Manchester City Council Report for Resolution
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MANCHESTER CITY COUNCIL REPORT FOR RESOLUTION REPORT TO: THE EXECUTIVE DATE: 18 JANUARY 2006 SUBJECT: THE BBC MANCHESTER INITIATIVE REPORT OF: THE CHIEF EXECUTIVE 1. Purpose of Report To update the Executive on proposals by the BBC to create the UK’s second largest network broadcasting and production centre in Manchester; inform the Executive of the Councils’ role in facilitating the relocation to Manchester; and to seek the Executive’s approval for the actions required to realise the full economic potential of the BBC Manchester Initiative. 2. Recommendations 2.1 The Executive is recommended to: i. Note and welcome the progress that has been made in taking forward the BBC Manchester Initiative; ii. Note the key findings of the economic impact study commissioned by the City Council and the NWDA of the BBC Manchester Initiative, which demonstrates the transformational impact of the BBC’s relocation decision (attached at Appendix 1); iii. Determine that the proposals for the Council’s support as set out in the report for the BBC’s relocation within the City Centre and the development of the Media Enterprise Zone, will promote and improve the City’s economic and social well being. iv. Authorise the Chief Executive to continue to work with the BBC and the North West Development Agency (NWDA), and to lead a core group of key public partners and other stakeholders to develop further the concept of a Media Enterprise Zone, with the intention of delivering the BBC’s relocation within the city centre, thereby generating additional benefits through the participation and relocation of other media and creative related businesses; v. In light of the determination at iv. agree, in principle, funding of up to £20M as part of the Council’s Capital Programme from the Council’s Capital Fund to support the BBC’s relocation to Manchester, subject to £30M also being committed by the NWDA, and to a full business - 1 - case and details of the proposed contractual arrangements between the parties being presented to the Executive for approval; and vi. Request a further report be brought back to the Executive, in due course, on the outcome of the BBC Manchester Initiative, with a detailed strategy and implementation plan for its delivery. 3. Financial Consequences for the Revenue Budget The City Council, together with a range of other public agencies are continuing to assist the BBC to define the scope, content and public investment requirements of their proposal, based on a range of value added measures that will bring wider economic benefit to the City and the region. These measures have and will continue to require funding from key public agencies, notably the Council and the NWDA. There will be a requirement for the Council to expend further resources over the coming months to support the business and development planning process, but this will be funded through existing budgets. Any relocation of a significant facility to Manchester should increase the Council’s non-domestic rates base with the possibility of a share of this coming to the City Council in future years through the Local Authority Business Growth Incentive. 4. Financial Consequences for the Capital Budget The City Council and the NWDA have given a joint commitment to support the BBC’s relocation strategy up to a total of £50M. The commitment has been given on the basis of the quantum and quality of the economic impact and wider benefits generated by the BBC Manchester Initiative, though the final sum will be dependent on a robust business case. However, the detailed proposals for funding arising out of the BBC Manchester Initiative will be brought back to the Executive, in due course. The proposed £20M City Council investment can be met from utilising the anticipated balances on the Capital Fund. 5. Contact Officers Howard Bernstein Chief Executive 234 3006 Email: [email protected] Richard Paver City Treasurer 234 3564 Email: [email protected] Pat Bartoli Chief Executives Department 234 3329 Email: [email protected] 6. Background Documents Report to the Executive – July 2004 - 2 - Report to the Executive – December 2004 Report to the Executive – March 2005 Cambridge Policy Consultants Report The Strategic Case Making and Economic Impact of the BBC North Plan – November 2005 All held on file in Room 307. 7. Wards Affected All 8. Implications for Anti-Poverty Equal Opportunities Environment Economic Yes Yes Yes Yes - 3 - 1. Introduction 1.1 The Executive has received reports informing them of the outline proposals by the BBC to devolve a significant amount of programme commissioning spend and jobs out of London. These reports also identified the key role of the Council in working closely with the BBC to deliver their objectives. 1.2 This report seeks to update the Executive on progress with the BBC’s objectives, the central role of the Council (and the NWDA) in helping the BBC to progress the Initiative, and the timetable for the BBC to make a formal decision on their proposed move. 2. Background 2.1 In December 2004, the BBC formally announced plans to create the UK's second largest network broadcasting and production centre in Manchester. This announcement was the culmination of extensive discussions involving the Leader of the Council and the Chief Executive with the current and previous Director General of the BBC. The BBC plan to relocate a significant proportion of its London base to Manchester, including CBBC, BBC Sport, New Media, Research and Development, and Radio Five Live. The BBC will also transfer around £250M of commissioning spend and up to 1,600 BBC jobs from London. A further 250 facility roles may be created for in-house services (eg. post-production facilities) and 150 ancillary roles (in contract services such as cleaning and security). 2.2 The BBC’s announcement fully complemented the objectives identified by the Council and the NWDA to create in Manchester a sustainable media cluster of national and international significance, which, in turn, will help to transform the market position and prospects of the media sector in Manchester, the North West and the North of England as a whole. 2.3 Working with the BBC and the NWDA, the Council developed a series of proposals to deliver a range of additional benefits to augment the BBC’s plans to enable Manchester and the wider region to build on its current position as the UK’s leading regional media centre. Central to these was a proposal to develop a Media Enterprise Zone (MEZ), which would be the location for the BBC’s campus, together with a range of media and creative related businesses and enterprises. The MEZ would support both the BBC in the development of its talent base and enable the media and creative sector to continue to grow and flourish in the City and the region. This critical mass of activity would capture important synergies through the participation of the full range of media enterprises, including the sharing of technical facilities. The intention would, of course, be to incorporate the requirements of ITV/Granada either through their physical co-location on the site of the MEZ, or through their sharing of technical facilities. (Section 4 below provides more detail on the MEZ proposal). - 4 - 2.4 Independent consultants (Cambridge Policy Consultants) were also commissioned by the Council and the NWDA in Summer 2005 to analyse the scale of economic impact that would be generated by the BBC’s relocation proposals, and as part of the MEZ. This work has recently been completed and their findings indicate that the totality of the BBC’s proposals has the potential to generate more than £1.5bn in Gross Value Added over the next decade, and a total of 4,400 jobs, making the BBC Manchester Initiative potentially the single largest inward investment proposal ever to take place in the City. The Executive Summary of this Study is attached at Appendix 1. 2.5 In previous reports it was suggested that significant public funding would be required for the creation of the MEZ, if all the public sector’s objectives were to be achieved. 3. Progress with the BBC Manchester Initiative 3.1 In August 2005, the BBC decided to initiate a new process for determining a site for its relocation, in order to demonstrate transparency in its decision-making. The BBC issued an open invitation inviting landowners in the Manchester area to respond to a Request for Information (RfI) regarding the suitability of sites in their ownership for a purpose-built BBC campus and the development of the MEZ. This process led to four sites being shortlisted by the BBC - two in Manchester - namely: Quay Street (the existing Manchester base for ITV/Granada); and the Central Spine in the Southern Gateway area; and two in Salford, Pier 9 at Salford Quays; and Greengate in Central Salford. 3.2 The BBC has decided that the existing BBC campus site on Oxford Road is not a valid option, as the site could not easily accommodate additional facilities and services above that are required by the BBC. In addition, the BBC considered that the costs of decanting and site assembly would make the Oxford Road site prohibitively expensive. 3.3 As the Chief Executive reported to the Executive in December, submissions have been made to the BBC on the Manchester sites, as requested by the BBC on the basis of a MEZ proposition and alternatively, a BBC stand-alone option, which would attract different levels of public funding subsidy. 3.4 The submissions included information around the capacity of the Manchester sites to physically accommodate the BBC’s campus, which would include existing Manchester-based BBC staff, the creation of the MEZ; the track record of the landowners and their partners; the provision of technical facilities; support provision for relocating staff; and the strategic fit with local, sub-regional and regional strategies and plans.