions, taking ownership of projects to support the sector. Key priorities for the year follow the three strategic strands identified in the Creative and Cultural Strategy: • Creating the Foundations for Creativity and Culture to flourish - through a focus on skills, access to both formal and informal learning opportunities for
all, creating eco-systems for creative digital companies to flourish, and making strong links between creativity and place-making.
• Enabling the creative and cultural sector to grow - through ensuring sufficient spaces and locations for creative and cultural activity and businesses to flourish. Making links to Cumbria’s natural assets and using them as a means to attract more audiences to the County, identifying and anchoring in new sources of funding to support the sector, and building on the strength of existing networks to create a strong voice for the Cumbrian Cultural Sector.
• Promoting Cumbria’s unique offer to national and international audiences - working with current and future marketing campaigns, promoting Cumbria as a place to relocate to, and developing a County-wide calendar of events, working with the Visitor Economy to do so. This will depend on current and future COVID-19 regulations. 3.4 It will be key for the Sector Panel to work collaboratively with complimentary Sector Panels and Strategy Groups, such as Visitor Economy; People Employment and Skills; Places; Ideas and Innovation and Business Strategy. Members are keen to also work with all Governance Groups to ensure a cohesive approach to cross- sectoral challenges. Expanding Membership 3.5 In October 2020 the LEP undertook a recruitment process to open up Sector Panel membership to include more digital and freelance Members. Two new members were co-opted onto the group in December 2020, with an additional 3 in current discussions to join the Sector Panel for 2021. 3.6 The Futures Forum Co-Chairs have also welcomed the opportunity to identify a representative to sit on the Panel and the Chair and members look forward to welcoming the representative once confirmed. NET ZERO CARBON – STANDING ITEM
Agenda FINANCE, AUDIT AND RESOURCES COMMITTEE REPORT
Agenda
FINANCE, AUDIT AND RESOURCES COMMITTEE REPORT
1. ISSUE
1.1 Updating the Board on the latest income and expenditure position and other issues considered at the most recent meeting of the Finance, Audit and Resources Committee (FARC)
2. RECOMMENDATIONS 2.1 That the CLEP Board: a) note the latest income and expenditure position for the nine months ended 31 December 2020 (Annex A); b) note that work on developing the 2021/22 budget is progressing well and this will be presented to the Board at its March 2021 meeting; c) note the draft note of the FARC meeting held on 11 January 2021.
3. BACKGROUND
Income and Expenditure
2020/21 Income 3.1 During November and December 2020 the following income was received : £100,000 Sellafield match funding; £40,000 Getting Building Fund; £31,103 BEIS Additional Funding; £17,554 Careers and Enterprise Company; and £16,000 DITKAM. These receipts provided a helpful boost to cashflow. 3.2 In terms of significant outstanding contributions, these relate to BEIS Additional Funding and the new Peer to Peer Network and EU Transition programmes. In respect of the BEIS Additional Funding £112,758 was due to be received in late December 2020, but instead cleared into CLEP’s bank account on 4 January 2021. 3.3 The budget for the Peer to Peer Programme has increased by £30,000 to reflect an additional two cohorts of activity. The cashflow position in relation to the Peer to Peer Programme has also improved slightly with claims now being accepted on a monthly basis and with only 50% rather than 80% triggers. Whilst the income will still be backloaded, CLEP will no longer be expending in advance of repayment to the same level. 3.4 The grant offer for the EU Transition programmes has now been received and the activity in relation to these programmes is being mobilised, including recruiting consultants on a temporary basis to support the delivery of
this short term programme. There are now four different funding pots, with some flexibility available between pots other than the £54,000 outreach fund, which is ring-fenced. CLEP has plans in place to ensure that all of this funding is drawn down. These programmes are neutral on the “bottom line” as all income must be fully expended on direct deliverables. Expenditure 3.5 Additional cost headings have been created to reflect the three new EU Transition Programme lines. There has also been an increase in the forecast outturn for professional services to reflect the additional Peer to Peer Network delivery activity. 3.6 Tight management of expenditure continues and will do so for the remainder of the year, with the intention being to try to further reduce the operating deficit. 3.7 The projected carry over of income and expenditure reserves into 2021/22 is currently forecast to be £226,006. The operating deficit for the year is projected to be £152,843. 2021/22 Income and Expenditure 3.8 FARC has been working on developing the 2021/22 budget, with some of the proposals being the subject of informal discussion at the Board Bird Table meeting on 13 January 2021. A number of income lines are still to be confirmed and as such the Board Bird Table agreed that the proposed budget should be presented to the CLEP Board at the March 2021 meeting, to allow some of these budget lines to be firmed up. FARC Meeting
3.9 The draft note of the FARC meeting that took place on 11 January 2021 is provided at Annex B
3.10 The Chair of FARC will be pleased to respond to any queries.
Cumbria Local Enterprise Partnership Limited Year ending 31 March 2021 Summary of forecast and budgeted income and expenditure accounts
Apr-20 Jan 21 Apr-20 Apr-20 to to to to Dec-20 Mar-21 Mar-21 Mar-21 Actual Expected Forecast Budget £ £ £ £ Income MHCLG Core Funding 500,000 - 500,000 500,000 BEIS Additional Funding 31,104 172,873 203,976 200,000 Match funding - other parties 30,000 - 30,000 30,000 Match funding - Sellafield 100,000 - 100,000 100,000 Sellafield - NWNA funding 45,000 - 45,000 45,000 BEIS Growth Hub Funding - - - 14,160 DiT 2019-20 Funding 32,000 16,000 48,000 48,000 CEC Programme and Mangement 135,970 40,673 176,643 210,000 Relationship Manage Coastal Rail 9,793 40,207 50,000 75,000 Skills Advisory Panel 75,000 - 75,000 75,000 Contribution from CCC - RGD/CIF - 39,000 39,000 41,000 Peer to Peer Network - 165,000 165,000 - Interest 129 - 129 - Costal Rail - - - - EU Exit Advisory - Outreach - 54,000 54,000 - Getting Building Fund 40,000 - 40,000 - EU Exit Advisory - Specialist and Generalist - 67,500 67,500 - EU Exit Advisory - Intel Monitor Nival - 5,000 5,000 - EU Exit Advisory - Regional - 9,550 9,550 - 998,996 609,803 1,608,798 1,338,160
Expenditure LEP Staffing 508,785 281,215 790,000 756,936 EU Exit Advisory - Outreach 6,608 47,392 54,000 - EU Exit Advisory - Specialist and Generalist - 67,500 67,500 - EU Exit Advisory - Intel Monitor Nival - 5,000 5,000 - EU Exit Advisory - Regional - 9,550 9,550 - Board & Ops Expenses - Travel 69 1,931 2,000 30,000 Board & Ops Expenses - Other 160 5,840 6,000 20,000 515,623 418,427 934,050 806,936
Events & Materials 3,286 3,714 7,000 20,000 Comms - General 20,812 9,188 30,000 25,000 Place Marketing Campaign 5,506 6,494 12,000 25,000 29,604 19,396 49,000 70,000
Accountable Body Costs 150,000 - 150,000 150,000 IT Services 15,000 - 15,000 15,000 Research and Intelligence 45,000 - 45,000 45,000 Careers Hub Programme Budget 28,970 56,473 85,443 102,728 Sellafield - NWNA Programme 32,400 29,741 62,141 62,141 Professional services 106,144 187,856 294,000 110,000 Studies and Research 69,255 46,745 116,000 110,000 LEP Network 8,400 - 8,400 12,000 Depreciation 1,954 653 2,607 2,607 457,124 321,467 778,591 609,476
Total expenditure 1,002,351 759,290 1,761,641 1,486,412
Surplus/(Deficit) of income over exp. (3,355) (149,487) (152,843) (148,252)
Interest receivable - - - - Corporation Tax - - - -
Surplus/(Deficit) after tax (3,355) (149,487) (152,843) (148,252) Cumbria Loan Enterprise Partnership Limited Year ending 31 March 2021
£ £
I & E Balance b/f at 1 April 2020 378,849 378,849
Surplus/(Deficit) of income over expenditure (152,843) (148,252)
226,006 230,597
Cumbria Local Enterprise Partnership Limited Actual balance sheet as at 31 December 2020
31-Dec-20 £ £ £
Fixed Assets 8,473
Current Assets Cash at bank and in hand 698,602 Accrued income - Prepayments -
Current liabilities Corporation tax - Deferred income - Accruals -
Net assets 707,076
Income and Expenditure Restricted Total
Reserves b/fwd 378,849 331,582 710,431
Income and expenditure surplus/(deficit) to 31 December 2020 (3,355) - (3,355)
Reserves c/fwd 375,494 331,582 707,076
Forecast Balance sheet as at 31 March 2021 31-Mar-21 £ £ £ Fixed assets 7,822
Current assets Cash at bank and in hand 398,108 Accrued income 151,659 Prepayments - 549,767
Current Liabilities Corporation tax - Deferred income - Accruals - -
Net assets 557,589
Income and Restricted Total Expenditure
Reserves b/fwd 378,849 331,583 710,432
Income and expenditure surplus/(defiit) to 31 March 2021 (152,843) - (152,843)
Reserves c/fwd 226,006 331,583 557,589
ANNEX B Draft Note of the Finance, Audit and Resources Committee Meeting held at 1.00pm on Monday 11 January 2021 via Videoconference
Attendees • Nigel Wilkinson, Chair Cumbria LEP • Steve Curl Cumbria LEP • Sarah Swindley Cumbria LEP • Andrew Wren Cumbria LEP
Jim Jackson, Deputy Chair of CLEP, Board joined the meeting from Item 3. Jamie Wright, Cumbria County Council (CCC) as Accountable Body; Jen Hewitt and Jo Lappin, Cumbria LEP were also in attendance. 1. Welcome and Introductions
1.1 The Chair opened the meeting by welcoming attendees. Members were advised that apologies had been received from Paul Turney, Cumbria County Council. 2. Minutes of the Previous Meeting and Matters Arising
2.1 The notes of the previous meeting held on 9 November 2020 were agreed as a true and accurate record.
2.2 The matters arising paper was reviewed by FARC with the following points noted:
Action Point: Jo Lappin to raise Sellafield match funding with Rebecca Weston - The funding had been released and received in November 2020. This had helpfully boosted cashflow.
Action Point: Jo Lappin to explore whether the £29,741 could be spent on wider business support activity – this funding could not be deployed on wider business support activity but could be re-deployed to support consultancy work for the development of the application for the Spherical Tokamak for Energy Production (STEP).
Action Point: Jamie Wright to provide an updated statement of liability for CCC as at 31 March 2021 – this had been completed.
2.3 The Chair of FARC asked that Jamie Wright provided a further statement on pension strain and liability for CCC for the financial year ending 31 March 2022.
Action Point: Jamie Wright to provide a further statement on pension strain and liability for CCC as at 31 March 2022. Jim Jackson joined the meeting.
3. 2020/21 Financial Update
3.1 The Chair advised members that the format of the report had been updated to reflect the discussions at previous FARC meetings. He hoped that the revised format now reflected the Committee members’ earlier feedback.
Income
3.2 Jo Lappin advised that there had a boost of income since the last meeting with payments received from Sellafield, Getting Building Fund, BEIS, CEC and DiT KAM. CLEP was expecting to receive BEIS Additional Funding of £112,758 into the account in December 2020 with funds clearing on 4 January 2021.
3.3 Members were advised that income in relation to Peer to Peer should be less heavily back loaded as claims are now acceptable on a monthly basis and the payment triggers had been reduced from 80% to 50%. This meant that CLEP would not have to forward fund the programme to the same extent.
3.4 In relation to EU Transition Funding, there had been three additional funds received. However, these are neutral in income and expenditure terms as the funding needs to be directly expended on activity. Helpfully, the funds would support further EU Exit Analysis and ongoing intelligence activity.
Expenditure
3.5 Expenditure would continue to be tightly monitored for the remainder of the financial year. Business support budgets are being carefully monitored and managed.
Summary
3.6 Overall, CLEP is currently forecasting to be only £5,000 away from the initial profile for 20/21, which is a reasonable position, given the challenges to deliver significant amounts of additional COVID response and recovery activity at pace.
3.7 The Chair clarified that this would provide a £226,006 carryover of income and expenditure reserves into 2021/22, with the operating deficit for the 2020/21 financial year currently projected to be £152,843. The net assets carried forward as at 31 March 2021, which includes both the income and expenditure reserve and the restricted reserve, are currently projected to be circa £558,000.
3.8 Nigel added that at the last meeting the operational deficit for the 2020/21 financial year had been projected to be £178,000, so there was an improved position since the previous FARC meeting.
3.9 Sarah Swindley queried the financial period for the Sellafield match funding, given that it arrived in Quarter 3. Jo Lappin confirmed that this related to the 2020/21 financial year. This grant funding is to support the breadth of CLEP’s activity.
3.10 The Chair advised that, in accordance with previous professional advice, the Sellafield funding is a grant and would be treated as such for VAT purposes. If there are any changes in the nature of this income stream in the future, that status of the receipt would need to be considered and the appropriate VAT treatment adopted.
3.11 Steve Curl welcomed the new reporting format, which he felt provided a clearer picture of the current position and the projected outturn.
4. 2021/22 Draft Budget 4.1 The Chief Executive presented an initial draft budget for the 2021/22 financial year. She caveated the figures presented by saying that at this point Government had provided no indication of funding for the 2021/22 financial year, although she had been informally advised that £400,000 for Growth Hub activity would be a reasonable assumption. In relation to the Core Funding, discussions around this are still continuing.
4.2 In relation to other income streams the Chief Executive advised on the level of surety in relation to each of these.
4.3 On the expenditure lines, the Chief Executive explained the proposed rationale for each of these. She recognised that negotiation was needed in relation to some of the proposals. She also flagged that Professional Services and Studies and Research are very tight in budget terms. Therefore, if additional funds became available these two cost headings should be re- visited.
4.4 Members noted that the first draft of the budget for the 2021/22 financial year showed an operating surplus of £27,771, which would slightly increase the income and expenditure reserve to carry forward into 2022/23.
4.5 Members’ feedback was requested in relation to the proposed budget and whether this provided the basis for an informal conversation to take place at the Board Bird Table on 13 January 2021.
4.6 Jim Jackson provided his thoughts and observations on the current funding environment and the uncertainties around this. He concluded that some of this situation will be a “leap of faith” until things became clearer.
4.7 Sarah Swindley added that any budget proposals need to be financially prudent, fiscally responsible for the organisation and provide best value for businesses. Andrew Wren was in agreement and felt that CLEP needed to focus on what would drive effective delivery.
4.8 Members invited the Chief Executive to respond to a series of questions in relation to the assumptions within the first draft budget.
4.9 Following a detailed discussion, members confirmed their “in principle” agreement to the proposals contained within the budget and agreed that this should form the basis for an informal discussion at the Board Bird Table on 13 January 2021.
Action Point: Chief Executive to prepare a summary of the first draft of the 2021/22 budget for informal discussion at the Board Bird table on 13 January 2021.
4.10 Members also asked that the Chief Executive undertake further development work on the activity underpinning the budget for consideration at the March 2021 meeting of FARC. All implications in relation to this would be factored into the work programme.
Action Point: Chief Executive to provide an updated version of the 2021/22 budget, and the detailed workings underpinning this, at the next FARC meeting.
4.11 Steve Curl asked for clarification on the status of the Growth Deal fund. The Chief Executive confirmed that this will end in March 2021, after which the Levelling Up Fund would be introduced. This is a competitive pot and as such CLEP would need to compete for this alongside Local Authorities and other organisations. The detail in relation to the Levelling Up Fund is still being worked up.
5. Redundancy Policy
5.1 Members were invited to consider a draft redundancy policy as requested at the previous meeting. The Chief Executive outlined the background and rationale to this and explained the main components of the policy. In summary, the proposed redundancy payment removes the statutory weekly earnings cap and reduces the qualifying period to one year of service rather than two.
5.2 In advance of the meeting the Chair of FARC had further reviewed the proposal wording and provided some additional amendments on paragraphs 8.1 and 8.2, which were screen shared for understanding and agreement. Jim Jackson also requested clearer distinction between voluntary and compulsory redundancy in the policy.
5.3 Members were advised that the Chair’s comments had been forwarded to Baines Wilson for review, as they had produced the original draft.
5.4 The Chief Executive was asked to confirm that all pension liabilities had been accounted for. After discussion, all members confirmed their agreement to the proposed policy, and it was resolved that the policy should be presented to the CLEP Board at its meeting on 22 January 2021 with a recommendation from FARC that the policy should be adopted.
5.5 In advance of this, Sarah Swindley requested a further drafting change under paragraph 8.2. Colleagues agreed to the reference being changed from Cumbria County Council to the Accountable Body.
Action Point: Chief Executive to complete the drafting changes and present the redundancy policy to the CLEP Board meeting on 22 January 2021.
5.6 The discussion on redundancy policy resulted in a discussion on the Memorandum of Agreement between CLEP and the Accountable Body (Cumbria County Council). The Chair asked that the Chief Executive secure written confirmation as to the scope of coverage of the Restricted Reserve.
Action Point: The Chief Executive to secure written confirmation of the scope of coverage of the Restricted Reserve.
Jim Jackson left the meeting.
6. Risk Register
6.1 All risks had been updated. The most significant change related to the de-escalation of risks 28 – 30 as a result of the EU Exit Deal.
6.2 It was noted that risk 18 had reverted to amber rather than red risk, which was in error and needed to be corrected.
Action Point: Risk register to be submitted to the CLEP Board once Risk 18 had been reverted back to red.
7. Any Other Business
7.1 Steve Curl asked for an update around identifying a replacement to allow the Chair to stand down. The Chief Executive explained that this had been advertised but CLEP had not received any applications. It had therefore been re-advertised but had not secured any responses. 7.2 She was therefore considering exploring whether a Finance Director in another LEP would be willing to undertake the role. However, very helpfully the FARC Chair had confirmed that he would continue in the role until a suitably qualified replacement could be found. Action Point: Jo Lappin to explore the possibility of co-opting a Finance Director from another LEP to Chair, FARC. 8. Date and Time of next Meeting 8.1 The next meeting is to take place on Friday 12 March 2021 between 14.00 and 16.00.
INVESTMENT PANEL REPORT
Agenda
INVESTMENT PANEL UPDATE
1. ISSUE
1.1 To provide an update to the Board on delivery against CLEP Programmes and to agree delegated authority for approval of the Q3 2020/21 Dashboard.
2. RECOMMENDATION
2.1 That CLEP Board members:
(a) Note the update on Growth Deal performance and the management of risk within the Programme;
(b) Note the update on delivery of the Getting Building Fund and the management of risk in the Programme;
(c) Provide delegated authority for approval of the Q3 2020/21 Dashboard to the Investment Panel.
3. BACKGROUND
Growth Deal Performance and Delivery
3.1 The heightened COVID-19 restrictions have continued to impact on delivery of the Growth Deal Programme with a number of projects reporting delays to delivery and planned activity slipping from Quarters 1 and 2 into Q3 and Q4. In some cases, delivery has been forced into Q1 2021/22.
3.2 In order to help deal with identified slippage, the Investment Panel has agreed a number of upfront payments. Decisions to approve upfront payments have been supported through additional consideration of risk and the inclusion of appropriate conditions within Funding Agreements.
3.3 In terms of financial performance, the cumulative expenditure at the end of Quarter 3 has increased significantly from Quarter 2. To date £6.548m has been claimed within Q3, with this figure expected to increase slightly once the outstanding claims for Q3 have been processed. This is against an allocation for 2020/21 of £11,694,598, and a final expenditure forecast of £16,730,760 which would see delivery of the full Growth Deal allocation.
3.4 Detailed performance information will be outlined in the covering report accompanying the Dashboard, which will be circulated to the Board for information in February, following approval by the Investment Panel.
3.5 £58.4m has been contracted representing 97% of total Growth Deal funding. Two projects are currently being contracted:
• Cross-a-Moor - will be issued week commencing 18 January 2021. Once agreed and sealed the full payment of £0.925m will be made to SLDC. • Lillyhall North – new contract will be issued following approval of the Change Control by the Investment Panel on 20 January and a single upfront payment of £1.789m made upon clearance of the pre-conditions.
3.6 The key remaining risks to the Programme are as follows:
• Lillyhall North – The project is now behind schedule with planning permission not due until February 2021 and completion scheduled for August 2021, some five months later than originally approved. A change control recommending the issuing of a revised contract and updated milestones will be considered by the Investment Panel on 20 January 2021. • Whitehaven High Street – The project was granted £1,056,649 to purchase 5 properties in the town centre. These would then be improved and renovated as a central pillar of the anticipated Future High Streets Fund award. At the time of writing the applicant had completed the purchase of 3 properties representing £556,129. Prior to Christmas, the Council withdrew its application for FHSF and instead intends to apply to the ‘Levelling Up Fund’ to support regeneration in Whitehaven, once details are announced by Government. Without certainty of Levelling Up Funding, the Council has concluded that it is not prudent to complete the purchase of the remaining properties at this time. The applicant is in the process of completing a change control to request that the majority of the unutilised grant is instead used to undertake essential renovations on the purchased properties. Further information on any impact on the Programme will be detailed at the next Board meeting. • Carlisle Citadels – The project has experienced delays due to the inability of the vendor to deliver vacant possession of Paton House as a direct result of the impact of Covid-19. A change control was considered and approved by the Investment Panel in November, which revised the purchase date to March 2020, with demolition to be completed in Q1 of 21/22. A revised draft funding agreement has been issued to the applicant, but the project continues to be high risk with exchange of contracts for Paton House not yet taking place. The Executive continues to work closely with the applicant to monitor this risk, and an update will be provided at the Investment Panel on 20 January 2021.
Getting Building Fund Performance and Delivery
3.7 Two projects were invited to submit Business Cases for the £10.5m Getting Building Fund. The first, Bothel A595 Improvements was approved by the CLEP Board at its meeting in November 2020.
3.8 Contracting is at an advanced stage and should be issued and approved by 31 January 2021. Once sealed, a single upfront payment will be made for the full £5m. Delivery is underway and the project is already incurring eligible expenditure. Works should complete by March 2022.
3.9 The Vertical Farm project was invited to submit an Outline Business Case which had been due to be considered at the November Board. Delays in the submission prevented this, and an extension was provided and an intention to consider at the January 2021 meeting.
3.10 The Outline Business Case received by CLEP was lacking information in key areas, with a number of critical concerns including, but not limited to the following;
• No confirmation of match funding. • Outputs considerably less than those originally specified by the applicant. As a reminder, all GBF outputs specified in the Offer Letter to CLEP were associated with the Vertical Farm project and were based on the original submission. • No final state aid opinion (although a draft state aid assessment has been provided) and concerns about the project’s ability to meet recommendations within the independent state aid assessment. • Lack of information on the role of key delivery partners, particularly the higher education partner which is critical as the project has been classified as an R&D project to meet the requirements for state aid.
3.11 The Executive has provided considerable support to the applicant, with detailed written and verbal feedback and fortnightly meetings to review progress. Unfortunately, at this stage the application does not meet the requirements set out in the Local Assurance Framework. The Executive is in discussion with both the applicant and CLGU to agree an appropriate way forward.
Quarter 3 Dashboard
3.12 Timing for submission of the Quarter 3 Dashboard does not align with Board meetings and as such members are invited to agree that approval of the Quarter 3 dashboard is delegated to the Investment Panel. The approved Dashboard will be circulated to the Board, for information.
REDUNDANCY POLICY
Agenda
REDUNDANCY POLICY
1. ISSUE
1.1 Agreeing a Redundancy Policy for CLEP.
2. RECOMMENDATION
2.1 That the Board agree the CLEP Redundancy Policy (Annex A) for immediate implementation.
3. BACKGROUND
3.1 At the November 2020 Board meeting, members agreed that a Redundancy Policy should be prepared for consideration at the January 2021 Board meeting. FARC, at its meeting on 11 January 2021, considered a draft policy and provided suggested changes to this. The policy provided at Annex A reflects these proposed changes and members are invited to review this and agree that it provides a suitable policy for the organisation going forward.
Financial Provision
3.2 Board members are aware that following CLEPs establishment Cumbria County Council as Accountable Body transferred a sum of £331,582, which needed to be held in reserve and cannot be spent without the prior written agreement of the Accountable Body. There is a commitment within CLEP’s Memorandum of Agreement that this sum must meet the redundancy costs of employees of the Council seconded to the LEP, with subsequent clarification sought confirming that this is available to cover all wind up or wind down costs for CLEP.
3.3 The sum available significantly exceeds the likely demand placed upon the existing commitments to County Council employees and in 4 different scenarios tested by the Chief Executive for CLEP’s directly employed staff. Therefore, there is no concern regarding the sum being insufficient to meet wind-up commitments.
3.4 The issue of creating a specific redundancy scheme has raised concerns in relation to contingent liability and future affordability and as such the redundancy policy has been framed in recognition of this. The proposed redundancy payments are contained within section 8 of the policy.
3.5 In considering the potential level of exposure members will wish to note the latest cost estimates, as at 31 March 2021 , based on the current staffing cadre.
EMPLOYER REDUNDANCY PILON MAXIMUM COSTS EXPOSURE Cumbria County Council £95,000.00 £49,755.40 £144,755.40 Cumbria LEP £14,079.58 £55,039.99 £69,119.57 TOTAL £109,079.58 £104,795.39 £213,874.97
ANNEX A
Redundancy Policy
Responsible officer: Chief Executive
Author: Chief Executive
Date effective from: January 2021
Date last amended: N/A
Review date: January 2022
CUMBRIA LOCAL ENTERPRISE PARTNERSHIP (CLEP)
Redundancy Policy
Contents
1 Policy Statement...... 1
2 Scope of Policy ………...... 1
3 The legal background ………………………………………...... 1
4 Setting redundancy in context……..………………………………………. 1
5 Minimising compulsory redundancies...... 2
6 Compulsory redundancies ………………………………………………… 2
7 Issuing notice or redundancy dismissal issued to employees …………. 3
8 Redundancy Payments …………………………………………………….. 3
9 Notice Period ………………………………………………………………… 3
10 Monitoring and Review ……………………………………………………… 3
1. Policy Statement
1.1 Most employees value secure employment. Uncertainty about future employment prospects is likely to be damaging to morale and reduce commitment to the future success of the organisation. We want to implement this policy to create a secure environment for our existing staff and to encourage the best people to come and work for our organisation.
1.2 However, in a changing environment, all organisations must adapt to change if they are to remain viable. This will almost inevitably involve changes in the number of employees and skills they need.
1.3 It is the policy of CLEP to respond to change. In doing so it will aim to keep compulsory redundancies to a minimum by using voluntary redundancy. This policy commitment is reflected in this policy.
2. Scope of Policy
2.1 This procedure applies to all employees with the exception of employees who have continuity of service of less than 1 year. This policy will be reviewed from time to time to ensure that it reflects our legal obligations and to meet the needs of the organisation. It may be amended or withdrawn at any time and does not form part of any employee's contract of employment.
3. The legal background
3.1 There is a statutory definition of redundancy, which is set out in S139(1) of the Employment Rights Act 1996. In summary, there are three sets of circumstance which can give rise to a redundancy situation, which are: • An organisational closure; • A workplace closure (e.g. closure of one of several sites, or relocation to a new site); • Diminished requirements of the organisation for employees to do work of a particular kind.
4. Setting redundancy in context
4.1 The need to alter the number of employees required within CLEP can arise from a change in the way that a service needs to be provided; a restructuring; or a need to make budget savings due to reduction or removal of income.
4.2 However, there may be occasions when redundancy dismissals are unavoidable, for example where:
• there is no suitable alternative job for someone whose post is no longer required; or • CLEP has asked for volunteers for redundancy and insufficient volunteers came forward which means CLEP cannot make the required savings; or • Government reduces or withdraws its funding to LEPs.
5. Minimising compulsory redundancies
5.1 CLEP is committed to minimising compulsory redundancies. Measures to do this will be applied wherever possible and include:
• redeployment to other jobs within CLEP; • managing other budget costs; • controls on recruitment; • seeking applicants for voluntary redundancy, which might be on enhanced terms; and • consultation with employees as early as possible in the process to share ideas about alternative options that do not involve redundancy.
6. Compulsory redundancies
6.1 When it is not possible to avoid making compulsory redundancies, CLEP will advise all affected employees and, where 20 or more employees are affected (Collective Redundancy), employee representatives that compulsory redundancies cannot be avoided. We will consult employee representatives on the procedure that will then be followed in a Collective Redundancy and the criteria that will be applied.
6.2 In carrying out any redundancy exercise CLEP will not discriminate directly or indirectly on grounds of gender, sexual orientation, marital or civil partner status, gender reassignment, race, colour, nationality, ethnic or national origin, religion or belief, disability or age. Part-time employees and those working under fixed-term contracts will not be treated differently to permanent, full-time comparators.
6.3 The criteria used to select those employees who will potentially be made redundant will be objective, transparent and fair and based on the skills required to meet our existing and anticipated business needs.
6.4 CLEP will consult individually with those employees who have been provisionally selected for redundancy.
6.5 Where selection for redundancy is confirmed, employees selected for redundancy will be given notice of termination of employment in accordance with their contracts and written confirmation of the payments that they will receive. Employees will be given the opportunity to appeal against this decision.
6.6 CLEP will continue to look for alternative employment for redundant employees until their termination dates. The manner in which redundant employees will be invited to apply for and be interviewed for vacancies will be organised depending on the circumstances existing at the time. Alternative employment may be offered subject to a trial period where appropriate.
7. Issuing notice of redundancy dismissal to Employees
7.1 Notice of redundancy dismissal will not be issued to an employee until any Collective Redundancy and individual consultation has ended.
8. Redundancy Payments
8.1 All permanent staff employed continuously for a period of over 1 year will, in the event their employment comes to an end by reason of redundancy, receive a statutory redundancy payment (using an equivalent to the statutory calculation for those with over 1 years’ service, but under 2 years’ service). When calculating the statutory redundancy payment, CLEP will not use the current statutory cap on a weeks’ pay and will instead base the calculation on an employee’s usual gross weekly pay. For the avoidance of doubt, the calculation of the statutory redundancy payment will otherwise follow the current statutory redundancy payment scheme.
8.2 CLEP may, entirely at its discretion, and if circumstances permit, and subject to any restriction imposed on CLEP by Accountable Body or any legislation or government directive try to improve on any statutory redundancy payment due to any employee as set out in clause 8.1 above. Any proposed terms will be discussed with employee representatives (in a Collective Redundancy) or the employee concerned. For the avoidance of doubt, CLEP are not obliged to make any increase on the statutory redundancy payment described in clause 8.1 above.
9. Notice Period
9.1 CLEP will issue notice to its employees in line with their contractual notice period, which varies between 4 weeks and 3 months. If an employee’s entitlement to statutory notice is longer than their contractual notice period, they will be entitled to statutory notice. Employees will be expected to work their notice period.
9.2 The only exception to this will be if circumstances make this not practicable and possible.
10. Monitoring and Review
10.1 The Chief Executive will be responsible for ensuring this policy is regularly reviewed.
11.2 This procedure has been evaluated and CLEP believe that it does not discriminate against any employee on the grounds of gender, sexual orientation, marital or civil partner status, gender reassignment, race, colour, nationality, ethnic or national origin, religion or belief, disability or age. Part-time employees and those working under fixed-term contracts will not be treated differently to permanent, full- time comparators. The procedure will be reviewed regularly to ensure CLEP meets this objective.
FREEPORT UPDATE
Agenda
FREEPORT UPDATE
1. ISSUE
1.1 Updating the Board on the development of the Cumbria Freeport Bid.
2. RECOMMENDATION
2.1 That the CLEP Board note the update and the further development work to prepare the bid for submission.
3. BACKGROUND
What is a Freeport?
3.1 Freeports are a special kind of port where normal tax and customs rules do not apply. These can be airports as well as maritime ports. At a freeport, imports can enter with simplified customs documentation and without paying tariffs (Customs Sites). Businesses operating inside designated areas in and around the port can manufacture goods using the imports and add value, before exporting again without ever facing the full tariffs or procedures (Tax Sites).
Cumbria’s Emerging Proposal
3.2 Cumbria does not have one dominant port, but rather several ports along the coast that fulfil different functions. Cumbria also benefits from a commercial airport, Carlisle Lake District Airport, which is operated by Stobart Air and has excellent links to large scale freight facilities. Currently, each port fulfils different functions and has different opportunities for growth and development. The configuration of the ports means that Cumbria is ideally placed to be a multi-centred, multi-modal Freeport centred on the following locations:
• The Port of Barrow - owned and operated by ABP. As well as traditional port activities it acts as a key service port for the offshore oil and gas sector and for the national nuclear submarine programme. The 10-hectare Barrow Waterfront Business Park located adjacent to the port has seen extensive public investment, including support from CLEP, and is now fully available for development. The Furness area has extensive expertise in advanced manufacturing linked to offshore engineering and shipbuilding. The port can handle vessels up to 150 metres in length and has direct rail access.
• The Port of Workington - owned and operated by Cumbria County Council. The port has direct rail access facilities. Currently, its 500,000 tonnes of traffic are largely liquid and dry bulks, forest products, and project cargo. It has the capacity to support considerably more activity and has large areas of developable land to the north of the port including the former iron works at Oldside. An improved port access bridge is being built to improve the developability of land at the port and the site benefits from rail siding and direct access to the Cumbrian Coast Line.
• Carlisle Lake District Airport - owned and operated by Stobart Air. It has benefitted from a recent £15 million investment in new facilities supported by CLEP. The airport is well located for the M6, A69 and Carlisle and has a series of development plots suitable for large scale manufacturing and other uses.
3.3 Each of these three locations have underutilised space on, or immediately adjacent to, the port facilities and have seen past investment in infrastructure to unlock development potential. Each port site offers access to a range of key growth sectors: Workington to West Coast expertise in the nuclear sector and wind energy; Barrow to the Furness and South Lakes and its advanced manufacturing expertise and wind energy; and Carlisle Lake District to the M6/M74 corridor’s expertise in logistics and niche manufacturing.
3.4 Freeport status helps attract inward investment, help businesses expand and to allow for experimentation and innovation in new ideas and processes. Importantly, it will also support economic recovery, levelling up and facilitate new and growth sectors.
3.5 Initial assessments have shown that a multi-centre Freeport within Cumbria could support 1,500 to 3,000 new jobs and £100 million to £200 million in extra GVA in a range of advanced engineering and manufacturing businesses.
Consultant Selection
3.6 Hatch, working with WSP, have been secured through CCC to act as consultants to develop the Cumbria Freeport bid for a multi modal, multi-centre Freeport. The bidding process closes at 12.00 noon on Friday 5 February 2021.
Constraints/ Risks
3.7 Since the detailed guidance has emerged the challenges in relation to creating a multi-centre, multi-modal bid has become clearer. These include:
• Volume – of current freight imports/ exports from the customs sites to create a credible site. The smaller volumes through Cumbrian ports makes this more challenging. The specifics in relation to this are still being worked through by the consultants.
• Boundary – the geographic boundary of the Freeport must be within 45km. The proposed 3 port multi-port bid of Barrow, Workington and Carlisle exceeds the geographic boundary by a significant amount. Hatch’s view is that compelling evidence can be gathered to justify the sites. CLEP believes that rural geographies require specific consideration.
• Commitment - ABP Barrow has yet to confirm that they wish to be included within the bid. Urgent discussions are taking place to confirm their position.
• Competing Bids – CLEP is aware of another Cumbrian Freeport bid, which could undermine the CLEP and its partners submissions.
Milestones
3.8 In preparing the finalised bid, the following key milestones have been identified:
Week Ending 15 January
Priority – final scope of proposition agreed. Key contacts identified and contacted with expectation of support needed. Information gathering completed.
Meeting(s) to be scheduled with Lake District Airport to address the key tasks of Customs/ Tax sites confirmation within the Bid, this would include Airport, Local Authority Leads and local MPs.
Meeting(s) to be scheduled with Port of Workington to address the key tasks Customs/ Tax sites within confirmation within the Bid, this would include Port representatives, Local authority leads and local MPs.
Week Ending 22 January
Priority – governance and management issues agreed with the port owners/ operators. Scope of minimum intervention and preferred intervention options agreed.
Week ending 29 January
Priority – draft bid prepared.
Week ending 5 February - Input and finalisation
Priority - bid finalised, approved and ready for input into the Bid Webform.
3.9 Board Members are invited to note this update and raise any issues in relation to it. EU EXIT ANALYSIS
Agenda
EU EXIT ANALYSIS 1. ISSUE
1.1 Inviting the Board’s views on the EU Exit Analysis.
2. RECOMMENDATIONS 2.1 That the Board: a) review the report and provide comment on this; and b) agree that the report should be publicly available. 3. BACKGROUND 3.1 The Board agreed that once the time was right the EU Exit Analysis should be updated. This work was placed on hold until the outcome of the negotiations with the EU were concluded. Once the negotiations were concluded and the Trade and Cooperation Agreement reached an update of the EU Exit analysis was commissioned. 3.2 This was produced by Stephen Nicol, Nicol Economics and was presented to the Business and Economic Response and Recovery Group (BERRG) at its meeting on 12 January 2021, for comment. BERRG reviewed the document and at headline level agreed with the assessment within it. 3.3 Members are invited to review the draft report and comment on it. Once finalised, members are invited to agree that it is made publicly available.
Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
Updated EU Exit Analysis for Cumbria, January 2021
Contents A. Summary 1 B. What now does EU Exit mean in practice? 4 C. Business preparedness for EU Exit 7 D. Medium to longer term impacts from EU Exit 12 E. Likely sectoral impacts from EU Exit 13
A. Summary
1.1 This note updates the findings of the earlier analysis notes on EU Exit (we use the term EU Exit instead of Brexit throughout this note)1 for Cumbria in the light of the most recent developments. In particular, it assesses the implications of the UK and EU Trade and Cooperation Agreement (TCA)2 finally agreed in December 2020. This has now been ratified by the Heads of State of all EU countries and the UK Parliament (although it is still to be ratified by the EU Parliament). The note is based on a desk based review and data for the Cumbria Business Survey carried out in 2020.
1.2 The note focusses on the potential economic consequences of EU Exit on the Cumbria economy (and so does not cover any potential social or well-being impacts). The principal conclusions are set out below.
The new UK-EU Trade and Cooperation Agreement and post EU Exit relationships
1) The eventual agreement of the near 1,300 page TCA on the 24th December 2020 led to a collective sigh of relief from all business bodies in the UK. The alternative, moving to WTO trade terms, would have introduced significant tariffs and quotas to UK-EU trade. In the case of some agricultural exports to the EU (e.g. sheep and beef) the impact would have been severe.
2) However in spite of the TCA, as the UK has now left the EU’s Custom Union and Single Market, this means that Cumbria’s exporters and importers now face new customs checks/ documentation, other red tape and further reporting and approval requirements. These have added and will add to the cost of trading with the EU. Such costs and administrative requirements are likely to be more off-putting and difficult to deal with for smaller businesses.
1 December 2018 and August 2019 2 A useful assessment of the TCA is to be found on the Institute of Government web site and the CBI Brexit Bulletin
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Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
3) The end to freedom of movement and the introduction of the new points based migration regime for the UK will make it significantly harder to recruit new workers from the EU, especially in jobs paying less than £25,600. There will be new and, at times, complex processes for SMEs to employ non-UK workers as visa sponsors. Previous analyses had highlighted that access to EU migrant labour is a particularly important issue facing the tourism sector, food manufacturing and parts of the health and care sector in Cumbria.
Business preparedness
4) At a national level the evidence towards the end of 2020 was that the impact of Covid-19 and the uncertainty about the outcome of the trade negotiations with the EU were hampering business preparations. Many businesses were only partially prepared and some were not prepared at all. Generally smaller firms continued to be less well prepared than larger firms.
5) The latest evidence from the survey of Cumbria firms in the autumn of 2020 (carried out of course before it was clear that there would be a TCA) highlights that the direct impact of post-EU Exit trading arrangements is likely to be focused on a relatively small number of businesses (the c. 4% where sales to the EU were 10% or more of all sales).
6) Uncertainty about the EU exit was highlighted as a significant barrier to performance by 25% of businesses, but when surveyed this was a less important barrier than the effects of Covid-19, cashflow or other factors such as access to broadband. This of course reflects that fact that only a minority of businesses trade directly with the EU. The uncertainty was however much more important for larger firms generally (likely to be exporting and trading with the EU) and amongst Cumbria’s farming sector and manufacturers.
7) In the short term (the next 12 months), those businesses anticipating a negative impact from EU Exit on their business outnumbered those expecting a positive impact 3 to 1; but in the longer term (two or more years), the proportions were evenly balanced. The majority of business saw the impact as neutral or could not assess the impact. The specific concerns that were most important were around tariffs, (no longer an issue as a result of the TCA) but also around regulations, standards and customs procedures (which are all areas where changes have occurred and challenges remain).
8) Despite these concerns only 2% of firms expect to be seeking specific advice on EU Exit.
Medium to longer term economic effects
9) The consensus of most economists is that even with a free trade agreement (FTA) (such as now been agreed with the EU) there is likely to be a reduction in the medium to longer growth rate of the UK economy as a result of EU Exit. This is because the close integration brought about by the Single Market and Customs Union with our largest trading partner has helped enhance UK growth.
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Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
10) There is, however, inevitably a considerable range of uncertainty about any such estimates. Also, to date there are no estimates specific to the exact parameters of recent TCA with the EU (which goes further than most FTAs).
11) The estimates of the longer term effects on the UK economy range from a reduction of 2% to 3% up to falls of 6% to 7% of GDP. It is important to stress that these are not estimates of direct falls in GDP but rather reductions on the future rate of growth of UK GDP over a 5 to 10 year period compared to a “no Brexit” scenario. The OBR has already “priced in” a UK-wide 4% reduction effect from EU Exit (with a free trade deal) in its central longer term economic forecasts for the UK.
12) It of course does not follow that these reductions will occur in Cumbria, although the performance of the Cumbrian economy is of course inexorably bound up with that of the UK economy.
Sectoral impacts in Cumbria
13) The previous conclusions about the medium to longer term vulnerability and exposure of Cumbria’s economy by sector to EU Exit have changed as a result of the TCA. We have re-assessed the potential impacts by sector in the light of the TCA and the new migration system and the greater time that businesses have had to prepare.
14) In the new assessment the potential scale of the impacts (or degree of “exposure”) have been downgraded and the number of sectors where significant impacts will occur has been reduced.
15) We assess that roughly £1.5bn3 (13% of the total) and around 45,000 to 50,000 jobs (19% of the total) fall in those sectors where the downside impacts could be medium/high or medium (tourism, food, agriculture). This is as a result of a mixture of impacts on migration/access to workers and the non-tariff barriers to trade.
16) There are number of sectors where there will be some medium to low impacts either as a result of non-tariff barriers to trade or labour supply issues. However, much will depend on the particular market focus and size of firms in terms of the importance of the issue and their ability to deal with it. For instance, larger scale manufacturers that already export to markets outside the EU should find it relatively straightforward to deal with the additional customs and regulatory requirements in most sector) as will most multi-national firms.
17) The rough estimate is that these medium to low impact sectors could account for around £2.6 billion of current economic activity and 55,000 to 60,000 jobs (both 22% of the Cumbria totals).
18) There will be specific firms in all sectors that will also have new opportunities as a result of EU Exit. Also in some in sectors overall not identified as likely to see major impacts specific firms may face new challenges. For instance, the TCA does not provide for the same levels of access to EU markets for service sector companies as those selling goods.
3 Note the GVA and jobs figures refer to 2016 data, but would be only very marginally changed by more recent data
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Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
Overall conclusions
19) The signing of the TCA now provides much needed clarity and certainty for Cumbrian businesses. It avoided potential cliff edge effects that could have been damaging for parts of the Cumbrian economy.
20) Nevertheless, there are now challenges faced by businesses from 2021 onwards as a result of all the ramifications of EU Exit.
B. What now does EU Exit mean in practice?
1.3 At the end of 2020 it finally became clear what EU Exit is likely to mean in practice, removing much (but not all) of the uncertainty.
Leaving the Single Market and Customs Union
1.4 The UK left the Single Market and the Customs Union at the end of 2020 after the end of the transition period. Rather than revert to WTO trading terms with the EU, the new 1259 page TCA sets out the parameters for the UK’s relationship with the EU in trade and range of other matters. As far as the economy of Cumbria is concerned the key points are:
1) The UK has left both the Customs Union and the Single Market. As the EU press release on the TCA puts it the UK “will no longer benefit from seamless access to the EU Single Market and Customs Union, or from EU policies and international agreements (including its free trade agreements with other third countries)”.
2) The TCA critically ensures that UK trade in goods with the EU will be subject neither to tariffs nor quotas. This would have not been the case under a so-called “No Deal Brexit” if the UK had had to revert to WTO rules on trade with the EU. The EU is by far the largest market for UK goods (around half) so this is critical. For exporting (and importing) businesses in Cumbria this means that there will be no tariffs on imports4 from or exports to the EU. This is particularly important for some sectors which would otherwise have faced steep tariffs with the EU (especially agricultural products).
3) However, trade with the EU in goods will now face more “friction” from a mixture of basic customs checks and procedures and what economists call non-tariff barriers as:
a) All exports to the EU will be subject to customs formalities from the 1st of January 2021 and will need to comply with the customs rules of the EU. The same will happen to EU imports into the UK but the UK Government have agreed a waiver for six months to ease the transition for businesses importing to the UK. The TCA provides for mutual recognition of Trusted Trader Schemes, that may allow for more streamlined customs procedures for eligible traders.
4 The UK had already set very low important tariffs as part of its so import tariff for goods from the EU would have mainly been set a zero of very low levels
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Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
b) All UK imports into the EU must meet all EU standards and so will be subject to regulatory checks and controls for safety, health and other public policy purposes. This means that UK agri-food exporters will have to meet all EU animal, food and plant sanitary and phytosanitary import requirements and be subject to official controls carried out by Member States' authorities at border control.
c) The “rules of origin” will apply to goods in order to qualify for preferential trade terms under the TCA (ie no tariffs). This means that the element of the product sold that is produced in the UK/EU will need to reach certain minimum levels to avoid tariffs. This is particularly important for car manufacturing, but is much less of an issue for those manufacturing sectors that are important to Cumbria.
4) The TCA contains provisions to try and reduce the practical cost and effect of these non-tariff barriers and customs administration – reflecting the fact that the UK is starting off from having operated within the Single Market for many decades.
5) The situation is different in respect of trade in services. UK service exporters will lose their automatic right to offer services across the EU. They may need to establish themselves in the EU to continue operating. They will need to comply with the host- country rules of each EU Member State. However, the TCA goes beyond many free trade agreements and makes provision for trade in services. The non-discrimination obligations of the TCA ensure that service suppliers or investors from the UK will be treated no less favourably than other EU operators in the EU, and vice-versa.
6) A key area not covered by the TCA relates to the movement of business personal in the EU (as there is no freedom of movement). This will make it harder for UK businesses to sell services abroad in the EU in person (eg maintenance contractors etc). Also UK qualifications will no longer be automatically recognised in the EU.
7) Although the UK will leave the European Atomic Energy Community (Euratom), the Single Market for trade in nuclear materials and technology, a separate agreement between Euratom and the UK on the uses of nuclear energy provides for wide- ranging cooperation on nuclear safety and uses of nuclear energy,
1.5 There was widespread welcome from business bodies that the agreement was finally reached, even if at the 11th hour and even if the scope was not as deep and wide as some had sought. Box 1: Business group reaction to the TCA ”This will come as a huge relief to British business at a time when resilience is at an all-time low. But coming so late in the day it is vital that both sides take instant steps to keep trade moving and services flowing while firms adjust” CBI “While firms will welcome the agreement of a new foundation for UK-EU trade, they are now faced with the gargantuan task of adapting to new arrangements with scarcely a week before they take effect”, British Chambers of Commerce “For business leaders, this Christmas gift is better late than never …. It provides a stable basis for the future relationship with our biggest market”, Institute of Directors “After such a torrid year, and during such a disrupted festive trading season, it’s a huge relief to see negotiators finally strike a deal”, Federation of Small Businesses “The successful conclusion of a deal between the UK and EU is very positive news for British agriculture” NFU
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Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
The level playing field
1.6 One of the key areas of difference between the UK and the EU was about the so-called “level playing field”. This covers the extent to which the UK, as a very close trading partner with the EU, had to maintain the same or very similar rules and regulations as the EU. In practice the TCA means that:
1) The UK has agreed to at least maintain the current standards applicable in the key areas of labour and social standards, environment, and climate. The TCA states these cannot be lowered in any manner that affects trade or investment. However, the TCA does not require the UK to follow a process of ”dynamic alignment” in the future which would have required it to change its current standards if the EU changed theirs.
2) In relation to State Aids the TCA sets out that neither the UK or the EU can use “trade- distorting subsidies”. However, the full EU State Aid regime will no longer apply in the UK which therefore can devise its own regime so long as it adheres to the “broad principles” set out in the TCA5. At present the new subsidy regime for the UK is yet to be determined. The implication is that until this is produced we will need to operate within the current EU State Aid regime.
Ending of free movement
1.7 The UK now has a new points-based migration regime6 which applies equally to new EU and non-EU migrants. (Existing EU migrants already residing in the UK are treated differently and have the right to remain). There is no longer freedom of movement of EU nationals into the UK (and of course equally for UK nationals into the EU). In practical terms this means that it will be very difficult to fill a job earning less than £25,600 (or the “going rate for your job” if this is higher) via a migrant worker from the EU or elsewhere. In Cumbria in 2019 around 40% of all full-time jobs were paid less than this level. Earnings levels in Cumbria are around 5% below those of the UK so a lower proportion of jobs will be covered by this wage level than nationally.
1.8 However, there are exemptions for jobs in shortage occupations and for people aged under 26. It is possible to be paid between 70% and 90% of the usual going rate for your job so long as the actual salary is at least £20,480 per year.
1.9 For designated skilled shortage occupations it is possible to be paid as little as 80% of the going rate for that occupation (which might be less than £25,600 a year). These occupations currently cover skilled chefs, veterinarians and a range of other professional and scientific/technical occupations as well. There is a separate list of health and education shortage occupations (including nurses but not care home staff) where it is possible to get a visa in theory if that occupation was paid less than £25,600.
5 These are that it can be demonstrated that the subsidy : (1) a contribution to a well-defined objective of public interest (for example the green transition); (2) there is a need for state intervention to remedy a market failure; (3) is an appropriate measure; and (4) the “proportionality” of the subsidy, taking into account its negative effects on trade between the EU and UK 6 There are some exceptions
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Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
1.10 For current and recent students (up to 2 years post-graduation) and young people under the age of 26 it is possible to earn 70% of the going rate for that occupation and still obtain a visa.
1.11 The first consequence is that EU nationals not resident in the UK who might have considered working in Cumbria, may view working in the UK as less attractive due to: (1) the costs of the visa; (2) the administration and bureaucracy involved in applying for a visa; and (3) the fact that other family members would not automatically be able to accompany the worker.
1.12 The second consequence is that the process of employing EU nationals will become much more complex for many SMEs that are not used to dealing with visas for workers. Across the UK there are the approximately 340,000 SMEs which currently employ EU nationals but often have little or no experience of recruiting from the rest of the world. The social care, food manufacturing and hospitality sectors are particularly exposed. The logistics sector is also reliant on EU labour, employing EU nationals as 13% of its staff.
C. Business preparedness for EU Exit
National level
1.13 At a national level surveys have repeatedly shown that smaller firms have tended to be unprepared for EU Exit. Business preparations for EU Exit generally have been hampered by: (1) the, in some cases, all-consuming impact of Covid-19 during 2020; and (2) the uncertainty about the outcomes of the negotiations on a trade deal throughout 2020 (even though the need to prepare for some practical issues have been clear for some time)7.
1.14 In September 2019 the British Chamber of Commerce (BCC) reported that about two fifths of UK firms that trade internationally had not considered the impact of EU Exit on their business (ie a risk assessment) ahead of the end of the EU Exit transition period on 1 January 2021. Overall, those that trade internationally (63%) were far more likely to have carried out a risk assessment on the impact of EU Exit to their business than their counterparts that trade in the UK only (35%). By September 2020 the BCC found that around half of UK firms which trade internationally have completed appropriate risk assessments for EU Exit.
1.15 The BCC noted that “political turbulence and ongoing uncertainty about the final outcome of the Brexit process is hampering business planning, making it impossible for firms to know what to prepare for”.
1.16 The Institute for Government8 reported that CBI had indicated in the summer of 2020 that in large part as a result of Covid-19 “preparations for the end of transition haven’t just stalled, they’ve gone backwards”.
1.17 The Bank of England Agents’ report for Q4 2020 started that for manufacturers “preparations for new UK-EU trading arrangements among smaller companies may be less well advanced than among larger corporates. For example, small and medium-enterprises (SMEs) said that they have more stockbuilding left to do by the end of this year — possibly
7 Whatever the result of the negotiations it has been the case that UK businesses trading with the EU need an Economic Operator Registration and Identification number (EORI), the UK Government automatically issued these to all VAT registered businesses in 2019, but not to non-VAT registered businesses; similarly firms have needed to either have in house capacity to handle Customs and Safety and Security Declarations or an agreement with third party suppliers 8 “Preparing Brexit - The scale of the task left for UK business and government”, Joe Marshall et al, IfG Insight | July 2020
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Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
reflecting cash constraints. And a number of SMEs said they were planning to close their operations in order to avoid potential disruption in early January”.
1.18 In the November 2020 Decision Makers Panel the Bank noted that “businesses reported an increase in the level of preparedness for the end of the transition period with the EU. Excluding firms who do not trade with the EU, 6% reported that they were fully prepared, 62% were “as ready as they can be” (up from 55% in October), 27% were partially prepared and 4% were not all prepared.
Local level
1.19 There is some specific evidence on the current preparedness of businesses in Cumbria for EU Exit and the importance of EU Exit. This comes from preliminary analysis of the 2020 Cumbria Business Survey carried out at between October and December 2020 (based on an interim extract of around 1,700 responses9).
1.20 This analysis shows that the direct importance of EU Trade is focussed on a small percentage of (larger) businesses . The great majority of businesses responding (87%) made no sales to the EU at all, but for 12% of respondents, at least some of their sales are to the EU (note sales to overseas tourists were excluded from the definition)10. For 8% of respondents, EU sales make up 1-10% of their sales, for 2% of respondents EU sales make up 11-25% of their sales and for a very small proportion (1.6%) EU sales represent more than a quarter of their sales. The proportion who exported to the EU was similar to that reported in the 2015 Business Survey (15%). This emphasises that the trade impacts of EU Exit in Cumbria are likely to be focused on a relatively small number of businesses.
1.21 The latest (2019) data from HMRC11 suggest that in Cumbria: • Around 950 Cumbrian businesses exported goods to the EU and 1,660 firms imported from EU. • In comparison, fewer businesses traded with non-EU countries, around 750 businesses exported to non-EU countries and 970 imported from non-EU countries (roughly 80% and 60% respectively of numbers trading with the EU). • There is some data on estimates for service exports (which are less reliable) these suggest that in 2017 around £510 million in services were exports to the EU and £565 million to non-EU markets.
9 The data and the analysis kindly provided by Ginny Murphy of Cumbria County Council 10 According to HMRC data, 920 firms based in Cumbria exported to the EU 2016 (and 740 outside the EU) which represents 4.5% of total active business stock, which is above the overall UK rates of 3.6% 11 This data also produces estimates of the value of goods exported and imported however this is far less reliable, this data suggest that the value of exports is great to non-EU countries than to EU countries (£800 million to EU and £933 million to non-EU countries). The two biggest EU export countries by value for Cumbria are Germany and France
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Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
1.22 Barriers to Performance. Respondents to the survey were asked about a range of barriers to business performance and efficiency. In 2020 “uncertainty with regard to forward planning related to the UK’s exit from the EU” was added as an option together with some Coronavirus options. It was the Coronavirus barriers that were most likely to be cited by businesses with availability of staff also a significant barrier. Overall, 25% of businesses surveyed indicated that uncertainty about the EU exit was a significant barrier to their performance (ranking above other more local issues such as parking, public transport, roads, business rates and rents). • The importance of uncertainty about EU exit was, as would be expected, far more important for larger firms who are more likely to export (over 100 employees).
Whether uncertainty relating to EU exit presents a barrier to business performance (by employment size) 60% 57% 50% 40% 27% 30% 23% 24% 20% 20% 10% 0% 2 - 4 5 - 9 10 - 24 25 - 99 100+ Employment sizeband (site based)
• The sectors in which the importance of EU Exit uncertainty were concentrated were farming, manufacturing and information & communication (but only a small sample for the latter).
Whether uncertainty relating to EU exit presents a barrier to business performance (by sector)
Agriculture, forestry & fishing 67% Information & communication 39% Manufacturing 38% Administrative & support services 32% Wholesale & retail 26% Professional, scientific & technical 25% Accommodation & food services 22% Arts, entertainment & recreation 19% Finance & insurance 18% Other services 17% Real estate 16% Human health & social work 15% Construction 15% Transport & storage 14%
0% 10% 20% 30% 40% 50% 60% 70% 80%
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Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
1.23 Businesses were asked what their expectations were about whether the EU exit would have a positive or negative impact on their business in the next 12 months and also in the medium term (2 years plus). Clearly when this question was asked businesses did not know if there would be a EU Exit deal or not. The key findings were that: • The highest proportion were neutral about both the short (46%) and medium term impact (43%). • A third of respondents believed the short term impact would be negative (8% saying it would be very negative) and those seeing the short term impact as negative outnumbers those seeing as positive 3 to 1. • Over the medium term, the proportion of businesses anticipating negative impact reduced to 21% while the proportion expecting positive impact increased to 18% (ie these were roughly balanced).
Expectations of EU Exit Impact on Business
Next 12 mths 31% 46% 10% 13%
Next 2 years+ 21% 43% 19% 18%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Negative Neutral Positive Don't know or N/A
1.24 Businesses were also asked whether they believed specific potential changes arising from the EU exit would have an impact on their business’s sales, supply chains or costs (they were not asked to specify whether this would be negative or positive). The highest proportion (35%) believed that regulatory changes would have an impact, closely followed by EU tariffs (32%). Other issues which a quarter or more of respondents believed would have an impact were potential changes to environmental standards (26%) and customs procedures (27%).
1.25 Of the issues of potential concern or impact, the concerns about EU (and non-EU) tariffs are fortunately no longer current as a result of the new TCA. However, concerns about many the other issues (such as regulation, environmental standards, customs procedures, product standards and employment) are, arguably, relatively unaffected by the TCA.
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Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
Businesses believing changes arising from the EU exit will have an impact on sales, supply chains or costs
Regulatory changes 35% EU Tariffs 32% Customs procedures 27% Environmental standards 26% Non-EU Tariffs 24% Data protection 23% Product standards 22% Employment 21% State Aid 17% Recognition of qualifications 14% Copyright/trademarks patents 10% 0% 5% 10% 15% 20% 25% 30% 35% 40%
1.26 Despite the concerns expressed about the EU exit, relatively few businesses were expecting to seek external support or advice specifically on that topic – just 2% of all business (5% of those expecting to seek any type of support). However, some of the other areas of business support listed could potentially indirectly relate to issues arising from the EU exit.
Topics businesses expect to seek advice/support for in next 12 months
Accessing finance - grants etc 6% Accountancy/general finance 6% Accessing finance - borrowing 5% Business planning & related issues 4% Coronavirus outbreak 3% Marketing & communications 3% Marketing products & services 3% Growing the business (general advice) 3% Business regulations/ red tape 3% New technologies 2% Health & safety 2% Improving workforce skills 2% Legal advice - unspecified 2% Website development - social media 2% EU Exit 2% 0% 1% 2% 3% 4% 5% 6% 7% % all businesses
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Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
D. Medium to longer term impacts from EU Exit
1.27 Some work on the economic impact on EU Exit has addressed the longer term effects of changes in trade policy, access to markets and to migration. The consensus of this work is that even with a free trade agreement (FTA) (such as now been agreed with the EU) there is likely to be a reduction in the medium to longer growth rate of the UK economy as a result of EU Exit. This is because the close integration brought about by the Single Market and Customs Union has helped enhance UK growth. There is, however, inevitably a range of uncertainty about any such estimates and so no estimates have been produced for the exact parameters of recent new TCA with the EU (which goes further than most FTAs)
1.28 The OBR in 2018 noted that: “studies of the impact of Brexit conclude that increased (tariff and non-tariff) trade barriers with the EU will leave output in the UK (and EU) lower than would otherwise have been the case. For the most part, these effects are likely to emerge gradually …... The limited literature on the adjustment process suggests that the full transition would take more than ten years, although the effect might be somewhat front-loaded in the earlier part of the period…. the scope for trade deals with non-EU countries to offset these effects is likely to be limited, as the affected trade flows are significantly smaller than UK-EU trade and these trade agreements generally reduce non-tariff barriers by significantly less than the EU’s single market”12.
12 Brexit and the OBR's forecasts, Discussion paper No. 3, OBR, October 2018
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Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
1.29 The review of estimates of longer term economic effects can be summarised as follows: • The OBR had already ”priced in” to their long term central forecasts for the UK a “4% long-run loss of output associated with leaving the EU with a typical free trade agreement”13. • HM Treasury’s earlier analysis of EU Exit scenarios suggested that the long term GDP effects of an “average FTA” on would be around a 5½% fall in UK per capita GDP UK GDP compared to remaining in the EU (ie no EU Exit) (with a range of around a fall of 4% to up to 7%)14. In this context it describes long term as being “interpreted as around 15 years after the UK's new relationship with the EU comes into effect” – or by the middle part of the next decade.
• The IMF in 201815 suggest that in a more “benign FTA scenario, output falls by between about 2½ and 4% relative to continued EU membership in the long run”. • The UK in a Changing Europe report on the likely elements of the EU Exit deal (similar to what has now been negotiated) assessed the long term impact on GDP per capita (under optimistic assumptions) as being around 2.3%16.
1.30 Therefore the estimates of the longer term effects range from reductions of 2% to 3% in GDP up to reductions of 6% to 7% of GDP. It is important to stress that these estimates are not of direct falls in GDP compared to now, but reductions in the future size of the UK economy and so the future rate of growth of UK GDP over a 5 to 10 year period compared to a no EU Exit scenario.
E. Likely sectoral impacts from EU Exit
1.31 The two previous EU Exit impact assessments were produced before the impact of Covid- 19 on the world, UK and Cumbria economies. As the previous section shows, for most businesses in Cumbria the effects of Covid-19 are a more pressing concern for their business than EU Exit.
1.32 The December 2018 EU Exit Analysis focussed on assessing the degree of “exposure” of the Cumbria economy overall and in its different sectors to EU Exit in the medium to longer term17 as a result of the: • The direct impacts of EU Exit would be caused by impacts on market access to the EU, by the availability of EU labour in Cumbria in what is already a very tight labour market in most areas and as a result of important other links to the EU (most notably in the agriculture sector). • The indirect impacts of EU Exit on Cumbria (via effects on the rest of the UK economy) which could be as significant as the direct effects on sales and labour.
13 Annex B Brexit Scenarios in “Economic and fiscal outlook”, OBR, November 2020 14 “EU Exit: Long-term economic analysis, HM Treasury, November 2018 15 IMF Country Report No. 18/317, United Kingdom Selected Issues, December 2018 16 The economic impact of Boris Johnson’s Brexit proposals, The UK in a Changing Europe, October 2019 17 At the time there was an expectation that there would be at least a 2 year transition period from March 2019 to March 2021 during which little would change – so the short term effects would have been relatively limited
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Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
1.33 The assessed degree of direct exposure of the Cumbrian economy to EU Exit varied widely by sector and within sector by location and firm. The previous research noted that national studies applied to Cumbria can, and have given, quite misleading results because of the particular structure of our economy.
1.34 We have updated the assessment of the overall exposure of the Cumbria economy to future changes as a result of EU Exit in Figure 1 below (we now talk about “impacts” as opposed to “exposure” given that there is clarity on what EU Exit means). This is based on the following assessment: • As a result of the TCA no sector now falls into the previous “high” category (this had been 13% of GVA and 19% of jobs). The new “medium to high” category only applies to the tourism sector18. This had previously been identified as facing a “high” exposure as a result of the impact of EU Exit on access to labour. Access to labour issues, once the sector picks up post Covid-19, will still remain. However, there have been some changes to the new migration system (such as work visas for EU students and ex-students) that could improve the access to labour and the sector has had more time to adjust. We therefore deem the impacts as “medium/high”. • It is also the case that the sector may face some opportunities from increased domestic tourism post EU Exit (as it may become marginally more costly to travel to the EU for holidays). • The next category is “medium” impact. These are sectors where even as result of the TCA there are new non-tariff barriers and cost of trading with the EU as a result of regulatory requirements and checks. These sectors are agriculture and food manufacturing. In both cases these sectors face enhanced regulatory checks to access the EU’s Single Market. The impact of a no deal EU Exit would have been very serious particularly for agriculture, but nevertheless there are some increased costs of trading with the EU under the TCA. • Finally, there are number of sectors where the impacts are “medium to low”. These are sectors impacted by access to workers (health and particularly social care), new regulations and checks (transport) and most manufacturing sectors. Here the effects will vary from firm to firm and specific sector to sector. The assessment now, post TCA, is more on relatively lower rather than medium impacts.
18 Note: this is based on the direct impact on GVA and jobs of tourism spend in Cumbria
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Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
Figure 1: Share of Cumbria’s economy in terms of GVA and jobs by degree of medium to longer term impacts of EU Exit, updated January 2021
Source: EU Exit Analysis, January 2021. Note: jobs impacts rounded to the nearest 10,000
Table 1: Potential sectoral impacts of EU Exit in Cumbria Sector Impact Comments Tourism MEDIUM Previous reports highlighted tourism as vulnerable to the to HIGH impact of EU Exit as a result of the high proportion of hospitality sector staff from the EU and the impact of a new points based migration regime and salary cap that could worsen previous recruitment difficulties. This fundamental issues remains, although as far as the sector is concerned at present the impact of Covid-19 is far more serious. Farming MEDIUM There has been increased focus recently on EU Exit impacts Food MEDIUM on this sector in part because of the just-in-time and perishable nature of the products meaning it is particularly vulnerable to disruption in transport, supply chains and is also subject to significant degree of standards and regulatory requirements within the EU. The TCA means that exports to the EU will still need to comply with EU laws in this area. Sanitary and phytosanitary (SPS) border controls involve the most extensive checks, with specialist paperwork and frequent physical inspections required on products of animal origin. This UK–EU deal sets a general aim to keeping the frequency of checks to a minimum but does not remove the need for them. The UK has not achieved its ambition of agreeing an equivalence mechanism for SPS measures (in other words the UK SPS regime will not automatically passport to the EU this means agri-food traders will incur extra costs on GB–EU trade. Compared to a no deal EU Exit with high tariffs on exports to the EU the TCA is very welcome.
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Cumbria LEP EU Exit ANALYSIS NOTE – UPDATE JANUARY 2021
However, there will be some longer term impacts on the costs of trade and so the likely prices that Cumbria farmers and foods suppliers will get for any exports to the EU. The end of EU farm payments is being replaced by a new UK level system which is likely to create winners and losers within the farming sector. Manufacturing MEDIUM The effects will be felt largely in those sectors with significant to LOW sales to the EU. The effect of the TCA is to remove the danger of tariffs on exports to the EU. However, as noted earlier it will add to the friction of trade. The main concern here is amongst those smaller businesses that export where, many may not have even made basic preparations for the new export regimes. Some key parts of our manufacturing base linked to nuclear and shipbuilding (and associated supply chains) are, however, relatively insulated against the direct effects of EU Exit. The agreement between the UK and EURATOM appears to secure the ability for our nuclear sector businesses to operate in the EU. Transport MEDIUM This sector, or at least the part of the sector involved in to LOW transport to and from the EU, faces short term disruption. Health and MEDIUM The main direct longer term impact of EU Exit is likely to be social care to LOW on the ability to attract and retain staff. Here where businesses have already faced challenges in recruiting, EU Exit is likely to exacerbate these issues and lead to more competition from across the UK for staff, thus adding to a challenge that already exists and was growing anyway.
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2020/21 ANNUAL PERFORMANCE REVIEW
Agenda
2020/21 ANNUAL PERFORMANCE REVIEW 1. ISSUE
1.1 Updating Board members on the 2020/21 Annual Performance Review.
2. RECOMMENDATIONS 2.1 That the Board: a) note the revised Annual Performance Review guidance for the 2020/21 year b) note that the Annual Performance Review is taking place on 11 February 2021; and c) note that a readout will be provided to the Board, once the APR meeting has taken place. 3. BACKGROUND 3.1 The Annual Performance Review (APR) of LEPs takes place annually by government, with the guidance for the 2020/21 APR attached at Annex A. This confirms that as in previous years, the focus will be on three themes of Governance, Delivery and Strategic Impact. Delivery now encompasses Local Growth Fund (LGF), Getting Building Fund (GBF), Enterprise Zones and other programmes. 3.2 The Cities and Local Growth Unit (CLGU) appreciates the additional demands that have been placed on LEPs as they work on supporting economic recovery in response to COVID- 19. This has been considered alongside the feedback received from last year’s review, resulting in a streamlined Annual Performance Review (APR), which reflects the exceptional year to date. This approach has resulted in a move away from a marking (Exceptional to Inadequate) to an outcomes-based approach with findings of “met” and “action needed.” 3.3 The APR meeting will be chaired by the Cities and Local Growth Unit with CLEP represented by the Chair, Chief Executive, Head of Programmes together with colleagues from the Accountable Body. In advance of the meeting an APR Preparation Report and a Governance Assurance Statement must be submitted by 20 January 2021 together with the S151/73/127 Officer Assurance Statement from the Accountable Body. In addition, the Governance Assurance Statement must be published on the CLEP website by 24 February 2021. The Section 151/73 Officer must also write to the Ministry of Housing, Communities and Local Government’s (MHCLG) Accounting Officer by the same date. 3.4 Board members are invited to note the APR process and raise any issues in relation to this.
2020-21 Annual Performance Review
Delivery
Strategic Governance Impact
Annual Performance Review
Feedback Comments
Input
Guidance
Version 3.1 – December 2020
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Contents Introduction ...... 3 Background ...... 3 Annual Performance Review ...... 3 Mid-Year Reviews ...... 4 Annual Performance Review Meeting ...... 5 Quarter 2 LEP Data Return ...... 6 Compliance Checks ...... 6 LEP Annual Performance Review Returns ...... 6 DfT, ESFA and Homes England Engagement ...... 7 Freedom of Information ...... 7 Following the Annual Performance Review Meeting ...... 8 Record of the Annual Performance Review Meeting ...... 8 Performance Assessment ...... 8 Performance Assessment Outcomes ...... 8 Outcome ...... 9 Forward Look ...... 9 Indicative Timeline ...... 10 Annex A –2020-21 Annual Performance Review Preparation ...... 11 Annex B: S151/73/127 Officer Assurance Statement Template (also supplied in Word) ...... 12 Annex C: Governance Assurance Statement Template (also supplied in Word) ..... 13 Annex D: APR Meeting Agenda Template ...... 14 Annex E: S151/73/127 Officer Assurance Letter Template (also supplied in Word) 15 Annex F: Performance Assessment Key Indicators ...... 16
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Introduction
1. This guidance sets out the process for the LEP Annual Performance Review 2020-21.
2. The Cities and Local Growth Unit appreciates the additional demands that have been placed on LEPs as they work on supporting economic recovery in response to COVID- 19. This has been considered alongside the feedback received from last year’s review, resulting in a streamlined Annual Performance Review (APR) which is reflective of the exceptional year to date. The significant work to review LEP delivery through the Local Growth Fund review process has also informed this. Central to this approach is the movement away from a marking (Exceptional to Inadequate) to an outcomes-based approach with findings of “met” and “action needed” taking account of mitigating circumstances.
Background
3. The Accountability System Statement for Local Government and Local Growth Funding sets out how local government funding and local growth funding are allocated, describing the robust local systems which are in place to ensure that resources are spent with regularity, propriety, and value for money.
4. In January 2019 the Ministry for Housing Communities and Local Government (MHCLG) published the National Local Growth Assurance Framework which provided parameters in which LEPs must operate and guidance for Mayoral Combined Authorities (MCAs).
Annual Performance Review
5. The Annual Performance Review is the formal way by which the Government and each LEP meet to discuss the contribution the LEP has made towards driving forward local economic growth; to review LEP governance and assurance processes; to look at progress on delivery of key local growth programmes; and to discuss the LEP’s strategic impact, priorities and challenges for the year ahead.
6. Critically, the Annual Performance Review also acts as a key milestone in the process of confirming Getting Building Fund payments for the following financial year.
7. The Annual Performance Review cannot be seen as a standalone event. Improvement plans and/or action plans after last year’s Annual Performance Review are reviewed throughout the year by the Cities and Local Growth Unit, including at the Mid-Year Review which took place in September 2020. Both reviews form part of the overall Annual Assurance Process which consists of the following elements:
a) Compliance checks against the National Local Growth Assurance Framework;
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b) Regular dialogue between the Cities and Local Growth Unit and LEPs ensuring that emerging issues and risks are dealt with early and that improvement and/or action plans are regularly reviewed and actioned;
c) Quarterly and bi-annual LEP monitoring returns including total spend, forecast spend and output metrics for the Enterprise Zones and Growth Hubs, with output monitoring for the Local Growth Fund;
d) On-going monitoring of LEP progress by the Cities and Local Growth Unit, regular attendance at LEP boards and sub-boards to allow continuous assessment of overall progress with Growth Deal delivery to provide an early warning system which highlights any emerging risks so that prompt action can be taken to address these;
e) A Mid-Year Review (September/October); and
f) An Annual Performance Review (January/February).
8. The Annual Performance Review provides government and LEPs with the opportunity to:
a) Reflect on the LEP’s performance over the last six – twelve months in the areas of governance, delivery and strategic impact;
b) Elaborate on key issues highlighted in their pre-annual performance review return and in the outcome of the Mid-Year Review;
c) Showcase the progress to date on delivery of strategic economic objectives and programmes;
d) Reflect on their current position and highlight to Government any barriers they are encountering; and
e) Look forward to the major priorities and challenges expected in 2021-22.
9. The formal elements of the Annual Performance Review take place in the context of on-going and trusted dialogue between Cities and Local Growth Unit Area Leads and LEPs. Performance issues ought to surface and be dealt with in real time, in an honest and open fashion, and so the Annual Performance Review should not include any surprises for either LEPs or the Cities and Local Growth Unit.
Mid-Year Reviews
10. Following the Mid-Year Review a formal note was agreed. For the avoidance of doubt, matters that develop between the Mid-Year Review and the Annual Performance Review will be taken into consideration at the Annual Performance Review.
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Annual Performance Review Meeting
11. As in previous years, the 2020-21 Annual Performance Review process will focus on three themes of Governance, Delivery and Strategic Impact. Note, we have further clarified “Delivery” and refer to it as Growth Programme Delivery in order to reflect Local Growth Fund (LGF), Getting Building Fund (GBF), Enterprise Zones etc.
a. Annual Performance Review meetings will take place between 25 January and 12 February 2020. The Cities and Local Growth Unit and LEPs will follow the current COVID-19 government guidelines when planning the meeting. It is expected that the meeting will take place via video conference. The meetings will be chaired by a Cities and Local Growth Unit Area Lead or a Deputy Director where appropriate. LEP representation is in line with the National Local Growth Assurance Framework, allowing for flexibility in who represents the LEP. LEPs should agree their attendance with the Area Lead. b. It is also suggested that the LEP’s delivery lead is present and a representative from the MCA if Local Growth Fund forms part of the Single Pot or the MCA are leading the delivery of the Getting Building Fund.
12. LEPs may be expected to discuss the following in the Annual Performance Review meetings as a minimum:
a) Governance i. Actions from the Mid-Year Review, Action or improvement plans; ii. Update on progress against the diversity statement/plan; iii. Any further challenges faced during this exceptional year.
b) Growth Programme Delivery iv. Actions from the Mid-Year Review, Action or improvement plans; v. Quarter 2 2020-21 Getting Building Fund data returns vi. Quarter 2 2020-21 Local Growth Fund data returns; and vii. Any COVID-19 impacts on delivery.
c) Strategic Impact viii. Actions from the Mid-Year Review, Action or improvement plans; ix. Recovery and Growth Strategy Planning update
13. Ahead of the Annual Performance Review meeting, Cities and Local Growth Unit Area Leads will gather information from a variety of sources in preparation for the discussions. This will include data returns on government-funded projects and programmes, as well as an assessment on the progress against the agreed actions from the Annual Performance Review last year and the Mid-Year Review. Where improvement plans were agreed following the 2019-20 Annual Performance Review, there is a specific agenda item to review them.
14. The meeting agenda (Annex D) will be streamlined and agreed with LEPs in advance in order to provide opportunities for LEPs to table agenda items for discussion.
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15. An Indicative Outcome will be shared with LEPs ahead of the APR. As with last year, this will not include any discussion of mitigating circumstances, other than where the formal National Local Growth Assurance Framework exemptions have been followed or institutional change is understood to be in progress. This Indicative Outcome may change during the APR and will cover met / action needed for the three outcomes of Governance, Strategic Impact and Delivery. This will be used to frame the discussion and focus LEPs on improvement areas.
Annual Performance Review Preparation Report (Annex A)
16. LEPs are required to submit the Annual Performance Review Preparation (Annex A) by 20 January 2021. This deadline has been set in order to create parity between all LEPs, so they have the same amount of time regardless of when their Annual Performance Review meeting is scheduled. The purpose of Annex A is to help shape discussions at the Annual Performance Review meeting. It is not intended to be a detailed record of all evidence. Any additional information, wider context and mitigating circumstances that a LEP wishes to be taken into consideration should be briefly noted in the free text boxes, for discussion at the Annual Performance Review meeting. LEPs should request specific agenda items accordingly. It is intended that there should be “no surprises” for either the LEP nor the Cities and Local Growth Unit.
Quarter 2 LEP Data Return
17. The Cities and Local Growth Unit will also utilise specific Local Growth Fund and Getting Building Fund data returns in order to establish an accurate view of delivery performance. So that the Cities and Local Growth Unit can conduct appropriate analysis, the quality of this data return is also important, and this will be a category requirement for delivery (see Performance Assessment Key Indicators Annex F). LEPs are required to ensure that data returns are fully completed and accurate and that they have a consistent use of language (i.e. project names).
Compliance Checks
18. The Cities and Local Growth Unit have completed a compliance check of all 38 LEPs during October and November with feedback now being shared with LEPs. LEPs are required to resolve any issues found within the timescales stated in the feedback; usually within 10 working days.
LEP Annual Performance Review Returns
19. There are a number of actions that LEPs are required to take in accordance with the National Local Growth Assurance Framework (summarised in paragraph 26).
20. The Section 151/73 Officer must submit their S151/73/127 Officer Assurance Statement (Annex B) to the Cities and Local Growth Unit at [email protected] copying the relevant Cities and Local Growth Unit Area Lead by the deadline of 20 January 2021.
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21. The LEP must submit their Governance Assurance Statement (Annex C) to the Cities and Local Growth Unit at [email protected] copying the relevant Cities and Local Growth Unit Area Lead by the deadline of 20 January 2021. In addition, the statement must be published on their website by 24 February 2021, with confirmation sent to [email protected] copying the relevant Cities and Local Growth Unit Area Lead.
22. The Section 151/73 Officer must write to the Ministry of Housing, Communities and Local Government’s (MHCLG) Accounting Officer (a template is provided in Annex E) by 24 February 2021. Letters should be addressed to:
The Permanent Secretary Ministry of Housing, Communities and Local Government 2 Marsham Street London SW1P 4DF
And sent via email to: [email protected] copying in the relevant Cities and Local Growth Unit Area Lead.
23. Unless otherwise agreed, these are the deadlines for the submission of LEP documentation to [email protected] copying the Cities and Local Growth Unit Area Lead:
Documentation Deadline
Annual Performance Review Preparation (Annex A) 20 January 2021
Section 151/73 Assurance Statement (Annex B) 20 January 2021
Governance Assurance Statement (Annex C) 20 January 2021
Section 151/73 Assurance Letter to the Accounting 24 February 2021 Officer (Annex E) – details in paragraph 23
24. The LEP Board should be informed that the Annual Performance Review meeting is taking place. LEPs may wish to share the completed documentation with the LEP Board prior to submitting it to the Cities and Local Growth Unit.
DfT, ESFA and Homes England Engagement
25. As with the last year’s Annual Performance Reviews, representatives from other government departments may attend. LEPs should make their Area Lead aware in good time if they want a nominated person to attend.
Freedom of Information
26. Please note that the Cities and Local Growth Unit is bound by the Freedom of Information Act and may have to disclose contents of this document on request.
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Following the Annual Performance Review Meeting
Record of the Annual Performance Review Meeting
27. The Cities and Local Growth Unit will produce a short record of the meeting which will include any agreed actions. This will be shared with the LEP and Section 151/73 Officer for comment and agreement ahead of being formally issued at the end of the Annual Performance Review process.
Performance Assessment
28. Following the Annual Performance Review meeting, the Cities and Local Growth Unit will undertake a performance assessment. This will look at the performance of the LEP across each of the three themes and will be based on a holistic view of LEP performance. The review will highlight and capture areas of good practice and/or areas for further development. This will involve reviewing the information provided for the Annual Performance Review along with other sources including (but not limited to): Growth Deal data returns and LEP governance processes and policies.
Performance Assessment Outcomes 29. At the conclusion of the process LEPs will receive an outcome of either “requirements met” or “action needed” for Growth Programme delivery, Governance and Strategic Impact. Recognising the unprecedented impact and requirements of COVID 19 for LEPs, contextual information will be included as appropriate.
30. Annex F Performance Assessment Key Indicators provides an overview of some of the recognised key indicators, which are the same as last year and are used to inform the Outcomes. It is important to note that this list is not exhaustive, and that Performance Assessment Outcomes will be based not only on the information provided as part of the Annual Performance Review, but also on a holistic view of the assurance elements as outlined in paragraph 7.
31. In the interest of transparency, the Cities and Local Growth Unit have also included a number of category requirements for governance and delivery. The Cities and Local Growth Unit will take consideration of appropriate COVID Exemptions and mitigating circumstances that might have prevented LEPs reaching a category requirement at the National Moderation. LEPs are required to table this evidence before the APR meetings for discussion at the APR meeting in order that both parties are aware of the issues. This will make for an open and productive discussion at the meeting. The Cities and Local Growth Unit will communicate additional delivery category requirements to LEPs.
APR National Reflection
32. Following the conversations conclusion, teams from across the Cities and Local Growth Unit will come together to take stock, review the outcomes and discuss any particular areas of concern, opportunities and challenges.
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33. If a LEP receives an outcome of action needed, the LEP will be required to produce an improvement plan which needs to be submitted to the Cities and Local Growth Unit Area Lead. These plans may be subject to Ministerial approval in the future. In addition, should there be a decision to withhold any funding, the LEP will be required to produce an action plan which sets out clear milestones/indicators to trigger the release of any further funding.
34. A deep dive may be triggered if a LEP is non-compliant against any of the requirements in the National Local Growth Assurance Framework or where they receive an action needed outcome. The Cities and Local Growth Unit may also conduct deep dives on LEPs selected randomly as part of the overall annual assurance process.
Outcome
35. The outcomes of this review, along with any further actions identified and the notes of the Annual Performance Review will be shared formally with the LEP by the Cities and Local Growth Unit Director once the process has been concluded, which is expected to be during April 2021.
36. The outcomes of the Annual Performance Review will, where appropriate for the LEP inform whether or not, and in what way, the Getting Building Fund payments will be released. Where the need for further improvement is identified, the LEP must acknowledge this and set out an improvement plan, with milestones, to address the issue. If it is deemed that it is appropriate to apply conditions or sanctions in relation to future payments this will be communicated to the LEP at the earliest possible opportunity and an action plan agreed with Cities and Local Growth Unit.
Forward Look
37. The Cities and Local Growth Unit is committed to continually reviewing and improving this process. This is only possible with collaboration from across the LEP Network working group, and the Cities and Local Growth Unit plan to continue to engage on the development of the LEP assurance process going forward.
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Indicative Timeline
Timing/deadlines Activity
December Annual Performance Review Guidance Issued
Annual Performance Review Preparation (Annex A completed) LEP return
20 January Section 151/73 Assurance Statement LEP return
Governance Assurance Statement LEP return By 21 January Indicative Outcomes Provided to LEPs
25 January – 12 February Annual Performance Review Meetings
February - March Cities and Local Growth Unit moderation
Section 151 Officer assurance letter to MHCLG Accounting Officer 24 February
Publication of the Governance Assurance Statement
Quarter 3 Local Growth Fund and Getting Building 26 February Fund data returns deadline
Outcome letters sent to LEPs from the Area Deputy April Director Completion of the Annual Performance Review May process and Getting Building Fund payments
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Annex A –2020-21 Annual Performance Review Preparation
Annex A is provided as a standalone Excel document.
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Annex B: S151/73/127 Officer Assurance Statement Template (also supplied in Word)
The Section 151/73 /127 Officer should here provide a report to the Annual Performance Review on their work for the LEP over the last twelve months, and their opinion, with a specific requirement to identify any issues of concern, on governance and transparency. The report should focus on any issues raised in Annex A: Annual Performance Review Preparation. This report should be sent to the Assurance Team via [email protected], copying the Cities and Local Growth Unit Area Lead by 20 January 2021. (max 500 words)
Signed: Name: Position: [Chair] Date:
Signed: Name: Position: [Chief Exec] Date:
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Annex C: Governance Assurance Statement Template (also supplied in Word)
The LEP Chair and Chief Executive should here provide a brief formal assurance statement on the status of governance and transparency. This should include any overview and scrutiny function undertaken by the Accountable Body. This should be sent to the Assurance Team via [email protected], copying the Cities and Local Growth Unit Area Lead, by 20 January 2021. This statement should also be published on the LEP’s website by 24 February 2021 and confirmation sent to the email address above. (max 500 words)
Signed: Name: Position: [Chair] Date:
Signed: Name: Position: [Chief Exec] Date:
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Annex D: APR Meeting Agenda Template
[Insert LEP Name] Annual Performance Review 2020-2021
Date: Time:
Suggested headings/discussion points:
1. Introductions
2. Purpose of the Annual Performance Review
3. Governance:
a. Mid-Year Review Governance actions and progress b. Review of general performance and compliance, including action needed areas c. Diversity statement and Board membership d. Any further challenges faced during this exceptional year
4. Delivery:
a. Mid-Year Review Delivery actions and progress b. Getting Building Fund data returns c. Local Growth Fund data returns d. Progress on published Delivery Plan e. Any COVID-19 impacts on delivery
5. Strategic Impact
a. Mid-Year Review Strategic Impact actions and progress b. Recovery and Growth Strategy Planning update
6. LEP feedback 7. AOB 8. Summary of Actions and Next Steps
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Annex E: S151/73/127 Officer Assurance Letter Template (also supplied in Word)
Permanent Secretary Accounting Officer Ministry of Housing Communities and Local Government 2 Marsham Street SW1P 4DF
Responses should be submitted by email to: [email protected]
Date:
Dear Permanent Secretary
Re. [INSERT NAME] LEP
As the Section 151/73/127 [delete as appropriate] Officer for [INSERT NAME OF ACCOUNTABLE BODY]), the LEP’s Accountable Body, I would like to confirm that myself and my deputies have undertaken all the necessary checks to ensure that the LEP has in place the processes to ensure the proper administration of their financial affairs.
[Accordingly, having considered all the relevant information, in my role as the Section 151/73/127 [delete as appropriate] Officer, I am of the opinion that the financial affairs of the LEP are being properly administered. The LEP’s Local Assurance Framework is compliant with the minimum standards as outlined in the National Local Growth Assurance Framework (2019).]
OR
[Having considered all the relevant information, in my role as the Section 151/73/127 [delete as appropriate] Officer I am of the opinion that unfortunately the financial affairs of the LEP are not being properly administered. My main concerns are [please provide details]. I have advised the LEP Board that in order to rectify this, my recommendations are [please provide details]. The LEP have assured me that they are working to deliver my recommendations by [date]. I will write to you in due course with an update.]
Yours sincerely,
[NAME OF S151/73/127/127 OFFICER [NAME OF ACCOUNTABLE BODY]
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Annex F: Performance Assessment Key Indicators
The Cities and Local Growth Unit recognises that a LEP has autonomy over how it implements the National Local Growth Assurance Framework (January 2019), to ensure compliance. It is appreciated that there is not a “one-size-fits-all” approach and that each LEP will face different circumstances and challenges.
It is important that the Nolan principles are embedded throughout the work of any LEP, from its governance to its delivery and strategic impact. Capturing how these principles are embedded requires consideration on a case-by-case basis. The outcome of the Annual Performance Review is to arrive at a set of agreed actions from an assessment of performance against the three themes of governance, growth programme delivery and strategic impact.
The information contained in this document is not exhaustive. Every LEP will have areas in which it can improve. The intention of the Annual Performance Review is to help LEPs identify these areas and form a considered plan to improve. The Cities and Local Growth Unit has set out some of the characteristics which may be demonstrated by LEPs across the requirements Met / Action Needed, for growth programme delivery, governance and strategic impact. These will be familiar and are consistent with those used previously. A series of category requirements are also included for delivery and governance which must be met by the LEP. If any criteria are not met, mitigating circumstances will be considered and the LEP will be provided with opportunities to raise these before and/or during their APR meeting.
For the avoidance of doubt, any exemption or extension to the National Local Growth Assurance Framework as granted by the department which a LEP has relied upon will be taken into consideration alongside the use of freedoms and flexibilities.
Areas included under each theme
Governance Growth Programme Delivery Strategic Impact Culture and Accountability Board Membership Delivery of Investment Programmes Strategic Development Governance Policies Section 151 Officer Management of Risk Strategic Delivery Transparency Continuous Improvement External Communications and Branding Strategic Collaboration Engagement and Challenge Structure and Decision Making
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Performance Indicators
The met outcome covers a wide range of performance and includes LEPs who will have shown very strong and reliable performance through the year.
Examples of met for Governance will include LEPs that meet the guidance set out in the National Local Growth Assurance Framework, where there is a culture of accountable and transparent governance and scrutiny, and where it is evident that the Nolan principles are embedded throughout. There should be clear and transparent structures and processes in place to ensure decisions are evidence based, with active private sector challenge and engagement throughout the decision-making process. There should be evidence of collaboration and engagement with external stakeholders with the LEP showing confidence, inspiration and influence. LEP Board membership should have diverse representation. There is a strong business voice; the Board has two thirds private sector representation. Succession planning for the Board is considered as met, and new members have a thorough induction programme so that they are able to make a strong contribution from the start. The LEP is reactive to improvement opportunities.
Being in receipt of a met outcome for Growth Programme Delivery will include LEPs that get the basics right, have an effective programme management, which enables programmes to be delivered to its expenditure profiles and achieve planned outputs Met over their lifetime. The LEP has an agreed pipeline of projects which is publicly available and underpinned by transparent selection processes. The pipeline is correctly aligned to the LEP’s strategic priorities and generally delivers value for money. The LEP has a clear, managed approach to risk including appropriate and deliverable mitigations which are presented to Board. The LEP will promote the projects it supports, with recognition of Government. The LEP generally adheres to the branding and communications guidelines.
Where the LEP has not provided data to confirm its LGF programme is currently more than 90% contractually committed with a projection to be 100% contractually committed and is not on track to complete expenditure this financial year, the LEP will not be able to obtain an outcome of met for the theme of delivery.
Requirements met for Strategic Impact will include LEPs that have continued to develop their strategic thinking in the past year, including supporting the wider COVID-19 response and ongoing development of its evidence base. There is evidence of a strategic focus, clear vision informed by the local area and LEP board, and engagement with local stakeholders. There is clear evidence that the LEP uses its “soft powers” (i.e., outside of government funded growth programmes) to take forward delivery of its strategic priorities during the year; the LEP demonstrates that it is a strong convenor/coordinator of partners to ensure delivery of its strategic priorities. The LEP is a strong convenor /coordinator of local partners, ensures targeted engagement in the broader business community (for instance with chamber of commerce, other BROs VCSE etc.), and collaborates effectively
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through cross-LEP and regional forums to build strategic alliances. The LEP has a good understanding of its local economy drawing largely from local evidence and experience. The LEP sets clear KPIs from the outset, with regular monitoring so that the LEP is clear about how the economy and its places are changing through time, informing its plans and investment decisions.
A LEP receiving an outcome of action needed means that they are not up to the standard expected and that there are specific areas where the LEP needs support to improve. Any LEP who does not meet the minimum requirements of met may be assessed action needed. This does not make a LEP a poor performer.
A LEP may receive the outcome of action needed for its Governance where a LEP does not yet meet the standards expected by government as set out in the National Local Growth Assurance Framework and/or where the Nolan principles are not operating as expected. Examples of where LEP’s maybe given the outcome of action needed are where the LEP’s local assurance framework has multiple areas of improvement needed and/or where the LEP is not fully implementing its local assurance framework. Where a LEP could make improvements towards a culture of good governance, it may not be evident that the Nolan principles are at the core of the LEP and sufficiently embedded in all aspects of the LEPs work. There is limited debate/discussion when making decisions or the private sector voice is crowded out. The LEP has fallen below the target on board representation and size and there is not sufficient evidence to assure government that the LEP will reach and maintain this. Succession planning for Board members is weak and induction programmes are limited. There may be some evidence of collaboration and engagement with external stakeholders, but this does not meet the standards of met. The LEP may have made Action ad hoc improvement which is pursued as a result of external pressure or not undertaken in a timely manner. Needed
A LEP maybe in receipt of action needed for Growth Programme Delivery where the LEP is at some risk of not achieving its investment programme expenditure profiles, and risk of underperforming on the delivery of outputs. The LEP has an agreed pipeline but there has been no active review recently. The pipeline lacks transparency, robustness and strategic direction and does not represent the best value for money. There is limited management of risk with some evidence of Board oversight, limited evidence of the appropriate use of mitigations, project reviews and reporting. The LEP only promotes some of the projects it supports and/or recognition of government support is very inconsistent. Branding and communications guidelines are not often enforced.
LEPs maybe in receipt of action needed for Strategic Impact include those where the LEP shows little or no evidence of ongoing strategy development or engagement in the wider local COVID-19 response. There may be insubstantial evidence of strategic focus on priorities, of a clear vision, and of local engagement and understanding. The is limited evidence of action from the LEP in collaborating with neighbouring LEPs, or it may be is willing to work with neighbouring LEPs but is not pro- active. There is little or no evidence of the LEP making contributions at a sub-national or national level. The LEP has had some limited success in convening/coordinating local partners, but rarely works through cross-LEP or regional forums and rarely
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provides any leadership to such collaboration. The LEP can struggle to convene/coordinate local partners and/ or there is evidence of significant local stakeholder disquiet. The LEP does not set clear KPIs or makes limited use of KPIs to inform its strategy.
Category Requirements
Where the S151 Officer (or a senior representative) has not attended at least one LEP Board meeting during this financial year, the LEP may not be able to obtain an outcome of met for the theme of Governance. If the LEP has not maintained 1/3 female rep (33%) (excluding co-opted members), the LEP may not be able to obtain the assessment outcome of met for the theme of Governance. Where there are outstanding compliance issues that were originally raised in checks undertaken during October / November 2020, at the Annual Performance Review the LEP may not be able to obtain an Governance outcome of met for the theme of governance. Where the LEP board size exceeds 20 (excluding co-opted members), the LEP will receive an outcome of action needed for the theme of Governance. If the LEP has not maintained two thirds private sector board representation (excluding co-opted members), the LEP may not be able to obtain an outcome of met for the theme of Governance. Where there has been a non-compliance issue noted against the National Local Growth Assurance Framework, and where it was not resolved either within ten working days, or within the agreed timescales that the LEP stated, the LEP may not be able to obtain an outcome of met for the theme of Governance. The LEP shall be considered to have met the requirements of the National Local Growth Assurance Framework where it is on track to deliver against expenditure and output profiles (subject to mitigating Growth Programme Delivery actions and freedoms and flexibilities) across its growth programmes. The LEP is found to have action needed for the theme of delivery where there is a significant risk that growth programme delivery would not be achieved and actions to mitigate risks have not been managed.
Strategic Impact There are currently no set criteria that would affect the assessment on this theme.
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Progress towards achieving the milestones set out in the Improvement Plan will be taken into Improvement Plans consideration. The LEP must demonstrate a genuine and sustained commitment to improving against all actions contained within the plan or will otherwise be considered as having action needed.
NB. Any additional category requirements for delivery will be communicated to LEPs
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STEP MINI-SITING COMPETITION
Agenda
STEP MINI-SITING COMPETITION 1. ISSUE
1.1 Updating Board members on the STEP Mini-Siting Competition.
2. RECOMMENDATIONS 2.1 That the Board: a) note that the STEP mini-siting Expression of Interest exercise closed on 8 January 2001; b) note that consultants have been appointed to assess the mini-siting competition; c) note that applications need to be submitted to UKAEA by 31 March 2021. 3. BACKGROUND 3.1 The UKAEA has opened a siting competition to identify a 100 hectare site to host the Spherical Tokamak for Energy Production (STEP) fusion facility. This process is likely to be highly competitive and as such CLEP and its partners want to ensure that Cumbria puts forward the strongest possible site. The Board agreed at a Bird Table that the Executive should look to develop a process to help secure the strongest possible application from Cumbria and deploy resource to help achieve this. 3.2 A STEP ‘launch’ event took place on 16 December with Rebecca Weston and Tris Denton, UKAEA answering questions from over 50 partners about the STEP opportunity. On the back of this event, CLEP launched an Expression of Interest (EoI) exercise to identify suitable sites, with landowners and site promoters invited to submit sites using the form at Annex A. This resulted in the submission of two sites – one nominated by Barrow Borough Council and the other by Copeland Borough Council. 3.3 In parallel, a tender specification was issued to assess the relative merits of any EoIs; identify the strongest site in terms of meeting UKAEA’s criteria; and then to work with the site promoter/landowner to develop their full application. Five organisations tendered for this work and after assessment of the bids Mott MacDonald was offered and accepted the contract to complete the work. 3.4 The work programme is now being mobilised with the intention being to prepare a really strong Cumbrian bid for submission by 31 March 2021 deadline. In addition, CLEP will be working with NW and Northern partners to secure support for the Cumbria submission.
ANNEX A
CUMBRIA LEP SPHERICAL TOKAMAK FOR ENERGY PRODUCTION (STEP) MINI-SITING COMPETITION
EXPRESSION OF INTEREST FORM
Cumbria LEP is working with its partners to identify a site in Cumbria, which has a very strong fit with UKAEA’s criteria for the national open call to identify a suitable site to locate STEP. In order to identify Cumbria’s strongest site Expressions of Interest are now invited from landowners and site promoters to put forward sites that are felt to be suitable.
Landowners and site promoters wishing to nominate a site are invited to complete this form and return it to [email protected] by 11.59pm on Friday 8 January 2021.
PROPOSER’S DETAILS
Name of Submitting Individual
Name of Organisation
Name of Landowner (if different)
Is the Landowner’s Permission YES/NO Secured (Delete as appropriate)
If not, what plans are in place to secure this?
ISSUES FOR RESPONSE
ISSUE RESPONSE Please outline why you believe the site is a suitable, in terms of fit with national and local policies, including planning?
ISSUE RESPONSE Are you aware of any policy barriers or concerns that would present challenges in taking this site forward?
Has the site previously been declined regulatory permissions for the operation of a major industrial facility on any grounds of human or environmental safety? Please confirm that the proposed site can be made available to STEP on an unfettered and enduring basis? Does the site comprise a minimum land footprint of 100 Hectares? Is there any designated cultural, historically significant, or archaeologically sensitive sites partially or wholly on the site? Is the site a designated Natura 2000 sites - partially or wholly?
Will the land proposed be made available to STEP on an acquisition or lease basis? If leased, what terms would be proposed? Please give an indication of likely costs associated with selecting this site for STEP, including enabling access, if needed.
SUPPORTING INFORMATION
Please provide with your Expression of Interest a marked map and open-source satellite imagery denoting the proposed site
FORM TO BE RETURNED TO [email protected] BY 11.59PM ON FRIDAY 8 JANUARY 2021 FUTURES FORUM
Agenda EXPORT PLAN UPDATE
Agenda
EXPORT PLAN 1. ISSUE
1.1 Updating Board members on the development of Cumbria’s Export Plan.
2. RECOMMENDATIONS 2.1 That the Board note this report. 3. BACKGROUND 3.1 The Department of International Trade (DIT) is supporting CLEP with funding to support export development activity in Cumbria. In order to take forward this work DIT and CLEP jointly recruited Sarah Peak, with DIT seconding her to Cumbria as Export Manager on a temporary contract until 31 March 2021. Sarah will attend the Board meeting to introduce herself to the Board and to present the report. 3.2 Sarah will lead on the establishment and development of an Export Plan for Cumbria. She will also engage in and drive forward collaborations with key trade and business support parties to maximise DIT’s services and programmes to increase international trade in Cumbria. 3.3 Mickledore Ltd has been appointed to develop the Export Plan. The plan will support the delivery of the export specific elements of the CLEP’s Internationalisation Strategy. 3.4 The Export Plan is intended to provide a practical series of steps to maximise the effectiveness of export support activities. The purpose of the plan is to improve the overall export performance of the Cumbrian economy. There is a clear focus on additionality and ensuring that existing activity is not duplicated and that this does not support activity that would take place anyway. 3.5 The approach to the Export Plan is: • Evidence based - supplementing existing data which has limitations. • Barriers/Enablers - areas which help or hinder exporting and what interventions can be deployed. • Best Markets - that offer the best opportunity based on the UK’s position and the sector strengths and Cumbrian experience. • Best Practice - locations which have provided the best support to their exporters. • Packaging and Presentation - how the export support and export opportunity can be packaged for Cumbria’s businesses. • Routes to Market – the agencies, people and different approaches which can be deployed. 3.6 Research is being carried out throughout January, which focuses on interviewing businesses on a one to one basis and delivering virtual round tables across a range of sectors from manufacturing to food and services. These are to
understand the challenges and rewards that businesses have faced when exporting and to find out their awareness of the DIT and the services it offers. 3.7 CLEP is working closely with the seven Cumbrian Export Champions to understand their export experiences and recommendations for new types of support to help Cumbrian businesses succeed in trading internationally. 3.8 The Export Plan will be completed in February, together with an action plan that can be implemented immediately. 3.9 A marketing/communication plan has been launched to the business community in Cumbria, outlining the services available from the DIT to help them plan for exporting. This could be from 10 hours of webinar training courses to grants that can be used to support market research or enabling businesses to get their website ready for trading in the global marketplace. COMMUNICATIONS UPDATE
Agenda
COMMUNICATIONS
1. ISSUE
1.1 An update on CLEP communications activity.
2. RECOMMENDATION
2.1 That the CLEP Board note this report.
3. BACKGROUND
Introduction
3.1 CLEP continues to support the multi-agency response to COVID-19 through its membership of the Local Resilience Forum’s (LRF) Strategic Co-ordination Group, Strategic Recovery Co-ordination Group, Health Protection Board and other Sub-Groups, in particular the Business and Economic Response and Recovery Group (BERRG). John Reynolds, Head of Communications, and Lucy Clarke, Media and Communications Officer, have provided the communication support function for BERRG since its inception in March, 2020. 3.2 They also continue to sit on the LRF’s Strategic Media Advisory Cell (SMAC), which includes representatives from Cumbria’s major public sector and health authorities. 3.3 In addition to the requirements demanded by the COVID-19 pandemic, communications activities relating to all other aspects of CLEP’s programme continue. These include proactive and reactive media relations work, delivery of a growing social media work stream, partnership work with other organisations on communications projects of mutual interest, support to the internal communications function and communications support to specific CLEP projects. Priorities 3.4 That workload will continue into 2021. Priority activities for the Communications Team’s 2021 work programme are outlined in the remainder of this report. Local Resilience Forum 3.5 The Communications Team will continue to prioritise support for Cumbria’s LRF structure, in particular BERRG and SMAC. 3.6 BERRG is the LRF group tasked with developing the county’s business and economic response to COVID-19. SMAC continues to provide a forum through which communications relating to COVID-19 and agencies’ responses to it can be co- ordinated and aligned, where necessary. At each meeting, updates are provided in relation to BERRG’s activities and communication requirements.
Business Support Communications Plan 3.7 The Communications Team will continue to prioritise assistance to CLEP’s Business Support programme. 3.8 CLEP is offering free expert professional services support on a time-limited basis to the county’s Small and Medium Enterprises (SMEs) through a number of targeted interventions. CLEP is also offering advice and guidance in areas such as export procedures and EU Transition. 3.9 A communications tactical plan has been developed covering all aspects of Business Support and is reviewed on a weekly basis with all relevant team members. Appropriate activities are therefore planned across the various communications channels available and individuals or teams tasked with delivery. Skills Programme Communications, including Careers Hub and Our Future Campaigns 3.10 The Communications Team will continue to prioritise assistance to CLEP’s Skills programmes, with particular reference to the Careers Hub and Our Future campaign. 3.11 Working with the CLEP Head of Skills, the team will access available Careers Hub funding to further raise the profile of the project and encourage wider participation across all sectors. This will be achieved through a multi-channel approach utilising both traditional and new media. 3.12 A tactical communications plan has been developed to provide the framework for regular communications and will be reviewed on a monthly basis with appropriate CLEP team members. 3.13 The Communications Team will also work closely with the CLEP Head of Skills to re-energise the ‘Our Future’ campaign, which is aimed at highlighting the opportunities available to Cumbria’s young people but which was paused due to the COVID-19 pandemic. Your Future Campaign Communications 3.14 The Communications Team will continue to prioritise further rollout of the Your Future campaign. The campaign, which was launched last year, is aimed at highlighting the opportunities available within Cumbria to those living outside the county but now open to the idea of re-location. It was paused due to the COVID-19 pandemic but enforced home working for many has illustrated the potential for living and working in areas with enhanced quality of life. 3.15 The team will re-engage with other partner agencies to deliver a co-ordinated campaign with agreed messaging showcasing Cumbria’s appeal as a location in which to live, work and invest.
Futures Forum Communications Support 3.16 The Communications Team will prioritise support for the Futures Forum. Members will recall that the ‘Futures Framework’, produced by the Forum, was endorsed at the last Board meeting. 3.17 CLEP instigated the Forum to ensure that the views of young people were taken seriously and represented at a strategic level in relation to the economic development opportunities and challenges faced by the Cumbrian economy. 3.18 The Forum will undertake a number of roles and responsibilities in areas such as strategic development and partnership building, investment, risk, co-ordination and advocacy. The Communications Team will engage with Forum leaders on a regular basis to offer assistance and support, wherever possible.
CHIEF EXECUTIVE’S REPORT
Agenda
CHIEF EXECUTIVE’S REPORT
1. ISSUE
1.1 Updating the Board on CLEP activity not covered elsewhere in the Board Papers.
2. RECOMMENDATION
2.1 That the Board note the report.
3. BACKGROUND
3.1 The Board has agreed that the Chief Executive should provide an update on CLEP’s activities not covered elsewhere on the agenda. This report provides that update.
RELATIONSHIP MANAGEMENT
Policy Roundtables
3.2 Since the previous Board meeting CLEP has participated in three roundtables: an Industrial Strategy Council online discussion; a rural policy discussing hosted by DeFRA; and a BEIS Select Committee roundtable on Industrial Strategy, EU Exit and COVID Recovery. Further details on any of these are available on request.
Levelling Up Fund
3.3 CLEP is participating in a round table discussion with HMT and a small number of other LEPs on the emerging Levelling Up prospectus.
STRATEGY
Recovery Strategy
3.4 Restart, Reboot, Rethink has continued to evolve since the previous Board meeting. The pace of implementation has clearly been affected by Tiering restrictions and the most recent lockdown. The focus has therefore been on developmental work to support the Rethink themes including STEP and its contribution to clean energy and Freeports and its contribution to Diversify to Thrive. Additionally. work is underway on the Future of Farming with next generation leads considering opportunities to inform the work of the Rural Sector Panel.
Digital Strategy
3.5 A Task and Finish Group has been formed to refine and finalise the Digital Strategy. A sharper, better presented document was provided to the Task and Finish Group, which received further helpful development comments. A further revision to the strategy is being prepared and this will be subject to consultation
across the wider governance structure. However, this has been paused given the escalation in COVID case levels. The intention is that this will now move to late February, dependant on circumstances.
Consultations
House of Commons Treasury Committee - Call for Evidence on Changes to the Green book
3.6 CLEP has prepared a draft response to the Treasury Committee’s call for evidence on changes to the Green Book, on behalf of the LEP Network. This proposes 5 recommendations for Government:
• Recommendation 1 – To be clear on the relevant ‘unit of place’ over which costs and benefits should be assessed in designing new programmes, for example the UK Shared Prosperity Fund and Levelling Up Fund.
• Recommendation 2 – to be much clearer how place based impacts are to be taken into account in programmes without a specific spatial focus but with major spatial implications e.g. the roads programme.
• Recommendation 3 – to clarify how to use the employment multiplier values put forward in the revised Green Book at different spatial levels.
• Recommendation 4 – to consider adding supplementary guidance to the Green Book or ensuring consistent cross departmental guidance on measuring jobs and on the longevity of different forms of interventions.
• Recommendation 5 – to define what it means by ‘levelling up’, what metrics should be used to assess success/ contribution to this objective and set appropriate targets.
3.7 A copy of the draft response is available on request.
Union Connectivity Review – Call for Evidence
3.8 Cumbria County Council and CLEP submitted a response to the Union Connectivity Review, which is being led by Sir Peter Hendy. The purpose of the Review is to consider transport connectivity between the nations of the UK. The Review Team is currently reviewing the submissions made.
DELIVERY Working Arrangements 3.9 CLEP continues to operate working from home arrangements and is likely to do so for the immediate future, given the current lockdown and return to advice that ‘those that can work from home, should do so’. We are closely monitoring the wellbeing of the team given the now long-term nature of remote working and the additional pressures presented by the further lockdown. This includes family health and wellbeing, home schooling and shielding/isolation.
Towns Funds 3.10 CLEP continues to participate in the five Towns Deal Boards with the focus since the last CLEP Board being on Cleator Moor and Millom, both of which are due to submit their Town Investment Plans in late January. The Barrow Towns Board is now focussed on implementing the Towns Investment Plan following receipt of £25 million of investment. Feedback is still awaited on Carlisle and Workington’s Town Investment Plans. 3.11 Government made its announcements on the Future High Street Fund, which confirmed that Maryport Town Centre had received £11,527,849 of funding and Carlisle City Centre had received £9,129,874. Unfortunately, Barrow did not receive an allocation. The bid for Whitehaven was withdrawn prior to decisions being made.
TRANSPORT AND INFRASTRUCTURE
Rail
Capacity Improvements on Furness Line
3.12 The Furness Line connects Barrow-in Furnace to Lancaster and is critical to supporting increased visitors and commuter demand.
3.13 Network Rail is of the opinion that the quickest and most cost-effective way to resolve a capacity issue is being addressed by Northern, current Train Operating Company, with its ongoing rolling stock replacement scheme. Barrow-in-Furness Council is still considering a redevelopment of the Station and a scope setting conversation took place with a developer in late December 2020. NR has yet to see the output from this but would welcome enhancements to the station and would look to facilitate access to DfT’s 106 funding if the project warranted this.
Lakes Line Improvements
3.14 The Lakes Line connects the West Coast Mainline at Oxenholme to Windermere in the heart of the Lake District World Heritage Site. The Line is critical to supporting the visitor economy and clean growth by enabling visitors to travel in a more sustainable way. Capacity improvements are required to support increased services between Oxenholme and Windermere
3.15 The size of the potential project means this will be outside of the financial envelope for Small Operational Enhancement Fund projects as previously considered. This will now go forward as a Restoring Your Railway proposal (RYR), which is a government led and funded initiative controlled by the DfT. RYR is in tranches with T2 now closed so this will go forward as a T3 submission. The opening dates for T3 are yet to published but it is likely to be late January/early February and will be open for 6-8 weeks. The scope for the submission has been broadly defined by CCC and will demonstrate the need to improve capacity on the line to support sustainable travel and tourism in the Lake District. NR will assist in the creation of the submission, but it will be a CCC submission and will need the support of an MP.
Cumbria Coast Line - Capacity Improvements
3.16 The Cumbria Coastal Line is critical to major businesses in West Cumbria, including the servicing of national nuclear assets of Sellafield and Low-Level Waste Repository. The line has suffered from under-investment and requires upgrades to improve capacity and journey times. Investment in the line will also support inward investment and enhance service provision linked to major wind and nuclear investment opportunities.
3.17 The preparation of the Outline Business Case is underway and progressing in line with schedule for completion by Summer 2021. Efforts are being progressed to align delivery with the requirements of WCM and other developers. Particular focus is on strengthening the strategic and economic case, with external consultancy support being procured to assist. Funding for this procurement is within the available funds of the ECRU.
Port of Workington Bridge (Siddick Bridge)
3.18 This project will deliver a replacement road-over rail bridge serving as the Port of Workington’s only road access and demolish the existing deteriorating masonry arch bridge. The replacement bridge will safeguard access to the Port, as the existing bridge has structural weaknesses and is not suitable for long term HGV traffic.
3.19 A deliverable way forward has been agreed involving installation of a temporary level crossing to allow the Port to remain open whilst the permanent construction works takes place. Efforts to secure preferred site for the level crossing have been unsuccessful so an alternative is now being pursued with a planning submission made to Allerdale BC - securing this planning approval is on 'Critical Path'. Butterfly conservation is a priority at this new site. Project completion still targeted for May 2021 with bridge installation during Easter 2021.Project will remain at amber until land assembly and planning issues are resolved
Carlisle Station Gateway
3.20 The Carlisle Station Gateway will provide opportunities to improve the access arrangements, parking and will act as a catalyst for investment opportunities.
3.21 An Outline Business Case for improvements to Carlisle Station has been developed seeking £15m of Borderlands Inclusive Growth Deal funding. This was jointly developed by Cumbria County Council and Carlisle City Council, with Avanti West Coast and Network Rail both directly involved. The improvements include the pedestrianisation of Court Square to remove conflict between vehicles and people, improvements to the station frontage and retail offer within the station, improved access at the rear of the station with more public car parking and complimentary public realm improvements around the Pools site.
3.22 However, in response to the impacts of Covid-19, the financial case for the project had to be revisited and additional funding for the scheme was sought. The Borderlands Partnership Board has agreed to allocate an additional £5m to the
project as an over-programming commitment. This was conditional upon further activity being undertaken to secure funding from other sources in order to reduce the over-programming and to replenish the Borderlands funding pot. Following the termination of the rail franchise, dialogue has been re-opened with DfT to explore the potential for funding support.
Borders Railway
3.23 The Borderlands Inclusive Growth Deal commits £10m towards the feasibility work for the development of a business case to reinstate the railway line from Tweedbank to Carlisle. Transport Scotland is leading on the study. Borderlands has £5m from DfT for Border Railway Feasibility Study, with DfT progressing capacity assessment for Carlisle Station with Network Rail. Confirmation on funding being used for local strategic and economic assessment work is awaited.
Roads
Carlisle Southern Link Road (CSLR)
3.24 St Cuthbert’s Garden Village is within the Government’s Garden Town programme in recognition of the significant potential for housing led growth in Carlisle. Carlisle Southern Link Road is a new 8km road connecting Junction 42 of M6 to A595. This will unlock delivery of the 10,000 homes in St Cuthbert’s Garden Village while also enhancing cross city movement and M6 connectivity.
3.25 A funding contract is in place between CCC, Carlisle City Council and Homes England including additional funding of £32m to fast track the CSLR delivery programme. Planning permission was granted at the Planning Committee on 9 October 2020. The CPO has been made, negotiations with landowners are ongoing and procurement is underway for a contractor to undertake the detailed design and build of the CSLR. Construction is to commence in 2022 with road completion scheduled for May 2024.
A595 Grizebeck
3.26 The scheme seeks to improve connections between South and West Cumbria supporting major economic activity at BAE and Sellafield. The scheme would see a new 1km single carriageway road between Chapels and Grizebeck, to the east of the existing A595; significantly improving journey time reliability.
A595 Whitehaven Relief Road
3.27 This proposes a new eastern bypass of Whitehaven. This would transform journey times, resilience and reliability; enhancing access to major employment and nuclear sites to the south of town; it would also increase access to markets, employment and services while supporting housing and employment growth.
3.28 This was not included in RIS2 Funding announcement on 11 March 2020. The way forward is to promote A595 improvement needs through Highways England's Route Strategy Process and work to update Route Strategies, which will commence
shortly. This will be progressed by Highways England's Strategy and Planning Team and these strategy documents will be used to inform future investment decisions for the period after 31 March 2025.
A689 trunking/ Warwick Bridge Detrunking
3.29 The inclusion of the A689 between the A69 and M6 Junction 44 within the Strategic Road Network (SRN) seeks to ensure greater cohesion of the SRN and to enhance connections to Carlisle Lake District Airport.
3.30 The scheme is identified in TfN’s investment programme and there is dialogue with DfT about how and when it may be possible to move consideration of this proposal, forward. The Transport Secretary, Grant Shapps, MP previously confirmed that the DFT had identified the A689 east of the M6 Junction 44 as a potential candidate for trunking, because it would provide a direct connection for Carlisle Lake District Airport onto the SRN. However, the case for trunking of the A689 has been weakened following the closure of the airport for commercial flights as a result of COVID-19. Kendal Northern Access Route (KNAR)
3.31 KNAR is the preferred strategic transport scheme to reduce town centre congestion in Kendal, connecting the A591 and the A6 to the north.
3.32 A Strategic Outline Business Case (SOBC) was submitted to DfT in July 2019 for inclusion in the Large Local Majors programme, asking for £409k funding to contribute to the £509k required to prepare an Outline Business Case (OBC). The remainder of the funding would come from local contributions.
3.33 Following receipt of DfT’s final clarifications to support the business case in November 2020, a response was sent on 15 December 2020. A decision on funding for the next stage of business case development should now follow from the DfT. This is anticipated to take a minimum of six to eight weeks following the approval process set out by the DfT.
3.34 If a positive decision is reached on the SOBC, funding to develop an OBC would be received, in order to make the case for delivery funding. In developing the KNAR further, consideration would be given to the emerging South Lakeland Local Plan, the Environment Agency’s flood defence proposals for the north of the town and proposals that may emerge through the Local Walking and Cycling Infrastructure Plan for the town.
A595 Bothel Improvement
3.35 This scheme proposes a package of measures along a 5km section of the A595 near Bothel, in order to improve connectivity between Carlisle and west Cumbria. Enhancements include climbing lanes, carriageway realignment and junction improvements.
3.36 An Outline Business Case was submitted to the DfT in Autumn 2019 to secure £28.9m of funding to deliver this scheme. Clarifications from the DfT on elements of the OBC is ongoing and after a meeting with DfT in March 2020, significant further modelling information was requested. The recently updated West Cumbria Transport model is being used to prepare the additional modelling assessments and an updated business case will be submitted by the end of January 2021.
3.37 CLEP has allocated £5m of funding from the MHCLG Getting Building Fund, towards the total cost. This will fund further development of the entire scheme to get the scheme ‘shovel ready’, alongside detailed design and construction of the A595 Greyhound Inn/Torpenhow junction. The delivery of the wider scheme would be dependent on further funding, resulting from the approval of the business case by the DfT.
A590 Cross-a-Moor Roundabout
3.38 The A590 Cross-a-moor junction will provide access to residential development sites in Ulverston and in doing so help unlock a significant number of new homes.
3.39 Land negotiations are progressing with firm cost estimate expected in February 2021. At that point a decision will be taken on whether the scheme remains affordable and can proceed. The current programme indicates order publication in January 2021.
3.40 Enabling works, which are not dependent upon confirmation of statutory orders (e.g. site preparation, hedge removal, drainage construction) are programmed to start in January 2021. A provisional start of main works is expected in Autumn 2021. The construction period is estimated to be 9 months leading to provisional opening in Summer 2022.
A66 Brigham Broughton
3.41 The A66 provides strategic connections between M6, Lake District and West Cumbria. Land discussions are progressing, and a feasibility design is due to be completed by end March 2021. However, funding is still to be confirmed. A request is being considered to include bus stops on A66 and in order to do this safe locations would be needed with discussions continuing with CCC and Stagecoach.
A590 improvements including a Ulverston Bypass
3.42 The A590 is the only route to the Furness peninsular and is critical for access to major manufacturing businesses, including BAE. Improvements to junctions at Ulverston, Meathop and Brettargh Holt are required to enhance the reliability, and resilience while also improving integration and accessibility within Ulverston.
3.43 Consultants were commissioned by HE and CCC to undertake a feasibility study and the report was completed and signed-off in July 2020, Next steps are for HE and CCC to agree which options should be progressed and to establish the most
suitable funding mechanisms to progress the package of improvements across the strategic and local road network.
A66 Dualling Eastwards Penrith
3.44 The A66 is a nationally important strategic road linking Penrith with the A1(M) at Scotch corner in North Yorkshire. As well as benefitting local people, the upgrade will support tourism and freight traffic, improving connectivity between ports in Scotland and Northern Ireland and those in England.
3.45 This was included in the RIS2 Funding announcement on 11 March 2020, with the preferred route announced on 23 May. SoW currently Q4 24/25 and Autumn 20 Government Spending Review announced support for 50% reduction in construction duration from 10 to 5 years as part of Project Speed. The ground Investigation works are to commence in January 2021, with the next statutory stage being the start of public consultations in Spring 2021.
Digital Infrastructure
BT superfast contract
3.46 Deployment is now complete ahead of schedule and ahead of target with 94.6% of premises able to access superfast broadband >24Mbps.
Full fibre connections to eligible hub sites such as village halls
3.47 The digital village hub business case was submitted to DCMS on 24 November 2020. Feedback is not expected until later in the month.
Digital Borderlands full fibre voucher top-up scheme
3.48 This was launched in June 2020 to enable rural communities in superfast ‘not- spots’ to gain access to full fibre infrastructure. £956k of voucher applications had been granted in Cumbria out of £2m available as at 25 November 2020. Applications close on 31 March 2021.
UK Government F20 programme for gigabit capable connections to the hardest to reach [Final] 20% of premises
3.49 The Open Market Review was completed in Cumbria on 4 December 2020. This sets out suppliers existing gigabit connectivity and commercial plans. The Comprehensive Spending Review on 25 November 2020 reduced the funding available until 2025 from £5bn to £1.2bn. This has reduced the associated target from 100% gigabit coverage to 85%. CCC is lobbying UKG to ensure that Cumbria is prioritised within this programme.
Digital Borderlands 4G infill programme
3.50 CCC is working with Mobile UK and DMSL to understand the footprint of the SRN 4G programme in Cumbria so that the remaining not-spots can be targeted. The Outline Business Case has been drafted, but it is dependent on SRN data and State Aid clearance as set out below.
Shared Rural Network (SRN) 4G programme
3.51 Agreement between DCMS and MNOs is now in place to deliver 4G coverage from at least one MNO to 95% of UK landmass by 2025 in a £1bn programme. Work is underway with Digital Mobile Spectrum Limited to encourage and facilitate SRN deployment in Cumbria and inform the 4G infill programme. SRN data has been further delayed until this month after the MNO initial radio plans were rejected by Ofcom. The post Brexit State Aid regime also needs to be clarified and must allow MNO operating and maintenance costs to be subsidised.
Borderlands 5G research and development
3.52 CCC is working with Cisco Systems and the University of Strathclyde on the 5G ‘New Thinking’ project. This project is on schedule. Potential 5G mast sites in the Borderlands are being reviewed and use cases prepared.
Walking and Cycling
Hadrian’s Wall Corridor
3.53 SOBC submitted to Government included cycling and walking as a theme. Development of an OBC for the Hadrian’s Wall coastal cycle corridor to commence in early 2021.
See More Lake District
3.54 SOBC developed and submitted to Government in June 2020. The feedback received from Government resulted in a change to the projects included within the SOBC, with a stronger focus on active travel. This was resubmitted in late 2020. The next step is to develop an Outline Business Case, which will commence in early 2021.
Local Cycling and Walking Investment Plans (LCWIPs)
3.55 LCWIPs, as set out in the Department for Transport's (DfT) Cycling and Walking Investment Strategy (CWIS), are a new, strategic approach to identifying cycling and walking improvements.
3.56 LCWIPs will enable a long-term approach to developing local cycling and walking networks (ideally over a 10-year period) and will ensure that Cumbria is well placed to make the case for future investment. The Cumbria LCWIPs will be central to achieving the fourth objective of the Cumbria Cycling Strategy.
3.57 LCWIPs will be developed for a number of towns across the country, initially focussing on Barrow-in-Furness, Carlisle, Kendal, Penrith, Whitehaven and Workington. This will be undertaken across three phases:
• Phase 1 (Summer 2020 to Spring 2021) - Barrow and Carlisle • Phase 2 (Autumn 2020 to Summer 2021) - Workington and Kendal • Phase 3 (Spring to Autumn 2021) - Whitehaven and Penrith
3.58 The phasing aligns with funding available and when outputs from the LCWIPs are required. Outputs of the Barrow LCWIP have already led to a £5m proposal for Cycling and Walking being included in the Barrow Town Deal submission made in the summer. The outputs from the Carlisle LCWIP will be important for both the Carlisle Town Deal and to inform the St Cuthbert’s Garden Village Local Plan.
3.59 Progress to date is as follows:
• Barrow – LCWIP development commenced in May 2020. LCWIP informed the ask for £5m for cycling and walking as part of the Barrow Towns Deal Investment Plan submitted to government in the summer and funding confirmed by Government. LCWIP to be completed in Spring 2021. • Carlisle - LCWIP under development and to be completed in Spring 2021. • Workington – Development of Workington LCWIP commenced in October 2020 and to be completed by Summer 2021. • Kendal – Development of Kendal LCWIP commenced in October 2020 and to be completed by Summer 2021, • Penrith - Funding required for consultants to develop LCWIP. Funding contribution agreed by CCC Eden Local Committee. Further funding required before the LCWIP can be progressed. • Whitehaven - Funding required for consultants to develop LCWIP.
KINGMOOR PARK
Masterplan
3.60 Legal negotiations with Maplegrove/ Eric Wright stalled at the end of the process and Kingmoor Park Board have therefore started early discussions with other interested parties that have expressed an interest in being involved.
3.61 A full audit of the private electrical network is underway and KPEZ are confident that there is enough load capacity to service the first phase of development. Quotes from Electricity North West for additional capacity which could be a limiting factor to any future development and a feasibility study is to be done.
3.62 Edinburgh Woollen Mill administration is the first real impact as a result of COVID. KPEZ is monitoring the situation and actively dealing with void space.
Site Development
3.63 The solar farm continues to produce power in excess of initial forecasts and discussions have started on expanding on-site provision to meet the green vision.
3.64 Public consultation on the Environment Agency’s Permit Application closed on 30 November 2020. Talks are ongoing with Verus and Fortum.
Plot Development
3.65 A proposal has been offered to a commercial organisation. However, there is a viability gap as a result of the size and nature of the building, the covenant and the rental limit they have enforced based on their current property. RISK REGISTER
Agenda
REVIEW OF RISK REGISTER
1. ISSUE
1.1 Reviewing CLEP’s Risk Register.
2. RECOMMENDATIONS 2.1 That the Board review the register and confirm that all risks have been identified and appropriate mitigations are in place.
3. BACKGROUND
3.1 The CLEP Board agreed that an overarching risk register should be produced, for the entirety of CLEP’s business and that this should be reviewed and updated on a quarterly basis. The updated version would then be incorporated into the Local Assurance Framework. The latest version of the Risk Register is provided at Annex A.
3.2 This overarching risk register is underpinned by a detailed programme and project risk register, which is reviewed and maintained by the Investment Panel. In reviewing this risk register, Board members will wish to note that this detailed risk register is in place.
3.3 The main changes in the register are the de-escalation of the three risks (Nos 28-30) related to the End of EU Transition, following agreement of the EU/UK Trade and Cooperation agreement.
ANNEX A RISK REGISTER
NO RISK DESCRIPTION RESPONSIBLE LIKELIHOOD IMPACT SCORE STATUS MITIGATION MITIGATED MITIGATED ACTION TO DATE PLANNED ACTIONS MITIGATED OFFICER SCORE STATUS STATUS THEME: GOVERNANCE
Board 1 Board is not compliant with CEO Medium High High Ensure that recruitment Medium CLEP has exceeded the private All future recruitments Risk to be private sector and gender exercises are effectively sector and gender requirements will promote inclusivity mitigated diversity requirements managed in line with through targeted recruitment and diversity, to ensure by March representation campaigns. However, there that the 2023 target can 2023 requirements. remains a challenge in meeting be met. the 2023 equal representation target based on current public sector membership. Ongoing monitoring and action will be required. 2 Board non-compliant with CEO Medium High High Ensuring that all Board Medium New arrangements have been Support the national LEP Code of Conduct, Conflict of members receive guidance introduced to regularly review Network induction Interest and Declaration of on compliance with the and monitor compliance. The programme with local Interests code of conduct and LEP Network has completed an activity, which supports conflict of interest policies induction handbook for new new Board members to and understand the members and a pilot training be effectively inducted. personal responsibility for programme, which one of CLEP’s managing DoIs District Authority Board members attended. Completed confirmation exercise in November 2020. 3 Board members exceed their CEO Low High Medium Ensure that arrangements Low Arrangements are in place to Prepare for the period of office are in place to monitor all monitor all periods of office and transition of District periods of office and a a procedure is in place for Authority and nuclear procedure for dealing with dealing with a further third year representation in 2021. a further third year period period of appointment. This was of appointment. successfully used for the most recent extension of two Board members in July 2020. 4 Succession planning CEO Low High Medium Succession planning Low The process was successfully Make the necessary arrangements are not in place arrangements are in place implemented with the preparations for the for Chair, Deputy Chair and for all three appointments. appointment of the new Deputy appointment of a new Vice Chair The arrangements for the Chair in May 2018. Deputy Chair in 2021. Deputy Chair will be tested once the Deputy Chair steps down. The Vice Chair is now an Accountable Body nominee. 5 Board is not effective in taking CEO Low High Medium Ensure that the Low Board members have been Review the effectiveness forward the strategic governance structure is appropriately appointed into of the governance priorities of CLEP and ensuring designed to ensure that relevant portfolios, on which structure at the third effective operations Board members have they have the necessary skills anniversary in November portfolio responsibilities and expertise. All governance 2021. enabling members to have bodies are in the process of individual depth of developing their economic understanding and recovery plans. Governance collective breadth of reviewed in September 2020. understanding.
Accountability NO RISK DESCRIPTION RESPONSIBLE LIKELIHOOD IMPACT SCORE STATUS MITIGATION MITIGATED MITIGATED ACTION TO DATE PLANNED ACTIONS MITIGATED OFFICER SCORE STATUS STATUS 6 CLEP is not compliant with the CEO Low High Medium Ensure that CLEP regularly Low CLEP revised its LAF in line with Review on an ongoing National Local Assurance reviews its Local Assurance the new National LAF (January basis. Framework Framework (LAF) to ensure 2016) and confirmed compliance compliance. at the Annex E checklist by 31 March as requested. It was further revised in May 2019 to reflect changes to CLEP’s scrutiny arrangements. It has subsequently been reviewed on an ongoing basis with a substantive review completed in September 2020. 7 There is insufficient visibility CEO Low High Medium The LAF outlines CLEP’s Low The LAF is regularly reviewed Maintain this approach of the LEP’s commitment to commitment to and immediately placed on going forward. accountability transparency and is highly CLEP’s website. The website has visible on CLEP’s website. also been refreshed to ensure All external activities that all documents that demonstrate this government requires to be on commitment. the website are clearly signposted and cross- referenced. 8 Accountable body has CEO Low High Medium Ensure that all compliance Low CLEP has ensured that all Continue to implement significant concerns about issues are developed in compliance documents have agreed approach and compliance with consultation with the been developed in close report to Accountable government’s requirement Accountable Body and that consultation with the Body LEP Governance regular review meetings Accountable Body to ensure that Programme Board on a are in place. its expectations are being met. quarterly basis. Additionally, a specific officer body (Accountable Body LEP Governance Programme Board) has been established to monitor compliance. 9 CLEP is not perceived as CEO Low High Medium Implement a tri-partite Low The tri-partite approach to Prepare for annual accountable to government, approach to accountability accountability is being operated, performance review with local government or wider which delivers with arrangements in place for government on 11 stakeholders. accountability to local government scrutiny February 2021. government through the through the revised LEP Scrutiny Annual Performance Board. The Annual Report was Prepare for March 2021 Review and ongoing produced for 2020 and LEP Scrutiny Board. relationship management presented at the AGM on 20 model; local government September 2020. During the through the revised COVID restrictions period regular scrutiny arrangements and review meetings have taken engagement in the wider place with the Scrutiny Board governance structure; and Chair. wider stakeholders through the Annual General Meeting, Annual Report and engagement in the governance structure. 10 Breach of guidance causes CEO Low High Medium Put in place the necessary Low Necessary systems and Ensure that all existing reputational damage to the systems and processes to processes are now in place to and new Board members
LEP militate against this. militate against this. The confirm understanding responsibility placed on and acceptance of Code individual members to comply of Conduct and Conflict transfers the burden of of Interest requirements. responsibility and maximizes the potential of compliance. Update completed at the November 2020 Board meeting. Wider Governance Arrangements No Risk Description RESPONSIBLE Likelihood Impact Score Status Mitigation Mitigated MITIGATED ACTION TO DATE PLANNED ACTIONS MITIGATED OFFICER Score STATUS STATUS 11 Structure does not effectively CEO Low High Medium Ensure that the Low The governance structure has Complete governance engage partners in the governance structure is been widely advertised with an recruitment campaign to delivery of CLEP activity widely advertised with an open recruitment process secure new members for open and transparent conducted to ensure significant Spring 2021. recruitment process. engagement in the structure from across Cumbria. All governance bodies are now operational. The VCSE is a member of the Board and been invited to nominate to the rest of the structure. 12 Structure does not add value CEO Low High Medium Develop a structure that Low Structure has been designed to Implement restart- to the business of CLEP add values to the business add value to the business with reboot-rethink plans and the delivery of the the Strategy Groups reflecting from November 2020 Local Industrial Strategy. the drivers of productivity and onwards. the Sector Panels the priority business sectors. A formal one year review took place in Autumn 2019 to confirm that the structure remained fit for purpose. Each of these sub- Board bodies has developed its work plan to deliver on the priorities within the LIS. 13 CLEP cannot successfully CEO Low High Medium Ensure that appropriate Low CLEP secured additional Continue current manage the scale of the resource is in place to resource to manage this arrangements and governance arrangements effectively manage the including the secondment of the monitor the structure. Head of Strategy and Policy, and effectiveness of the recruitment of the Head of operations. Secretariat and the PA/Office Manager. 14 Governance bodies lose CEO Low High Medium Review the structure on an Low First annual review completed in Continually refresh momentum over time. annual basis to ensure that autumn 2019, and all bodies agenda and membership it remains current, confirmed for continuation. In of governance bodies. relevant and responsive to May 2020 the Board agreed that the evolving needs of the the Health and Care Sector Panel economy. should be disbanded, with the Sector Lead engaging in County- wide H&S governance. Future Forum formally adopted into the governance structure and the principle of incorporating BEAG accepted. Structure reviewed in September 2020. Scrutiny
No Risk Description RESPONSIBLE Likelihood Impact Score Status Mitigation Mitigated MITIGATED ACTION TO DATE PLANNED ACTIONS MITIGATED OFFICER Score STATUS STATUS 15 Scrutiny fails to keep CLEP CEO Low High Medium Develop revised scrutiny Low The Accountable Body is co- Ensure that the agenda compliant arrangements which bring ordinating the scrutiny function, for March 2021 Scrutiny in those with significant which is being delivered by all Board focuses on the scrutiny expertise Local Authorities. Members issues of greatest training has taken place. relevance to scrutiny Outcomes from the LEP Scrutiny members and implement Boards have been actioned. actions arising from this. Continue to have review meetings with the Scrutiny Panel Chair during lockdown.
16 The arrangements do not CEO Low High Medium Ensure that an agenda Low The LEP Scrutiny Board is Continue to hold cover the scope of CLEP’s setting process ins in place developing an agenda for its planning meetings in business to consider all relevant scrutiny activity to ensure that advance of each Scrutiny issues CLEP’s activity is effectively Meeting to ensure that scrutinised. All members have the scope is sufficiently received induction training. An broad. agenda setting meeting will take place with the Scrutiny Chair prior to each meeting to agree the agenda. 17 CLEP fails to respond to CEO Low High Medium The Chair to take personal Low The lead CLEP representatives Ensure that all actions scrutiny findings responsibility for reporting are the Chair and Chief Executive identified by the Scrutiny to ensure that findings are to ensure that all issues are Board are effectively brought to the attention of effectively addressed. The addressed. the Board and acted upon. findings from September Scrutiny Board were limited in nature and immediately addressed. Viability No Risk Description RESPONSIBLE Likelihood Impact Score Status Mitigation Mitigated MITIGATED ACTION TO DATE PLANNED ACTIONS MITIGATED OFFICER Score STATUS STATUS 18 CLEP is not a going concern in Finance, Low High Medium Constitute a Finance, Audit Medium CLEP’s financial position will Continue to explore all Ongoing 2021/22 Audit and and Resources Committee always be operating on an funding options to Resources to ensure that ‘going annual basis, given the annual ensure that CLEP is a Committee concern’ considerations funding cycle of government. going concern in are actively managed. The Finance Audit and Resources 2021/22. Committee ensures that viability is monitored on an ongoing basis. Going concern status was confirmed in the 2019/20 audit process. 19 CLEP cannot meet its liabilities Finance and Low High Medium Develop a reserve to meet Low CLEP now has a reserve in place Ensure that any wind-up on wind up or closure Resources these costs that provides sufficient cover to costs can be met from Committee meet wind up and redundancy within the restricted costs, should this be necessary. reserve. This funding will only be used in extremis. This reserve has been carried forward into 2020/21 and is retained in a separate account.
20 Improper use of company CEO Low High Medium Ensure that staff are made Low Banking arrangements are in FARC to maintain resources or defrauding the aware of expectations place, which requires dual management oversight company of its resources when using company signatories with a limited through monthly resources and that number of signatories in place to accounts. appropriate risk mitigation limit risk. Similarly, delegations arrangements are in place. are limited in nature to ensure Ensure that a full control of expenditure. programme of Independent accountancy and independent audit activity audit arrangements have been is in place. Provide a put in place for all of CLEP’s confidential whistleblower revenue expenditure to ensure reporting policy to ensure oversight of all transactions. An that Directors or staff with independent auditor completed any concerns on probity a systems and processes review can raise these issues. to ensure the strength of CLEP’s financial systems. The annual audit process provided a clean bill of health. No recommendations flowed from this. CLEP’s major Local Growth Fund expenditure is financially managed by the Accountable Body, so risk is offset. Whistleblowing policy is in place and communicated to Directors and staff. All staff are aware of appropriate procurement, defrayal and the delegation limits. THEME: STRATEGY
Role of LEPs NO RISK DESCRIPTION RESPONSIBLE LIKELIHOOD IMPACT SCORE STATUS MITIGATION MITIGATED MITIGATED ACTION TO DATE PLANNED ACTIONS MITIGATED OFFICER SCORE STATUS STATUS 21 Government changes its CEO Low High Medium Influence government on Medium Attended Select Committee to Provide ongoing input position on the roles and the importance of LEPs outline the role that LEPs can into government’s Local responsibilities of LEP’s and the role that they can play on regional investment and Economic Recovery play on the economy and growth. Worked with LEP Group. in implementing recovery Network and NP11 on making activity. the case for LEPs and the role that these can play in future growth and recovery implementation. Local Industrial Strategy/Recovery Plan 22 Local Industrial Strategy (LIS) CEO Low High Medium Develop a timetable with Medium Outline timetable provided by Develop a flightpath is not produced to standard key milestone for CLGU with scheduled timetabled back to the LIS priorities and time production of the LIS for completion October 2019. based on CLEP’s three- This has slipped due to other strand restart-reboot- government priorities. The rethink approach. conversation with government is now about re-purposing the LIS to address COVID-19 impacts.
23 LIS/Recovery Plan does not CEO Medium High High Develop a formal Low Consultation process delivered Complete consultation have partnership commitment consultation process to in line with seven stage process, on Recovery Plan and to priorities secure the buy in of all strong partnership buy in finalise this in line with partners. secured throughout the process. consultees and
Recovery Plan is being government feedback. developed in partnership with BERRG and other key consultees. 24 LIS is not agreed with CEO Low High Medium Develop a process with Medium Negotiation briefs submitted to Identify how Government government to ensure that government for departmental government wants to Cumbria’s Local Industrial discussions. Have produced reposition the LISs for a Strategy is co-produced. proposed draft structure for co- Post-COVID world. produced LIS which has been submitted to government
25 LIS is not successfully CEO Medium High High Develop the necessary Low Work programme developed by Complete the review and implemented governance arrangements all governance bodies. updating of the LIS Work to successfully implement programmes in line with the Local Industrial COVID-19 three-strand Strategy. approach. 26 LIS does not secure sufficient CEO Medium High High Work with national, Medium CLEP has submitted a formal Implement outcomes finance to deliver proposed regional and local partners response to the consultation on from CSR 2020. activities to identify current and the Regional Investment and future sources of finance Growth and met with to deliver the LIS departmental leads on the Shared Prosperity Fund to try to influence future investment plans. Additional funding secured from the Getting Building fund, which was in excess of previous per head settlements. Response submitted to the BEIS Post Pandemic Inquiry and CSR. 27 LIS does not make the CEO Medium High High Design the LIS to ensure it High Cumbria has been significantly Continue to press for necessary impact on focuses on the most affected by COVID-19 and as specific interventions to Cumbria’s economy significant issues for such, CLEP is leading BERRG to support Cumbria’s Cumbria’s economy ensure that effective mitigation businesses and economy measures are in place and that and develop a flightpath the risks to Cumbria’s economy back to LIS priorities. are understand at national level. However, this is likely to be a longer-term recovery process. Brexit – End of Transition Period No Risk Description RESPONSIBLE Likelihood Impact Score Status Mitigation Mitigated MITIGATED ACTION TO DATE PLANNED ACTIONS MITIGATED OFFICER Score STATUS STATUS 28 Cumbria is not sufficiently CEO Medium High High Identify the specific risks Medium The Deal has reduced the major Implement EU Transition well prepared for the end of and issues for Cumbria in concerns around tariffs and support activity and look the Brexit transition period. relation to end of the EU movement of goods. The risk to reach as many Exit Transition period. now is on implementation issues affected businesses as and the impact of these on possible. business. An EU End of transition impact assessment has been produced. The EU Transition team is now in place to support businesses with transitional issues.
29 The end of the EU Exit CEO High High High Complete a further Brexit Medium Brexit impact assessment Integrate Brexit risks transitional period has a impact assessment to completed. with COVID-19 recovery significant detrimental impact identify most significant plan to develop a
on Cumbria risks for Cumbria. cohesive framework to address both issues. 30 Opportunities presented post- CEO Medium High High Work with sector or bodies Medium COVID-19 has inhibited the Integrate Eu exit risks Eu Exit are not realized. to identify the development and with COVID-19 to opportunities for Cumbria. implementation of the develop a cohesive opportunities plan. This is now framework to identify being picked up in a COVID-19 new opportunities. context. THEME: DELIVERY
Growth Deal NO RISK DESCRIPTION RESPONSIBLE LIKELIHOOD IMPACT SCORE STATUS MITIGATION MITIGATED MITIGATED ACTION TO DATE PLANNED ACTIONS MITIGATED OFFICER SCORE STATUS STATUS 31 Growth Deal is not delivered CEO Low High Medium Contingency Planning is in Medium 2019/20 Growth Deal profile Complete contracting in line with annual profile place and active to ensure met. A full programme review and delivery of all that the Growth Deal has been completed and remaining Growth Deal annual profile is achieved. significant progress made in projects. A detailed risk register on contingency planning to ensure programme risks is delivery in 2020/21. Final one managed by the third of allocation secured. Investment Panel 32 Outputs, outcomes and CEO Medium High High Complete a programme High Significant work has been Final contracts to secure impacts are not achieved review to ensure that all undertaken to ensure that all additional key outcomes. KPIs are being effectively outcomes are reported and that recorded and captured. where possible these are Target future investments accelerated. The Programme to those activities that Management team is actively generate the highest monitoring programme level outcomes in ‘under- delivery working with applicants performing’ areas. to address any shortfalls in delivery. The Investment Panel is closely monitoring and will escalate risks as and when necessary to the Board. 33 Individual projects fail to CEO Low Medium Medium Monitor all projects on an Medium The Programme Management Maintain monitoring deliver on requirements ongoing basis team is in place to actively approach and alert project manage all applicants. government to the They regularly update a project projects at greatest risk. level risk register, which is managed by the Investment Panel with any programme level risks escalated to the Board. However, COVID-19 is having a significant impact on delivery for a number of major projects. 34 Investment decisions are CEO Low Medium Medium Develop clear and open Low There are clear and open Ensure that all systems viewed as unfair or lacking in application processes. processes for calls for bids which and processes remain transparency are outlined within the LAF and highly transparent. on CLEP’s website. A new application process was introduced to streamline and further clarify the process for applicants.
Cumbria Infrastructure Fund No Risk Description RESPONSIBLE Likelihood Impact Score Status Mitigation Mitigated MITIGATED ACTION TO DATE PLANNED ACTIONS MITIGATED OFFICER Score STATUS STATUS 35 Demand for funding is CEO Medium Medium Medium Effectively promote the Medium However, COVID-19 means that Continue to promote the insufficient Fund risk appetite is diminished. A availability of the national case was made to re- funding. purpose CIF to provide revenue grant funding to businesses but this was not approved. 36 Repayments are not made CEO Low High Medium Ensure that effective Low CLEP has reviewed its systems Regularly review systems and processes are and processes to minimise the repayment profiles to in place to minimise the potential for non-repayment identify risk and then potential for non- with a lessons learned exercise mitigate at project level. repayment. conducted. 37 Investment decisions are CEO Low Medium Medium Develop clear and open Low There are clear and open Ensure that all systems viewed as unfair or lacking in application processes. processes which are outlined and processes remain transparency within the LAF and on CLEP’s highly transparent. website. A revised application process was recently introduced. Cumbria Growth Catalyst No Risk Description RESPONSIBLE Likelihood Impact Score Status Mitigation Mitigated MITIGATED ACTION TO DATE PLANNED ACTIONS MITIGATED OFFICER Score STATUS STATUS 38 Contracting process is CEO Low High Medium Conducted a fully Low The Accountable Body N/A – Contract let deemed unfair compliant OJEU process. conducted a fully compliant OJEU process on behalf of CLEP. CLEP is demonstrating an open approach to procurement which will encourage tenderers to come forward 39 Contract is not delivered in CEO Low High Medium Develop new contract Low New contract management Continue current line with profile management arrangements were introduced arrangements arrangements which included penalties for non-delivery. Mid Term Evaluation completed. Head of Business and Innovation responsible for contract management. 40 Activity does not impact on CEO Medium Medium Medium Ensure that the Business Low The Business Strategy Group is Undertake development Cumbria’s overall business Strategy Group reviewing the overall business work to consider how all performance understands the contract support landscape to ensure business support and has the opportunity to that all aspects of the delivery mechanisms can operate influence local activity support infrastructure make an as a cohesive system. impact and address the business support challenges Cyber Security No Risk Description RESPONSIBLE Likelihood Impact Score Status Mitigation Mitigated MITIGATED ACTION TO DATE PLANNED ACTIONS MITIGATED OFFICER Score STATUS STATUS 41 CLEP’s business is seriously CEO Low High Medium Operate under Cumbria Medium Arrangements in place to Continue to work with IT N/A - adversely affected by a Cyber- County Council’s IT system operate through Cumbria provider to ensure the ONGOING attack. to provide access to County Council’s IT provision, security of the service. serious systems and which is continually upgraded Cyber Security will processes to mitigate the and provides access to anti- always be a credible risk cyber security risks. malware, scanning to ensure hence the medium safety of servers, email mitigated status. attachments, web traffic &
portable media etc. 42 Poor local management of IT CEO Low High Low Operate under the Low Arrangements put in place to Continue to monitor systems. umbrella of Cumbria operate through Cumbria effectiveness of County Council, so no local County Council’s IT provision. arrangements. responsibility of IT systems. People Management 43 CLEP staff do not deliver CEO Low High Medium Recruit a team with Low All team members have been Complete Annual business activity to their suitable skills and recruited in line with job Reviews using maximum potential. expertise for the roles descriptions, which focused on Performance within the structure. the necessary skills and Management Ensure that an appropriate expertise for the posts required Framework and develop Performance Management within the organisation. organisational learning Framework is in place and Performance Management and development plan that team members have Framework in place and being based upon bottom up access to learning and used to review performance and feed-in and top down development identify learning and assessment of opportunities. development needs. organisational needs. CEO to regularly test individual and team working environment through 1-2-1 and team meetings. 44 Succession planning CEO Low High Medium Develop a succession plan Medium New organisational structure CEO to regularly review arrangements are not in place for the organisation. developed and recruitment succession plan for CLEP for CLEP. exercise concluded to ensure and develop contingency that CLEP moved to being plans to address any genuinely team managed. changes to existing Reducing reliance on one or two arrangements. individuals. Systems and processes put in place to ensure effective operations not reliant on know-how of one or two. Business Continuity Planning 45 CLEP cannot operate CEO Medium High High Develop a Business Medium The business continuity plan has Continue to monitor the effectively during a serious Continuity Plan to ensure operated effectively allowing effectiveness of resilience event. that CLEP can operate in business to continue its operations the event of a serious operations remotely. disruption
Health and SafetySafety 46 The Health and safety of staff CEO Low High Medium Ensure that effective Low All new staff are inducted and Continuously monitor is not adequately protected. health and safety updated on all health and safety the effectiveness of arrangements are in place issues. The Office Manager has health and safety and all health related specific responsibility for arrangements. procedures are complied ensuring a safe working with. environment. During COVID-19 extended homeworking checks have been made to ensure that all staff can operate safely
RISK MATRIX
IMPACT
Low Medium High
Low Low Medium Medium
Medium Low Medium High LIKELIHOOD High Medium High High
LEP COMMUNICATIONS
Agenda FORWARD PLAN
Agenda
LEP FORWARD PLAN 2021
FRIDAY 25 MARCH 2021– VIA ZOOM AT 9.30AM
Report from Finance, Resources and Audit Committee Chair Committee
Report from Sub-Board Governance Head of Secretariat Bodies
STEP Siting Competition Chief Executive
Feedback from Annual Performance Chief Executive Review
Chief Executive’s Update Chief Executive
Annual Delivery Plan – Review 2020/21 Chief Executive and 2021/22 Plan
Investment Panel Update Deputy Chair
STANDING ITEMS
Risk Register Chief Executive
Net Zero Carbon Chief Executive
LEP Communications Chief Executive
Forward Planner Chief Executive
FRIDAY 21 MAY 2021 – REDHILLS, PENRITH AT 9.30AM
Report from Finance, Resources and Audit Committee Chair Committee
Report from Sub-Board Governance Head of Secretariat Bodies
Chief Executive’s Update Chief Executive
Investment Panel Update Deputy Chair
STANDING ITEMS
Risk Register Chief Executive
Net Zero Carbon Chief Executive
LEP Communications Chief Executive
Forward Planner Chief Executive
FRIDAY 22 JULY 2021 – REDHILLS, PENRITH AT 9.30AM
Report from Finance, Resources and Audit Committee Chair Committee
Report from Sub-Board Governance Head of Secretariat Bodies
Chief Executive’s Update Chief Executive
Annual General Meeting and Annual Chair Report
Investment Panel Update Deputy Chair
Preparing for Mid-Year Review Chief Executive
STANDING ITEMS
Risk Register Chief Executive
Net Zero Carbon Chief Executive
LEP Communications Chief Executive
Forward Planner Chief Executive
FRIDAY 24 SEPTEMBER 2021 – REDHILLS, PENRITH AT 9.30AM
Report from Finance, Resources and Audit Committee Chair Committee
Report from Sub-Board Governance Head of Secretariat Bodies
Chief Executive’s Update Chief Executive
Investment Panel Update Deputy Chair
AGM Preparation Chair
STANDING ITEMS
Risk Register Chief Executive
Net Zero Carbon Chief Executive
LEP Communications Chief Executive
Forward Planner Chief Executive
ANNUAL GENERAL MEETING FRIDAY 24 SEPTEMBER 2021 – REDHILLS, PENRITH AT 2.00PM
Ratification of Board Appointments Chair
Minutes of Previous AGM and Matters Chair Arising
Report of Finance, Audit and Resources Committee Chair Committee
CLEP Update Board Members
Annual Delivery Plan Update Chief Executive
Open Forum All Attendees
FRIDAY 25 NOVEMBER 2021 – REDHILLS, PENRITH AT 9.30AM
Report from Finance, Resources and Audit Committee Chair Committee
Report from Sub-Board Governance Head of Secretariat Bodies
Chief Executive’s Update Chief Executive
Investment Panel Update Deputy Chair
STANDING ITEMS
Risk Register Chief Executive
Net Zero Carbon Chief Executive
LEP Communications Chief Executive
Forward Planner Chief Executive
ANY OTHER BUSINESS
Agenda DATE AND TIME OF NEXT MEETING
Agenda