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Date of Board Meeting: 28 July 2021

Report Title: CEO Report

Author: Glenn Caplin-Grey

Contact: [email protected]

Decision Required by the Board Y/N: N

For Information Only Y/N: Y

Recommendation(s)

1. That the Board notes the contents of this report and the overall progress across operational activity, with a particular focus on our activity on; a. The Green b. Labour Market and skills.

1. Executive Summary This report seeks to provide the Board with an update on activity and also highlights any key operational issues that the Board needs to be aware of. Supplementary presentations on emerging issues for the economy of and the and the LEP work programme will be provided. Specifically, on the subject of;

• Labour market and skills challenges • Green Industrial Revolution opportunities

This reflects concerns raised by the Employment and Skills Board and the wider private sector as part of COVID recovery, as well as opportunities to further develop our approach to securing the economic and social benefits of the Green Industrial Revolution ahead of COP26.

2. Progress/Update/Impact/Outcomes/Issues

2.1 Governance

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APR update Every year LEP’s have an Annual Performance Review (APR) with Government to:  Discuss the contribution the LEP has made towards driving forward local economic growth.  Review LEP governance and assurance processes.  Look at progress on delivery of key local growth programmes.  Discuss the LEP’s strategic impact, priorities and challenges for the year ahead.

The CIoS LEP’s APR meeting took place on 4 February 2021 and was attended by the LEP CEO, Head of LEP Commissioning, Programmes Lead, Executive and Governance Manager and representatives from the Cities and Local Growth Unit. In May, the Cities and Local Growth Unit informed the LEP of the positive outcome for the three criteria:  Governance: Met  Strategic Impact: Met  Delivery: Met

LEP Review The government led review is due to report by the Summer Recess, to inform advice to Ministers, the Levelling-up White Paper and the Spending Review, on how to evolve LEPs to best support and represent businesses in places whilst LA’s take on elements of local growth capital funding.

The review is considering future LEP objectives, functions, form, departmental ownership, geography, representation, relationship with Local Government, people implications, funding and implementation.

The lead minister for the review is Minister Scully. The LEP Chair and CEO are working together with the LEP Network to provide information and guidance to the Whitehall team’s work on the LEP Review.

Sub-Groups Sub-Groups of the Board have continued to meet virtually and play a key part in governance.

LEP Audit and Assurance Committee The Committee have met twice since the last LEP Board meeting in March. At their meeting on 14 April 2021 the Committee agreed a revised budget monitor layout, which now includes income and expenditure broken down into

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ringfenced and un-ringfenced funds and provides more information in the balance sheet. The Committee also considered the 2021/22 LEP/ Internal Audit Plan options and undertook a review of the risk register which included the following amendments:  amended the risk headings from governance, delivery and strategy to the headings of organisational, economic and strategic risks.  combined the previous governance, resources and finance risks to remove potential duplication.  combined the previous programme management and bad debt risk.  included a new risk relating to succession planning arrangements under the organisational risk heading.  included the escalation of the EU Transition horizon scanning risk to the main risk register under the economic risk heading.  included the escalation of the climate change horizon scanning risk to the main risk register under the strategic risk heading.

At the Committee’s meeting on 7 July 2021, the Committee considered the preparation and audit timetable for the 2020/21 Annual Report and Financial Statements. They also considered the inclusion of a safeguarding statement with the Local Assurance Framework. A full report on this is provided at agenda item 4.6. The Committee also considered a revised risk register and proposed risk profiles. The latest register can be found at appendix 2.

LEP Nominations Committee At their meeting on 28 April 2021, the Committee discussed the LEP Review and succession planning arrangements. A full report is provided under agenda item 4.5.

CIoS LEP Investment and Oversight Panel A full report on the CIoS LEP Investment and Oversight Panel is provided under Agenda Item 5.1. However, the Board should note the significant progress made in delivering the programme on time and on budget in the last quarter of 20/21.

CIoS LEP Enterprise Zones Board A full report on the CIoS LEP Enterprise Zones (EZ) Board is provided under Agenda Item 4.7.

2.2 Finance Attached at Appendix 1 is the May 2021 budget monitor, including a detailed narrative on spend and commitments.

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2.3 Risk In terms of corporate risk, the Board will note the latest risk register at Appendix 2. The Board is asked to note the following risk profiles:  Red risks - the risk in respect of changes in government policy, approach and regulations (risk A) remains red, due to potential LEP Reform implications. Risk G (coronavirus) also remains red due to ongoing implications of the national restrictions and recovery requirements, including emerging housing/labour market implications. Risk F (EU Transition) has increased to a red risk due to EU funds and potential emerging gaps in business support provision as ESIF funding comes to a close and Shared Prosperity Fund arrangements are established.  Changes in risks - Risk B (governance and resource) has increased due to core funding not yet received from Government. Risk D (comms/reputation) has reduced due to positive G7 LEP messaging and coverage. Risk E (succession planning) has increased due to proximity of required Board changes.  The remaining amber risk is showing as stable due to mitigations in place.  Horizon scanning - horizon scanning items included for review, covering future programming, devolution white paper, G7 legacy and UK City of Culture.

3. Policy update

3.1 Post COVID-19 Recovery Work is ongoing through the LEP led Economic Recovery Group, with additional activities continuing across the recovery areas set out in the Delivery Plan.

Recent focus of the Economic Recovery Cell has included the housing and labour market impacts, intelligence gathering, G7, COVID-19 increase mitigations, further development of Local Authority grant approach, ERDF changes, furlough and support scheme extensions and emerging recovery priorities, including the post-support landscape and G7 opportunity.

3.2 UK Shared Prosperity Fund / Levelling-up Following the March 2021 Budget announcement of a Community Renewal Fund (CRF), Cornwall Council conducted a local call for CRF projects during April-May, appraised the bids received and submitted a package of 5 projects at a total value of just below £3 million (the maximum limit) to central Government. Government is likely to announce which projects can be taken forward by early August 2021 and successful projects will have until end of March 2022 to complete project activity.

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The UK Shared Prosperity Fund Investment Framework is expected to be published during 2021 and the funding envelope for the UK SPF may be published following the Comprehensive Spending Review in Autumn.

3.3 EU Programmes

European Regional Development Fund (ERDF) The Integrated Territorial Investment (ITI) Board continue to meet to discuss programming and performance with ERDF, via MS Teams or through written procedures.

Following a discussion on how to use the remaining ERDF funds at the February ITI Board, Project Change Requests (PCRs) were invited from:  Projects seeking additional funds to meet existing Grant Funding Agreements (GFA);  PA1 & PA3 projects seeking additional funds to extend activity; and  Two PA4 applications for new projects.

Subsequently, analysis of Programme values meant the sterling allocation was significantly reduced and it was identified that there were insufficient funds available to support all the additional activity. Factors impacting the sterling allocation were:  Revaluation of England programme in Jan 2020;  Exchange rate relevant to payment of each European Commission Payment Allocation (ECPA) (reimbursement from European Commission (EC) to the Managing Authority (MA));  Rate at which funds were drawn down (i.e. Priority intervention rate v project intervention rate);  Projection of exchange rate for future payments; and  Need to manage risk of overcommitting in sterling to avoid cost to domestic budgets.

All the PCRs seeking funds for additional activity and the PA4 applications were rejected in June and advised this was due to a significantly reduced budget. With the reduced budget available, funds were prioritised for existing contracts that had been impacted by Covid-19, or other unforeseen circumstances, and where additional support was required to meet GFA targets. All PCRs in this category have been or are being taken forward.

At present the MA is working with projects that submitted proposals for additional activity and are due to financially complete in 2021. Smaller sums may be available to enable 6-12 month extensions relative to the differing

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levels of running costs and the amount of underspend each project has. PA3 projects with financial completion dates in 2022, and who had been seeking to undertake additional activity, will be contacted by the MA in the autumn to discuss options, subject to funds being available. There are a number of projects that have fallen behind their GFA profiles due to the impact of Covid- 19 and it is anticipated that PCRs to use underspend and/or extend the timeline will be taken forward. Any funds returned to the Programme through underspends or irregularity payments will be recycled into existing projects.

European Social Fund (ESF) One National ESF Call was live in CIoS during this reporting period which was a repeat of the digital inclusion offer with the delivery window extended, and the additional requirement for applicants to provide match. It is understood that there were no applications received by the MA in response to this Call from CIoS or nationally.

Whilst the turnaround time for new projects has reduced significantly, with a number of GFAs issued recently, PCRs are still taking a long time to go through, with some partners reporting up to 7 months wait.

No further Calls are anticipated, any underspends/recycled funds will likely be managed through PCRs. DWP are managing and monitoring the FOREX position and a recent ESF action note has confirmed that the use of electronic signatures is now business as usual.

European Agricultural Fund for Rural Development (EAFRD) The third round of the Growth Programme closed to new full applications on 31 October 2020. Since then, the MA team has been working through the appraisal of these applications. Round 1, 2 and 3 of the Growth Programme (£8.940m) has been formally contracted to 54 projects. A further 3 projects remain in appraisal seeking £162k of grant. If these are approved the final “landing point” for the EAFRD Growth programme will be 97% commitment against the original allocation of £9.4 million.

3.4 EU Transition The LEP continues to monitor the impact of the end of the transition period. The non-tariff barriers that are now being applied for goods such as fisheries products has led the significant disruption of trade and loss of income to many fishers. The ban on exports of bi-valves without depuration came at very short notice and stopped that trade immediately. Some exporters are beginning to re-open markets but volumes are low and the costs and risks associated with exports are high in comparison to the average size of each

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consignment which is discouraging small exporters from exporting to the EU. Partner discussions with DEFRA and City Council about the scope for a “logistics hub” in the South West has highlighted that export levels are down by at least 19% on 2019 levels.

The LEP funded Growth Hub continues to provide EU Transition support to businesses via its core funding from BEIS.

The availability of seasonal labour remains a concern especially in the agricultural and hospitality sectors. For agriculture, there is an need to consider extending the duration, scope (to include non-food crops) and duration of the Seasonal Agricultural Workers Scheme as industry evidence suggests that there is a real risk of crops going unharvested in 2021/22 if sufficient seasonal labour cannot be sourced.

3.5 Great South West (GSW) Following publication of the GSW prospectus, and the work of the GSW All Party Parliamentary Group (APPG) chaired by Sir Gary Streeter and , work continues on the GSW initiative. The GSW geography continues to be utilised by Department for International Trade for adviser geography, the GSW tourism partnership and joint work across the South West Peninsula Growth Hub Cluster.

3.6 Town Deals All Town Deal Boards have now accepted their respective offers from Government in order to deliver against the aspirations set out in the TIPs available to view here, along with the amounts agreed:  - £23.7m  - £21.5m  St Ives - £19.9m  - £23.6m

LEP Board Directors continue to play a positive role across the Town Boards, in support of the realisation of the Town Investment Plans.

3.7 Joint Local Enterprise Partnership/Local Nature Partnership Sub Group The joint LEP/LNP sub group have met in April and July to discuss support in the transition to a low carbon economy, funding and project opportunities and pilot project activity relating to ‘greening’ of town centres. Co-chaired by Mark Duddridge and Lord Teverson, with LEP Executive and LNP officers progressing a variety of joint initiatives.

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3.8 G7 An item at the last LEP Informal Board meeting highlighted the various media impacts related to G7, outlining national and international media coverage, both general and industry specific media relating to lithium, FLOW, space and more. The LEP edited Business Cornwall magazine was included in the journalist packs. The LEP’s press briefing had 1.8K views on Youtube.

A sub-group of the LEP are meeting to discuss further follow up around communications and legacy.

3.9 UK City of Culture Bid Cornwall has announced its intention to bid for City of Culture 2025 as groups of towns become able to bid for the first time.

Launched by UK Culture Minister Oliver Dowden, the winner of the four-yearly contest will pick up the baton from , which predicts a £110m investment dividend from being this year’s host.

Cornwall’s creative economy includes more than 1,000 businesses employing over 5,700 people and it boasts a fast-growing tech sector. Falmouth University specialises in creative industries and contributes some £100m to the Cornish economy every year, with courses ranging from fine art to computer gaming.

Cornwall has world-class cultural institutions, from the St Ives to the , more than 70 museums, and a range of spectacular venues from the rugged clifftop Minack Theatre to plain-an-gwary (translated ‘playing-place’) medieval amphitheatres. It is also a place with a thriving community culture fuelled by the participation of the wider community in Cornwall’s many choirs, dances, bands, festivals and sporting events. The year-long festival would celebrate culture and creativity exploring the spaces where culture meets the environment and wellbeing, connecting local communities with global change.

The LEP are working with Cornwall’s creative and cultural community, through Hall For Cornwall, to finalise our programme and create a very unique bid which makes the case for rural creativity and builds on both our cultural heritage and supports our plan for an innovative future.

3.10 Green Industrial Revolution The LEP declared a climate emergency in 2019, in line with Cornwall Council and a number of other key stakeholders in the region, and the LIS sets out an ambition for a carbon neutral economy by 2030.

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In the lead up to G7, Government announced it will back a major drive to restore Cornwall’s renowned natural environment and make Cornwall the first net zero region of the UK.1

In a response to the Climate Change Committee (CCC) 6th carbon budget report in December, which for the first time included a local element to the report, government are developing a Net Zero Strategy, due in the Autumn, before COP26.

The BEIS Local Energy Team are engaging Local Authorities and stakeholder to develop a more place-based approach to net zero, both at a devolved administration level and at a local government level. They are seeking views on what big asks needs to be in the Net Zero Strategy and what government needs to do to unlock what is trying to be achieved locally, i.e., reg barriers, finance etc.

The LEP supports key strategic sectors that will be part of a ‘green industrial revolution’ and the UK’s decarbonisation and enjoys a positive reputation as being able to facilitate joint working between the private, public and community/voluntary sector. This joint working, at pace, will be required if the region wants to become the first net zero region in the UK and capture the likely economic benefits that will bring. We intend to work with our public and private partners over the Summer and Autumn to refocus both our investment offer (building on G7 messaging) and our suggestions on how energy policy can be improved to support the further growth of the sector.

The presentation to the Board will set out our initial thinking, based on engagement with private sector and the table below sets out a number of possible key immediate and intermediate things CIoS ‘needs’, when considering a ‘green industrial revolution’, economic recovery, levelling up as well as net zero or carbon neutrality, across a number of areas to be addressed. How these different things can be achieved or leveraged, what approach will be taken by who and when, will require further consideration with partners and stakeholders.

1 PM announces new funding for Cornwall to create a G7 legacy for the region - GOV.UK (www.gov.uk)

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The need The outcome £300-500k for the first rural and island Local Area Energy Plan; an open and Strategic infrastructure investment decisions, accessible evidence base, scenario and roadmap to a Net Zero energy demand led RD&I, business creation and scale system, developed with business and communities. up, engagement and behavioural change across society. Ongoing support from the SW Energy Hub and increased/devolved locally CIoS taking a leading role in the Net Zero 1. The building blocks based support to build capacity and capability. transition, growing inhouse expertise, supporting businesses and communities, developing and delivering solutions, whilst sharing lessons learned and good practice. Net Zero working group across central and local government, private and Dissemination and diffusion of innovation, public sector, that includes developing opportunities for devolved powers. new products, technology and alternative business models and practices. Greater resources to manage both the transition and enforcement Carbon capture will form a key part of CIoS functions required to embed nature recovery and natural climate solutions becoming net zero, as there will have to be 2. Nature recovery throughout CIoS, including the transition to the ELMs scheme. drawn down of significant amounts of carbon to deal with the residual emissions. Support and increased recognition for the “technology metals” low carbon CIoS providing the UK with the low carbon extraction industry, particularly the lithium resource in Cornwall. strategic minerals necessary for the 3. Resource efficiency transition. The UK leading the world by example, whilst supporting local economies.

Strategically aligned onshore and offshore transmission and grid Onshore and offshore transmission and reinforcement programmes, that value and incentivises flexibility. Greater distribution networks that are ready for CIoS links between local strategic intent and planning and the WPD 2023-2030 to be Net Zero, with the potential to integrate 4. Infrastructure investment timelines, ensuring that the required changes can be made FLOW to become exporters of power. effectively to reflect market conditions and consumer patterns.

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The need The outcome UKGIB investment ahead of need into Port infrastructure, and the Ports that are ready and able to benefit from repurposing of existing infrastructure. FLOW and help maximise UK content and ports and railways that the nascent battery metals industry. Urgent upskilling provision to ‘green’ existing jobs and to locally fill new The scaling up of businesses, required in jobs response to policy driven demand and economic opportunities. Deep dive into the FLOW supply chain, jobs and skills required in The local economy filling the high value preparation for GW’s off the CIoS coast. sustainable jobs that will be created by new industries and to help maximise UK content. 5. Business base Increased and expert business support via Growth Hubs, focussed on the Increased participation in the Race to Zero Net Zero transition and opportunity it creates. and the development of Net Zero business plans. Expanded roles of businesses within Funding conditions related to decarbonisation commitments. supply chains, and opportunities for value add within a circular economy. A pilot for the first regional Office for Investment, utilising the existing Local knowledge attracting substantial inward knowledge and expertise within Cornwall Trade and Investment. investment and increased trade. Early advisory services and support from UKIB to develop and finance Significant investment into high value and 6. Finance projects, linked to the regional Office for Investment complex economic infrastructure projects, sharing experiences and lessons learned with other areas. Devolved Net Zero Innovation Portfolio funding and bid writing support. CIoS pioneering transformational RD&I, increased expenditure and a higher success 7. Innovation rate of securing an increased amount of funding.

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The need The outcome Regulation that supports fugitive biomethane capture, usage and storage Greater recognition of the climate change and particularly its use in homes for heating, for rural EV charging and as a impact of fugitive biomethane and its value marine transport fuel. across in a Net Zero energy system, where there are technology gaps. A focus on funding Hydrogen innovation into areas that cannot be Advances in the hardest to decarbonise parts electrified, such as specialised vehicles, aerospace and marine. of the energy system. Direct allocation of retrofit budgets to the Local Authorities, with longer- More efficient and accelerated delivery of term funding agreements retrofits and a secure pipeline for the local supply chain. 8. Built environment Support to develop business models to recover additional cost to A sustainable model for developers and LA’s developers of domestic renewables from affordable energy sales to for new net zero homes that does not impact homeowners. further on affordability and the housing crisis.

Zonal Planning, Leasing & Licensing and Offshore Consenting (ZiPLOC) - UK back in the global race, with fast-tracked pre-consented offshore zones. approvals and FLOW gestation periods reduced to 4 years. A 50MWe Minima for deep geothermal and admin strike price of £140 An unlocked geothermal industry providing MWh for CfD AR4 baseload flexible power and net zero affordable warmth, expanding into the UK 9. Heat and power and globally.

A replacement incentive in line with the RHI tariff to fill the policy gap after Natural gas use gradually phased out and a the end of the RHI for heat pumps and geothermal. sustainable and market driven uptake up of low carbon and cost competitive heat The redistribution of existing taxes, such as the climate change levy, across solutions. the whole energy system and all consumers.

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The recommendation to the Board is the LEP take the lead on the development of a collaborative Net Zero Framework for CIoS, setting out a series of commitments, timetabled set of high-level actions, roles and responsibilities and ‘asks’ to government.

Additional dedicated resource and a budget will be required to undertake this piece of work and it is proposed that a scope of work is developed and costed for the Board to consider when ready.

4. Performance Summary The finance and performance report is attached at Appendix 3. This provides a mechanism for tracking finance and performance against the priority areas and activities contained with the LEP’s Delivery Plan.

4.1 Data and Space The Data and Space strategy was updated ahead of G7. The Data and Space Steering Group, chaired by Mark Goodwin, met on the 19 July to review progress against strategic targets, consider the South West Centre of Excellence in Satellite Applications role in delivering the strategy and considered KPI development for how CIoS will ‘play a strategic role in offering access to environmental intelligence’. The Centre for Space Technologies is progressing well however there is still a funding gap for the Space AI Institute.

4.2 Creative Chaired by Mandy Berry on behalf of the LEP, the Creative Industries Task Force (CITF) has identified the areas it will prioritise for its focus for the year ahead, to raise the profile of our creative economy, support sector and wider bids and make the case for and attract inward investment. 1 Growing the evidence base – building on the database, identifying and addressing gaps to provide data on the make-up and size of the creative and cultural sectors. 2 Creative Hubs - aligned to the above and building on the research commissioned in partnership between Cornwall Council and Falmouth University into the role of creative hubs, identify creative clusters in the region and their connections to hubs and networks. 3 Cornwall Creative Network – ongoing investigation into the demand and need for an independent network and options for development. 4 Research and Development (R&D) and Innovation - raise awareness in the region of the role, importance and opportunities offered by R&D and innovation. This will be done in consultation with Falmouth University and the University of Exeter. It will include a focus on R&D Tax credits

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and applications to Innovate UK competitions. There is a potential policy initiative from the Arts and Humanities Research Council on UK wide innovation and a creative innovation network. 5 Support Cornwall’s UK City of Culture bid

Creative and Cultural Leadership The CITF members are taking a key role in the July ‘Leading Creatively’ Roundtable – a high level discussion amongst senior stakeholders in the UK, on growing the next generation of creative and cultural leaders in rural regions. Part of the Creative and Cultural Leadership Development Programme led by the University of Plymouth with Cultivator.

wAVE Project – the project is in its final delivery phase, with partners Cornwall Museums Partnership and Falmouth University busy finalising the creation and installation immersive technology across 5 museum sites in , St Agnes, Isles of Scilly, and Porthcurno. The project experiences are phasing launches between May and July, subject to reopening, with project completion set for the end of July 2021.

4.3 Floating Offshore Wind (FLOW) In May, the sale of Wave Hub Ltd (including the offshore site and transmission assets) was agreed with Hexicon, a Swedish floating offshore wind technology developer. Working with Bechtel, a global construction company, they have formed Twin Hub Ltd which is a project to deploy up to 40MW at the site by 2025. This brings the total number of leased areas in the Celtic Sea under development for FLOW to two, with maximum cumulative capacity of 136MW.

In addition, following on from their market engagement exercise at the end of 2020, the Crown Estate announced in March that they were commencing work to design and deliver a new leasing opportunity for early commercial-scale floating offshore wind projects in the Celtic Sea. The leasing process will focus on projects of circa 300 MW in scale, which is up to three times larger than any rights previously awarded to floating wind in the UK.

This announcement, together with the upcoming Contract for Difference auctions which recognise FLOW as a new technology with higher costs than fixed wind, has prompted significant interest in the region from a number of developers, with Twin Hub, Blue Gem, OW energy, Morwind, RWE and DP energy all being actively and openly engaged.

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To ensure that the region maximises the benefits that the FLOW market will bring, activity continues to cover key strategic areas including Zonal Planning, Port Infrastructure, Grid Infrastructure, Local Content and Cumulative Impacts.

The FLOW conference held in the margins of June’s G7 Summit saw over 300 delegates from across seven countries. All of the active developers in the region were represented in person, as were The Crown Estate, KPMG, HMG, national and local politicians. This, along with the LEP’s messaging throughout the build up to the G7 period, helped cement the regions reputation as a leader in the FLOW industry.

4.4 Energy and Climate Response

Geothermal/lithium The starting of the drilling at Eden coincided with a visit from Alok Sharma, President for COP 26. Following this, a briefing note developed by the LEP and local partners (Eden Geothermal, their investors Gravis and GEL) was sent to articulate how the potential of geothermal can be further unlocked by Government.

At the final stages of testing commenced 29 June for a week. They tested the whole circulatory system and brought superheated hot water to the surface. This informs the size of power plant required and enables testing of the water for mineral content as part of the Getting Building Fund, Direct Lithium Extraction pilot, which is built and ready to start testing.

Biomethane capture, usage and storage Cornwall Council continue to work with Bennamann on the biomethane farm pilot, that captures biogas emitted from Bennamann’s designed and purposely built slurry lagoons on 6 Council owned farms. Their technology then upgrades the biogas to biomethane and compresses it so they can transport and sell it for use in the Cormac vehicle fleet. The project is gaining interest from other Local Authorities, farm owners and DEFRA’s Farming Investment Fund.

Case New Holland have recently bought a minority equity stake in to Bennamann and are working with them on a number of innovations related to fugitive biomethane capture, usage and storage, supported by the Innovation and Clean Growth Team.

Hydrogen The recent Hydrogen study commissioned by the LEP summarises the current UK hydrogen policy landscape, outlines current and pipeline hydrogen activity

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in CIoS, and identifies several sector-specific and general opportunities for hydrogen development in the region.

The opportunities were identified by considering the region’s unique geography, resources, strategic and decarbonisation priorities, existing hydrogen and non-hydrogen activity, and via engagement with a range of key and regional stakeholders. These opportunities are also focused around innovation, trials of new technology and the development of a strategy that will enable CIoS to take advantage of future hydrogen opportunities.

Next steps being considered include a more detailed study looking at the area as a developing industrial cluster and the creation of a working group.

COP26 The West Midlands is hosting an international summit on the UK’s net zero future in the build-up to the UN’s climate change conference COP26 in November. Mayors and local leaders from across the country and ministers attended the Net Zero Leaders’ Summit on 13 July, either virtually or in . It was followed, on the same day, by an international conference for delegates from the UK and across the globe, attended by LEP Board Member and Cornwall Council Leader, Cllr Linda Taylor.

On 19 October the UK Government will be holding a Global Investment Summit at Windsor Castle and London hosted by the Royal Family and the Prime Minister. The most prominent investors from around the world will be invited. The one-day meeting is expected to catalyse billions of pounds of investment. As part of this Summit, the Department for International Trade sought to identify the most high-value, strategically important and innovative green investment opportunities from across the UK. A number of projects and sector opportunities from CIoS have been submitted.

4.5 Tourism Tourism recovery implications continue to be addressed at the Economic Recovery Group, with a focus on regulatory issues and joint messaging. Work to finalise the Tourism Strategy is ongoing, with a focus on sustainable, regenerative tourism, maximising value and net zero imperatives. A Great South West Tourism Partnership Plan, Towards 2030 has been developed across the wider region, with input from Destination Management Organisations (DMOs), LEPs and Local Authorities.

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The Department for Culture, Media and Sport’s review of DMOs is ongoing across England, expected to report later this year, it seeks to examine the extent to which the current DMO landscape:  is economically efficient, effective and sustainable (with regard to funding, structure and performance).  best enables the government to meet its leisure and business tourism policy objectives at a national, regional and local level.  engages within the wider local and regional economic landscape, and the current focus on English devolution and levelling up.

Depending on the findings of this examination, the review will need to make recommendations, to government, the tourism sector, or both as appropriate, about:  whether DMOs might be structured or funded differently, and if so how any proposals might maximise post-COVID-19 recovery and long-term success.  what the role of DMOs should be, bearing in mind existing other local structures such as local enterprise partnerships (LEPs), mayoral combined authorities (MCAs), local authorities and other similar local/regional bodies, and where these might intersect.  how DMOs should best engage with, and be engaged by, VisitEngland, VisitBritain and DCMS, as well as wider government/public bodies where relevant (e.g. ; UK Sport).

4.6 Agri-food/Rural Farm Business Survey data suggests that 65% of farms are at risk due to low profitability and reliance on the current Basic Payment Scheme (worth on average £16k per farm in Cornwall and will go to £0 by 2027) so the need to adapt their business models to deal with this loss of income is clear.

DEFRA have opened a consultation on their planned “lump sum exit scheme” which is designed to encourage farmers to exit the industry. The LEP and Cornwall Council are continuing conversations with the DEFRA team who are leading the work on future economic grants to share lessons learned from previous activity and discuss how any planned activity can link to the UK SPF proposals. A key requirement of these discussions is to ensure that the UK SPF is fully rural proofed as the future DEFRA grant schemes will not be a direct replacement for the EU’s Rural Development Programme and therefore it is vital that the UK SPF includes the scope to support businesses that DEFRA will no longer support under their schemes (e.g. non-farm based/owned food processors).

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Availability of migrant/seasonal labour remains as a major issue in the agricultural and the horticultural sector. The decision to extend the Seasonal Agricultural Workers Scheme (SAWS) in December 2020 was welcomed and fortunately the majority of businesses have managed to secure sufficient workers with settled status or under SAWS for the summer of 2021 and for food crops. Many have also tried to increase the number of UK residents employed with little success. Over 95% of the field operatives employed on farms in Cornwall (2,500 between Jan – Mar each year on Daffodils and approx. 1,200 employed throughout the year in the vegetable sector) are classified as migrant/seasonal workers so shifting this position will take time.

A further concern for the sector is the impact of trade deals. The UK/Australia trade deal opens up the opportunity for significant volumes of food products (red meat, chicken, dairy products) to be imported into the UK that are produced to standards that are illegal in the UK. This means that production costs are lower and prices could undercut domestic production. Given the importance of the dairy and livestock sector in Cornwall the potential impact of these trade deals is of concern.

4.7 Employment and Skills Work is ongoing to ensure our Employment and Skills Programme can flex to meet our most pressing needs and aspirations for the future. Activity is guided by our Local Industrial Strategy to integrate support, particularly building skills and business capacity to achieve sustainable and inclusive growth, as the current health and economic emergency is addressed.

Labour Market Shortages The Employment and Skills Board Members, stakeholders, delivery partners and local businesses are reporting significant workforce and skills issues. This is not a unique issue to one business area or geography; but is being reported in all our employing sectors, exacerbated but not necessarily caused by housing and transport issues. These issues are or will;  restrict the ability for many sectors to open up fully and recover liquidity.  limit investment in emerging sectors or technologies  cause inflationary pressures which may not always be able to pass on to customers or consumers either in the short or medium term.  cause a redefinition of the world of work which will impact on housing/workspace etc

These challenges will be more clearly set out at the Board meeting, with the opportunity for board members to feed into our proposals, workplans and potential interventions.

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Devolution Through the work of the Employment and Skills Board (Skills Advisory Panels), the emerging Local Industrial Strategy, ITI Board and the Devolution Deal partners have been able to better align funding to deliver more locally relevant projects and support, tackling some of our key employment and skills issues and supporting the needs of our emerging and adapting sectors. An ask of Government will be to give powers and funding to the CIoS Employment and Skills Board to draw down and govern devolved multi-year adult skills funding, with an estimated value of £196m over 7 years, so that we can design and invest in locally relevant skills programmes.

Redundancy Support Provision has been made to support and coordinate partner responses to mass redundancies working with Cornwall Development Company (CDC). This will ensure that we have business and individual support packages, information, advice and events to support people back into work, in partnership with CDC, Job Centre Plus, employers and employment and support providers in the region.

People Hub In response to the Covid-19 Pandemic the People and Prosperity Team worked alongside CDC to design and agree the early implementation of the People Hub. The People Hub acts as a one stop shop for residents seeking information, advice and guidance, signposting, and practical and financial support to help them move closer to employment. The Hub works alongside the current Growth and Skills Hubs to engage individuals to assess their needs and develop bespoke Personal Action Plans (PAPs). The ESF funded 3 year People Hub project is now up and running. CDC has also submitted a bid to ESF to extend the work of the people hub to cover people in work and at risk of redundancy, the outcome of this application is imminent.

Local Skills Report The Skills Advisory Panel (SAP) guidance requires the LEP to produce a Local Skills Report. The Local Skills Report will set the local context, provide an assessment of the local labour market and set out priorities and actions for the short to medium term. The Department for Education has approved our Local Skills Report which was published on the LEP website in March 2021. The People and Prosperity Team is now working on the November update which will be reported to DFE and Cornwall Council Cabinet. This will be supported by a business and resident survey into current barrier to recruitment.

Information Classification: CONTROLLED

Digital Skills Partnership (DSP) The DSP has supported a variety of activities. More detail can be found in the Employment and Skills Board progress report. We have successfully recruitment Chloe Rickard to the Digital Skills Partnership Coordinator Post and Laura Herbert as People and Prosperity Communications officer. The priorities for Chloe in the first quarter will be a review of the board, DSP vision and priorities and development of a communications and action plan for the board.

4.8 Cornwall and Isles of Scilly Growth Hub The CIoS Growth Hub continues to act as the gateway to publicly funded business support across Cornwall and the Isles of Scilly. The front facing element of the CIoS Growth Hub aligns the Skills Hub, Careers Hub, Business Regulatory Hub, and People Hub.

The Growth Hub continues to utilise BEIS funded LEP monies to deliver its ERDF co-funded operations, recently pivoting to a digital-first offer, whilst responding to additional directives/opportunities including EU Transition, Peer Networks and Kickstart activities. Utilising the BEIS funding, the LEP and the Growth Hub have increased advisor capacity for visitor economy, agri-food and town centre businesses, intelligence, communications and activity designed around COVID-19 response/recovery and ensuring coordination across the SW Peninsula cluster geography.

The previous 12 months saw 120,000+ Growth Hub website users, an estimated 460 ERDF Kickstart Grants (£1.4M), 2000 new ‘leads’ for support, 13,000 calls to the Growth Hub number, 2000+ support web chats, 1000+ Growth business reviews @3 hrs and many more short interventions. Since December 2020, the targeted support saw an average of approx. 500 interventions per week reported to BEIS, signposting to COVID and EU Transition Support.

Further grant funding from BEIS has been confirmed for 2021/22, seeing continuation of Peer Networks and ongoing uplift in Growth Hub activities and advisor capacity.

4.9 Communications Update The last few months have been mainly dominated by G7 activities and we have also launched the new website.

Highlights include:  Guest editing Business Cornwall magazine as a G7 special edition, included in official G7 journalist packs and the only print media included in the

Information Classification: CONTROLLED

Summit itself and distributed to delegates and leaders. https://issuu.com/businesscornwall/docs/bc_jun21  International journalist briefing focusing on Cornwall’s emerging sectors and evolving Cornwall’s narrative watched by 1,919 people https://www.youtube.com/watch?v=TQl9qRUlyow&t=714s  Campaign film and press for the Green Industrial Revolution used widely across digital media, the media briefing and in the media centre https://www.youtube.com/watch?v=j7SLn7EvKBs  National and international PR campaign resulting in press coverage across Sky News, Today Programme, BBC News, Independent, New Times, US News, Associated Press, Die Welt, Boersen Zeitung, Forbes and La Repubblica  Announcement that Cornwall will bid for the City of Culture, resulting in 2,242 views of the film and live coverage with BBC Breakfast and Radio Cornwall as well as national media.

Upcoming We’re keen to maintain momentum around Cornwall’s emerging sectors and role in the Green Industrial Revolution and will look to COP26 for opportunities to keep our messages and narrative in the media. We will also be following up on investments with press to follow on projects.

5. Financial Implications There are no direct financial implications associated with this report, the current financial position is reported in Appendix 1.

6. Appendices Appendix 1 - May 2021 budget monitor and narrative Appendix 2 - LEP Corporate Risk Register Appendix 3 - Delivery Plan - Finance and Performance Reporting

Section 151 (finance) Officer commentary and sign off Name: Ellie Willcocks Date: 19 July 2021 The current forecast spend within the budget monitor can accommodate additional activities without overspend of the original budget. As new initiative and activity costs are identified, they must be considered within the overall affordability of the LEP.